EX-99.1 2 tqntexh99102611.htm PRESS RELEASE TQNT.Exh99 10.26.11


NEWS RELEASE

TriQuint Announces Third Quarter 2011 Results

    
HILLSBORO, OREGON (USA) - October 26, 2011 - TriQuint Semiconductor, Inc (NASDAQ: TQNT), a leading RF solutions supplier and technology innovator, announces its financial results for the quarter ended October 1, 2011, including the following highlights:

▪
Revenues for the quarter were $216.0 million; revenues for the nine months ended October 1, 2011 were $669.1 million
▪
GAAP net income for the quarter was $16.2 million, or $0.09 per diluted share
▪
Non-GAAP net income for the quarter was $19.0 million, or $0.11 per diluted share
▪
Recognized in Fortune magazine's "100 Fastest Growing Companies" annual list
▪
Earned the "Green Partner" Award from Huawei
▪
Released the world's first 40G SMT optical network differential driver

Commenting on the results for the quarter ended October 1, 2011, Ralph Quinsey, President and Chief Executive Officer, stated “TriQuint's long term growth story remains intact. Mobile broadband and high performance RF are some of the most exciting growth markets in the world today. At TriQuint we are helping customers define the next generation of RF solutions. Additionally, we are investing in the capacity and capability required for future growth. I firmly believe these investments will lead to superior and sustainable long term financial performance for the company.”






Summary Financial Results for the Three and Nine Months Ended October 1, 2011:

Revenues for the third quarter of 2011 were $216.0 million, down 9% from the third quarter of 2010 and down 6% sequentially. Revenues for the nine months ended October 1, 2011 were $669.1 million, up 7% from the nine months ended October 2, 2010. Mobile Devices revenue grew 14% over last year on a year to date basis.

GAAP

Gross margin for the third quarter of 2011 was 34.9%, down from 41.3% in the third quarter of 2010 and down sequentially from 40.3%. Gross margin for the nine months ended October 1, 2011 was 38.1%, compared to 40.3% for the same period in 2010.

Operating expenses for the third quarter of 2011 were $63.3 million, or 29% of revenue, up from $59.1 million in the third quarter of 2010 but down from $70.9 million in the previous quarter. Operating expenses for the nine months ended October 1, 2011 were $201.3 million, up from $173.1 million for the nine months ended October 2, 2010.

Net income for the third quarter of 2011 was $16.2 million, or $0.09 per diluted share, relatively consistent with the second quarter of 2011. Net income for the nine months ended October 1, 2011 was $45.2 million or $0.26 per diluted share.

Non-GAAP

Gross margin for the third quarter was 36.3%, down from 42.3% in the third quarter of 2010 and down sequentially from 41.4%. The decline was largely due to product ramp related costs and product mix. Gross margin for the nine months ended October 1, 2011 was 39.3% down from 41.3% for the nine months ended October 2, 2010.

Operating expenses for the quarter were $58.7 million or 27% of revenue, down from $65.6 million in the prior quarter. Operating expenses for the nine months ended October 1, 2011 were $187.5 million or 28% of revenue.

Net income for the third quarter of 2011 was $19.0 million, or $0.11 per diluted share, down sequentially from $0.17 per diluted share and down from $0.28 per diluted share in the third quarter of 2010. Net income for the nine months ended October 1, 2011 was $74.0 million, or $0.43 per diluted share.

Please see the discussion of non-GAAP financial measures below and the attached supplemental schedule for a reconciliation of GAAP to non-GAAP financial measures.

Outlook:

The Company believes fourth quarter revenues will be between $215 million and $225 million. During the fourth quarter, we expect lower factory utilization as we burn through excess inventory and weak product mix to drive gross margin of 32% to 34%. Fourth quarter non-GAAP net income is expected to be between $0.06 and $0.08 per share. The Company is 90% booked to the midpoint of revenue guidance.







Additional Information Regarding October 1, 2011 Results:
GAAP and non-GAAP financial measures are presented in the tables below (in millions, except for percentage and per share information). Non-GAAP financial measures are reconciled to the corresponding GAAP financial measures in the financial statement portion of this press release.
GAAP RESULTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
Q3 2011
Q2 2011
Change vs. Q2 2011
 
Q3 2010
 
Change vs. Q3 2010
 
Q3 2011
Q3 2010
Change vs. Q3 2010
 
Revenue
$
216.0

$
228.8

(6
)%
 
$
237.0

 
(9
)%
 
$
669.1

$
625.3

7
 %
 
Gross Profit
$
75.4

$
92.1

(18
)%
 
$
98.0

 
(23
)%
 
$
254.9

$
251.9

1
 %
 
Gross Margin %
34.9
%
40.3
%
(5.4
)%
 
41.3
%
 
(6.4
)%
 
38.1
%
40.3
%
(2.2
)%
 
Op Income
$
12.0

$
21.3

(44
)%
 
$
38.9

 
(69
)%
 
$
53.6

$
78.8

(32
)%
 
Net Income
$
16.2

$
16.6

(2
)%
 
$
112.2

 
(86
)%
 
$
45.2

$
148.3

(70
)%
 
Diluted EPS
$
0.09

$
0.10

$
(0.01
)
 
$
0.69

 
$
(0.60
)
 
$
0.26

$
0.92

$
(0.66
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NON-GAAP RESULTS A 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
Q3 2011
Q2 2011
Change vs. Q2 2011
 
Q3 2010
 
Change vs. Q3 2010
 
Q3 2011
Q3 2010
Change vs. Q3 2010
 
Revenue
$
216.0

$
228.8

(6
)%
 
$
237.0

 
(9
)%
 
$
669.1

$
625.3

7
 %
 
Gross Profit
$
78.3

$
94.8

(17
)%
 
$
100.3

 
(22
)%
 
$
262.8

$
258.5

2
 %
 
Gross Margin %
36.3
%
41.4
%
(5.1
)%
 
42.3
%
 
(6.0
)%
 
39.3
%
41.3
%
(2.0
)%
 
Op Income
$
19.6

$
29.2

(33
)%
 
$
44.3

 
(56
)%
 
$
75.3

$
95.4

(21
)%
 
Net Income
$
19.0

$
28.9

(34
)%
 
$
44.2

 
(57
)%
 
$
74.0

$
94.9

(22
)%
 
Diluted EPS
$
0.11

$
0.17

$
(0.06
)
 
$
0.28

 
$
(0.17
)
 
$
0.43

$
0.59

$
(0.16
)
 
A 
Excludes stock based compensation charges, non-cash tax expense, certain entries associated with acquisitions, and other specifically identified non-routine transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 








Conference Call:
TriQuint will host a conference call this afternoon at 2:00 p.m. PDT to discuss the results for the quarter and our future expectations for the company. To access the conference call, please dial (888) 813-6582 domestically, or (706) 643-7082 internationally, approximately ten minutes prior to the beginning of the call, using passcode 15587215. The call can also be heard via webcast accessed through the “Investors” section of TriQuint's web site at: www.triquint.com/investors/events. A replay of the conference call will be available until November 2, 2011.

Non-GAAP Financial Measures:
This press release provides financial measures for non-GAAP net income, diluted earnings per share, gross profit, operating expenses and operating income that exclude equity compensation expense, non-cash tax expense, certain entries associated with acquisitions, and other specifically identified non-routine items, and are therefore not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The non-cash tax expense excludes certain deferred tax charges and benefits that do not result in a tax payment or tax refund. Management believes that these non-GAAP financial measures provide meaningful supplemental information that enhances management's and investors' ability to evaluate TriQuint's operating results.

These non-GAAP financial measures are not intended to be used in isolation and should not be considered a substitute for any other performance measure determined in accordance with GAAP. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, including that other companies may calculate similar non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool. The company compensates for these limitations by providing specific information regarding the GAAP amount excluded from the non-GAAP financial measures. The company further compensates for the limitations of our use of non-GAAP financial measures by presenting comparable GAAP measures more prominently. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our GAAP net income and net income per share.

Forward-Looking Statements:     
This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding TriQuint's anticipated revenues, non-GAAP net income and our bookings to revenue; TriQuint's factory utilization and product mix; expected litigation charges; the impact of our investments in increased capacity; the opportunity to be at the leading edge of RF solutions; growth in demand for TriQuint's products; RF content expansion in smartphones; and expected market growth. These forward-looking statements are statements of management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied in the statements herein or from historical results, due to changes in economic, business, competitive, technological and/or regulatory factors. More detailed information about risk factors that may affect actual results are set forth in TriQuint's reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. These reports can be accessed at the SEC web site, www.sec.gov. Except as required by law, TriQuint undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.
A reader of this release should understand that it is not possible to predict or identify all risk factors and should not consider the risk factors described in TriQuint's filings with the Securities and Exchange Commission to be a complete statement of all potential risks and uncertainties.

Facts About TriQuint
Founded in 1985, TriQuint Semiconductor (NASDAQ: TQNT) is a leading RF solutions supplier and




technology innovator for the world's top communications, defense and aerospace companies. People and organizations around the world need real-time, all-the-time connections; TriQuint products help reduce the cost and increase the performance of connected mobile devices and the networks that deliver critical voice, data and video communications. With the industry's broadest technology portfolio, recognized R&D leadership, and expertise in high-volume manufacturing, TriQuint creates standard and custom products using gallium arsenide (GaAs), gallium nitride (GaN), surface acoustic wave (SAW) and bulk acoustic wave (BAW) technologies. The company has ISO9001-certified manufacturing facilities in the U.S., production in Costa Rica, and design centers in North America and Germany. For more information, visit www.triquint.com.

TriQuint: Connecting the Digital World to the Global Network® 

Steve Buhaly
VP of Finance & Administration, CFO
TriQuint Semiconductor, Inc
Tel: +1.503.615.9401
E-mail: steve.buhaly@tqs.com 
Roger Rowe
Director, Investor Relations
TriQuint Semiconductor, Inc.
Tel: +1.503.615.9189
E-Mail: roger.rowe@tqs.com
Media Contact: Brandi Frye
Director, Marketing Comms
TriQuint Semiconductor, Inc.
Tel: +1.503.615.9488
E-mail: brandi.frye@tqs.com





CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
October 1, 2011
 
July 2, 2011
 
October 2, 2010
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and investments
 
$
147,224

 
$
180,855

 
$
187,170

 
 
Accounts receivable, net
 
140,144

 
135,394

 
141,795

 
 
Inventories
 
 
159,330

 
137,358

 
103,346

 
 
Other current assets
 
 
72,363

 
79,348

 
75,260

 
 
 
Total current assets
 
 
519,061

 
532,955

 
507,571

 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
451,642

 
419,807

 
309,914

 
Other, net
 
 
85,661

 
85,200

 
84,013

 
 
 
Total assets
 
 
$
1,056,364

 
$
1,037,962

 
$
901,498

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
109,522

 
$
107,502

 
$
112,826

 
 
Other accrued liabilities
 
11,731

 
13,315

 
13,647

 
 
 
Total current liabilities
 
121,253

 
120,817

 
126,473

 
 
 
 
 
 
 
 
 
 
 
 
Long-term income tax liability
 
2,183

 
5,167

 
9,247

 
Other long-term liabilities
 
 
10,096

 
10,401

 
8,878

 
 
 
Total liabilities
 
 
133,532

 
136,385

 
144,598

 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' equity
 
 
922,832

 
901,577

 
756,900

 
 
 
Total liabilities and stockholders' equity
 
$
1,056,364

 
$
1,037,962

 
$
901,498

 









  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
October 1, 2011
 
July 2, 2011
 
October 2, 2010
 
October 1, 2011
 
October 2, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
215,988

 
$
228,785

 
$
236,998

 
$
669,096

 
$
625,314

Cost of goods sold
 
140,632

 
136,643

 
139,039

 
414,204

 
373,373

 
Gross profit
 
75,356

 
92,142

 
97,959

 
254,892

 
251,941

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Research, development and engineering
36,479

 
37,955

 
32,978

 
110,910

 
96,397

 
Selling, general and administrative
22,799

 
25,386

 
23,308

 
73,415

 
71,594

 
Litigation expense
4,058

 
7,512

 
2,807

 
16,968

 
5,133

 
 
Total operating expenses
63,336

 
70,853

 
59,093

 
201,293

 
173,124

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
12,020

 
21,289

 
38,866

 
53,599

 
78,817

 
 
 
 
 
 
 
 
 
 
 
 
 
Other (expense) income:
 
 
 
 
 
 
 
 
 
 
Interest income
40

 
106

 
85

 
249

 
308

 
Interest expense
(367
)
 
(354
)
 
(189
)
 
(1,107
)
 
(559
)
 
Foreign currency (loss) gain
(309
)
 
87

 
(202
)
 
(278
)
 
(411
)
 
Recovery of investment
360

 
356

 
—

 
867

 
—

 
Other, net
7

 
71

 
248

 
101

 
316

 
 
Other (expense) income, net
(269
)
 
266

 
(58
)
 
(168
)
 
(346
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax
11,751

 
21,555

 
38,808

 
53,431

 
78,471

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
(4,464
)
 
4,990

 
(73,367
)
 
8,212

 
(69,872
)
Net income
 
$
16,215

 
$
16,565

 
$
112,175

 
$
45,219

 
$
148,343

 
 
 
 
 
 
 
 
 
 
 
 
 
Per Share Data:
 
 
 
 
 
 
 
 
 
 
 
Basic per share net income
$
0.10

 
$
0.10

 
$
0.72

 
$
0.28

 
$
0.96

 
Diluted per share net income
$
0.09

 
$
0.10

 
$
0.69

 
$
0.26

 
$
0.92

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
164,812

 
164,110

 
155,734

 
163,773

 
154,737

 
Diluted
 
171,027

 
173,518

 
162,653

 
173,082

 
161,146








  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(% of revenue)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
October 1, 2011
 
July 2, 2011
 
October 2, 2010
 
October 1, 2011
 
October 2, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
100.0
 %
 
100.0
 %
 
100.0
 %
 
100.0
 %
 
100.0
 %
Cost of goods sold
 
65.1
 %
 
59.7
 %
 
58.7
 %
 
61.9
 %
 
59.7
 %
 
Gross profit
 
34.9
 %
 
40.3
 %
 
41.3
 %
 
38.1
 %
 
40.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Research, development and engineering
16.9
 %
 
16.6
 %
 
13.9
 %
 
16.6
 %
 
15.4
 %
 
Selling, general and administrative
10.6
 %
 
11.1
 %
 
9.8
 %
 
11.0
 %
 
11.4
 %
 
Litigation expense
1.8
 %
 
3.3
 %
 
1.2
 %
 
2.5
 %
 
0.8
 %
 
 
Total operating expenses
29.3
 %
 
31.0
 %
 
24.9
 %
 
30.1
 %
 
27.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
5.6
 %
 
9.3
 %
 
16.4
 %
 
8.0
 %
 
12.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Other (expense) income:
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
0.0
 %
 
0.1
 %
 
0.1
 %
 
0.1
 %
 
0.0
 %
 
Interest expense
 
(0.2
)%
 
(0.2
)%
 
(0.1
)%
 
(0.2
)%
 
(0.1
)%
 
Foreign currency (loss) gain
(0.1
)%
 
0.0
 %
 
(0.1
)%
 
(0.0
)%
 
(0.1
)%
 
Recovery of investment
0.2
 %
 
0.2
 %
 
—
 %
 
0.1
 %
 
—
 %
 
Other, net
 
0.0
 %
 
0.0
 %
 
0.1
 %
 
0.0
 %
 
0.1
 %
 
 
Other (expense) income, net
(0.1
)%
 
0.1
 %
 
(0.0
)%
 
(0.0
)%
 
(0.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax
5.5
 %
 
9.4
 %
 
16.4
 %
 
8.0
 %
 
12.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
(2.0
)%
 
2.2
 %
 
(30.9
)%
 
1.2
 %
 
(11.2
)%
Net income
 
7.5
 %
 
7.2
 %
 
47.3
 %
 
6.8
 %
 
23.7
 %










SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
October 1, 2011
 
July 2, 2011
 
October 2, 2010
 
October 1, 2011
 
October 2, 2010
 
 
 
 
(% of revenues)
 
(% of revenues)
 
(% of revenues)
 
(% of revenues)
 
(% of revenues)
GAAP GROSS PROFIT
$
75,356

34.9
 %
 
$
92,142

40.3
 %
 
$
97,959

41.3
 %
 
$
254,892

38.1
 %
 
$
251,941

40.3
 %
 
Adjustment for stock based compensation charges
1,906

0.9
 %
 
1,585

0.7
 %
 
1,321

0.6
 %
 
4,710

0.7
 %
 
3,407

0.5
 %
 
Adjustment for charges associated with acquisitions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets
1,079

0.5
 %
 
1,079

0.4
 %
 
1,039

0.4
 %
 
3,224

0.5
 %
 
3,124

0.5
 %
NON-GAAP GROSS PROFIT
$
78,341

36.3
 %
 
$
94,806

41.4
 %
 
$
100,319

42.3
 %
 
$
262,826

39.3
 %
 
$
258,472

41.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP OPERATING EXPENSES
$
63,336

29.3
 %
 
$
70,853

31.0
 %
 
$
59,093

24.9
 %
 
$
201,293

30.1
 %
 
$
173,124

27.7
 %
 
Adjustment for stock based compensation charges
(4,230
)
(1.9
)%
 
(5,716
)
(2.5
)%
 
(3,336
)
(1.4
)%
 
(13,632
)
(2.0
)%
 
(9,532
)
(1.5
)%
 
Adjustment for charges associated with acquisitions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in estimate of earnout liability
—

—
 %
 
681

0.3
 %
 
467

0.2
 %
 
681

0.1
 %
 
467

0.1
 %
 
 
Writeoff IPR&D for abandoned development effort
(186
)
(0.1
)%
 
—

—
 %
 
—

—
 %
 
(186
)
—
 %
 
—

—
 %
 
 
Amortization of intangible assets
(195
)
(0.1
)%
 
(208
)
(0.1
)%
 
(213
)
(0.1
)%
 
(619
)
(0.1
)%
 
(1,011
)
(0.2
)%
NON-GAAP OPERATING EXPENSES
$
58,725

27.2
 %
 
$
65,610

28.7
 %
 
$
56,011

23.6
 %
 
$
187,537

28.1
 %
 
$
163,048

26.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP OPERATING INCOME
$
12,020

5.6
 %
 
$
21,289

9.3
 %
 
$
38,866

16.4
 %
 
53,599

8.0
 %
 
78,817

12.6
 %
 
Adjustment for stock based compensation charges
6,136

2.8
 %
 
7,301

3.2
 %
 
4,657

2.0
 %
 
18,342

2.7
 %
 
12,939

2.1
 %
 
Adjustment for charges associated with acquisitions
1,460

0.7
 %
 
606

0.2
 %
 
785

0.3
 %
 
3,348

0.5
 %
 
3,668

0.6
 %
NON-GAAP OPERATING INCOME
$
19,616

9.1
 %
 
$
29,196

12.7
 %
 
$
44,308

18.7
 %
 
$
75,289

11.2
 %
 
$
95,424

15.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP NET INCOME
$
16,215

7.5
 %
 
$
16,565

7.2
 %
 
$
112,175

47.3
 %
 
$
45,219

6.8
 %
 
$
148,343

23.7
 %
 
Adjustment for stock based compensation charges
6,136

2.8
 %
 
7,301

3.2
 %
 
4,657

2.0
 %
 
18,342

2.7
 %
 
12,939

2.1
 %
 
Adjustment for recovery of investment
(360
)
(0.2
)%
 
(356
)
(0.2
)%
 
—

—
 %
 
(867
)
(0.1
)%
 
—

—
 %
 
Adjustment for non-cash tax (benefit) expense
(4,470
)
(2.0
)%
 
4,734

2.1
 %
 
(73,511
)
(31.0
)%
 
7,868

1.2
 %
 
(70,341
)
(11.2
)%
 
Adjustment for charges associated with acquisitions
1,482

0.7
 %
 
628

0.3
 %
 
873

0.3
 %
 
3,432

0.5
 %
 
3,995

0.6
 %
NON-GAAP NET INCOME
$
19,003

8.8
 %
 
$
28,872

12.6
 %
 
$
44,194

18.6
 %
 
$
73,994

11.1
 %
 
$
94,936

15.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP DILUTED EARNINGS PER SHARE
$
0.09

 
 
$
0.10

 
 
$
0.69

 
 
$
0.26

 
 
$
0.92

 
 
Adjustment for stock based compensation charges
0.04

 
 
0.04

 
 
0.02

 
 
0.11

 
 
0.08

 
 
Adjustment for recovery of investment
(0.00
)
 
 
(0.00
)
 
 
—

 
 
(0.01
)
 
 
—

 
 
Adjustment for non-cash tax (benefit) expense
(0.03
)
 
 
0.03

 
 
(0.44
)
 
 
0.05

 
 
(0.42
)
 
 
Adjustment for charges associated with acquisitions
0.01

 
 
0.00

 
 
0.01

 
 
0.02

 
 
0.02

 
NON-GAAP DILUTED EARNINGS PER SHARE
$
0.11

 
 
$
0.17

 
 
$
0.28

 
 
$
0.43

 
 
$
0.59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Our earnings release contains forward looking estimates of non-GAAP gross margin and diluted earnings per share for the fourth quarter of 2011. We provide these non-GAAP measures on a prospective basis for the same reasons that we provide them to investors on a historical basis. The following table provides a reconciliation of GAAP gross margin and diluted earnings per share to non-GAAP gross margin and diluted earnings per share for Q4 2011 based on the mid-point of guidance.

Forward Looking GAAP Gross Margin
31.6
%
 
Adjustment for stock based compensation charges
0.9
%
 
Adjustment for charges associated with acquisitions
0.5
%
Forward Looking non-GAAP Gross Margin
 
33.0
%
 
 
 
 
 
Forward Looking GAAP Diluted Earnings per Share
$
(0.02
)
 
Adjustment for stock based compensation charges
0.04

 
Adjustment for non-cash tax expense
 
0.04

 
Adjustment for charges associated with acquisitions
0.01

Forward Looking non-GAAP Diluted Earnings per Share
$
0.07