Microsemi Corporation reported unaudited results for its third quarter of fiscal year 2016 ended July 3, 2016. Net sales for Microsemi's third quarter of fiscal year 2016 were $431.4 million, up 36.0 percent from $317.1 million in the third quarter of 2015. GAAP gross margin for the third quarter of 2016 was a record 61.9 percent, up 760 basis points compared to 54.3 percent in the third quarter of 2015 and up 1,680 basis points from the 45.1 percent in the second quarter of 2016. GAAP operating income and net income for the third quarter of 2016 were $51.2 million and $115.2 million, respectively, and included restructuring, acquisition, divestiture, non-cash foreign exchange and financing related charges of $27.4 million, in addition to a pre-tax gain on divestitures of $125.5 million reflected in net income.
GAAP operating loss and net loss for the second quarter of 2016 were $97.9 million and $212.0 million, respectively. GAAP operating income and net income for the third quarter of 2015 were $25.2 million and $14.7 million, respectively. GAAP operating margin for the third quarter of 2016 was 11.9 percent, up 400 basis points compared to 7.9 percent for the third quarter of 2015 and up 3,390 basis points compared to an operating loss of 22.0 percent for the second quarter of 2016, which reflected acquisition and financing charges related to the PMC acquisition.
GAAP net income per diluted share was $1.00 for the third quarter of 2016 compared to net loss of $1.93 per diluted share for the second quarter of 2016 and net income of $0.15 per diluted share for the third quarter of 2015.
Microsemi ended the third quarter of 2016 with a debt balance of $2.3 billion, following principal payments during the quarter of $371.6 million. The consolidated leverage ratio, calculated in accordance with its credit agreement, was 3.7, net of cash.
"We are pleased with our execution during our third fiscal quarter. We grew organically, while integrating a transformative acquisition, and disposed of non-strategic, lower value businesses," said James J. Peterson, Microsemi's chairman and CEO. "Our growth in profitability continues, which coupled with our improving capital structure will continue to benefit our shareholders."
Microsemi currently expects net sales in the fourth quarter of fiscal year 2016 of between $438 million and $458 million, and expects non-GAAP diluted earnings per share of between $0.83 and $0.97.
