Semtech Ends Comcast Warrant Deal Early, Takes $21.5M Hit

The warrant agreement, which began in late 2016, is now fully-vested.

May 4, 2018

2 Min Read

CAMARILLO, Calif. -- Semtech Corporation (Nasdaq:SMTC) a leading supplier of high performance analog, mixed-signal semiconductors and algorithms, today announced that it has accelerated the vesting of the remaining 586,956 unvested shares from the Warrant originally issued to a subsidiary of Comcast (Nasdaq: CMCSA) on October 5, 2016. The Warrant is now fully-vested and exercisable for a total of 869,565 shares.

Comcast has continued to make solid progress on the rollout of its comprehensive LoRaWAN network. As its deployment has matured, Comcast has shifted deployment efforts to better target high-value strategic markets by providing extensive coverage within these markets before expanding regional coverage to new markets. The Company noted that while this change in priorities has been in the best interest of both the Company and Comcast, these priorities were not anticipated in the original vesting terms of the Warrant. In order to encourage the proper allocation of Comcast resources, and in recognition of its network deployment and widespread use-case accomplishments related to the LoRaWAN open protocol, the Company concluded that it was appropriate to accelerate the vesting on the remaining unvested Warrant shares.

“We are pleased with the speed and extensiveness by which Comcast has executed the deployment of Semtech’s LoRa technology to enable its machineQ platform. Comcast’s efforts in the deployment of LoRaWAN networks in various U.S. markets is further helping to establish the LoRaWAN protocol as the de facto standard for LPWAN deployments,” stated Mohan Maheswaran President and Chief Executive Officer of Semtech Corporation.

As a result of this action, the Company expects to record expense related to the Warrant of $21.5 million, including $15.9 million related to this acceleration, which will be reflected as a reduction to GAAP net sales in our first fiscal quarter ended April 29, 2018. Because the Warrant is now fully vested, the Company does not expect to record any additional expense related to the Warrant in future periods. The Company will discuss this in more detail during its fiscal first quarter earnings conference call tentatively scheduled for May 30, 2018.

Semtech Corp. (Nasdaq: SMTC)

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