Allegro MicroSystems CFO Departs, Interim Appointed; Q1 Results Reported

TL;DR

Allegro CFO out Aug 16, interim Guido steps in. Q1 sales $174.4M, net loss $1.2M.

AI Summary

On July 23, 2024, Allegro MicroSystems, Inc. announced the departure of Chief Financial Officer, David Berube, effective August 16, 2024. Concurrently, the company appointed Christopher Guido as interim CFO. Allegro also reported its financial results for the first quarter ended June 28, 2024, with net sales of $174.4 million and a net loss of $1.2 million.

Why It Matters

The departure of a CFO can signal strategic shifts or financial concerns, while the Q1 results provide insight into the company's current performance and profitability.

Risk Assessment

Risk Level: medium — CFO departures and reported net losses can indicate underlying business challenges or uncertainty.

Key Numbers

• $174.4M — Q1 2024 Net Sales (Represents the company's revenue for the first quarter.)
• $1.2M — Q1 2024 Net Loss (Indicates the company's profitability for the first quarter.)

Key Players & Entities

• Allegro MicroSystems, Inc. (company) — Registrant
• David Berube (person) — Departing Chief Financial Officer
• August 16, 2024 (date) — Effective date of CFO departure
• Christopher Guido (person) — Appointed Interim Chief Financial Officer
• June 28, 2024 (date) — End of first fiscal quarter
• $174.4 million (dollar_amount) — Net sales for Q1 2024
• $1.2 million (dollar_amount) — Net loss for Q1 2024

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share ALGM The Nasdaq Stock Mar
• $300 million — t by us of net proceeds of no less than $300 million from incremental term loans under the C
• $32,000,000 — available under the Credit Agreement by $32,000,000, (iii) permit under the Credit Agreemen

Filing Documents

• dp214872_8k.htm (8-K) — 50KB
• dp214872_ex1001.htm (EX-10.1) — 86KB
• dp214872_ex1002.htm (EX-10.2) — 78KB
• dp214872_ex9901.htm (EX-99.1) — 63KB
• 0000950103-24-010519.txt ( ) — 501KB
• algm-20240723.xsd (EX-101.SCH) — 3KB
• algm-20240723_lab.xml (EX-101.LAB) — 33KB
• algm-20240723_pre.xml (EX-101.PRE) — 22KB
• dp214872_8k_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Share Repurchase Agreement Pursuant to the terms of a share repurchase agreement (the "Share Repurchase Agreement") entered into by and between Allegro MicroSystems, Inc. (the "Company", "our", "us", "we" or "Allegro") and Sanken Electric Co., Ltd. ("Sanken") on July 23, 2024, we have agreed to repurchase from Sanken in a privately negotiated transaction 38,767,315 shares of our common stock at a price per share equal to the price per share at which the underwriters will purchase from us shares of our common stock in the public underwritten equity offering that the Company has separately announced today (the "Equity Offering"). The shares being repurchased by us pursuant to the Share Repurchase Agreement will be retired. On an as adjusted basis after giving effect to the Equity Offering and the transactions contemplated by the Share Repurchase Agreement, Sanken will hold approximately 33.2% (or 32.5% if the underwriters' option to purchase additional shares of our common stock is exercised in full) of our outstanding common stock. The repurchase by us of a number of shares of common stock equal to the number of shares being offered in the Equity Offering (excluding the underwriters' option to purchase additional shares of our common stock) is expected to occur one business day after the closing of the Equity Offering (the "First Closing"). We intend to fund the First Closing with the net proceeds of the Equity Offering (excluding any net proceeds from the exercise of the underwriters' option to purchase additional shares of our common stock). The repurchase of the remainder of the shares of our common stock that we expect to repurchase from Sanken is expected to occur substantially concurrently with the receipt by us of the proceeds from the exercise of the underwriters' option to purchase additional shares of our common stock or borrowings under the Credit Agreement (as defined below) or, otherwise, on ano

02 Results of Operations and Financial Condition

Item 2.02 Results of Operations and Financial Condition. On July 23, 2024, the Company filed a preliminary prospectus supplement (the "Preliminary Prospectus Supplement") in connection with the Equity Offering that contained preliminary financial results for the quarter ended June 28, 2024. The full text of the preliminary results is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such filing.

02. Departure of Directors or Certain Officers; Election

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On July 23, 2024, Kojiro (Koji) Hatano notified our Board of his decision to resign from the Board, effective as of the First Closing of the share repurchase. Mr. Hatano's resignation was a result of Sanken's anticipated reduction in ownership of our common stock as a result of the transactions contemplated by the Share Repurchase Agreement and pursuant to the Second Amended and Restated Stockholders Agreement, and not the result of any disagreement between Mr. Hatano and the Company or its management on any matter relating to the Company's operations, policies or practices.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On July 23, 2024, the Company announced in the Preliminary Prospectus Supplement that it anticipates amending its existing credit agreement (the "Credit Agreement"), dated as of June 21, 2023 and amended as of October 31, 2023, by and among the Company, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and each lender from time to time party thereto, to (i) incur new incremental term loans to finance a portion of the repurchase of shares of our common stock from Sanken pursuant to the terms of the Share Repurchase Agreement, (ii) increase the amount of revolving commitments available under the Credit Agreement by $32,000,000, (iii) permit under the Credit Agreement the repurchase contemplated by the Share Repurchase Agreement and (iv) make certain other changes. There can be no assurance that the incremental term loans or the increase to revolving commitments under the Credit Agreement (or the aforementioned amendments) will be completed on the terms described herein or at all. The information in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any filing of the Company under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains forward-looking covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements, other than statements of historical facts, contained in this Current Report on Form 8-K including statements regarding the Share Repurchase Agreement, the Second Amended and Restated Stockholders Agreement, the Credit Agreement, future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors affecting our business, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as "aim," "may," "will," "should," "expect," "exploring," "plan," "anticipate," "could," "intend," "target," "project," "would," "contemplate," "believe," "estimate," "predict," "potential," "seek," or "continue" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance or achievements, and one should avoid placing undue reliance on such statements.

Forward-looking statements are based on our management's

Forward-looking statements are based on our management's current expectations, beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 29, 2024, filed with the U.S. Securities and Exchange Commission on May 23, 2024. These risks and uncertainties include, but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions or customer demand; shifts in our product mix, customer mix or channel mix, which could negatively impact our gross margin; the cyclical nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business; our ability to compensate for decreases in average selling prices of our products and increases in input costs; our ability to manage any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products; our ability to accurately predict our quarterly n

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Share Repurchase Agreement, dated as of July 23, 2024, between the Company and Sanken. 10.2 Second Amended and Restated Stockholders Agreement, dated as of July 23, 2024, between the Company and Sanken. 99.1 Preliminary Results for Quarter Ended June 28, 2024. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALLEGRO MICROSYSTEMS, INC. Date: July 23, 2024 By: /s/ Derek P. D'Antilio Derek P. D'Antilio Executive Vice President, Chief Financial Officer and Treasurer

View Full Filing

View this 8-K filing on SEC EDGAR