Fiscal year 2020 proved to be a challenging year for the industry and Company, as macro headwinds negatively impacted all three of our product groups. However, the Company remained focused on execution and made great strides in several areas. Although in fiscal year 2020 net sales of $547.5 million declined 13% over fiscal year 2019’s record performance, we achieved another record number of new design wins and delivered critical new and disruptive products to our customers, all while driving solid operating cash flow of $118.6 million.
The Company continues to benefit from the three industry themes expected to drive our future growth: IoT for a Smarter Planet, Bandwidth Expansion, and Miniaturization for Mobility. All three of these secular themes are expected to play a significant role in improving people’s lives and creating a more sustainable environment going forward.
The proliferation of long-range, low-power IoT sensor networks (Low Power Wide Area Networks – LPWANs) is potentially the most important technology innovation in generations. Companies across the globe are deploying Semtech’s LoRa® devices and technology to enable IoT connectivity from the land, sea and sky - Everywhere. LoRa’s unique long range and ultra-low power, makes it an ideal technology for preserving natural resources such as water, reducing excess power consumption and managing air quality to help reduce pollution. When connected with Cloud-based analytics, LoRa enables the deployment of intelligent sensor networks across the globe allowing the realization of future smart homes, smart buildings and smart cities.
The insatiable demand for increased bandwidth has never been more evident, as demand on the global communication infrastructure exacerbated by COVID-19 illustrates the need for faster, more reliable and more broadly available connectivity used in telecommuting and particularly video conferencing. Semtech’s optical components go into critical infrastructure platforms that include data centers, passive optical networks (PON) and 5G wireless networks which are expected to grow significantly over the next several years. Our highly integrated solutions provide lower latency, and higher performance typically at lower power and lower cost, thereby improving efficiency while reducing power consumption and increasing bandwidth.
Consumers demand greater mobility in today’s untethered world, which requires smaller, battery-powered devices. Semtech’s protection and proximity sensing products help enable smaller, lower power platforms by protecting the delicate electronic components that can be destroyed by transient voltage spikes while making the device safer to the user by reducing the exposure of radio frequency (RF) signals from higher power radios.
While Semtech is focused on growing net sales and improving our financial metrics, we also understand the impact that our business can have on the environment and the community at-large. The Company takes this responsibility very seriously and has a focus on integrating Environmental, Social and Governance (ESG) factors in its everyday operations ensuring that Environmental, Social and Governance (ESG) factors are being integrated into everything we do. As a result, we design our products with a focus on providing real benefits to the global community, and have put in place numerous Internal Green Programs and initiatives to reinforce our commitment to reduce waste through effective manufacturing control, the use of green technology, and resource reduction in product designs.
Semtech’s employees, located across 32 offices in 15 different countries, with many different cultures, backgrounds and experiences, contribute to an exceptional, globally diverse, innovation machine with outstanding technology differentiation. Entering fiscal year 2021, the Company is celebrating its 60th year in business, and we believe we are very well positioned in our targeted markets. Despite the current challenges, we expect the strength of the secular drivers behind our key growth engines to remain firmly intact. Our exciting new product platforms targeting the Internet of Things, bandwidth expansion, and mobile devices, along with our diverse product offerings, balanced end-market approach, and strong customer relationships, should enable the Company to deliver a solid financial performance in fiscal year 2021.
Mohan Maheswaran
President and Chief Executive Officer
| BALANCE SHEET DATA (in thousands) | FY2016 | FY2017 | FY2018* | FY2019* | FY2020 |
|---|---|---|---|---|---|
| Cash and cash equivalents | $211,810 | $297,134 | $307,923 | $312,120 | $293,324 |
| Working capital | $237,334 | $315,453 | $335,024 | $355,390 | $362,095 |
| Total assets | $911,517 | $1,011,542 | $1,085,776 | $1,062,881 | $1,052,433 |
| Long-term debt, less current portion | $239,177 | $226,524 | $211,114 | $192,845 | $194,743 |
| Other long-term liabilities | $40,402 | $56,780 | $83,441 | $57,441 | $81,849 |
| Total stockholders' equity | $528,051 | $605,263 | $665,013 | $682,681 | $676,954 |
* During the fourth quarter of fiscal year 2020, management identified certain immaterial errors related to share-based compensation expense of market-based awards granted during fiscal years 2018, 2019 and 2020. We concluded that the impact of the errors was not material and have corrected our consolidated financial statements and all other financial information presented in this Annual Report on Form 10-K for these errors.
President and Chief Executive Officer
Executive Vice President, General Counsel and Secretary
Executive Vice President and General Manager, Signal Integrity Products Group
Senior Vice President, Corporate Marketing and Sales, Asia Pacific
Executive Vice President and
Chief Financial Officer
Vice President and General Manager, Protection Products Group
Senior Vice President, Human Resources
Vice President and General Manager, Wireless and Sensing Products Group
Vice President, Sales, Americas and EMEA
Executive Vice President, Worldwide Operations and Information Technology
Executive Vice President and Chief Quality Officer
Chairman of the Board, Nominating and Governance Committee Chair, Semtech Corporation; Chairman of the Board, The Kavli Foundation; lnvestor
Vice Chairman, Semtech Corporation; CEO, Endural, LLC and its predecessors
President, Applications Group, Vonage; Former SVP Sales, Magic Leap; Executive positions, SAP, Hewlett-Packard, Vesper and Nextel
Compensation Committee Chair, Semtech Corporation; CEO, Palagon Partners, LLC; Director, Lantronix, lnc.; Former Chairman and Director, Emulex Corporation
CEO Advisor to multiple startups; and Director, Xilinx, Inc.; Former CEO and Director, Teridion; Former SVP and GM, Hewlett-Packard; Executive positions, 3Com, Tropos Networks and Cisco Systems
Strategic Advisor, Diversis Capital, LLC; Advisory Board Member, a couple of private companies; Former COO, Huawei Enterprise USA, Inc.; Director, ServicePower and Knowles Corporation
Audit Committee Chair, Semtech Corporation; CFO, Adaptive Spectrum and Signal Alignment, Inc.; Former COO and CFO of Kilopass Technology, lnc.; Former CFO of eSilicon Corporation
President and Chief Executive Officer, Semtech Corporation
Independent Business Consultant; Former Board Member, two private companies; Former President and CEO, Attensity Inc.; Former CEO and Chairman, Platinum Software Corp and Silicon Systems Inc.
Board Member, Aristocrat Leisure Limited; Former CEO, President and Director, Trident Microsystems, Inc.
Computershare
462 South 4th Street, Ste. 1600
Louisville, KY 40202
Shareholder Inquiries: 877-868-8019
Foreign Shareowners: 781-575-2879
www.computershare.com/investor
Nasdaq, Ticker Symbol: SMTC
200 Flynn Road, Camarillo, CA 93012
Telephone: 805-498-2111
Email: webir@semtech.com
Telephone: 805-480-2004
This document may contain certain forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company’s financial position and long-term projections and strategy. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties discussed in our filings with the Securities and Exchange Commission. The Company’s actual results may differ materially from expected results. We undertake no obligation to update or revise forwardlooking statements, whether as a result of new information, future events or otherwise.
Semtech, the Semtech logo, ClearEdge®, LoRa® and LoRaWAN® and the LoRa Alliance® are registered trademarks or service marks, and FiberEdge™, and LoRa Cloud™ are trademarks or service marks, of Semtech Corporation.
