Semtech Announces First Quarter of Fiscal Year 2015 Results
-
Quarterly Revenue of
$132.9 million , Up 5% Sequentially - Book-To-Bill Greater Than 1:1
- Cash Flow From Operations Up 33% Year Over Year
-
Repurchased Approximately 385,000 Shares for
$10.0 million
Net revenue for the first quarter of fiscal year 2015 was
Gross profit margin, computed in accordance with U.S. generally accepted accounting principles (GAAP), for the first quarter of fiscal year 2015 was 58.8 percent compared to 59.9 percent in the first quarter of fiscal year 2014 and 42.5 percent in the fourth quarter of fiscal year 2014.
GAAP net income for the first quarter of fiscal year 2015 was
Included in the GAAP operating results for the fourth quarter of fiscal
year 2014 were charges that included non-cash items of
To facilitate the complete understanding of comparable financial
performance between periods,
- Stock-based compensation expense
- Acquisition related fair value adjustments
- Transaction and integration related expenses
- Intangible amortization and impairments
-
Charges related to the strategic realignment, including:
- Termination benefit costs
- Leasehold and moving costs
- Contract commitment charges
Excluding the items listed above, non-GAAP net income for the first
quarter of fiscal year 2015 was
Non-GAAP gross profit margin for the first quarter of fiscal year 2015 was 59.8 percent. Non-GAAP gross profit margin for the first quarter of fiscal year 2014 was 61.6 percent and 59.6 percent for the fourth quarter of fiscal year 2014.
As of
The results announced today are preliminary, as they are subject to the Company finalizing its closing procedures and customary quarterly review by the Company's independent registered public accounting firm. As such, these results are subject to revision until the Company will have filed its quarterly report on Form 10-Q for the first quarter of fiscal year 2015.
Second Quarter of Fiscal Year 2015 Outlook
-
Net sales are expected to be in the range of
$138.0 million to$146.0 million - GAAP gross profit margin is expected to be in the range of 59.3% to 60.3%
- Non-GAAP gross profit margin is expected to be in the range of 59.6% to 60.6%
-
GAAP SG&A expense is expected to be in the range of
$31.4 million to$32.4 million -
GAAP R&D expense is expected to be in the range of
$28.0 million to$29.0 million -
Stock-based compensation expense, is expected to be approximately
$7.3 million , categorized as follows:$0.4 million cost of sales,$4.4 million SG&A, and$2.5 million R&D -
Amortization of acquired intangible assets is expected to be
approximately
$6.4 million -
Interest and other expense is expected to be approximately
$1.8 million - GAAP tax rate is expected to be in the range of 13% to 15%
- Non-GAAP tax rate is expected to be in the range of 14% to 15%
-
GAAP earnings are expected to be in the range of
$0.18 to$0.24 per diluted share -
Non-GAAP earnings are expected to be in the range of
$0.36 to$0.42 per diluted share - Fully diluted share count is expected to be approximately 67.7 million shares
-
Capital expenditures are expected to be approximately$10.0 million
Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements prepared in accordance with GAAP, this release includes a non-GAAP presentation of gross profit margin, net income and earnings per diluted share and free cash flow. To provide additional insight into the Company's second quarter outlook, this release includes a presentation of forward-looking non-GAAP earnings per diluted share. A further discussion of these non-GAAP financial measures can be found above. The non-GAAP gross profit margin, net income and earnings per diluted share measures exclude stock-based compensation, amortization of acquired intangible assets, and the other items detailed above. The non-GAAP presentation of free cash flow excludes capital expenditures. These non-GAAP measures are provided to enhance the user's overall understanding of the Company's comparable financial performance between periods. In addition, the Company's management generally excludes the items noted above when managing and evaluating the performance of the business. The financial statements provided with this release include reconciliations of these non-GAAP measures to their most comparable GAAP results for the first and fourth quarters of fiscal year 2014 and a reconciliation of forward-looking earnings per diluted share to its most comparable GAAP measure for the second quarter of fiscal year 2015. These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may be inconsistent with similar measures presented by other companies.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, as amended, based on our current
expectations, estimates and projections about our operations, industry,
financial condition, performance, results of operations, and liquidity.
Forward-looking statements are statements other than historical
information or statements of current condition and relate to matters
such as future financial performance, future operational performance,
the anticipated impact of specific items on future earnings, and our
plans, objectives and expectations. Statements containing words such as
"may," "believes," "anticipates," "expects," "intends," "plans,"
"projects," "estimates," "should," "will," "designed to," "projections,"
or "business outlook," or other similar expressions constitute
forward-looking statements. Forward-looking statements involve known and
unknown risks and uncertainties that could cause actual results and
events to differ materially from those projected. Potential factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to: potential
differences between the Company's final results that have not been
determined as of the date of this release and the unaudited results
disclosed in this release, as a result of the completion of the
Company's financial closing procedures, final adjustments, review by the
Company's independent registered public accounting firm and other
developments arising between now and the final results, the continuation
and/or pace of key trends considered to be main contributors to the
Company's growth, such as demand for increased network bandwidth, demand
for increasing energy efficiency in the Company's products or end use
applications of the products, demand for increasing miniaturization of
electronic components; shifts in demand among target customers, and
other comparable changes or protracted weakness in projected or
anticipated markets; competitive changes in the marketplace, including,
but not limited to the pace of growth or adoption rates of applicable
products or technologies; shifts in focus among target customers, and
other comparable changes in projected or anticipated end user markets;
adequate supply of components and materials from our suppliers, and of
our products from our third-party manufacturers, to include disruptions
due to natural causes or disasters, or related extraordinary weather
events; the Company's ability to forecast and achieve anticipated
revenues and earnings estimates in light of periodic economic
uncertainty, to include impacts arising from European and global
economic dynamics; the Company's ability to manage expenses to achieve
anticipated amounts; and the amount and timing of expenditures for
capital equipment deemed necessary or advisable by the Company.
Additionally, forward-looking statements should be considered in
conjunction with the cautionary statements contained in the "Risk
Factors" section and elsewhere in the Company's Annual Report on Form
10-K for the fiscal year ended
About
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CONSOLIDATED STATEMENTS OF INCOME |
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(Table in thousands - except per share amount) |
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Three Months Ended | ||||||||||||
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2014 | 2014 | 2013 | ||||||||||
Q1 2015 | Q4 2014 | Q1 2014 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Net sales | $ | 132,859 | $ | 126,534 | $ | 162,407 | ||||||
Cost of sales | 54,775 | 72,729 | 65,120 | |||||||||
Gross profit | 78,084 | 53,805 | 97,287 | |||||||||
Operating costs and expenses: | ||||||||||||
Selling, general and administrative | 31,696 | 26,421 | 34,794 | |||||||||
Product development and engineering | 27,813 | 37,805 | 34,559 | |||||||||
Intangible amortization and impairments | 6,425 | 36,524 | 7,856 | |||||||||
Goodwill Impairment | - | 116,686 | - | |||||||||
Restructuring charges | 1,001 | 3,086 | - | |||||||||
Total operating costs and expenses | 66,935 | 220,522 | 77,209 | |||||||||
Operating income | 11,149 | (166,717 | ) | 20,078 | ||||||||
Interest expense | (1,387 | ) | (1,712 | ) | (4,060 | ) | ||||||
Interest income and other (expense), net | (278 | ) | (126 | ) | (807 | ) | ||||||
Income (loss) before taxes | 9,484 | (168,555 | ) | 15,211 | ||||||||
Provision for taxes | 1,617 | 42,253 | 434 | |||||||||
Net income (loss) | $ | 7,867 | $ | (210,808 | ) | $ | 14,777 | |||||
Earnings (loss) per share: | ||||||||||||
Basic | $ | 0.12 | $ | (3.12 | ) | $ | 0.22 | |||||
Diluted | $ | 0.12 | $ | (3.12 | ) | $ | 0.22 | |||||
Weighted average number of shares used in computing earnings per share: | ||||||||||||
Basic | 67,300 | 67,523 | 66,956 | |||||||||
Diluted | 67,970 | 67,523 | 68,579 | |||||||||
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CONSOLIDATED BALANCE SHEETS |
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(Table in thousands) |
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2014 | 2014 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 241,154 | $ | 243,194 | ||
Accounts receivable, net | 61,722 | 66,333 | ||||
Inventories | 55,296 | 60,267 | ||||
Deferred tax assets | 2,956 | 2,946 | ||||
Prepaid taxes | 2,529 | 4,993 | ||||
Other current assets | 16,484 | 15,863 | ||||
Total current assets | 380,141 | 393,596 | ||||
Property, plant and equipment, net | 111,221 | 110,121 | ||||
Long-term investments | 3,176 | 3,674 | ||||
Prepaid Taxes | 2,716 | - | ||||
Deferred income taxes | 365 | 348 | ||||
Goodwill | 276,898 | 276,898 | ||||
Other intangible assets, net | 134,205 | 140,944 | ||||
Other assets | 26,534 | 23,359 | ||||
Total assets | $ | 935,256 | $ | 948,940 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: |
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Accounts payable | $ | 38,716 | $ | 40,016 | ||
Accrued liabilities | 33,636 | 44,148 | ||||
Deferred revenue | 5,694 | 7,267 | ||||
Current portion - long term debt | 18,534 | 18,529 | ||||
Deferred tax liabilities | 930 | 930 | ||||
Total current liabilities | 97,510 | 110,890 | ||||
Deferred tax liabilities - non-current | 3,626 | 3,626 | ||||
Long term debt - less current | 268,658 | 273,293 | ||||
Other long-term liabilities | 26,952 | 25,288 | ||||
Stockholders' equity | 538,510 | 535,843 | ||||
Total liabilities & stockholders' equity | $ | 935,256 | $ | 948,940 | ||
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
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(Table in thousands) | |||||||
Three Months Ended | |||||||
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2014 | 2013 | ||||||
(Unaudited) | (Unaudited) | ||||||
Operating activities: | |||||||
Net income | $ | 7,867 | $ | 14,777 | |||
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of acquisitions | 14,902 | 2,373 | |||||
Net cash provided by operating activities | 22,769 | 17,150 | |||||
Net cash used in investing activities | (8,922 | ) | (6,641 | ) | |||
Net cash (used in) by financing activities | (15,887 | ) | (3,273 | ) | |||
Net increase (decrease) in cash and cash equivalents | (2,040 | ) | 7,236 | ||||
Cash and cash equivalents at beginning of period | 243,194 | 223,192 | |||||
Cash and cash equivalents at end of period | $ | 241,154 | $ | 230,428 | |||
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SUPPLEMENTAL INFORMATION - NOTES TO CONSOLIDATED GAAP STATEMENTS OF INCOME |
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(Tables in thousands - except per share amounts) |
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Three Months Ended | ||||||||||||
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2014 | 2014 | 2013 | ||||||||||
Stock-based Compensation Expense | Q1 2015 | Q4 2014 | Q1 2014 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Cost of sales | $ | 363 | $ | 519 | $ | 328 | ||||||
Selling, general and administrative | 4,065 | 193 | 4,882 | |||||||||
Product development and engineering | 2,419 | 2,268 | 3,416 | |||||||||
Total stock-based compensation expense | $ | 6,847 | $ | 2,980 | $ | 8,626 | ||||||
Three Months Ended | ||||||||||||
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2014 | 2014 | 2013 | ||||||||||
Gross |
Q1 2015 | Q4 2014 | Q1 2014 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
GAAP gross profit | $ | 78,084 | $ | 53,805 | $ | 97,287 | ||||||
Adjustments to GAAP gross profit: | ||||||||||||
Stock-based compensation expense | 363 | 519 | 328 | |||||||||
Acquisition related fair value adjustments | - | - | 2,408 | |||||||||
Restructuring charges | 1,056 | 16,776 | - | |||||||||
Impairment Charges | - | 4,342 | - | |||||||||
Non-GAAP gross profit | $ | 79,503 | $ | 75,442 | $ | 100,023 | ||||||
Three Months Ended |
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2014 | 2014 | 2013 | ||||||||||
Net Income - Reconciliation GAAP to Non-GAAP | Q1 2015 | Q4 2014 | Q1 2014 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
GAAP net income (loss) | $ | 7,867 | $ | (210,808 | ) | $ | 14,777 | |||||
Adjustments to GAAP net income: | ||||||||||||
Stock-based compensation expense | $ | 6,847 | $ | 2,980 | $ | 8,626 | ||||||
Acquisition related fair value adjustments | 339 | 339 | 2,747 | |||||||||
Transaction and integration related expenses | 444 | (1,873 | ) | 931 | ||||||||
Intangible amortization and impairments | 6,425 | 6,587 | 7,856 | |||||||||
Restructuring charges | 1,001 | 3,086 | - | |||||||||
Impairment charges | 1,052 | 59,075 | - | |||||||||
Goodwill impairment | - | 116,686 | - | |||||||||
Total before taxes | 16,108 | 186,880 | 20,160 | |||||||||
Associated tax effect | (2,212 | ) | 39,400 | (3,670 | ) | |||||||
Total of supplemental information net of taxes | 13,896 | 226,280 | 16,490 | |||||||||
Non-GAAP net income | $ | 21,763 | $ | 15,472 | $ | 31,267 | ||||||
Diluted GAAP earnings (loss) per share | $ | 0.12 | $ | (3.12 | ) | $ | 0.22 | |||||
Adjustments per above | 0.20 | 3.35 | 0.24 | |||||||||
Diluted non-GAAP earnings per share | $ | 0.32 | $ | 0.23 | $ | 0.46 | ||||||
Three Months Ended | ||||||||||||
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2014 | 2014 | 2013 | ||||||||||
Tax Impact Associated With Supplemental Information | Q1 2015 | Q4 2014 | Q1 2014 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Adjustments to GAAP net income: | ||||||||||||
Stock-based compensation expense | $ | 1,364 | $ | 893 | $ | 1,203 | ||||||
Acquisition related fair value adjustments | - | (13 | ) | 230 | ||||||||
Transaction and integration related expenses | 138 | 208 | 243 | |||||||||
Intangible amortization and impairments | 1,499 | 1,405 | 1,993 | |||||||||
Restructuring charges | 341 | 1,865 | - | |||||||||
Impairment charges | 84 | 9,432 | - | |||||||||
Valuation allowance | (1,214 | ) | (53,191 | ) | - | |||||||
Total of associated tax effect | 2,212 | $ | (39,400 | ) | $ | 3,670 | ||||||
Three Months Ended | ||||||||||||
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2014 | 2014 | 2013 | ||||||||||
Q1 2015 | Q4 2014 | Q1 2014 | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Free |
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$ | 22,769 | $ | 30,598 | 17,150 | |||||||
Net Capital Expenditure | (6,379 | ) | (6,411 | ) | (10,742 | ) | ||||||
Free |
$ | 16,390 | $ | 24,187 | $ | 6,408 | ||||||
Q2 FY15 Earnings Per Share Guidance | ||||||||||||
GAAP to Non-GAAP Reconciliation (net of tax) | ||||||||||||
Low | High | |||||||||||
GAAP EPS | 0.18 | 0.24 | ||||||||||
Stock based compensation expense | 0.08 | 0.08 | ||||||||||
Transaction and integration related expenses | 0.01 | 0.01 | ||||||||||
Amortization of acquired intangibles | 0.09 | 0.09 | ||||||||||
Non-GAAP EPS | 0.36 | 0.42 |
webir@semtech.com
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