Semtech Corp. Logo

Print Print page   Email Email page   PDF Download PDF    Add to Briefcase
« Previous Release | Next Release »



Semtech Announces Fourth Quarter And Fiscal Year 2017 Results


CAMARILLO, Calif., March 08, 2017 (GLOBE NEWSWIRE) -- Semtech Corporation (Nasdaq:SMTC), a leading supplier of analog and mixed-signal semiconductors, today reported unaudited financial results for its fourth quarter and fiscal year 2017, which ended January 29, 2017. Net sales computed in accordance with U.S. generally accepted accounting principles ("GAAP"), for fourth quarter and for fiscal year 2017 were $140.0 million and $544.3 million, respectively, after being reduced by $1.7 million and $5.4 million of share-based compensation associated with the previously-announced issuance of a Warrant to Comcast.  Excluding the offset associated with the Warrant, net sales were $141.8 million and $549.7 million, respectively ("non-GAAP net sales").

Highlights for the Fourth Quarter and Fiscal Year 2017

Results on a GAAP basis for the Fourth Quarter and Fiscal Year 2017
($ millions except for earnings per diluted share data)

 
  4QFY17FY2017
Net Sales   $  140.0 $  544.3 
Gross Margin  59.6% 59.7%
Operating Expense $  68.2 $   240.8 
Operating Margin  10.9% 15.4%
Net Income   $  8.0 $  54.7 
Earnings Per Diluted Share    $  0.12    $  0.83 

To facilitate a complete understanding of comparable financial performance between periods, the Company also presents performance results net of certain non-cash items and items that are not considered reflective of the Company's core results over time.  The Company's non-GAAP measures of net sales, gross margin, net income, earnings per diluted share, and free cash flow exclude certain items as described below under "Non-GAAP Financial Measures."

Results on a Non-GAAP basis for the Fourth Quarter and Fiscal Year 2017 (see list of non-GAAP items and the reconciliation of these to the most comparable GAAP measures set forth in the tables below):

($ millions except for earnings per diluted share data)

 
  4QFY17FY2017
Net Sales $  141.8 $  549.7 
Gross Margin  60.5% 60.4%
Operating Expense $  52.2 $   207.6 
Operating Margin  23.7% 22.6%
Net Income $  24.5 $  91.0 
Earnings Per Diluted Share $  0.37 $  1.38 

Mohan Maheswaran, Semtech's President and Chief Executive Officer, stated, "We were pleased to deliver better than seasonal Q4 results that were once again at the upper end of our guidance led by growth in the enterprise computing, communications and industrial end-markets.  The Company grew FY2017 non-GAAP net sales 12% over the prior year while delivering non-GAAP earnings growth at more than 5 times that rate by maintaining non-GAAP gross margins at the upper end of our target range and through Opex discipline.  We enter FY2018 with tremendous momentum driven by our growth markets that include IoT, hyper-scale datacenters and mobile devices which should continue to drive our growth and help the Company to outperform the Industry and peers."

GAAP First Quarter of Fiscal Year 2018 Outlook

Non-GAAP First Quarter of Fiscal Year 2018 Outlook

Webcast and Conference Call
Semtech will be hosting a conference call today to discuss its fourth quarter and fiscal year 2017 results at 2:00 p.m. Pacific time.  An audio webcast will be available on Semtech's website at www.Semtech.com in the "Investor Relations" section under "Investor News."  A replay of the call will be available through April 8, 2017 at the same website or by calling (855) 859-2056 and entering conference ID 40360389.

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 net sales, gross margin, net income, earnings per diluted share, and free cash flow.  The Company's measure of free cash flow is calculated as cash flow from operations less net capital expenditures.  The Company's non-GAAP measures of net sales, gross margin, net income and earnings per diluted share exclude the following items, if any:

To provide additional insight into the Company's first quarter outlook, this release also includes a presentation of forward-looking non-GAAP measures including net sales, gross margin, tax rate and earnings per diluted share. 

These non-GAAP financial measures are adjusted to exclude the items identified above because such items are either operating expenses which would not otherwise have been incurred by the Company in the normal course of the Company's business operations or are not reflective of the Company's core results over time.  These excluded items may include recurring as well as non-recurring items, and no inference should be made that all of these adjustments are unusual, infrequent or non-recurring.  For example: certain restructuring and integration related expenses (which consist of employee termination costs, facility closure or lease termination costs, and contract termination costs) may be considered recurring given the Company's ongoing efforts to be more cost effective and efficient; certain acquisition and disposition-related adjustments or expenses may be deemed recurring given the Company's regular evaluation of potential transactions and investments; and certain litigation expenses or dispute settlement charges or gains (which may include estimated losses for which we have established a reserve, as well as any actual settlements, judgments, or other resolutions against, or in favor of, the Company related to litigation, arbitration, disputes or similar matters, and insurance recoveries received by the Company related to such matters) may be viewed as recurring given that the Company may from time to time be involved in, and may resolve, litigation, arbitration, disputes, and similar matters.

Notwithstanding that certain adjustments, charges, costs or expenses may be considered recurring, in order to provide meaningful comparisons, the Company believes that it is appropriate to exclude such items because they are not reflective of the Company's core results and tend to vary based on timing, frequency and magnitude.

These non-GAAP financial 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 third and fourth quarters of fiscal year 2017 and the fourth quarter of fiscal year 2016 along with a reconciliation of forward-looking earnings per diluted share to its most comparable GAAP measure for the first quarter of fiscal year 2018.  The Company is unable to include a reconciliation of the forward-looking non-GAAP measure of non-GAAP tax rate to the corresponding GAAP measure as it is not available without unreasonable efforts due to the high variability and low visibility with respect to the charges which are excluded from this non-GAAP measure.  We expect the variability of the above charges to have a potentially significant impact on our GAAP financial results. These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may not be consistent 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 the Company's current expectations, estimates and projections about its 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 including the first quarter of fiscal year 2018 outlook, future operational performance, the anticipated impact of specific items on future earnings, and the Company's 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 unaudited results disclosed in this release and the Company's final results when disclosed in its Annual Report on Form 10-K as a result of the completion of the Company's financial closing procedures, final adjustments, annual audit by the Company's independent registered public accounting firm, and other developments arising between now and the disclosure of the final results; the Company's ability to forecast its tax rates due to changing income in higher or lower tax jurisdictions and other factors that contribute to the volatility of the Company's effective tax rates and impact anticipated tax benefits; the Company's ability to manage expenses to achieve anticipated 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; the Company's ability to realize expected synergies and benefits from its acquisitions and dispositions; the Company's ability to accurately forecast the amount and timing of the share-based compensation associated with the vesting of the Warrant issued to Comcast; 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, and demand for increasing miniaturization of electronic components; adequate supply of components and materials from the Company's suppliers, to include disruptions due to natural causes or disasters, weather, or other extraordinary events; the Company's ability to forecast and achieve anticipated net sales and earnings estimates in light of periodic economic uncertainty, to include impacts arising from European, Asian and global economic dynamics; and the amount and timing of expenditures for capital equipment.  Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2016, its Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission, and in material incorporated therein, including, without limitation, information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors".  In light of the significant risks and uncertainties inherent in the forward-looking information included herein that may cause actual performance and results to differ materially from those predicted, any such forward-looking information should not be regarded as representations or guarantees by the Company of future performance or results, or that its objectives or plans will be achieved or that any of its operating expectations or financial forecasts will be realized.  Reported results should not be considered an indication of future performance.  Investors are cautioned not to place undue reliance on any forward-looking information contained herein, which reflect management's analysis only as of the date hereof.  Except as required by law, the Company assumes no obligation to publicly release the results of any update or revision to any forward-looking statements that may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated or future events, or otherwise.

About Semtech
Semtech Corporation is a leading supplier of analog and mixed-signal semiconductors for high-end consumer, enterprise computing, communications and industrial equipment.  Products are designed to benefit the engineering community as well as the global community.  The Company is dedicated to reducing the impact it, and its products, have on the environment.  Internal green programs seek to reduce waste through material and manufacturing control, use of green technology and designing for resource reduction.  Publicly traded since 1967, Semtech is listed on the NASDAQ Global Select Market under the symbol SMTC.  For more information, visit http://www.semtech.com.

Semtech, and the Semtech logo are registered marks of Semtech Corporation and/or its subsidiaries.

SMTC-F

SEMTECH CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Table in thousands - except per share amount) 
            
  Three Months Ended Twelve Months Ended 
  January 29, October 30, January 31, January 29, January 31, 
   2017   2016   2016   2017   2016  
  Q4 2017 Q3 2017 Q4 2016 Q4 2017 Q4 2016 
  (Unaudited) (Unaudited)   (Unaudited)   
            
Net sales $   140,031   $   137,185    $   118,609   $   544,272   $   490,219   
Cost of sales  56,533     56,120     49,059     219,410     197,109   
Gross profit  83,498    81,065    69,550      324,862      293,110   
Operating costs and expenses:           
Selling, general and administrative  35,005     34,916     33,768     136,426     136,151  
Product development and engineering  26,203      24,800     28,966     102,500     113,737  
Intangible amortization and impairments  6,284     6,286     6,411      25,301     25,059  
Changes in the fair value of contingent earn-out obligations     (53)    (25,036)    (2,744)    (215)    (16,362) 
Gain on disposition of business operations    (477)  -   -     (25,513)  -  
Restructuring charges    1,248     1,000   -     2,282      4,526  
Total operating costs and expenses  68,210   41,966   66,401     240,781     263,111   
Operating income    15,288       39,099      3,149      84,081      29,999   
Interest expense, net  (3,443 )    (1,890)    (2,121)    (9,300)    (7,819) 
Non-operating expense, net  (850)    (690)    (649)    (1,721)    (1,801) 
Income before taxes     10,995      36,519      379      73,060      20,379   
Provision (benefit) for taxes     2,975     5,743     (868)    18,399     8,882  
Net income  $   8,020   $   30,776   $   1,247   $   54,661   $   11,497   
            
Earnings  per share:            
Basic $  0.12  $  0.47  $  0.02  $  0.84  $  0.18  
Diluted $   0.12  $  0.46  $  0.02   $  0.83  $  0.17  
            
Weighted average number of shares used in computing earnings per share:           
Basic  65,716   65,549   64,934   65,427   65,657  
Diluted  66,757   66,206   65,225   66,109   65,961  
            
             
SEMTECH CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Table in thousands) 
            
  January 29, January 31,       
   2017   2016        
  (Unaudited)         
ASSETS           
Current assets:           
  Cash and cash equivalents $  297,134  $  211,810        
  Accounts receivable, net    51,441     44,132        
  Inventories      65,872     63,875        
  Prepaid taxes    5,563     5,236        
  Other current assets    18,418      16,168        
  Total current assets    438,428     341,221        
            
Non-current assets:           
  Property, plant and equipment, net    108,910     101,006        
  Deferred tax assets    8,081     7,354        
  Goodwill    329,703     329,703        
  Other intangible assets, net    61,773     88,430        
  Other assets    67,235     43,803        
  Total assets $   1,014,130   $   911,517         
            
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:           
  Accounts payable $  41,960  $  35,486        
  Accrued liabilities    54,524     41,204        
  Deferred revenue    12,059     8,628        
  Current portion - long term debt    14,432     18,569        
  Total current liabilities    122,975     103,887        
            
Non-current liabilities:           
  Deferred tax liabilities - non-current    9,470     6,802        
  Long term debt - less current    226,524     239,177        
  Other long-term liabilities    49,899     33,600        
  Stockholders' equity    605,262     528,051        
  Total liabilities & stockholders' equity $   1,014,130   $   911,517         
            
  
SEMTECH CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Table in thousands) 
            
  Twelve Months Ended       
  January 29, January 31,       
   2017   2016        
  (Unaudited)         
            
Net income  $   54,661   $   11,497         
            
Net cash provided by operating activities    117,612     102,076        
Net cash used in investing activities    (13,515)    (66,827)       
Net cash used in financing activities    (18,773)    (53,767)       
Net increase (decrease) in cash and cash equivalents    85,324     (18,518)       
Cash and cash equivalents at beginning of period    211,810     230,328         
Cash and cash equivalents at end of period $   297,134   $   211,810         
            
            
SEMTECH CORPORATION 
SUPPLEMENTAL INFORMATION - NOTES TO CONSOLIDATED GAAP STATEMENTS OF INCOME 
(Tables in thousands - except per share amounts) 
            
  Three Months Ended Twelve Months Ended 
  January 29, October 30, January 31, January 29, January 31, 
   2017   2016   2016   2017   2016  
Share-based Payments Q4 2017 Q3 2017 Q4 2016 Q4 2017 Q4 2016 
  (Unaudited) (Unaudited)   (Unaudited)   
Revenue offset $  1,727  $  3,669  $-  $  5,396  $-  
Cost of sales    482      360     484     1,591     1,555  
Selling, general and administrative    6,018     3,965     4,049     18,019     10,055  
Product development and engineering    1,402     1,401   2,538     5,822     8,858  
Total stock-based compensation expense $  9,629  $  9,395  $  7,071  $  30,828  $  20,468  
            
            
  Three Months Ended Twelve Months Ended 
  January 29, October 30, January 31, January 29, January 31, 
   2017   2016   2016   2017   2016  
Gross Profit - Reconciliation GAAP to Non-GAAP Q4 2017 Q3 2017 Q4 2016 Q4 2017 Q4 2016 
  (Unaudited) (Unaudited)   (Unaudited)   
            
GAAP gross profit $   83,498   $   81,065   $    69,550   $   324,862   $   293,110   
Adjustments to GAAP gross profit:           
  Revenue: share-based payment- Comcast Warrant  1,727     3,669   -   5,396   -  
  Cost of sales: other share-based payments    482     360     484     1,591     1,555  
  Acquisition related fair value adjustments  -   -   -   -     265  
Non-GAAP gross profit $   85,707   $   85,094   $   70,034   $   331,849   $   294,930   
            
             
  Three Months Ended Twelve Months Ended 
  January 29, October 30, January 31, January 29, January 31, 
   2017   2016   2016   2017   2016  
Net Income - Reconciliation GAAP to Non-GAAP Q4 2017 Q3 2017 Q4 2016 Q4 2017 Q4 2016 
  (Unaudited) (Unaudited)   (Unaudited)   
            
GAAP net income $   8,020   $   30,776   $   1,247   $   54,661   $   11,497   
            
  Adjustments to GAAP net income:            
  Share-based compensation $  9,629  $  9,395  $  7,071  $  30,828  $  20,468  
  Intangible amortization and impairments    6,284     6,286     6,567     25,301     26,270  
  Gain on disposition of business operations    (438)    (25,036)  -     (25,474)  -  
  Transaction and integration related expenses, including debt refinance costs    1,827     224     1,118     4,474     7,147  
  Acquisition related earn-out    191     603      (1,925)    2,012     (12,105) 
  Environmental and other reserves    570     1,123   -     2,693     2,855  
  Litigation cost net of recoveries    289     50     94     (1,054)    593  
  Restructuring charges    1,248     1,034       2,282     4,526  
  Impairment of cost method investment  -   -     -     600  
  Total Non-GAAP adjustments before taxes    19,600     (6,321)    12,925     41,062     50,354  
  Associated tax effect    (3,144)    (196)    (3,372)    (4,725)    (5,449) 
  Total of supplemental information net of taxes    16,456     (6,517)    9,553     36,337     44,905  
Non-GAAP net income $   24,476   $   24,259   $   10,800   $   90,998   $   56,402   
            
Diluted GAAP earnings per share $  0.12  $  0.46  $  0.02  $  0.83  $  0.17  
  Adjustments per above    0.25      (0.09)    0.15     0.55     0.69  
Diluted non-GAAP earnings per share $  0.37  $  0.37  $  0.17  $  1.38  $  0.86  
            
            
  Three Months Ended Twelve Months Ended 
  January 29, October 30, January 31, January 29, January 31, 
   2017   2016   2016   2017   2016  
Tax Impact Associated With Supplemental Information Q4 2017 Q3 2017 Q4 2016 Q4 2017 Q4 2016 
  (Unaudited) (Unaudited)   (Unaudited)   
  Adjustments to GAAP net income:           
  Share-based compensation $  2,886  $  2,769  $  1,607  $  8,580  $  6,366  
  Intangible amortization and impairments    1,696     1,685     1,751     6,889     6,600  
  Gain on disposition of business operations    (121)    (6,839)      (6,959)  -  
  Acquisition related earn-out    12     8     (634)    142     (4,442) 
  Valuation allowance against deferred tax assets    (2,537)    2,309     296     (5,913)    (6,275) 
  Other    1,208     264     352     1,986     3,200  
  Total of associated tax effect $  3,144  $  196  $  3,372  $  4,725  $  5,449  
            
             
  Three Months Ended     
  January 29, October 30, January 31,     
   2017   2016   2016      
  Q4 2017 Q3 2017 Q4 2016     
  (Unaudited) (Unaudited)       
Free Cash Flow:           
Cash Flow from Operations $  32,918  $  39,227  $  34,460      
Net Capital Expenditure  (19,166)  (8,406)  (2,321)     
Free Cash Flow: $   13,752   $   30,821   $   32,139       
            
            
Q1FY18 EPS Guidance Range Reconciliation           
GAAP to Non-GAAP Reconciliation (net of tax)           
  Low  High       
GAAP EPS    0.16     0.20        
            
Stock based compensation expense    0.15     0.15        
Transaction, restructuring, and acquisition related expenses    0.01     0.01         
Amortization of acquired intangibles    0.07     0.07        
Non-GAAP EPS $  0.39  $  0.43        
            


Contact:

Sandy Harrison

Semtech Corporation

(805) 480-2004

webir@semtech.com

Primary Logo

Source: Semtech Corporation

News Provided by Acquire Media

Close window | Back to top