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Semtech Announces Second Quarter of Fiscal Year 2010 Results


CAMARILLO, Calif., Aug 19, 2009 (BUSINESS WIRE) -- SEMTECH CORPORATION (NASDAQ: SMTC), a leading producer of high performance analog and mixed-signal semiconductors, today reported un-audited financial results for its second quarter of fiscal year 2010 that ended July 26, 2009.

Net revenues for the second quarter of fiscal year 2010 were $66.3 million, down 15 percent from the second quarter of fiscal year 2009 and up 10 percent compared to the first quarter of fiscal year 2010.

Net income for the second quarter of fiscal year 2010, computed in accordance with U.S. generally accepted accounting principles (GAAP), was $7.4 million or 12 cents per diluted share. GAAP net income was $11.7 million or 19 cents per diluted share in the second quarter of fiscal year 2009 and $4.9 million or 8 cents per diluted share in the first quarter of fiscal year 2010.

GAAP gross profit margin for the second quarter of fiscal year 2010 was 54.5 percent compared to 54.9 percent in the second quarter of fiscal year 2009 and 54.5 percent in the first quarter of fiscal year 2010.

Semtech had $291.1 million of cash, cash equivalents and investments as of July 26, 2009, which was up from $270.5 million at the end of the first quarter of fiscal year 2010.

Mohan Maheswaran, Semtech's President and Chief Executive Officer, commented, "Semtech delivered solid financial results in the second quarter as we saw stronger demand from the high end consumer, communications and computing segments. Semtech's strategy combined with solid execution are yielding positive results for the company."

The results announced today are preliminary, as they are subject to customary quarterly review procedures by the Company's independent registered public accounting firm. As such, these results are subject to revision until the Company files its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2010.

Third Quarter Outlook

Semtech estimates net sales for the third quarter, which ends October 25, 2009, will increase 6 percent to 10 percent on a sequential basis. GAAP earnings for the third quarter of fiscal year 2010 are expected to be 12 to 14 cents per diluted share.

Forward-Looking and Cautionary Statements This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. 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. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected. Important factors that could cause actual results to differ materially include, but are not limited to: the depth, extent and duration of current and continuing world wide economic disruption and uncertainty, at both a macro level, and as impacts the Company's products, industry, and market sector, and the Company's ability to forecast and achieve anticipated revenues and earnings estimates in light of continuing economic uncertainty. 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 January 25, 2009, in the Company's other filings with the SEC, and in material incorporated therein by reference. Forward-looking statements should not be regarded as representations by the Company that its objectives or plans will be achieved or that any of its operating expectations or financial forecasts will be realized. The Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Semtech

Semtech Corporation is a leading supplier of analog and mixed-signal semiconductors for high-end consumer, 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 CORPORATION
GAAP CONSOLIDATED STATEMENTS OF INCOME

(Table in thousands - except per share amount)

Three Months Ended Six Months Ended
July 26, July 27, April 26, July 26, July 27,
2009 2008 2009 2009 2008
Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales$66,317$77,960$60,077$126,394$152,404
Cost of sales 30,165 35,165 27,345 57,510 68,818
Gross profit36,15242,79532,73268,88483,586
Operating costs and expenses:
Selling, general and administrative 16,581 18,787 17,267 33,848 37,408
Product development and engineering 10,591 10,434 10,085 20,675 21,506
Acquisition related items 302 273 303 605 545
Restructuring charge 1601401883482,310
Total operating costs and expenses 27,634 29,634 27,843 55,476 61,769
Operating income8,51813,1614,88913,40821,817
Interest and other income, net 282 1,241 1,290 1,572 2,980
Income before taxes8,80014,4026,17914,98024,797
Provision for taxes 1,380 2,738 1,236 2,616 5,056
Net income$7,420$11,664$4,943$12,364$19,741
Earnings per share:
Basic $ 0.12 $ 0.19 $ 0.08 $ 0.20 $ 0.32
Diluted $ 0.12 $ 0.19 $ 0.08 $ 0.20 $ 0.32
Weighted average number of shares:
Basic 60,493 61,839 60,321 60,429 61,278
Diluted 61,044 62,584 60,593 60,885 62,135
SEMTECH CORPORATION
GAAP CONSOLIDATED STATEMENTS OF INCOME

(Table stated as a percentage of revenue)

Three Months Ended Six Months Ended
July 26, July 27, April 26, July 26, July 27,
2009 2008 2009 2009 2008
Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales100.0%100.0%100.0%100.0%100.0%
Cost of sales 45.5% 45.1% 45.5% 45.5% 45.2%
Gross profit54.5%54.9%54.5%54.5%54.8%
Operating costs and expenses:
Selling, general and administrative 25.0% 24.1% 28.7% 26.8% 24.5%
Product development and engineering 16.0% 13.4% 16.8% 16.4% 14.1%
Acquisition related items 0.5% 0.4% 0.5% 0.5% 0.4%
Restructuring charges 0.2% 0.2% 0.3% 0.3% 1.5%
Total operating costs and expenses 41.7% 38.0% 46.3% 43.9% 40.5%
Operating income12.8%16.9%8.1%10.6%14.3%
Interest and other income, net 0.4% 1.6% 2.1% 1.2% 2.0%
Income before taxes13.3%18.5%10.3%11.9%16.3%
Provision/(credit) for taxes 2.1% 3.5% 2.1% 2.1% 3.3%
Net income11.2%15.0%8.2%9.8%13.0%

Note: Percentages may not add or calculate precisely due to rounding

SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS

(Table in thousands)

July 26, January 25,
2009 2009
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 115,910 $ 147,666
Temporary investments 151,628 98,735
Receivables, less allowances 25,581 27,467
Inventories 26,644 27,986
Deferred income taxes 4,344 4,287
Other current assets 8,979 7,561
Total Current Assets 333,086 313,702
Property, plant and equipment, net 32,083 31,786
Long-term investments 23,513 12,414
Deferred income taxes 25,701 25,544
Goodwill 25,540 25,540
Other intangibles 3,785 2,091
Other assets 9,507 9,718
Total Assets$453,215$420,795
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,000 $ 10,653
Accrued liabilities 14,712 15,915
Income taxes payable 2,226 2,108
Deferred revenue 2,597 2,808
Accrued taxes 727 727
Deferred income taxes 1,537 1,604
Total Current Liabilities 40,799 33,815
Deferred income taxes - non current 702 101
Accrued taxes 3,645 3,563
Other long-term liabilities 6,792 5,296
Shareholders' equity 401,277 378,020
Total Liabilities & Shareholders' Equity$453,215$420,795

The following information is provided to enhance the user's overall understanding of the Company's comparable financial performance between periods. Management generally considers these items in managing and evaluating the performance of the business.

Three Months Ended Six Months Ended
July 26, July 27, April 26, July 26, July 27,
2009 2008 2009 2009 2008
Supplemental Information Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009
(in thousands) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Acquisition related items 302 273 303 605 545
Option and restatement related expenses (340 ) 435 409 69 490
Stock based compensation expense 4,952 4,431 4,767 9,718 9,253
Restructuring cost 1601401883482,310
Total before taxes 5,074 5,279 5,667 10,740 12,598
Associated tax effect (1,399 ) (1,508 ) (1,441 ) (2,841 ) (3,528 )
Total of supplemental information net of taxes $ 3,675 $ 3,771 $ 4,226 $ 7,899 $ 9,070
Three Months Ended Six Months Ended
July 26, July 27, April 26, July 26, July 27,
2009 2008 2009 2009 2008
Stock Based Compensation Expense Q2 2010 Q2 2009 Q1 2010 Q2 2010 Q2 2009
(in thousands) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cost of sales $ 344 $ 382 $ 314 $ 658 $ 786
Selling, general and administrative 3,354 3,010 3,590 $ 6,944 6,383
Product development and engineering 1,254 1,039 863 $ 2,116 2,084
Total stock-based compensation $ 4,952 $ 4,431 $ 4,767 $ 9,718 $ 9,253

SOURCE: Semtech Corporation

Semtech Corporation
Chris Rogers, Investor Relations, 805-480-2004

Copyright Business Wire 2009

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