Semtech Corp. Logo

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



Semtech Announces Second Quarter of Fiscal Year 2011 Results


CAMARILLO, Calif., Aug 25, 2010 (BUSINESS WIRE) -- Semtech Corp. (Nasdaq: SMTC), a leading supplier of analog and mixed-signal semiconductors, reported un-audited financial results for its second quarter of fiscal year 2011 that ended August 1, 2010.

Net revenue for the second quarter of fiscal year 2011 was $113.2 million, up 70.7% percent from the second quarter of fiscal year 2010 and up 11.1% percent from the first quarter of fiscal year 2011.

Net income for the second quarter of fiscal year 2011, computed in accordance with U.S. generally accepted accounting principles (GAAP), was $19.7 million or 31 cents per diluted share. GAAP net income was $7.4 million or 12 cents per diluted share in the second quarter of fiscal year 2010 and $10.8 million or 17 cents per share in the first quarter of fiscal year 2011.

GAAP gross profit margin for the second quarter of fiscal year 2011 was 59.6 percent compared to 54.5 percent in the second quarter of fiscal year 2010 and 56.0 percent in the first quarter of fiscal year 2011.

To facilitate the complete understanding of comparable financial performance between periods, Semtech also presents performance results net of certain one-time items. Semtech's non-GAAP results exclude the following items:

Excluding the items listed above, non-GAAP net income for the second quarter of fiscal year 2011 was $26.7 million or 42 cents per diluted share. Non-GAAP net income was $11.1 million or 18 cents per diluted share in the second quarter of fiscal year 2010 and was $22.0 million or 35 cents per diluted share in the first quarter of fiscal year 2011.

Non-GAAP gross profit margin for the second quarter of fiscal year 2011 was 60.1 percent. Non-GAAP gross profit margin for the second quarter of fiscal year 2010 was 55.0 percent and 58.8 percent in the first quarter of fiscal year 2011.

Semtech had $193.2 million of cash, cash equivalents and marketable securities as of August 1, 2010, up from $170.8 million at the end of the first quarter of fiscal year 2011.

Mohan Maheswaran, Semtech's President and Chief Executive Officer, commented, "The strength we saw in the first quarter of fiscal year 2011 continued into the second quarter, driven by robust demand in our communications, consumer and industrial end markets. In addition, new products continued to gain traction, validating our strategic focus on the key trends that we believe will drive growth for years to come: demand for increased bandwidth, energy efficiency and miniaturization of electronics."

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 will have filed its quarterly report on Form 10-Q for the second quarter of fiscal year 2011.

Third Quarter of Fiscal Year 2011 Outlook

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, net income and earnings per diluted share. To provide additional insight into the Company's Q3 outlook, this release includes a presentation of forward-looking non-GAAP earnings per diluted share. All of these non-GAAP measures exclude stock-based compensation, amortization of acquired intangible assets, and other items detailed above. 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 such items in managing and evaluating the performance of the business. A further discussion of these non-GAAP financial measures can be found above. Reconciliations of GAAP results for the second quarter of fiscal years 2011 and 2010 and the first quarter of fiscal year 2011, as well as a reconciliation of forward-looking earnings per diluted share for the third quarter of fiscal year 2011, appear with the financial statements later in this release. These additional 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 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. These forward-looking statements are identified by the use of such terms and phrases as "intends," "goal," "estimate, "expect," "project," "plans," "anticipates," "should," "will," "designed to," "believe," and other similar expressions which generally identify 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. Important factors that could cause actual results to differ materially include, but are not limited to: the continuation and/or pace of key trends considered to be main contributors to Company growth, such as demand for increased network and backbone 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 focus among target customers, and other comparable changes in projected or anticipated markets; adequate supply of our products from our third-party manufacturer; benefits derived from recent acquisitions; the depth, extent and duration of current and potential national and world wide economic uncertainty, including such uncertainty associated with and arising predominantly from European markets, at both a macro level, and as it impacts the Company's products, industry, and market sectors; the Company's ability to forecast and achieve anticipated revenues and earnings estimates in light of continuing economic uncertainty; the Company's ability to manage expenses to keep same in line with anticipated amounts; the amount of legal expenses connected with the current defense of class action litigation relating to prior stock option award practices, as such expenses may be impacted by the nature and timing of procedural or other developments in the course of the litigation; 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 January 31, 2010, in the Company's other filings with the SEC, and in material incorporated therein by reference. In light of the significant uncertainties inherent in the forward-looking information included herein, any such forward-looking information 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. Investors are cautioned not to place undue reliance on any forward-looking information contained herein. 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 and the Semtech logo are marks of Semtech Corporation.

SEMTECH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Table in thousands - except per share amount)
Three Months Ended Six Months Ended
Aug 1, May 2, July 26, Aug 1, July 26,
2010 2010 2009 2010 2009
Q2 2011 Q1 2011 Q2 2010 Q2 2011 Q2 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 113,227 $ 101,880 $ 66,317 $ 215,107 $ 126,394
Cost of sales 45,795 44,833 30,165 90,628 57,510
Gross profit 67,432 57,047 36,152 124,479 68,884
Operating costs and expenses:
Selling, general and administrative 24,915 26,351 16,741 51,266 34,196
Product development and engineering 17,404 15,303 10,591 32,707 20,675
Amortization of acquired intangible assets 2,405 2,405 302 4,810 605
Total operating costs and expenses 44,724 44,059 27,634 88,783 55,476
Operating income 22,708 12,988 8,518 35,696 13,408
Interest and other income, net 308 197 282 505 1,572
Income before taxes 23,016 13,185 8,800 36,201 14,980
Provision for taxes 3,354 2,383 1,380 5,737 2,616
Net income $ 19,662 $ 10,802 $ 7,420 $ 30,464 $ 12,364
Earnings per share:
Basic $ 0.32 $ 0.18 $ 0.12 $ 0.49 $ 0.20
Diluted $ 0.31 $ 0.17 $ 0.12 $ 0.48 $ 0.20
Weighted average number of shares:
Basic 61,933 61,420 60,493 61,679 60,429
Diluted 63,552 63,181 61,044 63,264 60,885
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Table in thousands)
Aug 1, Jan 31,
2010 2010
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 105,918 $ 80,598
Temporary investments 56,625 55,462
Receivables, less allowances 49,009 31,163
Inventories 36,809 33,819
Deferred income taxes 11,808 11,808
Other current assets 7,412 6,616
Total current assets 267,581 219,466
Property, plant and equipment, net 45,860 38,063
Long-term investments 30,654 26,163
Deferred income taxes 5,462 7,153
Goodwill 129,651 129,651
Other intangible assets, net 79,532 84,343
Other assets 16,807 9,455
Total assets $ 575,547 $ 514,294
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,946 $ 23,643
Accrued liabilities 33,725 34,008
Income taxes payable 7,668 8,512
Deferred revenue 3,936 3,276
Accrued taxes - 2,609
Deferred income taxes 3,941 1,332
Total current liabilities 82,216 73,380
Deferred income taxes - non current 16,505 16,505
Accrued taxes 9,497 9,497
Other long-term liabilities 11,445 9,171
Shareholders' equity 455,884 405,741
Total liabilities & shareholders' equity $ 575,547 $ 514,294
SEMTECH CORPORATION
SUPPLEMENTAL INFORMATION - NOTES TO CONSOLIDATED GAAP STATEMENTS OF INCOME
(Tables in thousands - except per share amounts)
Three Months Ended Six Months Ended
Aug 1, May 2, July 26, Aug 1, July 26,
2010 2010 2009 2010 2009
Stock-based Compensation Expense Q2 2011 Q1 2011 Q2 2010 Q2 2011 Q2 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cost of sales $ 646 $ 526 $ 344 $ 1,172 $ 658
Selling, general and administrative 4,702 5,604 3,354 10,306 6,944
Product development and engineering 1,858 2,170 1,254 4,028 2,116
Total stock-based compensation $ 7,206 $ 8,300 $ 4,952 $ 15,506 $ 9,718
Three Months Ended Six Months Ended
Aug 1, May 2, July 26, Aug 1, July 26,
2010 2010 2009 2010 2009
Gross Profit - Reconciliation GAAP to Non-GAAP Q2 2011 Q1 2011 Q2 2010 Q2 2011 Q2 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GAAP gross profit $ 67,432 $ 57,047 $ 36,152 $ 124,479 $ 68,884
Adjustments to GAAP gross profit:
Stock-based compensation expense 646 526 344 1,172 658
Fair value adjustment related to acquired inventory - 2,311 - 2,311 -
Non-GAAP gross profit $ 68,078 $ 59,884 $ 36,496 $ 127,962 $ 69,542
Three Months Ended Six Months Ended
Aug 1, May 2, July 26, Aug 1, July 26,
2010 2010 2009 2010 2009
Net Income - Reconciliation GAAP to Non-GAAP Q2 2011 Q1 2011 Q2 2010 Q2 2011 Q2 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GAAP net income $ 19,662 $ 10,802 $ 7,420 $ 30,464 $ 12,364
Adjustments to GAAP net income:
Stock-based compensation expense 7,206 8,300 4,952 15,506 9,718
Legal expenses related to stock option matters 1,065 1,623 (340 ) 2,688 69
Fair value adjustment related to acquired inventory - 2,311 - 2,311 -
Amortization of acquired intangible assets 2,405 2,405 302 4,810 605
Restructuring cost - - 160 - 348
Total before taxes 10,676 14,639 5,074 25,315 10,740
Associated tax effect (3,613 ) (3,394 ) (1,399 ) (7,007 ) (2,840 )
Total of supplemental information net of taxes 7,063 11,245 3,675 18,308 7,900
Non-GAAP net income $ 26,725 $ 22,047 $ 11,095 $ 48,772 $ 20,264
Diluted GAAP earnings per share $ 0.31 $ 0.17 $ 0.12 $ 0.48 $ 0.20
Adjustments per above 0.11 0.18 0.06 0.29 0.13
Diluted non-GAAP earnings per share $ 0.42 $ 0.35 $ 0.18 $ 0.77 $ 0.33
Three Months Ended Six Months Ended
Aug 1, May 2, July 26, Aug 1, July 26,
2010 2010 2009 2010 2009
Tax Impact Associated With Supplemental Information Q2 2011 Q1 2011 Q2 2010 Q2 2011 Q2 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Adjustments to GAAP net income:
Stock-based compensation expense $ 2,703 $ 1,035 $ 1,412 $ 3,738 $ 2,582
Legal expenses related to stock option matters 263 617 (124 ) 880 31
Fair value adjustment related to acquired inventory - 878 - 878 -
Amortization of acquired intangible assets 647 864 84 1,511 169
Restructuring cost - - 27 - 58
Total of associated tax effect $ 3,613 $ 3,394 $ 1,399 $ 7,007 $ 2,840
Q3 FY11 Earnings Per Share Guidance
GAAP to Non-GAAP Reconciliation (net of tax)
Low High
GAAP earnings per share $ 0.33 $ 0.35
Stock-based compensation expense 0.08 0.08
Legal expenses related to stock option matters 0.01 0.01
Amortization of acquired intangible assets 0.03 0.03
Non-GAAP earnings per share $ 0.45 $ 0.47

SOURCE: Semtech Corp.

Semtech Corporation
Linda Brewton, 805-480-2004
webir@semtech.com

Copyright Business Wire 2010

Close window | Back to top