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Semtech Announces Fourth Quarter of Fiscal Year 2011 Results


CAMARILLO, Calif.--(BUSINESS WIRE)-- Semtech Corp. (Nasdaq: SMTC), a leading supplier of analog and mixed-signal semiconductors, today reported un-audited financial results for its fourth quarter of fiscal year 2011 that ended January 30, 2011.

Net revenue for the fourth quarter of fiscal year 2011 was $116.3 million, up 36.8 percent from the fourth quarter of fiscal year 2010 and down 5.6 percent from the third quarter of fiscal year 2011.

Net income for the fourth quarter of fiscal year 2011, computed in accordance with U.S. generally accepted accounting principles (GAAP), was $26.0 million or 39 cents per diluted share. This compares to GAAP net income of $9.5 million or 15 cents per diluted share in the fourth quarter of fiscal year 2010 and GAAP net income of $16.1 million or 25 cents per diluted share in the third quarter of fiscal year 2011.

GAAP gross profit margin for the fourth quarter of fiscal year 2011 was 60.2 percent compared to 53.9 percent in the fourth quarter of fiscal year 2010 and 60.0 percent in the third quarter of fiscal year 2011.

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

Excluding the items listed above, non-GAAP net income for the fourth quarter of fiscal year 2011 was $31.0 million or 47 cents per diluted share. Non-GAAP net income was $18.9 million or 30 cents per diluted share in the fourth quarter of fiscal year 2010 and was $30.4 million or 47 cents per diluted share in the third quarter of fiscal year 2011.

Non-GAAP gross profit margin for the fourth quarter of fiscal year 2011 was 60.5 percent. Non-GAAP gross profit margin for the fourth quarter of fiscal year 2010 was 56.6 percent and 60.2 percent in the third quarter of fiscal year 2011.

Semtech had $258.3 million of cash, cash equivalents and marketable securities as of January 30, 2011, up from $228.7 million at the end of the third quarter of fiscal year 2011.

Mohan Maheswaran, Semtech's President and Chief Executive Officer, commented, "Our fourth quarter of fiscal year 2011 was yet another record-breaking quarter for Semtech. Our gross profit margin, operating income and diluted earnings per share were the highest in our company's history and were achieved during a seasonally down revenue quarter. Q4 also closes out a superb year for Semtech in terms of financial discipline, new product platform releases, operational excellence, and technological innovation. We look forward to the opportunities that lie ahead on our journey toward becoming a billion-dollar company."

The results announced today are preliminary, as they are subject to the annual audit by the Company's independent registered public accounting firm. As such, these results are subject to revision until the Company will have filed its annual report on Form 10-K for fiscal year 2011.

First Quarter of Fiscal Year 2012 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 first quarter 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 the 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 fourth quarter of fiscal years 2011 and 2010 and the third quarter of fiscal year 2011, as well as a reconciliation of forward-looking earnings per diluted share for the first quarter of fiscal year 2012, appear with the financial statements included with 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 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 in projected or anticipated markets; adequate supply of our products from our third-party manufacturers; benefits derived from recent acquisitions; the depth, extent and duration of current and potential national and worldwide economic uncertainty, 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 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 January 30, 2011, 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 CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Table in thousands - except per share amount)
 
  Three Months Ended   Twelve Months Ended
Jan 30,   Jan 31,   Oct 31, Jan 30,   Jan 31,
2011 2010 2010 2011 2010
Q4 2011 Q4 2010 Q3 2011 FY 2011 FY 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
Net sales $ 116,270 $ 85,019 $ 123,125 $ 454,502 $ 286,560
Cost of sales   46,264     39,228     49,304   186,196   130,514
Gross profit 70,006 45,791 73,821 268,306 156,046
Operating costs and expenses:
Selling, general and administrative 23,637 25,216 35,501 110,404 77,934
Product development and engineering 18,517 13,707 18,400 69,624 44,847
Amortization of acquired intangible assets   2,304     1,440     2,406   9,520   2,348
Total operating costs and expenses   44,458     40,363     56,307   189,548   125,129
Operating income 25,548 5,428 17,514 78,758 30,917
Interest and other income, net   66     346     3   574   3,054
Income before taxes 25,614 5,774 17,517 79,332 33,971
Provision for taxes   (389 )   (3,705 )   1,412   6,760   33,014
Net income $ 26,003   $ 9,479   $ 16,105 $ 72,572 $ 957
 
Earnings per share:
Basic $ 0.41 $ 0.15 $ 0.26 $ 1.16 $ 0.02
Diluted $ 0.39 $ 0.15 $ 0.25 $ 1.12 $ 0.02
 
Weighted average number of shares:
Basic 63,506 61,238 62,493 62,339 60,779
Diluted 66,213 62,501 64,555 64,523 61,676
 

 

SEMTECH CORPORATION

CONSOLIDATED BALANCE SHEETS

(Table in thousands)

 
  Jan 30,   Jan 31,
2011 2010
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 119,019 $ 80,598
Temporary investments 112,237 55,462
Receivables, less allowances 50,610 31,163
Inventories 47,719 33,819
Deferred income taxes 13,369 11,808
Other current assets   10,744   6,616
Total current assets 353,698 219,466
 
Property, plant and equipment, net 56,778 38,063
Long-term investments 27,086 26,163
Deferred income taxes - 7,153
Goodwill 129,651 129,651
Other intangible assets, net 74,823 84,343
Other assets   17,907   9,455
Total assets $ 659,943 $ 514,294
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,629 $ 23,643
Accrued liabilities 48,723 34,008
Income taxes payable 2,928 8,512
Deferred revenue 5,020 3,276
Accrued taxes 4,191 2,609
Deferred income taxes   3,334   1,332
Total current liabilities 93,825 73,380
 
Deferred income taxes - non-current 11,120 16,505
Accrued taxes 10,548 9,497
Other long-term liabilities 15,835 9,171
 
Shareholders' equity   528,615   405,741
Total liabilities & shareholders' equity $ 659,943 $ 514,294
 

 
SEMTECH CORPORATION
SUPPLEMENTAL INFORMATION - NOTES TO CONSOLIDATED GAAP STATEMENTS OF INCOME
(Tables in thousands - except per share amounts)
 
  Three Months Ended   Twelve Months Ended
Jan 30,   Jan 31,   Oct 31, Jan 30,   Jan 31,
2011 2010 2010 2011 2010
Stock-based Compensation Expense Q4 2011 Q4 2010 Q3 2011 FY 2011 FY 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cost of sales $ 325 $ 225 $ 305 $ 1,802 $ 1,168
Selling, general and administrative 3,797 3,964 5,206 19,310 13,566
Product development and engineering   1,962     1,925     1,908     7,898     5,201  
Total stock-based compensation expense $ 6,084   $ 6,114   $ 7,419   $ 29,010   $ 19,935  
 
 
Three Months Ended Twelve Months Ended
Jan 30, Jan 31, Oct 31, Jan 30, Jan 31,
2011 2010 2010 2011 2010
Gross Profit - Reconciliation GAAP to Non-GAAP Q4 2011 Q4 2010 Q3 2011 FY 2011 FY 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
GAAP gross profit $ 70,006 $ 45,791 $ 73,821 $ 268,306 $ 156,046
Adjustments to GAAP gross profit:
Stock-based compensation expense 325 225 305 1,802 1,168
Fair value adjustment related to acquired inventory   -     2,088     -     2,311     2,088  
Non-GAAP gross profit $ 70,331   $ 48,104   $ 74,126   $ 272,419   $ 159,302  
 
 
Three Months Ended Twelve Months Ended
Jan 30, Jan 31, Oct 31, Jan 30, Jan 31,
2011 2010 2010 2011 2010
Net Income - Reconciliation GAAP to Non-GAAP Q4 2011 Q4 2010 Q3 2011 FY 2011 FY 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
GAAP net income $ 26,003 $ 9,479 $ 16,105 $ 72,572 $ 957
 
Adjustments to GAAP net income:
Stock-based compensation expense 6,084 6,114 7,419 29,010 19,935
Transaction and other expenses - 3,422 - - 3,422
Legal expenses related to stock option matters 289 2,185 10,613 13,590 3,332
Fair value adjustment related to acquired inventory - 2,088 - 2,311 2,088
Amortization of acquired intangible assets 2,304 1,440 2,406 9,520 2,348
Restructuring costs - 88 - - 486
Business interruption insurance recovery   -     (1,360 )   -     -     (1,360 )
Total before taxes 8,677 13,977 20,438 54,431 30,251
Associated tax effect   (3,710 )   (4,586 )   (6,116 )   (16,833 )   24,171  
Total of supplemental information net of taxes   4,967     9,391     14,322     37,598     54,422  
Non-GAAP net income $ 30,970   $ 18,870   $ 30,427   $ 110,170   $ 55,379  
 
Diluted GAAP earnings per share $ 0.39 $ 0.15 $ 0.25 $ 1.12 $ 0.02
Adjustments per above   0.08     0.15     0.22     0.59     0.88  
Diluted non-GAAP earnings per share $ 0.47   $ 0.30   $ 0.47   $ 1.71   $ 0.90  
 
 
Three Months Ended Twelve Months Ended
Jan 30, Jan 31, Oct 31, Jan 30, Jan 31,
2011 2010 2010 2011 2010
Tax Impact Associated With Supplemental Information Q4 2011 Q4 2010 Q3 2011 FY 2011 FY 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Adjustments to GAAP net income:
Stock-based compensation expense $ 2,551 $ 1,691 $ 2,881 $ 9,170 $ 4,978
Transaction and other expenses - 1,212 $ - - $ (31,589 )
Legal expenses related to stock option matters 794 856 3,235 4,909 1,293
Fair value adjustment related to acquired inventory - 810 - 878 810
Amortization of acquired intangible assets 365 530 - 1,876 784
Restructuring costs - 15 - - 81
Business interruption insurance recovery   -     (528 )   -     -     (528 )
Total of associated tax effect $ 3,710   $ 4,586   $ 6,116   $ 16,833   $ (24,171 )
 
Q1 FY12 Earnings Per Share Guidance
GAAP to Non-GAAP Reconciliation (net of tax)
Low High
GAAP EPS 0.31 0.34
 
Stock based compensation expense 0.08 0.08
Option and restatement related expenses 0.00 0.00
Amortization of acquired intangibles 0.02 0.02
   
Non-GAAP EPS $ 0.41   $ 0.44  
 

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

Source: Semtech Corp.

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