Exhibit 99.1
Contact: Richard Crowley
Micrel, Incorporated
2180 Fortune Drive
San Jose, CA 95131
Phone: (408) 944-0800
[MICREL LOGO]
PRESS RELEASE
MICREL REPORTS FOURTH QUARTER AND FISCAL 2007 FINANCIAL RESULTS
* Fourth quarter revenues of $64.6 million
* Fourth quarter GAAP earnings per diluted share of $0.11; Non-GAAP earnings
per diluted share of $0.12
* 2007 fiscal year revenues of $258.0 million
* 2007 fiscal year gross margin 57%, equaling the second highest in Company
history
* 2007 fiscal year GAAP earnings per diluted share of $0.57, the second
highest in Company history; Non-GAAP earnings per diluted share of $0.51
* Micrel released 82 new products in 2007, establishing a new Company record
San Jose, CA, January 31, 2008 - Micrel, Incorporated (Nasdaq NM: MCRL),
an industry leader in analog, high bandwidth communications and Ethernet IC
solutions, today announced financial results for the fourth quarter and
fiscal year ending December 31, 2007.
Revenues for the fourth quarter totaled $64.6 million, compared to
$65.2 million for the third quarter and $64.5 million posted in the year-ago
period. Fourth quarter GAAP net income was $8.4 million, or $0.11 per
diluted share. This compares with third quarter 2007 GAAP net income of $9.4
million, or $0.12 per diluted share, and GAAP net income of $8.8 million, or
$0.11 per diluted share, in the year ago period.
Fourth quarter 2007 non-GAAP net income was $9.4 million or $0.12 per
diluted share. This compares to non-GAAP net income of $10.5 million, or
$0.14 per diluted share in the previous quarter and $10.2 million, or $0.13
per diluted share in the fourth quarter of 2006. Non-GAAP results exclude
the impact of revenues and cost of revenues related to intellectual property
settlements, stock-based compensation expense, other operating income and
expense items, restructuring expenses, other income related to litigation
settlements and their related tax effects. A reconciliation of the GAAP net
income to non-GAAP net income is provided in the financial tables of this
press release.
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 2
For the year ended December 31, 2007, revenues were $258.0 million,
compared with $276.3 million in 2006. GAAP net income for fiscal 2007
increased 15.8% to $44.4 million, or $0.57 per diluted share, compared with
GAAP net income of $38.3 million, or $0.46 per diluted share in 2006. GAAP net
income in 2007 was the second highest annual result in the Company's history.
Included in 2007 net income was a $15.5 million pre-tax gain associated with
a first quarter legal settlement, which after income taxes, is equivalent to
$0.13 per diluted share. Non-GAAP net income in 2007 was $39.5 million, or
$0.51 per diluted share, compared with non-GAAP net income of $45.3 million,
or $0.55 per diluted share in 2006. Micrel's 2007 gross margin of 57%
matched the second highest level in the Company's history.
"Micrel's solid 2007 earnings and strong cash flows from operations
continued to bolster the Company's financial strength throughout the year,"
stated Ray Zinn, president and CEO of Micrel. "Momentum generated from
recent design wins coupled with a broad array of new products released during
2007 gives Micrel a strong platform to generate growth in revenues and net
income going forward. Solid cash flows from operations of $67.8 million
during 2007 enabled the repurchase of 5.5 million shares of common stock and
the commencement of a dividend payment to shareholders, representing our
confidence in the Company's operating performance and commitment to enhancing
shareholder value."
Outlook
-------
Fourth quarter bookings were below third quarter levels resulting in a
book-to-bill ratio of less than one. Order lead times remain very short,
further limiting visibility into end demand and making it difficult to
predict future revenues. A relatively high proportion of revenue must still
be booked and shipped within the quarter to OEM customers, or resold through
the Company's distributors. For the first quarter of 2008, the Company
estimates revenues will be lower by 1% to 4% compared to the fourth quarter,
and GAAP earnings per diluted share will be approximately $0.10.
Zinn concluded, "Evidence of a slowing U.S. economy has increased the
investment community's concerns about the business outlook for the
semiconductor industry. In addition, the first quarter is typically a
seasonally weak quarter for the semiconductor industry. However, we are
encouraged by the relatively normal booking levels we have experienced in
January, and to-date, we have seen no significant change in our customer's
order patterns."
Dividend
--------
The Company announced today that Micrel's Board of Directors has
authorized a quarterly dividend payment of $0.03 per share of common stock.
The payment will be made on February 26, 2008 to shareholders of record as of
February 11, 2008.
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 3
Conference Call
---------------
The Company will host a conference call at 4:30 p.m. Eastern time (1:30
p.m. Pacific time) on January 31, 2008. Chief Executive Officer Raymond Zinn
and Chief Financial Officer Richard Crowley will present an overview of the
2007 fourth quarter and full year financial results, discuss current business
conditions and then respond to questions.
The call is available, live, to any interested party on a listen only
basis by dialing (866) 321-6651. For international callers, please dial
(416) 642-5212. Interested callers should dial in at least five minutes
before the scheduled start time and ask to be connected to the Micrel,
Incorporated Conference Call. A live webcast will also be available through
www.vcall.com. An audio replay of the conference call will be available
through February 6, 2008, by dialing (719) 457-0820 or (888) 203-1112 and
entering access code number 5478741. The webcast replay will also be
available on the Company's website at: www.micrel.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release includes statements that qualify as forward-looking
statements under the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include statements about the following topics: our
expectations regarding future financial results, including revenues, net
income, earnings per share, customer demand, booking levels, turns-fill
requirements, new products, design wins and customer order patterns;
expectations regarding repurchase of the Company's common stock and payment
of future dividends, and the nature of macro-economic and industry trends.
Forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially. Those risks and
uncertainties include, but are not limited to, such factors as: softness in
demand for our products; customer decisions to cancel, reschedule, or delay
orders for our products; the effect that lead times and channel inventories
have on the demand for our products; economic or financial difficulties
experienced by our customers; the effect of business conditions in the
computer, telecommunications and industrial markets; the impact of any
previous or future acquisitions; changes in demand for networking or high
bandwidth communications products; the impact of competitive products and
pricing and alternative technological advances; the accuracy of estimates
used to prepare the Company's financial statements; the global economic
situation; the ability of the Company's vendors and subcontractors to supply
or manufacture the Company's products in a timely manner; the timely and
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 4
successful development and market acceptance of new products and upgrades to
existing products; softness in the economy and the U.S. stock markets as a
whole; fluctuations in the market price of Micrel's common stock and other
market conditions; the difficulty of predicting our future cash needs; the
nature of other investment opportunities available to the Company from time
to time; and Micrel's operating cash flow. For further discussion of these
risks and uncertainties, we refer you to the documents the Company files with
the SEC from time to time, including the Company's Annual Report on Form 10-K
for the year ended December 31, 2006 and the Company's Form 10-Q for the
quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.
All forward-looking statements are made as of today, and the Company disclaims
any duty to update such statements.
Non-GAAP Reporting
------------------
The Company presents non-GAAP financial measures only because investors
and financial analysts use non-GAAP results in their analysis of historical
results and projections of the Company's future operating results. The
Company's management uses non-GAAP measures on a limited basis, primarily for
employee performance-based compensation. In order to facilitate the
computation of non-GAAP results for the financial analyst community and
investors, the Company makes reference to non-GAAP net income and earnings
per share. These non-GAAP results exclude the impact of revenues and cost of
revenues related to intellectual property settlements, stock-based
compensation expense, other operating income and expense items, restructuring
expenses, other income related to litigation settlements and their related
tax effects. Micrel references those results to allow a better comparison of
results in the current period to those in prior periods and to provide
insight to the Company's on-going operating performance after exclusion of
these items. The Company has reconciled such non-GAAP results to the most
directly comparable GAAP financial measures in the financial tables at the
end of this press release.
Reference to these non-GAAP results should be considered in addition to
results that are prepared under current accounting standards but should not
be considered a substitute for results that are presented in accordance with
GAAP. It should also be noted that Micrel's non-GAAP information may be
different from the non-GAAP information provided by other companies.
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 5
About Micrel
------------
Micrel Inc., is a leading global manufacturer of IC solutions for the
worldwide analog, Ethernet and high bandwidth markets. The Company's
products include advanced mixed-signal, analog and power semiconductors; high
performance communication, clock management, Ethernet switch and physical
layer transceiver ICs. Company customers include leading manufacturers of
enterprise, consumer, industrial, mobile, telecommunications, automotive, and
computer products. Corporation headquarters and state-of-the-art wafer
fabrication facilities are located in San Jose, CA, with regional sales and
support offices and advanced technology design centers situated throughout
the Americas, Europe and Asia. In addition, the Company maintains an
extensive network of distributors and sales representatives worldwide.
For further information, contact Richard Crowley at: Micrel,
Incorporated, 2180 Fortune Drive, San Jose, California, 95131, (408) 944-
0800; or visit the Company's website at: http://www.micrel.com.
-Financial Tables to Follow-
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 6
MICREL, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------------------ -----------------------
December 31, September, December 31, December 31,
----------------------------------- ---------------------
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
Net revenues $ 64,569 $ 65,191 $ 64,482 $ 257,974 $ 276,307
Cost of revenues(1) 28,512 27,698 27,555 110,630 116,201
--------- --------- --------- --------- ---------
Gross profit 36,057 37,493 36,927 147,344 160,106
--------- --------- --------- --------- ---------
Operating expenses:
Research and development(1) 13,400 13,680 12,813 54,523 52,074
Selling, general and administrative(1) 10,917 10,871 11,485 45,040 49,016
Other operating expense (income) - - 53 86 966
Restructuring expense 28 28 168 128 269
--------- --------- --------- --------- ---------
Total operating expenses 24,345 24,579 24,519 99,777 102,325
--------- --------- --------- --------- ---------
Income from operations 11,712 12,914 12,408 47,567 57,781
Other income (expense):
Interest Income 1,500 1,605 1,426 6,267 5,978
Interest Expense (10) (11) (146) (93) (634)
Other income 10 10 8 15,543 59
--------- --------- --------- --------- ---------
Total other income 1,500 1,604 1,288 21,717 5,403
--------- --------- --------- --------- ---------
Income before income taxes 13,212 14,518 13,696 69,284 63,184
Provision for income taxes 4,793 5,095 4,883 24,933 24,876
--------- --------- --------- --------- ---------
Net income $ 8,419 $ 9,423 $ 8,813 $ 44,351 $ 38,308
========= ========= ========= ========= =========
Net income per share:
Basic $ 0.11 $ 0.12 $ 0.11 $ 0.58 $ 0.47
========= ========= ========= ========= =========
Diluted $ 0.11 $ 0.12 $ 0.11 $ 0.57 $ 0.46
========= ========= ========= ========= =========
Shares used in computing per share amounts:
Basic 75,248 76,964 78,372 76,918 81,550
========= ========= ========= ========= =========
Diluted 75,432 77,971 79,476 77,908 82,842
========= ========= ========= ========= =========
(1) Includes amortization of stock-based
compensation as follows:
Cost of revenues $ 308 $ 260 $ 353 $ 1,156 $ 1,540
Research and development 452 543 497 2,130 3,341
Selling, general and administrative 408 564 591 2,199 3,534
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 7
MICREL, INCORPORATED
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------------------ -----------------------
December 31, September, December 31, December 31,
----------------------------------- ---------------------
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
GAAP Net income $ 8,419 $ 9,423 $ 8,813 $ 44,351 $ 38,308
Adjustments to GAAP Net Income:
Patent settlement income included in net revenues - - - - (2,890)
Patent settlement costs included in cost of revenues - - - - 714
Stock-based compensation included in:
Cost of revenues 308 260 353 1,156 1,540
Research and development 452 543 497 2,130 3,341
Selling, general and administrative 408 564 591 2,199 3,534
Other operating expense (income) - - 53 86 966
Restructuring expense 28 28 168 128 269
Other non-operating income - Litigation Settlement - - - (15,514) -
Tax effect of adjustments to GAAP income (202) (288) (299) 4,961 (457)
--------- --------- --------- --------- ---------
Total Adjustments to GAAP Net Income 994 1,107 1,363 (4,854) 7,017
--------- --------- --------- --------- ---------
Non-GAAP income(2) $ 9,413 $ 10,530 $ 10,176 $ 39,497 $ 45,325
========= ========= ========= ========= =========
Non-GAAP shares used in computing non-GAAP
income per share (in thousands):
Basic 75,248 76,964 78,372 76,918 81,550
========= ========= ========= ========= =========
Diluted (1) 75,404 77,788 79,234 77,571 82,673
========= ========= ========= ========= =========
GAAP income per share - Basic $ 0.11 $ 0.12 $ 0.11 $ 0.58 $ 0.47
Total Adjustments to GAAP Net Income $ 0.02 $ 0.02 $ 0.02 $ (0.07) $ 0.09
--------- --------- --------- --------- ---------
Non-GAAP income per share - Basic $ 0.13 $ 0.14 $ 0.13 $ 0.51 $ 0.56
========= ========= ========= ========= =========
GAAP income per share - Diluted $ 0.11 $ 0.12 $ 0.11 $ 0.57 $ 0.46
Total Adjustments to GAAP Net Income $ 0.01 $ 0.02 $ 0.02 $ (0.06) $ 0.09
--------- --------- --------- --------- ---------
Non-GAAP income per share - Diluted(2) $ 0.12 $ 0.14 $ 0.13 $ 0.51 $ 0.55
========= ========= ========= ========= =========
(1) Non-GAAP shares have been adjusted from diluted outstanding shares calculated under FAS123R.
(2) Non-GAAP results were reached by excluding revenues and cost of revenues related to intellectual property
settlements, stock-based compensation expense, other operating income or expense items,
restructuring expenses, other income related to litigation settlements and their related tax-effects.
Non-GAAP results are presented to supplement our GAAP consolidated financial statements to allow a better
comparison of results in the current period to those in prior periods and to provide meaningful insight to the
Company's on-going operating performance after exclusion of these items.
MICREL ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS
January 31, 2008
Page 8
MICREL, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2007 2006
------------- -------------
ASSETS
CURRENT ASSETS:
Cash, cash equivalents, restricted cash
and short-term investments $ 107,679 $ 109,938
Accounts receivable, net 29,614 31,092
Inventories 35,660 37,183
Income taxes receivable 3,426 801
Deferred income taxes 19,387 23,096
Other current assets 3,604 2,283
----------- -----------
Total current assets 199,370 204,393
PROPERTY, PLANT AND EQUIPMENT, NET 82,585 78,665
INTANGIBLE ASSETS, NET 3,026 4,714
DEFERRED INCOME TAXES(1) 9,286 11,158
OTHER ASSETS 478 1,343
----------- -----------
TOTAL $ 294,745 $ 300,273
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 18,010 $ 17,429
Deferred income on shipments to distributors 20,238 21,705
Other current liabilities 14,097 22,564
Current portion of long-term debt - 80
----------- -----------
Total current liabilities 52,345 61,778
LONG-TERM TAXES PAYABLE(1) 2,814 -
OTHER LONG-TERM OBLIGATIONS 335 453
SHAREHOLDERS' EQUITY:
Common stock - 15,585
Accumulated other comprehensive loss (32) (35)
Retained earnings 239,283 222,492
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 239,251 238,042
----------- -----------
TOTAL $ 294,745 $ 300,273
=========== ===========
(1) On January 1, 2007, Micrel adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes ("FIN 48"). Implementation of FIN 48 resulted in a $2.1 million reclassification from current
taxes payable to long-term taxes payable and an additional $2.5 million was reclassified from current
taxes payable to reduce long term deferred tax assets.