Exhibit 99.1
[Company logo]
NEWS RELEASE
SEMTECH TO ACQUIRE XEMICS
Experts in Ultra Low Power, RF, Analog and Digital IC Designs
Expected to be Accretive to Net Income within Two Quarters
5:00 a.m. PDT
Monday, June 20, 2005
CAMARILLO, CALIFORNIA, June 20, 2005 - SEMTECH CORPORATION (NASDAQ:
SMTC), a leading producer of high performance analog and mixed-signal
semiconductors, today announced plans to acquire XEMICS SA, a fabless developer
of ultra-low power analog, radio frequency (RF) and digital integrated circuits
(IC).
XEMICS is a research and development (R&D) intensive company with 77
employees, of which 56 are actively engaged in the area of R&D. The company is
privately held and based in Switzerland. XEMICS applies its low-power,
low-voltage design expertise across its core technologies -- sensor
interfacing/data acquisition, 8-bit RISC microcontrollers, RF transceivers and
audio Codecs. These capabilities are aimed at adding value in next generation,
highly integrated battery powered wireless and sensing applications.
XEMICS was established in 1997 as a spin out of the Swiss Center for
Electronics and Microtechnology (CSEM). CSEM, which is funded by both government
and industry sources, carries out applied research and product development.
XEMICS works closely with CSEM on commercializing new technologies and is
expected to continue to do so after the acquisition.
In calendar year 2004, XEMICS generated net sales of about $23 million,
mostly from custom and standard IC products for battery powered applications,
remote metering, embedded systems and medical devices. Gross margin during this
period was 48 percent.
The addition of XEMICS strategically enhances Semtech's competitive edge
in high performance analog. XEMICS offers proprietary technology, including
patents and other exclusive IP; access to applied research; and an existing
business that is growing. Semtech has market presence and capital resources;
relationships with industry leaders; a roughly $225 million base of synergistic
product sales; and a worldwide infrastructure of sales, marketing and low cost
manufacturing resources.
XEMICS will be acquired by Semtech International AG, Semtech's
wholly-owned Swiss subsidiary, and will be known as the Wireless and Sensing
Products business unit.
Jason Carlson, Semtech's President and Chief Executive Officer
commented, "The addition of XEMICS represents an exciting convergence of
technology between Semtech's key analog disciplines of power management and
over-voltage protection and XEMICS's core capabilities in designing ultra low
power building blocks. In today's market, integration of functions is critical
in winning new designs and XEMICS greatly broadens our capabilities."
Alain Dantec, Chief Executive Officer of XEMICS said of the acquisition,
"Semtech's size and infrastructure should accelerate the development of a broad
portfolio of new proprietary products based on XEMICS' unique technology."
Mr. Carlson added, "We have established several expectations to come out
of the XEMICS acquisition . First, we expect to generate and promote 2 or 3 new
product lines from their technology over the next three or so years. Second,
these products should contribute nicely to top line sales and net income growth,
with gross margin forecasted above 55 percent. Third, XEMICS is expected to give
us immediate access to relatively new end-markets, such as automotive, home
security, industrial and medical. Finally, we should be able to double the
content Semtech offers to existing portable and communications customers."
Terms of the Transaction
Semtech International AG will pay $43 million in cash to the
shareholders of XEMICS and has agreed to pay up to an additional $16 million if
certain performance milestones are met within a twelve month period ending April
30, 2006. The transaction is expected to close within the next ten days. In the
second quarter that ends July 31, 2005, Semtech expects to incur a one-time
acquisition related charge to earnings of an estimated $4 million to $5 million
for the write-off of in-process R&D. Consistent with purchase accounting
treatment of the acquisition, other intangible items will be amortized over the
current quarter and future periods. The amount of acquisition related charges
are subject to the final valuation of XEMICS. Excluding these acquisition
related items, Semtech expects the transaction to be neutral to its earnings
initially and become accretive within two quarters.
Notice of Conference Call
The Company will hold a conference call on Wednesday, June 22, 2005 at
1:15 pm PDT to discuss the acquisition. Investors and other interested persons
can participate by calling 719-457-2641 or by accessing a free webcast of the
call via the investor relations section of Semtech's website. Soon after the
completion of the call, a replay will be available via the investor relations
section of Semtech's website for 30 days.
About Semtech
Semtech Corporation is a leading supplier of analog and mixed-signal
semiconductors used in a wide range of computer, industrial and communication
applications.
Forward-Looking and Cautionary Statements
This release 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 the expected closing date of the
transaction, the expected one-time charge, the expected impact of the
transaction on earnings, future financial performance, future operational
performance, and our plans, objectives and expectations. Some forward-looking
statements may be identified by use of terms such as "expects," "anticipates,"
"intends," "estimates," "believes", "projects", "should", "will", "plans" and
similar words.
Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those projected. These risks and
uncertainties include the possibility of a delay or failure in satisfying the
closing conditions, the possibility of a greater than expected one-time charge,
the possibility of less than anticipated cost savings, and the complexities of
successfully integrating the workforces and technologies of the companies. In
addition to considering these risks and uncertainties, 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, 2005, in its other
filings with the SEC, and in material incorporated therein by reference. In
light of the risks and uncertainties inherent in forecasts of revenue and gross
margin and in other projected matters, 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.
Investor Relations Contact
John Baumann, Treasurer, Telephone: 805-480-2010