Exhibit 99.1
Semtech Announces First Quarter Results
CAMARILLO, Calif.--(BUSINESS WIRE)--May 27, 2003--Semtech
Corporation (Nasdaq:SMTC) today announced results for its fiscal year
2004 first quarter that ended April 27, 2003.
Sales for the first quarter of fiscal year 2004 were $44.0 million
and net income was $8.3 million or 11 cents per diluted share. Sales
for the first quarter of fiscal year 2003 were $49.2 million and net
income was $10.0 million or 13 cents per diluted share. Gross margin
was 56.5 percent in the first quarter of fiscal year 2004, compared to
56.2 percent in the prior quarter and 57.1 percent in the prior year
first quarter. Sales for the fourth quarter of fiscal year 2003 were
$44.5 million and net income was $62,000.
Semtech continued to strengthen its balance sheet. Long-term debt
was reduced by $59.5 million during the first quarter of fiscal year
2004. Cash and marketable securities, net of outstanding debt,
increased to $248.3 million. Annualized inventory efficiencies
improved to 5.2 turns of inventory per year as of the first quarter.
The Company has bought back $250.0 million in convertible
subordinated notes and common stock under its current buyback program,
and has remaining $25.0 million authorized for additional purchases.
In the first quarter of fiscal year 2004, the Company recorded a $2.8
million pre-tax gain on the repurchase of convertible subordinated
notes.
Shipments of all product lines, except for Test and Measurement
and Desktop Power Management, increased sequentially in the first
quarter of fiscal year 2004. Portable Power Management sales were up
11 percent sequentially and up 136 percent compared to the prior year
period. Protection Product sales in the first quarter were up 9
percent from the prior quarter and Advanced Communications product
sales were up 27 percent.
New orders in the first quarter of fiscal year 2004 were up
slightly over the prior quarter. The largest percentage increases were
in the Test and Measurement and Human Input Device (HID) product
lines. The largest decline in new orders was in Desktop Power
Management, reflecting lower demand from the computer gaming segment
and delays in new desktop designs. Orders from desktop computer
customers are forecasted to improve toward the end of the second
quarter, as Semtech begins to benefit from increased market-share in
next generation systems.
Jack Poe, Semtech's Chairman and CEO, commented, "Sales of
products used in portable applications remained strong in the first
quarter and were up over 105 percent compared to the prior year. In
particular, our market-share in powering notebook computers and color
screens in cellular phones has increased substantially. First quarter
results were negatively impacted by seasonal weakness and average
selling price declines in products sold into the desktop computer
market. Sales to computer gaming and automated test equipment (ATE)
customers were also weak."
Mr. Poe added, "New orders were at their highest level in the past
four quarters and suggest there will be improved growth opportunities
in the second half of fiscal year 2004. We expect continued strength
in portable applications and improvements in the desktop, ATE and
telecom end-markets to begin late in the second quarter."
The expected improvement in second half conditions is broad based,
including assumed higher rates of growth from several newer product
lines. Semtech's highly proprietary SETS product line, used for timing
and synchronization in high-end networking systems, is benefiting from
design wins secured in the last two years. Semtech's industry leading
HID technology is gaining traction at several major OEMs. Finally, the
Networking/Industrial Power Management product line secured 33 new
design wins in the first quarter, including designs with power supply
makers which support broad end-applications.
Semtech estimates that net sales for the second quarter of fiscal
year 2004 will be flat to up 2 percent from the first quarter. Turns
orders (orders received and shipped in the same quarter) of
approximately 51 percent are required to achieve this forecast. Gross
margin and operating income are forecasted to improve. Interest and
other income will be down in the coming quarter due to lower rates of
return on investments and the expected absence of gain on the
repurchase of convertible subordinated notes. Earnings per diluted
share are forecasted to be either 9 or 10 cents in the second quarter.
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.
Safe Harbor Provision
Statements contained in this release that are not historical facts
are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements,
including projections and forecasts for revenue and gross margin,
involve risks and uncertainties that could cause actual results to
differ materially from those projected. These risks and uncertainties
include worldwide economic and political conditions, the timing and
duration of semiconductor market upturns or downturns, demand for
personal computers, cellular phones and automated test equipment,
demand for semiconductor devices in general, competitors' actions,
relations with large strategic customers and suppliers, manufacturing
costs and yields, demand for the Company's products in particular, and
risks associated with the businesses of major customers. Other factors
that may cause actual results to differ from the forward-looking
statements contained in this press release and that may affect the
Company's prospects in general are described in the Company's filings
with the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise forward-looking statements to reflect
subsequent events or changed assumptions or circumstances.
SEMTECH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands - except per share amounts)
Three Months Ended
April 27, April 28,
2003 2002
Net sales $44,017 $49,188
Cost of sales 19,160 21,108
Gross profit 24,857 28,080
Operating costs and expenses:
Selling, general and
administrative 8,946 8,412
Product development and
engineering 7,825 7,524
Total operating costs and
expenses 16,771 15,936
Operating income 8,086 12,144
Interest and other income,
net 2,792 1,179
Income before provision for taxes 10,878 13,323
Provision for taxes 2,611 3,331
Net income $8,267 $9,992
Earnings per share:
Basic $0.11 $0.14
Diluted $0.11 $0.13
Weighted average number of shares:
Basic 73,236 72,681
Diluted 76,522 78,997
Notes regarding Consolidated Statements of Income:
1.) In the first quarter of fiscal year 2004, $484,000 of
previously written-off inventory was sold and $229,000 of previously
written-off inventory was sold in the first quarter of fiscal year
2003.
2.) "Interest and other income, net" includes a gain on the
repurchase of convertible subordinated notes of $2.8 million in the
first quarter of fiscal year 2004 and a loss of $38,000 in the first
quarter of fiscal year 2003.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
April 27, January 26,
2003 2003
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $147,800 $137,041
Temporary investments 225,769 273,382
Receivables, less allowances 21,117 17,676
Inventories 14,673 16,351
Income taxes refundable 6,011 -
Deferred income taxes 5,331 11,731
Other current assets 4,125 2,267
Total current assets 424,826 458,448
Property, plant and equipment, net 50,366 51,547
Investments, maturities in excess of 1
year 56,759 78,624
Deferred income taxes 25,593 27,143
Other assets 3,591 4,784
Total Assets $561,135 $620,546
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $8,876 $5,725
Accrued liabilities 13,984 26,596
Income taxes payable 4,030 3,593
Deferred revenue 1,269 1,583
Other current liabilities 44 39
Total current liabilities 28,203 37,536
Long-term debt 182,070 241,570
Total Stockholders' equity 350,862 341,440
Total Liabilities and Stockholders'
Equity $561,135 $620,546
CONTACT: Semtech Corporation
John Baumann, 805-480-2010 (Investor Relations)