Exhibit 99.1
Semtech Announces Second Quarter Results; Operating Income Up 9
Percent, Exceeding Forecast; New Orders Up 7 Percent; Jason Carlson to
Become CEO, Board Member
CAMARILLO, Calif.--(BUSINESS WIRE)--Aug. 26, 2003--Semtech
Corporation (Nasdaq:SMTC), a leading producer of high performance
analog and mixed-signal semiconductors, today announced results for
its fiscal year 2004 second quarter that ended July 27, 2003 and the
promotion of Jason Carlson effective October 6, 2003.
Net sales for the second quarter of fiscal year 2004 were $44.6
million, an increase of 1 percent compared to the net sales of $44.0
million for first quarter of fiscal year 2004. Earnings per diluted
share under generally accepted accounting principles (GAAP) were 3
cents on net income of $2.4 million. Earnings for the second quarter
include a pre-tax charge of $6.8 million or net-of-tax 7 cents per
diluted share impact related to the Company's calling of its
convertible subordinated notes.
Gross margin was 57.3 percent in the second quarter of fiscal year
2004, up from 56.5 percent in the first quarter. Operating income was
up 9 percent over the previous quarter. The growth in operating
income, which exceeded forecast, was driven by sales of higher margin
products.
Sales for the first six months of fiscal year 2004 were $88.6
million and net income was $10.7 million or 14 cents per diluted
share. For the first six months of fiscal year 2003, net sales were
$101.3 million and net income was $21.1 million or 27 cents per
diluted share.
New orders in the second quarter of fiscal year 2004 were up 7
percent over the prior quarter, resulting in a book-to-bill ratio that
was above one. New orders were particularly strong out of the
industrial and communications end-markets. Demand from the notebook
segment of the computer market remained strong.
Jack Poe, Semtech's Chairman and Chief Executive Officer,
commented, "Demand for the Company's Test and Measurement products
improved during the quarter ahead of expectations. In the area of
Portable Power Management, this product line represented 38 percent or
approximately $26.0 million of new design dollars in the quarter.
Portable Power Management sales in the coming quarter are forecasted
to be up approximately 100 percent compared to the prior year period."
Third Quarter Outlook
Jason Carlson, Semtech's President and Chief Operating Officer,
said, "Order activity in the second quarter supports our belief that
solid shipment growth can be achieved in the third quarter. We expect
seasonal strength out of the computer and wireless markets and a
cyclical recovery in the ATE end-market. In addition, the newer
product lines of Human Input Devices, Networking/Industrial Power
Management and Advanced Communications are expected to grow faster
than the overall Company in the second half of fiscal year 2004."
Based on the strong order rates in the second quarter and so far
in August, Semtech estimates that net sales for the third quarter of
fiscal year 2004 will be up 4 to 6 percent over the second quarter.
Turns orders (orders received and shipped in the same quarter) of
approximately 52 percent are required to achieve this forecast. Gross
margin and operating income are forecasted to improve. Interest and
other income is expected to be approximately $1.0 million. Earnings
per diluted share in the third quarter are forecasted to be 11 cents.
Jason Carlson Promotion
Semtech announced that Jason Carlson has been promoted to
President and Chief Executive Officer, effective October 6, 2003. Mr.
Carlson will also become a member of the Company's board of directors.
Jack Poe, Semtech's current Chief Executive Officer, will continue in
his role as Chairman of the Board. Mr. Carlson was hired as President
and Chief Operating Officer of Semtech in November 2002. He has nearly
twenty years of semiconductor experience, including several senior
positions in the audio and video market segments.
Strong Balance Sheet and Ongoing Buyback
On July 18, 2003 Semtech called the remaining $165.0 million of
its outstanding convertible subordinated notes resulting in a pre-tax
charge of $6.8 million or net-of-tax 7 cents per diluted share impact.
The Company ended the second quarter with $245.8 million of cash and
marketable securities and no long-term debt. Semtech bought
approximately $900,000 of common stock in the second quarter under its
current buyback program and there remains $19.2 million authorized for
additional stock purchases.
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 Six Months Ended
July 27, July 28, July 27, July 28,
2003 2002 2003 2002
Net sales $44,569 $52,071 $88,586 $101,259
Cost of sales 19,039 21,739 38,199 42,847
Gross profit 25,530 30,332 50,387 58,412
Operating costs and expenses:
Selling, general and
administrative 9,228 8,816 18,174 17,228
Product development and
engineering 7,477 8,273 15,302 15,797
Total operating costs and
expenses 16,705 17,089 33,476 33,025
Operating income 8,825 13,243 16,911 25,387
Interest and other (expense)
income, net (5,651) 1,540 (2,859) 2,719
Income before provision for taxes 3,174 14,783 14,052 28,106
Provision for taxes 762 3,696 3,373 7,027
Net income $2,412 $11,087 $10,679 $21,079
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Earnings per share:
Basic $0.03 $0.15 $0.15 $0.29
Diluted $0.03 $0.14 $0.14 $0.27
Weighted average number of
shares:
Basic 73,411 73,348 73,326 73,014
Diluted 76,985 78,627 76,745 78,796
Notes regarding Consolidated Statements of Income:
1.) "Interest and other (expense) income, net" includes a $6.8
million charge for the calling of the Company's convertible
subordinated notes in the three and six month periods ended July 27,
2003.
2.) In the six month period ended July 27, 2003, $792,000 of
previously written-off inventory was sold and $644,000 of previously
written-off inventory was sold in the six month period ended July 28,
2002.
3.) "Interest and other (expense) income, net" includes a gain on
the repurchase of convertible subordinated notes of $2.9 million in
the six month period ended July 27, 2003 and a gain of $569,000 in the
six month period ended July 28, 2002.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
April 27, January 26,
2003 2003
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $72,007 $137,041
Temporary investments 154,425 273,382
Receivables, less allowances 22,722 17,676
Inventories 18,348 16,351
Income taxes refundable 5,795 -
Deferred income taxes 5,461 11,731
Other current assets 3,314 2,267
Total current assets 282,072 458,448
Property, plant and equipment, net 49,938 51,547
Investments, maturities in excess of 1 year 19,382 78,624
Deferred income taxes 25,753 27,143
Other assets 552 4,784
Total Assets $377,697 $620,546
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $9,626 $5,725
Accrued liabilities 13,070 26,596
Income taxes payable 1,490 3,593
Deferred revenue 1,275 1,583
Other current liabilities 51 39
Total current liabilities 25,512 37,536
Long-term debt - 241,570
Total Stockholders' equity 352,185 341,440
Total Liabilities and Stockholders' Equity $377,697 $620,546
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CONTACT: Semtech Corporation
John Baumann, 805-480-2010 (Investor Relations)