Exhibit 99.1
Semtech Announces Strong Third Quarter Results
CAMARILLO, Calif.--(BUSINESS WIRE)--Nov. 24, 2003--
New Orders Up 23 Percent Sequentially;
Net Sales and EPS Exceed Forecast;
Outlook for 8 to 10 Percent Sales Growth in Fourth Quarter
Semtech Corporation (Nasdaq:SMTC), a leading producer of high
performance analog and mixed-signal semiconductors, today announced
that net sales for its third quarter of fiscal year 2004 increased 8
percent compared to the second quarter. This exceeded the Company's
prior forecast. Gross margin, operating income and earnings per share
for the quarter also improved ahead of forecast.
Net sales for the third quarter that ended October 26, 2003 were
$48.1 million, up from $44.6 million in the second quarter and $47.2
million in the prior year third quarter. Net income for the third
quarter of fiscal year 2004 was $9.3 million or 12 cents per diluted
share.
Gross margin was 58.0 percent in the third quarter of fiscal year
2004, up from 57.3 percent in the second quarter and 56.0 percent in
the prior year period. Third quarter operating income increased 26
percent over the previous quarter and 30 percent compared to the prior
year quarter. The increase in operating income reflected improved
sales and increased contribution from higher margin products.
Net sales for the first nine months of fiscal year 2004 were
$136.7 million and net income was $19.9 million or 26 cents per
diluted share. For the first nine months of fiscal year 2003, net
sales were $148.4 million and net income was $34.1 million or 44 cents
per diluted share. Interest and other income/expense for both nine
month periods include gains related to the Company's repurchase of
convertible subordinated debentures. The first nine months of the
current fiscal year include the expense of calling the remaining
outstanding convertible subordinated debentures.
New orders in the third quarter of fiscal year 2004 increased 23
percent compared to the prior quarter. This resulted in the Company's
highest quarterly book-to-bill ratio in the last 4 years and best
order volume since the fourth quarter of fiscal year 2001. Demand was
particularly strong for Power Management products used in notebook
computers, cellular handsets and other handheld devices.
Jason Carlson, Semtech's President and Chief Executive Officer,
commented, "Our performance in portable applications has been
outstanding. Building off our strength in Power and Protection, we are
now starting to win designs for Human Input Devices (HID) used to
control touch-pads, pointing sticks and keyboards. Improved demand for
products used in more capital intensive end-markets, like test,
industrial and communication systems are also driving sales growth and
higher gross margin."
Two of Semtech's emerging product lines recorded impressive order
growth during the quarter. Orders for the Company's SETS and
Networking/Industrial Power Management product lines both grew
sequentially in excess of 35 percent. In addition, an initial design
win for HID products was recorded with a major notebook OEM. These
three emerging product lines contribute to Semtech's outlook for sales
growth and margin expansion over the coming year.
Fourth Quarter Outlook
Based on beginning backlog entering the quarter, Semtech estimates
that net sales for the fourth quarter of fiscal year 2004 will be up 8
to 10 percent over the third quarter. Turns orders (orders received
and shipped in the same quarter) of approximately 35 percent are
required to achieve this forecast. Gross margin and operating income
should improve. Earnings per diluted share in the fourth quarter are
forecasted to be 14 cents.
Mr. Carlson added, "As the end-markets have improved, our customer
base has begun to give us more visibility. This has allowed us to
build some backlog, which has reduced our reliance on turns orders to
below 50 percent for the first time in three quarters."
Semtech spent $3.1 million on the repurchase of common stock in
the third quarter and expects to continue to buyback shares under its
current buyback program. The Company ended the third quarter with
$260.3 million of cash and investments, up $14.5 million from the
prior 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 Nine Months Ended
Oct. 26, Oct. 27, Oct. 26, Oct. 27,
2003 2002 2003 2002
Net sales $48,112 $47,168 $136,698 $148,427
Cost of sales 20,230 20,736 58,429 63,583
Gross profit 27,882 26,432 78,269 84,844
Operating costs and expenses:
Selling, general and
administrative 9,271 8,790 27,445 26,018
Product development and
engineering 7,533 7,912 22,835 23,709
One-time costs - 1,202 - 1,202
Total operating costs and
expenses 16,804 17,904 50,280 50,929
Operating income 11,078 8,528 27,989 33,915
Interest and other (expense)
income, net 1,103 10,649 (1,756) 13,368
Income before provision for taxes 12,181 19,177 26,233 47,283
Provision for taxes 2,923 6,137 6,296 13,164
Net income $9,258 $13,040 $19,937 $34,119
Earnings per share:
Basic $0.13 $0.18 $0.27 $0.47
Diluted $0.12 $0.17 $0.26 $0.44
Weighted average number of
shares:
Basic 73,704 73,389 73,449 73,139
Diluted 77,902 76,721 77,154 77,430
Notes regarding Consolidated Statements of Income:
1.) In the nine month period ended October 26, 2003, $949,000 of
previously written-off inventory was sold. In the nine month
period ended October 27, 2002, $862,000 of previously written-off
inventory was sold.
2.) "Interest and other (expense) income, net" includes a $6.8 million
charge for the calling of the Company's convertible subordinated
notes in the nine month period ended October 26, 2003.
3.) "Interest and other (expense) income, net" includes a gain on the
repurchase of convertible subordinated notes of $2.9 million in
the nine month period ended October 27, 2003 and a gain of $11.2
million in the nine month period ended October 27, 2002.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
Oct. 26, Jan. 26,
2003 2003
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $90,310 $137,041
Temporary investments 91,961 273,382
Receivables, less allowances 20,614 17,676
Inventories 20,974 16,351
Income taxes refundable 5,795 -
Deferred income taxes 5,767 11,731
Other current assets 3,550 2,267
Total current assets 238,971 458,448
Property, plant and equipment, net 48,891 51,547
Investments, maturities in excess of 1 year 78,013 78,624
Deferred income taxes 24,779 27,143
Other assets 365 4,784
Total Assets $391,019 $620,546
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $10,182 $5,725
Accrued liabilities 14,539 26,596
Income taxes payable 2,454 3,593
Deferred revenue 1,876 1,583
Other current liabilities 14 39
Total current liabilities 29,065 37,536
Long-term debt - 241,570
Total Stockholders' equity 361,954 341,440
Total Liabilities and Stockholders' Equity $391,019 $620,546
CONTACT: Semtech Corporation
John Baumann, 805-480-2010 (Investor Relations)