Exhibit 99.1
Semtech Second Quarter Sales up 10 Percent Sequentially;
Record Gross Margin Achieved in the Quarter
CAMARILLO, Calif.--(BUSINESS WIRE)--Aug. 24, 2004--
Greater Than 1:1 Book-to-Bill Ratio
SEMTECH CORPORATION (Nasdaq:SMTC), a leading producer of high performance
analog and mixed-signal semiconductors, today announced that net sales and net
income for its second quarter that ended July 25, 2004 were up significantly
over the first quarter and the prior year period. Operating income was 31
percent of net sales in the second quarter and net income represented a 26
percent after-tax-margin. Semtech generated $21.4 million of operating cash flow
in the second quarter and spent $13.0 million to buy back 619,000 shares of its
common stock.
Net sales for the second quarter of fiscal year 2005 were $68.3 million, up
53 percent from $44.6 million in the prior year second quarter. As a result of
higher sales and record gross margin, net income for the second quarter of
fiscal year 2005 was $17.4 million or 22 cents per diluted share. Net income for
the second quarter of last year was $2.4 million or 3 cents per diluted share,
which included 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.
For the first six months of fiscal year 2005, net sales were up 47 percent
to $130.2 million and net income nearly tripled to $32.2 million or 41 cents per
diluted share. Net sales in the first six months of fiscal year 2004 were $88.6
million and net income was $10.7 million or 14 cents per share.
New orders in the second quarter of fiscal year 2005 exceeded shipments for
the period, resulting in a book-to-bill ratio of greater than 1:1. The strongest
growth came from the Company's timing and synchronization or SETS product line
used in high-speed communications, which saw new orders grow 32 percent over the
first quarter. The Human Input Device (HID) unit also saw meaningful order
growth, due in part to a new design win for the MicroBuddy(R) device being used
in a high volume digital video recorder.
Net sales were up 10 percent sequentially in the second quarter of fiscal
year 2005 compared to the first quarter, driven by growth in Power Management,
HID, SETS, and Protection products. Shipments of Semtech's two largest product
lines, Power Management and Protection, are both up more than 50 percent
compared to the prior year period. The expansion in sales reflected ongoing
demand tied to cellular handsets and consumer electronics, as well as a modest
recovery in the computer segment.
Jason Carlson, Semtech's President and Chief Executive Officer commented,
"I was most pleased with the new orders and shipment levels achieved by our SETS
product line in the second quarter. The emerging product lines of SETS and HID
have been areas of investment by Semtech for more than 4 years. In the case of
SETS, we are penetrating a relatively new end-market for Semtech, where HID
represents increased content in portable applications we are already
supporting."
Third Quarter Outlook
Semtech estimates that net sales for the third quarter that ends October
31, 2004 will be up 3 to 5 percent over the second quarter. Turns orders (orders
received and shipped in the same quarter) of approximately 32 percent are
required to achieve this forecast. Earnings in the third quarter are forecasted
to be 23 cents per diluted share. Per the Company's fiscal calendar, the third
quarter of fiscal year 2005 will be a 14-week 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
cellular phones, personal computers and automated test equipment, demand for
semiconductor devices in general, demand for the Company's products in
particular, competitors' actions, supply from key third-party silicon wafer
foundries and assembly contractors, manufacturing costs and yields, relations
with strategic customers, 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 25, July 27, July 25, July 27,
2004 2003 2004 2003
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net sales $68,305 $44,569 $130,198 $88,586
Cost of sales 27,470 19,039 52,581 38,199
Gross profit 40,835 25,530 77,617 50,387
Operating costs and
expenses:
Selling, general and
administrative 11,323 9,228 21,664 18,174
Product development and
engineering 8,435 7,477 16,342 15,302
Total operating costs and
expenses 19,758 16,705 38,006 33,476
Operating income 21,077 8,825 39,611 16,911
Interest and other income
(expense), net 1,288 (5,651) 2,182 (2,859)
Income before taxes 22,365 3,174 41,793 14,052
Provision for taxes 4,946 762 9,609 3,373
Net income $17,419 $2,412 $32,184 $10,679
========== ========== ========== ===========
Earnings per share:
Basic $0.23 $0.03 $0.43 $0.15
Diluted $0.22 $0.03 $0.41 $0.14
Weighted average number of shares:
Basic 74,452 73,411 74,339 73,326
Diluted 78,658 76,985 78,737 76,745
Notes regarding Consolidated Statements of Income:
1.) In the six month period ended July 25, 2004, $364,000 of
previously written-off inventory was sold. In the six month period
ended July 27, 2003, $792,000 of previously written-off inventory was
sold.
2.) "Interest and other income (expense), 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.
3.) "Interest and other income (expense), net" includes a gain on
the repurchase of convertible subordinated notes of $2.9 million in
the six month period ended July 27, 2003.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
July 25, January 25,
2004 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $62,776 $96,314
Temporary investments 100,325 93,044
Receivables, less allowances 25,028 20,362
Inventories 29,335 22,166
Income taxes refundable 5,795 5,795
Deferred income taxes 4,897 5,212
Other current assets 9,341 3,062
Total current assets 237,497 245,955
Property, plant and equipment, net 55,691 49,579
Investments, maturities in excess of 1
year 119,815 86,119
Deferred income taxes 24,092 25,552
Other assets 4,055 1,268
Total Assets $441,150 $408,473
=========== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $18,845 $8,554
Accrued liabilities 10,752 16,894
Income taxes payable 2,537 1,699
Deferred revenue 3,312 1,689
Other current liabilities - 27
Total current liabilities 35,446 28,863
Other long-term liabilities 1,072 -
Total Stockholders' equity 404,632 379,610
Total Liabilities and Stockholders'
Equity $441,150 $408,473
=========== ==============
CONTACT: Semtech Corporation
John Baumann, 805-480-2010