Exhibit 99.1
Semtech Announces Third Quarter Results
CAMARILLO, Calif.--(BUSINESS WIRE)--Nov. 29, 2004--SEMTECH
CORPORATION (NASDAQ:SMTC), a leading producer of high performance
analog and mixed-signal semiconductors, today announced financial
results for its third quarter that ended October 31, 2004.
Net sales for the third quarter of fiscal year 2005 were $65.0
million, up 35 percent from $48.1 million in the prior year third
quarter. Fiscal year 2005 third quarter net sales were down 5 percent
sequentially from the second quarter. Net income for the third quarter
was $14.6 million or 19 cents per diluted share, which was up from net
income of $9.3 million or 12 cents per diluted share in the prior year
period. The third quarter of fiscal year 2005 consisted of fourteen
weeks as compared to thirteen weeks in all other quarters presented.
Quarterly operating cash flow for the third quarter of fiscal year
2005 was at its highest level in the last nine quarters. Semtech
generated $24.2 million of operating cash flow in the third quarter
and spent $11.5 million to buy back 611,700 shares of its common
stock. The Company ended the third quarter with $295.7 million in cash
and investments and no long-term debt.
For the first three quarters of fiscal year 2005, net sales were
up 43 percent to $195.2 million and net income was up 135 percent to
$46.8 million or 60 cents per diluted share. Net sales in the first
nine months of fiscal year 2004 were $136.7 million and net income
(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) was $19.9 million or 26 cents per
diluted share.
New orders for the third quarter of fiscal year 2005 were below
shipments, resulting in a book-to-bill ratio of less than 1:1. New
orders and net sales in the third quarter were impacted by broad-based
weakness in end-market demand. Signs indicate that the Company's
distributors and OEM customers were working aggressively in the
quarter to reduce their inventory levels. The automated test equipment
was the weakest end-market segment, as demand for new test platforms
declined significantly. The communications end-market, which includes
cellular phones and telecom equipment, showed modest sales growth in
the third quarter.
Jason Carlson, Semtech's President and Chief Executive Officer,
commented, "Despite the near-term decline in order patterns from
customers, design win data and new product development were positive
for the third quarter. Semtech continues to find opportunities in the
traditionally strong areas of cellular phones and notebooks, and has
also seen good design win traction in PDA, set-top box, digital TV and
networking gear."
Mr. Carlson added, "We took several steps in the third quarter to
better focus our development resources, reduce internal inventory
levels and trim discretionary spending. While certain near-term cost
savings should be realized from these steps, the real benefit is
expected to be in long-term sales growth and margin expansion. The
Company's three focus end-markets over the next several years will
likely be portable devices, wireline communications and the broadly
defined industrial end-market."
Fourth Quarter Outlook
Semtech estimates that net sales for the fourth quarter that ends
January 30, 2005 will be approximately $59.0 million. Turns orders
(orders received and shipped in the same quarter) of approximately 40
percent are required to achieve this forecast. Earnings in the fourth
quarter are forecasted to be 16 cents per diluted share. For all of
fiscal year 2005, operating cash flow should exceed $65.0 million.
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(1) Nine Months Ended(1)
Oct. 31, Oct. 26, Oct. 31, Oct. 26,
2004 2003 2004 2003
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net sales $64,987 $48,112 $195,185 $136,698
Cost of sales 27,767 20,230 80,348 58,429
Gross profit 37,220 27,882 114,837 78,269
Operating costs and
expenses:
Selling, general and
administrative 11,438 9,271 33,102 27,445
Product development and
engineering 8,826 7,533 25,168 22,835
Total operating costs and
expenses 20,264 16,804 58,270 50,280
Operating income 16,956 11,078 56,567 27,989
Interest and other income
(expense), net 2,142 1,103 4,324 (1,756)
Income before taxes 19,098 12,181 60,891 26,233
Provision for taxes 4,503 2,923 14,112 6,296
Net income $14,595 $9,258 $46,779 $19,937
========== ========== ========== ==========
Earnings per share:
Basic $0.20 $0.13 $0.63 $0.27
Diluted $0.19 $0.12 $0.60 $0.26
Weighted average number of
shares:
Basic 74,000 73,704 74,220 73,449
Diluted 77,486 77,902 78,320 77,154
Notes regarding Consolidated Statements of Income:
1.) The three month and nine month periods ended October 31, 2004
consisted of fourteen weeks and forty weeks, respectively. The three
month and nine month periods ended October 26, 2003 consisted of
thirteen weeks and thirty-nine weeks, respectively.
2.) In the nine month period ended October 31, 2004, $423,000 of
previously written-off inventory was sold. In the nine month period
ended October 26, 2003, $949,000 of previously written-off inventory
was sold.
3.) "Interest and other income (expense), 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.
4.) "Interest and other income (expense), net" includes a gain on the
repurchase of convertible subordinated notes of $2.9 million in the
nine month period ended October 26, 2003.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
October January
31, 25,
2004 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $79,362 $96,314
Temporary investments 93,683 93,044
Receivables, less allowances 18,232 20,362
Inventories 29,803 22,166
Income taxes refundable - 5,795
Deferred income taxes 4,830 5,212
Other current assets 6,652 3,062
Total current assets 232,562 245,955
Property, plant and equipment, net 57,594 49,579
Investments, maturities in excess of 1 year 122,682 86,119
Deferred income taxes 21,224 25,552
Other assets 12,128 1,268
Total Assets $446,190 $408,473
=========== =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $9,408 $8,554
Accrued liabilities 15,349 16,894
Income taxes payable 2,896 1,699
Deferred revenue 3,044 1,689
Other current liabilities 29 27
Total current liabilities 30,726 28,863
Other long-term liabilities 1,701 -
Total Stockholders' equity 413,763 379,610
Total Liabilities and Stockholders' Equity $446,190 $408,473
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CONTACT: Semtech Corporation
John Baumann, 805-480-2010