Exhibit 99.1
Semtech Announces Fourth Quarter Results; Net Sales Grew 32 Percent in Fiscal
Year 2005, Net Income up 81%; Eighteenth Consecutive Year of Positive Operating
Cash Flow
CAMARILLO, Calif.--(BUSINESS WIRE)--March 1, 2005--SEMTECH
CORPORATION (NASDAQ:SMTC), a leading producer of high performance
analog and mixed-signal semiconductors, today announced financial
results for its fourth quarter and fiscal year 2005 that ended January
30, 2005. Per the Company's fiscal calendar, fiscal year 2005 was a
fifty-three week year, with the third quarter being a fourteen week
quarter.
Net sales for the fourth quarter of fiscal year 2005 were $58.4
million, up 6 percent from the prior year fourth quarter and down 10
percent sequentially from the third quarter. Net income for the fourth
quarter was $12.1 million or 16 cents per diluted share, which was
comparable to net income of $12.5 million or 16 cents per diluted
share in the prior year period. In the three months ended January 30,
2005, the Company reduced its inventory by $5.0 million or 17 percent.
Net sales for all of fiscal year 2005 increased 32 percent over
fiscal year 2004. Net income for fiscal year 2005 was $58.9 million or
75 cents per diluted share, up 81 percent from the prior year.
Operating margin for fiscal year 2005 was 28 percent.
Fiscal year 2005 represented Semtech's eighteenth consecutive year
of positive operating cash flow. Operating cash flow was approximately
$15.0 million in the fourth quarter of fiscal year 2005 and $70.0
million for the full year. The Company spent $11.0 million in the
fourth quarter to buy back 550,000 shares of its common stock.
New orders in the fourth quarter of fiscal year 2005 were up
slightly from the third quarter, but were less than fourth quarter
shipments. Orders were strongest in the area of Protection Products,
which grew 13 percent sequentially in the fourth quarter. Distributors
and end-customers have reduced their inventory levels, yet continue to
order product with very short delivery request dates. Semtech expects
new orders to grow sequentially in the first quarter of fiscal year
2006.
Jason Carlson, Semtech's President and Chief Executive Officer,
commented, "Despite waning demand in the second half, fiscal year 2005
was an impressive growth year for Semtech. Net sales grew 32 percent,
net income increased 81 percent and the net after-tax margin was 23
percent. Operating cash flow increased 96 percent and Semtech spent
more than 5 times as much on stock buybacks in fiscal year 2005 than
in the prior year."
Mr. Carlson added, "The ongoing inventory correction that has
impacted the electronics supply chain led Semtech to reduce its
inventory levels in the fourth quarter. While the Company's aggressive
reduction in inventory, and related lower overhead utilization rates,
negatively impacted the operating margin in the fourth quarter, we
enter the new fiscal year with a comfortable level of inventory. We
expect demand should improve as the year progresses, especially in the
seasonally stronger second half."
The Company introduced 24 new products in the fourth quarter,
including 7 out of the emerging Networking and Industrial Power
Management product line. Looking at customer design win data, the
largest design win dollars were for a proprietary ESD Protection
device used in portable applications, followed by 5 different Portable
Power Management parts used in cell phone, PDA and notebook
applications.
First Quarter Outlook
Semtech estimates that net sales for the first quarter that ends
May 1, 2005 will be down approximately 5 percent from the fourth
quarter. Turns orders (orders received and shipped in the same
quarter) of approximately 45 percent are required to achieve this
forecast. Earnings in the first quarter are forecasted to be 14 cents
per diluted share.
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. The Company has not yet completed its fiscal year 2005
financial statement audit, which includes an audit of internal
controls over financial reporting. As such, the financial information
presented in this press release is subject to adjustments that may be
required upon audit completion.
SEMTECH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands - except per share amounts)
Three Months Twelve Months
Ended Ended(1)
Jan. 30, Jan. 25, Jan. 30, Jan. 25,
2005 2004 2005 2004
(Unaudited)(Unaudited)(Unaudited)(Audited)
Net sales $58,427 $55,381 $253,612 $192,079
Cost of sales 25,397 22,903 105,745 81,332
Gross profit 33,030 32,478 147,867 110,747
Operating costs and expenses:
Selling, general and
administrative 11,151 9,762 44,253 37,207
Product development and
engineering 8,324 7,536 33,492 30,371
Total operating costs and
expenses 19,475 17,298 77,745 67,578
Operating income 13,555 15,180 70,122 43,169
Interest and other income
(expense), net 1,864 1,305 6,188 (451)
Income before taxes 15,419 16,485 76,310 42,718
Provision for taxes 3,276 3,956 17,388 10,252
Net income $12,143 $12,529 $58,922 $32,466
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Earnings per share:
Basic $0.16 $0.17 $0.79 $0.44
Diluted $0.16 $0.16 $0.75 $0.42
Weighted average number of
shares:
Basic 74,067 73,941 74,187 73,570
Diluted 77,758 78,736 78,124 77,504
Notes regarding Consolidated Statements of Income:
1.) The twelve month period ended January 30, 2005 consisted of fifty
three weeks, compared with the twelve month period ended January 25,
2004 which consisted of fifty two weeks.
2.) In the twelve month period ended January 30, 2005, $507,000 of
previously written-off inventory was sold. In the twelve month period
ended January 25, 2004, $1.4 million 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 twelve month period ended January 25, 2004.
4.) "Interest and other income (expense), net" includes a gain on the
repurchase of convertible subordinated notes of $2.9 million in the
twelve month period ended January 25, 2004.
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
January 30, January 25,
2005 2004
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $82,154 $96,314
Temporary investments 108,167 93,044
Receivables, less allowances 22,097 20,362
Inventories 24,811 22,166
Income taxes refundable - 5,795
Deferred income taxes 5,022 5,212
Other current assets 6,026 3,062
Total current assets 248,277 245,955
Property, plant and equipment, net 55,674 49,579
Investments, maturities in excess of 1 year 111,577 86,119
Deferred income taxes 20,499 25,552
Other assets 13,324 1,268
Total Assets $449,351 $408,473
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $9,737 $8,554
Accrued liabilities 11,500 16,894
Income taxes payable 3,315 1,699
Deferred revenue 2,879 1,689
Other current liabilities - 27
Total current liabilities 27,431 28,863
Other long-term liabilities 2,410 -
Total Stockholders' equity 419,510 379,610
Total Liabilities and Stockholders' Equity $449,351 $408,473
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CONTACT: Semtech Corporation
John Baumann, 805-480-2010