Exhibit 99.1
Semtech Announces First Quarter Results
-- Revenue up 4.5% over Previous Quarter
-- Board Authorizes $150M Accelerated Stock Repurchase
CAMARILLO, Calif.--(BUSINESS WIRE)--May 30, 2007--Semtech
Corporation (NASDAQ:SMTC), a leading producer of high performance
analog and mixed-signal semiconductors, today reported unaudited
financial results for its first quarter of fiscal year 2008 that ended
April 29, 2007.
Net sales for the first quarter of fiscal year 2008 were $60.6
million, down 8 percent from the first quarter of fiscal year 2007 and
up 4.5 percent when compared to the fourth quarter of fiscal year
2007.
Net income for the first quarter of fiscal year 2008, computed in
accordance with U.S. generally accepted accounting principles (GAAP),
was $7.9 million or 11 cents per diluted share. GAAP net income was
$11.8 million or 16 cents per diluted share in the first quarter of
fiscal year 2007 and was $4.6 million or 6 cents per diluted share in
the fourth quarter of fiscal year 2007. Gross profit margin for the
first quarter of fiscal year 2008 was 54.9% compared to 57.5 percent
in the first quarter of fiscal year 2007 and 50.3 percent in the
fourth quarter of fiscal year 2007.
Non-GAAP net income for the first quarter of fiscal year 2008 was
$10.6 million or 14 cents per diluted share. Non-GAAP net income was
$14.8 million or 20 cents per diluted share in the first quarter of
fiscal year 2007 and was $9.3 million or 12 cents per diluted share in
the fourth quarter of fiscal year 2007. Non-GAAP gross profit margin
for the first quarter of fiscal year 2008 was 55.4 percent. Non-GAAP
gross profit margin for the first quarter of fiscal year 2007 was 57.7
percent and 51.4 percent in the fourth quarter of fiscal year 2007.
Non-GAAP results exclude the impact of stock based compensation, the
amortization of acquisition-related intangibles, expenses associated
with Semtech's ongoing litigation against an insurer, the gain on sale
of an unused parcel of land, and expenses related to the Company's now
completed investigation into its historical stock option practices,
now completed restatement of past financial statements to correct
errors in stock option accounting and ongoing stock option related
matters including an inquiry by the SEC, a federal grand jury
subpoena, and previously announced derivative litigation.
New orders were up 7 percent in the first quarter of fiscal year
2008 compared to the fourth quarter of fiscal year 2007. New orders
exceeded shipments, resulting in a book-to-bill ratio above one.
Demand was strongest in the areas of industrial, handsets and
communications equipment.
Operating expenses for the first quarter of fiscal year 2008
included approximately $2.1 million related to the stock options
investigation, SEC inquiry, the grand jury subpoena, the previously
announced derivative litigation, the restatement, and related matters.
Operating expenses for the first quarter of fiscal year 2007 did not
include any expenses for these matters, as they arose after the end of
that quarter. In the fourth quarter of fiscal year 2007 these expenses
were $2.5 million.
Semtech had $364 million of cash, cash equivalents and marketable
securities as of April 29, 2007, which was up from $341 million at the
end of the fourth quarter of fiscal year 2007.
Mohan Maheswaran, Semtech's President and Chief Executive Officer,
commented, "Semtech had an encouraging first quarter performance with
improvements in sequential revenue growth, gross margins and earnings.
In addition, our power management business returned to sequential
revenue growth for the first time in almost three years, demonstrating
improved execution within the Company. "
The results announced today are preliminary, as they are subject
to customary quarterly independent auditor review procedures. As such,
these results are subject to revision until the Company files its
Quarterly report on Form 10-Q for the first quarter of fiscal year
2008.
Second Quarter Outlook
Semtech estimates net sales for the second quarter which ends July
29, 2007 will increase three to five percent compared to the first
quarter. Non-GAAP earnings for the second quarter are expected to be
14 to 15 cents per diluted share. Non-GAAP earnings for the second
quarter are prior to stock-based compensation expense, amortization of
intangibles and certain legal expenses. GAAP earnings for the second
quarter of fiscal year 2008 are expected to be 9 to 10 cents per
diluted share.
Accelerated Stock Buyback
In a separate press release today, Semtech announced that its
Board of Directors has authorized a $150M accelerated stock buy-back.
About Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements
prepared in accordance with GAAP, this release includes a non-GAAP
presentation of gross margin, net income and earnings per diluted
share. All of these non-GAAP measures exclude stock-based
compensation, acquisition related amortization of intangibles, and
other items detailed above. These non-GAAP measures are provided to
enhance the user's overall understanding of the Company's comparable
financial performance between periods. In addition, the Company's
management generally excludes such items in managing and evaluating
the performance of the business. A further discussion of these
non-GAAP financial measures can be found above, and reconciliations of
GAAP results for the first quarter of fiscal year 2008 and 2007,
respectively and the fourth quarter of fiscal 2007, appear with the
financial statements later in this release. These additional financial
measures should not be considered substitutes for any measures derived
in accordance with GAAP and may be inconsistent with similar measures
presented by other companies.
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.
Forward-Looking and Cautionary Statements
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements are statements other than
historical information or statements of current condition and relate
to matters such as future financial performance, future operational
performance, the anticipated impact of specific items on future
earnings, and our plans, objectives and expectations. Some
forward-looking statements may be identified by use of terms such as
"expects," "anticipates," "intends," "estimates," "believes,"
"projects," "should," "will," "plans" and similar words.
Forward-looking statements 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. In addition to considering these risks and uncertainties,
forward-looking statements should be considered in conjunction with
the cautionary statements contained in the "Risk Factors" section and
elsewhere in the Company's Annual Report on Form 10-K for the fiscal
year ended January 28, 2007, in the Company's other filings with the
SEC, and in material incorporated therein by reference. In light of
the risks and uncertainties inherent in forecasts of revenue and gross
margin and in other projected matters, forward-looking statements
should not be regarded as representations by the Company that its
objectives or plans will be achieved or that any of its operating
expectations or financial forecasts will be realized. The Company
assumes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
SEMTECH CORPORATION
GAAP CONSOLIDATED STATEMENTS OF INCOME
(Table in thousands - except per share amount)
Three Months Ended
-------------------------------------
April 29, April 30, January 28,
2007 2006 2007
------------ ------------ -----------
Q1 2008 Q1 2007 Q4 2007
------------ ------------ -----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $60,566 $65,943 $57,963
Cost of sales 27,313 28,032 28,786
------------ ------------ -----------
Gross profit 33,253 37,911 29,177
Operating costs and expenses:
Selling, general and
administrative 18,181 15,124 17,661
Product development and
engineering 10,005 10,702 10,737
Acquisition related items 276 365 276
Insurance recovery litigation
legal expenses 175 160 114
------------ ------------ -----------
Total operating costs and
expenses 28,637 26,351 28,788
Operating income 4,616 11,560 389
Interest and other income, net 5,715 2,922 3,954
------------ ------------ -----------
Income before taxes 10,331 14,482 4,343
Provision/(credit) for taxes 2,400 2,725 (252)
Net income $7,931 $11,757 $4,595
============ ============ ===========
Earnings per share:
Basic $0.11 $0.16 $0.06
Diluted $0.11 $0.16 $0.06
Weighted average number of
shares:
Basic 72,379 72,575 72,433
Diluted 73,593 74,715 74,311
SEMTECH CORPORATION
Notes to Consolidated GAAP statements of income
(Table in thousands - except per share amounts)
(1) - FAS 123R requiring the expensing of stock based compensation was
adopted starting in the quarter ended April 30, 2006. GAAP based
results include pre-tax stock based compensation charges as follows:
Three Months Ended
-----------------------
April April January
29, 30, 28,
2007 2006 2007
------- ------- -------
Stock Option Expense Q1 2008 Q1 2007 Q4 2007
- ---------------------------------------------- ------- ------- -------
Cost of sales $310 $134 $343
Selling, general and administrative 1,430 2,660 1,868
Product development and engineering 734 1,187 774
------- ------- -------
Total stock-based compensation $2,474 $3,981 $2,985
======= ======= =======
(2) - GAAP based results for the fourth quarter of fiscal year 2007
include pre-tax charges related to payments to individuals prohibited
from exercising expiring or lapsing stock options during the
restatement period.
April April January
29, 30, 28,
2007 2006 2007
------- ------- -------
Expenses related to expired options Q1 2008 Q1 2007 Q4 2007
- ---------------------------------------------- ------- ------- -------
Cost of sales $- $- $264
Selling, general and administrative - - 833
Product development and engineering - - 896
------- ------- -------
Total stock-based compensation $- $- $1,993
======= ======= =======
SEMTECH CORPORATION
Financial bridge - GAAP to Non-GAAP statements of income
(Table in thousands - except per share amounts)
RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT:
Three Months Ended
-----------------------------------
April 29, April 30, January 28,
2007 2006 2007
----------- ----------- -----------
Q1 2008 Q1 2007 Q4 2007
----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
Gross profit, as reported (GAAP) $33,253 $37,911 $29,177
Adjustments to GAAP gross
profit:
Stock-based compensation expense 310 134 343
Expenses related to expired
options - - 264
----------- ----------- -----------
Non-GAAP Gross profit $33,563 $38,045 $29,784
=========== =========== ===========
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME:
Three Months Ended
-----------------------------------
April 29, April 30, January 28,
2007 2006 2007
----------- ----------- -----------
Q1 2008 Q1 2007 Q4 2007
----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
Net Income, as reported (GAAP) $7,931 $11,757 $4,595
Adjustments to GAAP net income:
Acquisition related items 276 365 276
Insurance related legal expenses 175 160 114
Option and restatement related
expenses 2,076 - 2,483
Stock based compensation expense 2,474 3,981 2,985
Expenses related to expired
options - - 1,993
Land Sale (1,300) - -
Associated tax effect (1,038) (1,477) (3,186)
----------- ----------- -----------
Net Income on a Non-GAAP basis $10,594 $14,786 $9,260
=========== =========== ===========
Diluted GAAP earnings per share $0.11 $0.16 $0.06
Adjustments per above $0.03 $0.04 $0.06
----------- ----------- -----------
Diluted non-GAAP earnings per
share $0.14 $0.20 $0.12
SEMTECH CORPORATION
NON-GAAP STATEMENTS OF INCOME
(Table in thousands - except per share amounts)
Three Months Ended
-----------------------------------
April 29, April 30, January 28,
2007 2006 2007
----------- ----------- -----------
Q1 2008 Q1 2007 Q4 2007
----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $60,566 $65,943 $57,963
Cost of sales 27,003 27,898 28,179
----------- ----------- -----------
Gross profit 33,563 38,045 29,784
Operating costs and expenses:
Selling, general and
administrative 14,675 12,464 12,477
Product development and
engineering 9,271 9,515 9,067
----------- ----------- -----------
Total operating costs and expenses 23,946 21,979 21,544
Operating income 9,617 16,066 8,240
Interest and other income, net 4,415 2,922 3,954
----------- ----------- -----------
Income before taxes 14,032 18,988 12,194
Provision for taxes 3,438 4,202 2,934
Net income $10,594 $14,786 $9,260
=========== =========== ===========
Earnings per share:
Basic $0.15 $0.20 $0.13
Diluted $0.14 $0.20 $0.12
Weighted average number of shares:
Basic 72,379 72,575 72,433
Diluted 73,593 74,715 74,311
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Table in thousands)
April 29, January 28,
2007 2007
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $207,872 $162,882
Temporary investments 82,500 127,859
Receivables, less allowances 24,961 25,588
Inventories 20,424 20,493
Deferred income taxes 3,511 3,495
Other current assets 11,521 14,998
----------- -----------
Total Current Assets 350,789 355,315
Property, plant and equipment, net 38,760 40,573
Long-term investments 74,064 50,439
Other assets 8,317 10,166
Goodwill 32,719 32,687
Other Intangibles 4,008 4,284
Deferred income taxes 26,843 28,190
----------- -----------
Total Assets $535,500 $521,654
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,421 $9,909
Accrued liabilities 11,758 14,950
Deferred revenue 2,259 2,151
Deferred income taxes 1,478 1,500
Income taxes payable 2,633 1,974
----------- -----------
Total Current Liabilities 30,549 30,484
Other long-term liabilities 7,814 7,450
Deferred income taxes - Non Current 2,605 2,539
Shareholders' equity 494,532 481,181
----------- -----------
Total Liabilities & Equity $535,500 $521,654
=========== ===========
CONTACT: Semtech Corporation
Todd German, Investor Relations, 805-480-2004