EXHIBIT 99.1
Published on October 25, 2006
 |
EXHIBIT
99.1
NEWS
RELEASE
INVESTOR
RELATIONS CONTACT:
Gordon
Parnell - CFO . . . (480) 792-7374
|
MICROCHIP
TECHNOLOGY ANNOUNCES RECORD NET SALES AND
NET
INCOME FOR SECOND QUARTER FISCAL YEAR 2007
AND
RECORD QUARTERLY CASH DIVIDEND
| · |
Record
net sales of $267.9 million for the September quarter; net sales
increased
2.0% sequentially
|
| · |
In
the September quarter, on a non-GAAP basis, prior to share-based
compensation:
|
| · |
Record
gross margins of 60.45%
|
| · |
Record
operating profit of 36.4%
|
| · |
Record
net income of $84.2 million and
31.4%
|
| · |
On
a GAAP basis, gross margins of 60.45%, operating profit of 34.1%
and net
income of $79.5 million and
29.7%
|
| · |
Net
cash generated of $128.5 million during the September quarter before
dividend payment of $50.5
million
|
| · |
Increased
dividend by 6.4% to a record 25 cents per share; Represents an increase
of
56.3% from dividend level one year
ago
|
CHANDLER,
Arizona - October 25, 2006 - (NASDAQ: MCHP) - Microchip Technology Incorporated,
a leading provider of microcontroller and analog semiconductors, today reported
results for the three months ended September 30, 2006. Net sales for the
second
quarter of fiscal 2007 were $267.9 million, up 2.0% sequentially from $262.6
million in the immediately preceding quarter, and up 17.9% from sales of
$227.3
million in the prior year’s second fiscal quarter. The Company adopted SFAS No.
123 (revised 2004) “Share-Based Payment” at the beginning of the fiscal year
2007. As such, the Company has included additional information in its
disclosures to assist shareholders with appropriate comparative information.
Non-GAAP net income for the second quarter of fiscal 2007, which excludes
the
effect of all share-based compensation expense, was $84.2 million, or 38
cents
per diluted share, up 3.4% from non-GAAP net income of $81.4 million, or
37
cents per diluted share, in the immediately preceding quarter; and up 28.2%
from
GAAP net income of $65.7 million, or 31 cents per diluted share, in the prior
year’s second fiscal quarter. GAAP net income for the second quarter of fiscal
2007 was $79.5 million or 36 cents per diluted share. A reconciliation of
GAAP
to non-GAAP earnings per share is included as part of this press
release.
--
more --
Microchip
also announced today that its Board of Directors has declared a quarterly
cash
dividend on its common stock of 25 cents per share. The quarterly dividend
is
payable on November 22, 2006 to stockholders of record on November 8, 2006.
Microchip initiated quarterly cash dividend payments in the third quarter
of
fiscal 2003.
Microchip
also announced today that its Board of Directors has promoted Mr. Ganesh
Moorthy
to Executive Vice President of Microchip.
Microchip
also announced today that its Board of Directors has authorized a buy-back
of up
to 10 million shares of Microchip common stock in the open market or in
privately negotiated transactions. The purchases will depend upon market
conditions, interest rates and corporate considerations.
“In
the
face of challenging industry conditions, Microchip delivered record results
in
net sales, operating profit and net income in the September quarter. Net
sales
for the quarter ended up at approximately the mid-point of our updated guidance
which we provided on September 20, 2006,” said Steve Sanghi, Microchip’s
President and CEO. “As we indicated in that update, the Christmas builds in Asia
were delayed from our initial expectations, impacting net sales from our
original forecasts. Our factory in Thailand is operating at normal levels
post
the military coup in that country.”
“Sixteen-bit
microcontrollers achieved 53% growth sequentially and 210% over the year
ago
quarter, albeit from a small base,” said Ganesh Moorthy, Microchip’s Executive
Vice President. “Two and one-half years since the start of production, we
believe our 16-bit microcontollers have now reached the tipping point. A
large
number of designs are turning to production, and we expect continued strong
growth ahead.”
“Flash
microcontrollers grew 6.7% sequentially and 42.3% over the year ago quarter,
and
now represent approximately 64% of total microcontroller revenues,” added Mr.
Moorthy.
Mr.
Sanghi continued, “Geographically, Asia was our strongest territory in the
September quarter, growing approximately 4.5% sequentially, while both Americas
and Europe were essentially flat. Europe’s performance, in the summer vacation
quarter, delivered results above normal seasonality.”
“We
achieved record gross margins of 60.45% and non-GAAP operating margins of
36.4%
in the September 2006 quarter,” Mr. Sanghi added.
---
more --
Sanghi
continued, “We are also pleased to be increasing our quarterly dividend payment
to our shareholders by 6.4% sequentially, to 25 cents per share. The increase
in
dividends and the 10 million share buy-back authorization announced today
continue to evidence Microchip’s commitment to return value to our
shareholders.”
Gordon
Parnell, Microchip’s Chief Financial Officer, said, “Inventory days on our
balance sheet at the end of September, prior to the effects of share-based
compensation, were 99 days, down 2 days from the inventory levels at June
30,
2006. Inventory days including the effects of share-based compensation at
the
end of September were 101 days.”
“Inventory
in the distribution channel at the end of September 2006 was 1.9 months,
down
from 2.0 months as of the end of June 2006,” Mr. Parnell added. “Combined
channel inventories in support of our customers at the end of September 2006
are
at the lowest levels in our business in the last several years.
Mr.
Sanghi said, “The outlook for the December quarter continues to be challenging.
We expect distributors to continue to reduce inventories in response to the
industry leadtimes and overall conditions. This was certainly reflected in
the
book-to-bill ratio for the September quarter, which was 0.94. Although this
is
normally a stronger quarter for Asia, our customers’ response to date has been
rather muted. Additionally, it is a seasonally weak quarter in the Americas
and
Europe because of the Christmas holidays.”
“With
all
the variables that we are monitoring in our business, we are anticipating
revenues to be down approximately 5% in the December quarter. Earnings per
share
are expected to be about 36 cents on a non-GAAP basis, excluding the effect
of
share-based compensation. EPS on a GAAP basis is expected to be about 33
cents,”
Sanghi concluded.
Microchip’s
Recent Highlights:
| · |
Microchip
continued its tradition of innovation in the 8-bit microcontroller
space
with the PIC18F97J60 family, which integrates a full Ethernet controller
to provide embedded systems designers with a single-chip
remote-communication solution for a wide range of applications. Other
recent high-end 8-bit introductions included a family of Controller
Area
Network microcontrollers with large memory and small package sizes
for
automotive and industrial applications, and a family with an onboard
12-bit analog-to-digital converter (ADC) that eliminates the cost
and
complexity of interfacing to an external ADC, while providing the
precision required for high-speed, high-resolution sensor measurements
in
applications such as medical, industrial and utility
metering.
|
---
more --
| · |
Activity
with Microchip’s burgeoning 16-bit microcontrollers was also strong last
quarter, with 10 more devices going into volume production, bringing
the
total number of 16-bit microcontrollers and digital signal controllers
in
production to 75. Additionally, Microchip became the first 16-bit
supplier
to offer advanced security features that allow multiple parties in
a
collaborative system design to share the memory, interrupts and
peripherals of a single chip without compromising their intellectual
property. Called CodeGuard™ security, this memory segmentation reduces
system costs for OEMs and their design partners by eliminating the
need to
store programs on separate chips.
|
| · |
Microchip
squeezed its Baseline 8-bit PIC®
microcontrollers into an even smaller package, the 2x3 DFN, which
allows
the Company to serve an ever-widening range of low-cost,
space-constrained, non-traditional applications for digital
intelligence.
|
| · |
Microchip
added debugging capability to its popular and low-cost PICkit™ 2 Flash
Starter Kit tool, enabling engineers, students and anyone with an
interest
to easily begin development and evaluation with PIC microcontrollers
for a
very low initial investment. The new PICkit 2 Debug Express Kit features
a
44-pin demo board populated with a PIC16F917 microcontroller, and
connects
to any personal computer via USB.
|
| · |
On
the analog front, Microchip broadened its portfolio with three new
product
families of 1.5 amp low-dropout regulators, battery charge-management
controllers and the first amplifiers with a gain-select pin in place
of a
negative input-pin, enabling digital gain control for better system
accuracy and dynamic range.
|
| · |
Microchip
was named a Loyalty Leader in The Walker Loyalty Report for the
Semiconductor Industry, conducted by Walker Information in partnership
with EE Times magazine. Microchip was one of only eight semiconductor
companies, out of the 53 evaluated, to receive this designation of
superior customer and brand loyalty.
|
| · |
To
provide additional levels of customer support, Microchip launched
a global
network of 32 Regional Training Centers to meet engineers' needs
for more
technical training more often. Additionally, the 10th “Microchip’s Annual
Summer Technical Exchange Review” (MASTERs) conference in Arizona
experienced another record year for attendance with more than 1,000
worldwide embedded system designers attending the four-day event
for
intensive hands-on workshops and lecture courses on how to use Microchip’s
products.
|
---
more --
| · |
During
the quarter, Microchip shipped 16,275 new development systems. This
brisk
pace demonstrates the continued strong acceptance of Microchip’s products.
The total cumulative number of development systems shipped now stands
at
469,662.
|
| · |
Demonstrating
its ongoing efforts to practice good corporate citizenship through
sound
environmental practices, Microchip’s Fab 4 facility in Gresham, Oregon
received an Oregon Green Permit, a 10-year permit given by the Oregon
Department of Environmental Quality to recognize facilities that
go beyond
compliance to reduce environmental
impact.
|
| · |
On
the Microchip website, Really Simple Syndication (RSS) capability
was
added to provide customers with easy access to the latest technical
and
product information, and the Intelligent Power Supply Design Center
debuted.
|
Third
Quarter Fiscal 2007 Outlook:
The
following statements are based on current expectations. These statements
are
forward-looking, and actual results may differ materially.
| · |
Net
sales for the quarter ending December 31, 2006 are currently anticipated
to be down approximately 5% from the September 2006
quarter.
|
| · |
Gross
margins before the effect of share-based compensation for the quarter
ending December 31, 2006 are expected to be approximately 60.25%.
Gross
margins including the effect of share-based compensation are anticipated
to be approximately 59.6%. The quarter ending December 31, 2006 is
the
first quarter that gross margins will be impacted by the effect of
share-based compensation. Generally, gross margins fluctuate over
time,
driven primarily by the mix of microcontrollers, analog products
and
memory products sold; variances in manufacturing yields; fixed cost
absorption; wafer fab loading levels; pricing pressures in our
non-proprietary product lines; and competitive and economic
conditions.
|
| · |
Non-GAAP
operating expenses for the quarter ending December 31, 2006 are expected
to be approximately 24.5% to 24.75%, prior to the effects of all
share-based compensation expense. Operating expenses on a GAAP basis
for
the quarter ending December 31, 2006 are anticipated to be approximately
27.0% to 27.25%. Operating expenses fluctuate over time, primarily
due to
revenue and profit levels.
|
| · |
The
tax rate for the quarter ending December 31, 2006 is anticipated
to be
approximately 24%.
|
---
more --
| · |
Earnings
per diluted share for the quarter ending December 31, 2006 are anticipated
to be about 33 cents on a GAAP basis, and approximately 36 cents
on a
non-GAAP basis, excluding the effect of all share-based compensation
expense.
|
| · |
The
level of inventories fluctuates over time, primarily due to sales
volume
and overall capacity utilization. Based on our sales guidance, on
both a
GAAP and non-GAAP basis, inventories at December 31, 2006 are anticipated
to be up approximately 7 days compared with the September 2006
quarter.
|
| · |
Capital
expenditures for the quarter ending December 31, 2006 are expected
to be
approximately $15 million, and capital expenditures for fiscal 2007
are
expected to total approximately $70 million. The level of capital
expenditures varies from time to time as a result of actual and
anticipated business conditions.
|
| · |
Based
on cash projected to be generated from operations and current projected
capital expenditure levels, we expect net cash generation during
the
December quarter of approximately $100 million before the dividend
payment
of $54 million announced today. This amount is before the effect
of any
stock buy-back activity.
|
Use
of Non-GAAP Financial Measures:
SFAS
123(R) requires us to estimate the cost of certain forms of share-based
compensation, including employee stock options and awards under our employee
stock purchase plan (ESPP Plan), and to record a commensurate expense in
the
income statement. Share-based compensation expense is a non-cash expense
that
varies in amount from period to period and is affected by market forces that
are
difficult to predict and are not within the control of management, such as
the
price of our common stock.
Accordingly,
management excludes this item from its internal operating forecasts and models.
We are showing non-GAAP gross margin, non-GAAP research and development
expenses, non-GAAP selling, general and administration expenses, non-GAAP
net
income, and non-GAAP diluted earnings per share, all of which excludes all
share-based compensation expense, to permit additional analysis of our
performance. Management believes these non-GAAP measures are useful to investors
because they enhance the understanding of our historical financial performance
and comparability between periods. Many of our investors have requested that
we
disclose this non-GAAP information because they believe it is useful in
understanding our performance as it excludes non-cash charges that many
investors feel may obscure our true operating costs. Management uses these
non-GAAP measures
to manage and assess the profitability of its business and does not consider
share-based compensation expense, which is a non-cash charge, in managing
its
operations. Specifically, we do not consider share-based compensation expense
when developing and monitoring budgets and spending. Our determination of
the
above non-GAAP measures might not be the same as similarly titled measures
used
by other companies, and it should not be construed as a substitute for gross
margin; research and development expenses; selling, general and administrative
expenses; net income and diluted earnings per share determined in accordance
with GAAP. There are limitations associated with using non-GAAP measures,
including that they exclude financial information that some may consider
important in evaluating our performance.
---
more --
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION
OF GAAP TO NON-GAAP
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
(in
thousands except per share amounts)
(Unaudited)
|
Three
Months Ended
September
30, 2006
|
Three
Months Ended
September
30, 2005
|
||||||||||||||||||
|
GAAP
|
Adjustments
(1)
|
Non-GAAP
|
GAAP
|
Adjustments
(2)
|
Non-GAAP
|
||||||||||||||
|
Net
sales
|
$
|
267,934
|
0
|
267,934
|
$
|
227,298
|
0
|
227,298
|
|||||||||||
|
Cost
of sales
|
105,973
|
0
|
105,973
|
92,742
|
0
|
92,742
|
|||||||||||||
|
Gross
profit
|
161,961
|
0
|
161,961
|
134,556
|
0
|
134,556
|
|||||||||||||
|
60.45
|
%
|
60.45
|
%
|
59.20
|
%
|
59.20
|
%
|
||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Research
and development
|
29,084
|
(2,522
|
)
|
26,562
|
23,637
|
0
|
23,637
|
||||||||||||
|
Selling,
general and administrative
|
41,518
|
(3,646
|
)
|
37,872
|
31,624
|
0
|
31,624
|
||||||||||||
|
70,602
|
(6,168
|
)
|
64,434
|
55,261
|
0
|
55,261
|
|||||||||||||
|
26.35
|
%
|
24.05
|
%
|
24.31
|
%
|
24.31
|
%
|
||||||||||||
|
Operating
income
|
91,359
|
6,168
|
97,527
|
79,295
|
0
|
79,295
|
|||||||||||||
|
34.10
|
%
|
36.40
|
%
|
34.89
|
%
|
34.89
|
%
|
||||||||||||
|
Other
income, net
|
13,230
|
0
|
13,230
|
7,090
|
0
|
7,090
|
|||||||||||||
|
Income
before income taxes
|
104,589
|
6,168
|
110,757
|
86,385
|
0
|
86,385
|
|||||||||||||
|
Income
taxes
|
25,101
|
1,481
|
26,582
|
20,732
|
0
|
20,732
|
|||||||||||||
|
Net
income
|
$
|
79,488
|
$
|
4,687
|
$
|
84,175
|
$
|
65,653
|
0
|
$
|
65,653
|
||||||||
|
Basic
net income per share
|
$
|
0.37
|
$
|
0.02
|
$
|
0.39
|
$
|
0.31
|
$
|
0.00
|
$
|
0.31
|
|||||||
|
Diluted
net income per share
|
$
|
0.36
|
$
|
0.02
|
$
|
0.38
|
$
|
0.31
|
$
|
0.00
|
$
|
0.31
|
|||||||
|
Basic
shares used in calculation
|
215,025
|
0
|
215,025
|
209,424
|
0
|
209,424
|
|||||||||||||
|
Diluted
shares used in calculation
|
220,128
|
(1,106
|
)
|
219,022
|
214,688
|
0
|
214,688
|
||||||||||||
---
more --
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION
OF GAAP TO NON-GAAP
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
(in
thousands except per share amounts)
(Unaudited)
|
Six
Months Ended
September
30, 2006
|
Six
Months Ended
September
30, 2005
|
||||||||||||||||||
|
GAAP
|
Adjustments
(1)
|
Non-GAAP
|
GAAP
|
Adjustments
(2)
|
Non-GAAP
|
||||||||||||||
|
Net
sales
|
$
|
530,491
|
0
|
530,491
|
445,825
|
0
|
445,825
|
||||||||||||
|
Cost
of sales
|
210,046
|
0
|
210,046
|
183,764
|
0
|
183,764
|
|||||||||||||
|
Gross
profit
|
320,445
|
0
|
320,445
|
262,061
|
0
|
262,061
|
|||||||||||||
|
60.41
|
%
|
60.41
|
%
|
58.78
|
%
|
58.78
|
%
|
||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Research
and development
|
57,108
|
(4,813
|
)
|
52,295
|
47,032
|
0
|
47,032
|
||||||||||||
|
Selling,
general and administrative
|
82,297
|
(7,160
|
)
|
75,137
|
62,705
|
0
|
62,705
|
||||||||||||
|
139,405
|
(11,973
|
)
|
127,432
|
109,737
|
0
|
109,737
|
|||||||||||||
|
26.28
|
%
|
24.02
|
%
|
24.61
|
%
|
24.61
|
%
|
||||||||||||
|
Operating
income
|
181,040
|
11,973
|
193,013
|
152,324
|
0
|
152,324
|
|||||||||||||
|
34.13
|
%
|
36.38
|
%
|
34.17
|
%
|
34.17
|
%
|
||||||||||||
|
Other
income, net
|
24,844
|
0
|
24,844
|
14,358
|
0
|
14,358
|
|||||||||||||
|
Income
before income taxes
|
205,884
|
11,973
|
217,857
|
166,682
|
0
|
166,682
|
|||||||||||||
|
Income
taxes
|
49,412
|
2,874
|
52,286
|
40,005
|
0
|
40,005
|
|||||||||||||
|
Net
income
|
$
|
156,472
|
$
|
9,099
|
$
|
165,571
|
$
|
126,677
|
0
|
$
|
126,677
|
||||||||
|
Basic
net income per share
|
$
|
0.73
|
$
|
0.04
|
$
|
0.77
|
$
|
0.61
|
$
|
0.00
|
$
|
0.61
|
|||||||
|
Diluted
net income per share
|
$
|
0.71
|
$
|
0.05
|
$
|
0.76
|
$
|
0.59
|
$
|
0.00
|
$
|
0.59
|
|||||||
|
Basic
shares used in calculation
|
214,362
|
0
|
214,362
|
208,945
|
0
|
208,945
|
|||||||||||||
|
Diluted
shares used in calculation
|
220,869
|
(1,646
|
)
|
219,223
|
214,128
|
0
|
214,128
|
||||||||||||
| (1) |
Adjustments
consist of share-based compensation, related tax effect, and the
impact on
the treasury stock method under SFAS 123(R). The
treasury stock method used to calculate GAAP weighted average shares
outstanding requires amounts related to compensation costs attributable
to
future services and not yet recognized in the financial statements
to be
treated as proceeds that are assumed to be used to repurchase shares.
As a
result, this increases the total number of weighted average shares
for
purposes of calculating GAAP weighted average shares outstanding
(diluted). Since Microchip does not include the effects of these
compensation costs in its non-GAAP net income, management believes
these
amounts should not be applied to the repurchase of shares in calculating
non-GAAP net income per share, and, accordingly, adds such shares
back
into weighted average shares outstanding for purposes of calculating
non-GAAP net income per share.
|
| (2) |
For
the three and six months ended September 30, 2005, no share-based
compensation was recorded for stock options or for our employee stock
purchase plan, as we had not yet adopted SFAS
123(R).
|
-
- more - -
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
thousands)
ASSETS
|
September
30, 2006
(Unaudited)
|
March
31, 2006
|
||||||
|
Cash
and short-term investments
|
$
|
612,015
|
$
|
764,764
|
|||
|
Accounts
receivable, net
|
123,112
|
139,361
|
|||||
|
Inventories
|
117,584
|
115,024
|
|||||
|
Other
current assets
|
96,190
|
99,680
|
|||||
|
Total
current assets
|
948,901
|
1,118,829
|
|||||
|
Property,
plant & equipment, net
|
638,592
|
659,972
|
|||||
|
Long-term
investments
|
653,413
|
520,360
|
|||||
|
Other
assets
|
50,354
|
51,435
|
|||||
|
Total
assets
|
$
|
2,291,260
|
$
|
2,350,596
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
Short-term
debt
|
$
|
80,800
|
$
|
268,954
|
|||
|
Accounts
payable and other accrued liabilities
|
246,700
|
240,534
|
|||||
|
Deferred
income on shipments to distributors
|
98,207
|
99,481
|
|||||
|
Total
current liabilities
|
425,707
|
608,969
|
|||||
|
Pension
accrual
|
854
|
801
|
|||||
|
Deferred
tax liability
|
15,034
|
14,637
|
|||||
|
Stockholders'
equity
|
1,849,665
|
1,726,189
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
2,291,260
|
$
|
2,350,596
|
-
- more - -
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION
OF NET INCOME AND DILUTED EARNINGS PER SHARE
TO
NON-GAAP NET INCOME AND NON-GAAP DILUTED EARNINGS PER
SHARE
(in
thousands except per share amounts)
(Unaudited)
|
Three
Months Ended
September
30, 2006
|
Six
Months Ended
September
30, 2006
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
GAAP
net income
|
$
|
79,488
|
$
|
65,653
|
$
|
156,472
|
$
|
126,677
|
|||||
|
Share-based
compensation expense, net
of tax
|
4,687
|
0
|
9,099
|
0
|
|||||||||
|
Non-GAAP
net income
|
$
|
84,175
|
$
|
65,653
|
$
|
165,571
|
$
|
126,677
|
|||||
|
Diluted
GAAP net income per share
|
$
|
0.36
|
$
|
0.31
|
$
|
0.71
|
$
|
0.61
|
|||||
|
Diluted
Non-GAAP net income per share
|
$
|
0.38
|
$
|
0.31
|
$
|
0.76
|
$
|
0.59
|
|||||
|
Diluted
GAAP shares used in calculation
|
220,128
|
209,424
|
220,869
|
208,945
|
|||||||||
|
Diluted
non-GAAP shares used in calculation
|
219,022
|
214,688
|
219,223
|
214,128
|
|||||||||
-
- more - -
Conference
Call and Updates:
Microchip
will host a conference call today, October 25, 2006 at 6:00 p.m. (Eastern Time)
to discuss this release. This call will be simulcast over the Internet at
www.microchip.com.
The
webcast will be available for replay until November 1, 2006.
A
telephonic replay of the conference call will be available at approximately
8:00
p.m. (Eastern Time) October 25, 2006 and will remain available until 5:00
p.m. (Eastern Time) on November 1, 2006. Interested parties may listen to the
replay by dialing 719-457-0820 and entering access code 3092499.
Cautionary
Statement:
The
statements in this release relating to 16-bit microcontrollers reaching the
tipping point, a large number of 16-bit microcontroller designs turning to
production, expected continued strong 16-bit microcontroller growth, that the
increase in dividends and the 10 million share buy-back continue to evidence
our
commitment to return value to our shareholders, the outlook for the December
quarter being challenging, our expectation for distributors to continue to
reduce inventories, the December quarter normally being stronger for Asia but
the response being muted, the December quarter being a seasonally weak quarter
for the Americas and Europe, our expectation for revenues to be down
approximately 5%, for non-GAAP EPS of approximately 36 cents and GAAP EPS of
approximately 33 cents for the quarter ending December 31, 2006 quarter, the
continued strong acceptance of Microchip’s products, and the statements
containing our GAAP and non-GAAP guidance (as applicable) for the quarter ending
December 31, 2006 with respect to net sales, gross margins, operating expenses,
tax rate, earnings per diluted share, days of inventory, capital expenditures
for the quarter ending December 31, 2006 and for fiscal 2007, net cash
generation and future stock repurchases are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These
statements involve risks and uncertainties that could cause our actual results
to differ materially, including, but not limited to: changes in demand or market
acceptance of our products and the products of our customers; the mix of
inventory we hold and our ability to satisfy short-term orders from our
inventory; changes in utilization of our manufacturing capacity; our ability
to
continue to secure sufficient assembly and testing capacity; competitive
developments including pricing pressures; the level of orders that
are
received and can be shipped in a quarter; the level of sell-through of our
products through distribution; changes or fluctuations in customer order
patterns and seasonality; foreign currency effects on our business; costs and
outcome of any current or future tax audit or any litigation involving
intellectual property, customers or other issues; disruptions in our business
or
the businesses of our customers or suppliers due to natural disasters, terrorist
activity, armed conflict, war, worldwide oil prices and supply, public health
concerns or disruptions in the transportation system; and general economic,
industry or political conditions in the United States or
internationally.
For
a
detailed discussion of these and other risk factors, please refer to Microchip's
filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q
and
other relevant documents for free at Microchip’s Web site (www.microchip.com)
or the
SEC's Web site (www.sec.gov)
or from
commercial document retrieval services.
Stockholders
of Microchip are cautioned not to place undue reliance on our forward-looking
statements, which speak only as of the date such statements are made. Microchip
does not undertake any obligation to publicly update any forward-looking
statements to reflect events, circumstances or new information after this
October 25, 2006 press release, or to reflect the occurrence of unanticipated
events.
About
Microchip:
Microchip
Technology Inc. is a leading provider of microcontroller and analog
semiconductors, providing low-risk product development, lower total system
cost
and faster time to market for thousands of diverse customer applications
worldwide. Headquartered in Chandler, Arizona, Microchip offers outstanding
technical support along with dependable delivery and quality. For more
information, visit the Microchip Web site at www.microchip.com.
The
Microchip name and logo, PIC and dsPIC are registered trademarks of Microchip
Technology Incorporated in the U.S.A. and in other countries. PICkit and
CodeGuard are trademarks of Microchip Technology Incorporated in the U.S.A.
and
in other
countries. All other trademarks mentioned herein are property of their
respective companies.
--
end --