EXHIBIT 99.1
Published on October 9, 2007
 |
EXHIBIT
99.1
NEWS
RELEASE
INVESTOR
RELATIONS CONTACT:
Gordon
Parnell - CFO . . . (480)
792-7374
|
MICROCHIP
TECHNOLOGY ANNOUNCES PRELIMINARY RESULTS
FOR
SECOND QUARTER FISCAL 2008
CHANDLER,
Arizona – October 8, 2007 – (NASDAQ: MCHP) – Microchip Technology
Incorporated, a leading provider of microcontroller and analog semiconductors,
today announced its preliminary financial results for the second quarter of
fiscal 2008 ending September 30, 2007. Microchip expects net sales to
be approximately $258 to $259 million, which is down approximately 2.0%
sequentially from net sales of $264.1 million in the first quarter of fiscal
2008. Earnings per diluted share on a GAAP basis is expected to be
approximately 35 cents, and earnings per diluted share on a non-GAAP basis,
excluding the effect of share-based compensation, is expected to be
approximately 38 cents. For the September quarter of fiscal 2008,
Microchip expects to be able to sustain near record level gross margins of
approximately 60.4%.
“Our
business results for the September quarter have been adversely impacted by
several factors,” said Steve Sanghi, Microchip’s President and
CEO. “Net sales associated with the U.S. housing market continued to
be weak, and we also experienced weakness in other segments of our
consumer-related business.”
“Geographically,
net sales in both the Americas and Asia were below our
expectations. We believe that weakness in Asia is tied to U.S.
multinational companies who manufacture at Asian
subcontractors. Europe, although down sequentially, met our
expectations based on the normal seasonal trends for the region,” Mr. Sanghi
continued.
Mr.
Gordon Parnell, Microchip’s Chief Financial Officer said, “We expect days of
inventory to increase based on these revenue levels. Days of
inventory at September 30 are expected to be approximately 112 days, up 5
days
from overall inventory levels as of the end of June.”
Mr.
Sanghi added, “Our book-to-bill ratio for the September quarter was 0.94,
leading our business into a more seasonally challenging period in the December
quarter. While we are not in a position to give specific guidance at
this point, we expect that December net sales will be sequentially
down. Based on the current level of uncertainty in the consumer
segment of the business, we expect that the range of our guidance will be
wider
than our typical level.”
Mr.
Sanghi continued, “Our fundamental business model is still intact. We
expect our gross margin for the September quarter to be sustained at
approximately 60.4%. We continue to execute our strategic plan with
substantial progress made in 16-bit microcontrollers and analog
products. During the September quarter, we introduced 9 new products
in 16-bit microcontrollers, and now have 101 products in
production. We also expect 16-bit microcontroller revenue to be
sequentially up in both the September and December quarters.”
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“While
we
are facing the headwind in the U.S. housing and consumer segments, we are
executing on other ways to create shareholder value. We expect to
maintain our quarterly increase in dividends. We also purchased 4
million shares of Microchip stock last quarter against our 11.5 million stock
buy-back authorization, and we are prepared to purchase more shares
opportunistically,” Mr. Sanghi concluded.
Conference
Call Information:
Microchip
will host a conference call today, October 8, 2007 at 2:30 p.m. (Pacific
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 October 15, 2007.
A
telephonic replay of the conference call will be available at approximately
5:30
p.m. (Pacific Time) October 8, 2007 and will remain available until 5:00
p.m.
(Pacific Time) on Monday, October 15, 2007. Interested parties may
listen to the replay by dialing 719-457-0820 and entering access code
9897104.
Microchip
plans to announce its financial results for the second quarter of fiscal
2008
after market close on Tuesday, October 23, 2007. Microchip will
include a reconciliation of its GAAP and non-GAAP results as part of such
announcement.
Cautionary
Statement:
The
statements in this release relating to our net sales and GAAP and non-GAAP
earnings per share guidance for the quarter ending September 30, 2007, our
ability to sustain gross margins of approximately 60.4%, continued weakness
in
net sales associated with the U.S. housing market, weakness in Asia tied
to U.S.
multinational companies, days of inventory
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guidance,
our belief that the December quarter will be challenging, uncertainty in
the
consumer segment of our business, net sales being sequentially down in the
December quarter, range of guidance being wider, gross margin guidance,
continuing to execute our strategic plan, 16-bit microcontroller revenue
guidance for the September and December quarters, our ability to create
shareholder value, maintaining quarterly increases in dividend, and repurchasing
Microchip stock 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; the completion
of our customary quarterly closing and review procedures; 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 8, 2007 press release, or to reflect the
occurrence of unanticipated events.
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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 are registered trademarks of Microchip Technology
Incorporated in the U.S.A. and in other countries.
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