EXHIBIT 99.2
Published on February 3, 2010
 |
Exhibit
99.2
NEWS
RELEASE
INVESTOR
RELATIONS CONTACTS:
J.
Eric Bjornholt – CFO (480) 792-7804
Gordon
Parnell – Vice President of
Business
Development and
Investor
Relations (480) 792-7374
|
MICROCHIP
TECHNOLOGY EXCEEDS $1 BILLION
ANNUAL
NET SALES RUN RATE BASED ON ITS REVENUE
FOR
THE THIRD FISCAL QUARTER 2010
|
·
|
Net
sales of $250.1 million, up 10.3%
sequentially
|
|
·
|
On
a GAAP basis:
|
|
·
|
Gross
margin of 58.4%; Operating profit of 29.0%; Net income of $69.4 million
and 27.8% of net sales; EPS of 37 cents per diluted
share
|
|
·
|
GAAP
net income includes an $8.5 million benefit, or 4.5 cents per diluted
share, related to a tax audit
settlement
|
|
·
|
On
a non-GAAP basis:
|
|
·
|
Gross
margin of 59.0%; Operating profit of 32.8%; Net income of $70.1 million
and 28.0% of net sales; EPS of 38 cents per diluted
share
|
|
·
|
Record
16-bit microcontroller and analog revenue
|
|
·
|
Record
shipments of 41,492 development
tools
|
|
·
|
Increased
quarterly dividend to 34.1 cents per
share
|
CHANDLER,
Arizona – February 3, 2010 – (NASDAQ: MCHP) – Microchip Technology
Incorporated, a leading provider of microcontroller and analog semiconductors,
today reported results for the three months ended December 31, 2009 as
summarized in the following table:
|
GAAP
|
%
of Revenue
|
Non-GAAP1
|
%
of Revenue
|
|
|
Revenue
|
$250.1
million
|
$250.1
million
|
||
|
Gross
Margin
|
$146.0
million
|
58.4%
|
$147.6
million
|
59.0%
|
|
Operating
Income
|
$72.6
million
|
29.0%
|
$82.0
million
|
32.8%
|
|
Other
Income (Expense)
|
$(2.7)
million
|
$(1.1)
million
|
||
|
Income
Tax Expense
|
$0.5
million
|
$10.8
million
|
||
|
Net
Income
|
$69.4
million
|
27.8%
|
$70.1
million
|
28.0%
|
|
Earnings
per Diluted Share
|
37
cents
|
38
cents
|
|
1
|
See
the “Use of Non-GAAP Financial Measures” section of this
release.
|
-
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Microchip
Technology Incorporated 2355 West Chandler Blvd. Chandler, AZ
85224-6199 Main Office 480•792•7200 FAX
480•899•9210
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
Net
revenue for the third quarter of fiscal year 2010 was $250.1 million, up 10.3%
sequentially from net revenue of $226.7 million in the immediately preceding
quarter, and up approximately 30.1% from net revenue of $192.2 million in the
prior year’s third fiscal quarter. GAAP net income for the third
quarter of fiscal year 2010 was $69.4 million, or 37 cents per diluted share, up
56.0% from GAAP net income of $44.5 million, or 24 cents per diluted share, in
the immediately preceding quarter, and down 4.1% from GAAP net income of $72.4
million, or 39 cents per diluted share, in the prior year’s third fiscal
quarter. The December 2009 quarter included an $8.5 million favorable income tax
benefit associated with an IRS audit settlement while the December 2008 quarter
included a $51.3 million favorable income tax benefit related to an IRS
settlement, changes in tax regulations and the reinstatement of the R&D tax
credit.
Non-GAAP
net income for the third quarter of fiscal year 2010 was $70.1 million, or 38
cents per diluted share, up 31.9% from non-GAAP net income of $53.2 million, or
29 cents per diluted share, in the immediately preceding quarter, and up 70.3%
from non-GAAP net income of $41.2 million, or 23 cents per diluted share, in the
prior year’s third fiscal quarter. Our non-GAAP results exclude the
effect of share-based compensation, any gain or loss on trading securities, the
impact of our acquisition activities, non-recurring tax events and non-cash
interest expense on our convertible debentures associated with the adoption of
the Financial Accounting Standards Board’s Accounting Standards Codification
Subtopic 470-20, Debt with
Conversion and Other Options – Cash Conversion, which requires us to
account separately for the liability and equity components of certain
convertible debt instruments in a manner that reflects our nonconvertible debt
(unsecured debt) borrowing rate when interest cost is recognized. A
reconciliation of our non-GAAP and GAAP results is included in this press
release.
Microchip
also announced today that its Board of Directors declared a quarterly cash
dividend on its common stock of 34.1 cents per share. The quarterly
dividend is payable on March 4, 2010 to stockholders of record on February 18,
2010. Microchip initiated quarterly cash dividend payments in the
third quarter of fiscal 2003.
Additionally,
Microchip announced today that it has signed a definitive agreement to
acquire Silicon Storage Technology, Inc. (Nasdaq: SSTI) for $2.85 per share in
cash. The acquisition has been approved by the Boards of Directors of
each company and is expected to close in the second quarter of calendar 2010,
subject to approval of SST’s stockholders and other customary closing
conditions.
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- -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
“During
the December quarter we experienced strong growth in all geographies and product
lines, which resulted in us exceeding the revenue, gross margin, operating
profit and earnings per share guidance that we revised positively in late
November,” said Steve Sanghi, Microchip’s President and CEO.
“Non-GAAP
gross margins were 59%, up 350 basis points from the September quarter, and we
expect another 75 to 125 basis points of gross margin improvement in the March
quarter as we continue to see the benefits from increased production levels in
our factories in response to improving business conditions. We now
believe that we are positioned to reach our previous record high non-GAAP gross
margin of 61.6% by the end of fiscal year 2011,” continued Mr.
Sanghi.
“Our
microcontroller business delivered excellent results; revenue was up 10.0%
sequentially and we shipped a record 41,492 development tools. Our
16-bit microcontroller business achieved another record for quarterly revenue,
with strong sequential growth of 10%, as well as 101.4% growth from the year-ago
quarter,” said Ganesh Moorthy, Chief Operating Officer. “Our analog
business had another outstanding quarter with 14.1% sequential growth and
exceeded an annual revenue run rate of $100 million for the first time in
Microchip’s history.”
Eric
Bjornholt, Microchip’s Chief Financial Officer, said, “Due to the much stronger
than expected growth in revenue and despite the significant ramp in
manufacturing output, our inventory at 99 days remains well below our internal
target of 115 days."
Mr.
Bjornholt continued, “In the December quarter, our cash and investments position
increased by $26.9 million after payment of our quarterly cash dividend of $62.5
million. We expect our cash generation to continue to be strong in
the March quarter.”
Mr.
Sanghi concluded, “We are extremely pleased with the performance of our business
in the December 2009 quarter. Our book-to-bill ratio for the December
quarter was 1.12, providing us with excellent visibility. We started
the March 2010 quarter with a record high opening backlog. On the
other hand, the Lunar New Year holidays will have an adverse seasonal impact on
our business in Asia. Taking all these factors into consideration we
expect revenue to be up 3% to 7% sequentially.”
- - more -
- -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
Microchip’s Recent
Highlights:
|
·
|
Microchip
is rapidly growing its nanoWatt XLP eXtreme Low Power portfolio of 8- and
16-bit PIC®
microcontrollers, which continues its leadership position as the world’s
most battery-friendly MCUs. Introduced this quarter were two
new families of 16-bit PIC24F MCUs, as well as the new PIC16(L)F1826/7
general-purpose 8-bit XLP microcontrollers. PIC
microcontrollers with nanoWatt XLP technology recently won three global
honors, including Europe’s Elektra Awards, America’s Wireless Design &
Development Technology Awards, and EDN China’s Innovation
Awards. These awards mirror the positive reception of XLP by
Microchip’s customers, who have been able to lower their power budgets
substantially over competing MCUs.
|
|
·
|
The
PIC32 32-bit microcontroller portfolio underwent a major expansion this
quarter, with the introduction of three new families. These
three families were just named by EDN magazine to their 2009 “Hot 100”
list of the most significant new electronic products, in the
“Microcontrollers and Processors”
category.
|
|
·
|
Two
other recent Microchip products joined the PIC32 on EDN’s 2009 Hot 100
list: the dsPIC33F “GS” series-based AC/DC reference design,
which was named in the “Power” category, and the MCP651/2/5
offset-voltage-corrected operational amplifiers, which were named in the
“Analog ICs” category.
|
|
·
|
Microchip
acquired ZeroG Wireless, Inc, an innovator in low-power embedded
Wi-Fi®
solutions based in Sunnyvale, Calif., to further strengthen its wireless
offerings by enabling embedded designers to easily connect to this
ubiquitous networking protocol with any 8-, 16- or 32-bit PIC
microcontroller.
|
|
·
|
Also
in the wireless arena, Microchip announced that it has achieved
certification for its ZigBee®
RF4CE Compliant Platform, which enables the next generation of RF remote
controls and consumer electronics.
|
|
·
|
Responding
to the increasing market requirements for ICs specified for operation at
temperatures greater than 125° C, Microchip introduced the largest and
broadest portfolio of ICs for high-temperature applications—including 8-
and 16-bit PIC microcontrollers, dsPIC®
Digital Signal Controllers, serial EEPROM devices, and analog
products—that are specified for operation up to 150° C ambient and
qualified to AEC-Q100 Grade 0
requirements.
|
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
|
·
|
Microchip’s
broad, low-power Analog portfolio continued to grow at a steady pace,
including new high-accuracy, low-power temperature sensors; a metering
analog front end for highly accurate measurements; low dropout regulators
with wide input and output voltage ranges; and synchronous Buck MOSFET
drivers with maximum efficiency in small
packages.
|
|
·
|
During
the quarter, Microchip shipped 41,492 development systems, a new record
that demonstrates the continued strong interest in Microchip’s
products. The total cumulative number of development systems
shipped now stands at 884,502.
|
|
·
|
Microchip’s
mTouch Inductive Touch Sensing Technology was bestowed with the Best Touch
Sensing Technology award by Electronic Engineering & Product World
magazine in China, as part of their Embedded Systems Editor's Choice
Awards 2009.
|
Fourth Quarter Fiscal 2010
Outlook:
The
following statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially.
|
GAAP
|
Non-GAAP
Adjustments
|
Non-GAAP1
|
|
|
Revenue
|
$257.5
to $267.5 million
|
$257.5
to $267.5 million
|
|
|
Gross
Margin2,3
|
58.85%
to 59.35%
|
$2.3
to $2.5 million
|
59.75%
to 60.25%
|
|
Operating
Expenses2,3
|
29%
|
$7.2
to $7.5 million
|
26.2%
|
|
Other
Income (Expense)
|
($3.7)
to ($4.1) million
|
$1.6
million
|
($2.1)
to ($2.5) million
|
|
Tax
Rate
|
12%
to 12.5%
|
$1.8
to $2.0 million
|
12.5%
to 13%
|
|
Diluted
Common Shares Outstanding4
|
188.9
to 189.3 million
|
1.7
million shares
|
187.2
to 187.6 million
|
|
Earnings
per Share
|
34
to 36 cents
|
5
to 6 cents
|
39
to 41 cents
|
|
·
|
Inventory
at March 31, 2010 is expected to be about flat in days from the December
31, 2009 levels, while remaining below our internal target of 115
days.
|
|
·
|
Capital
expenditures for the quarter ending March 31, 2010 are expected to be
approximately $22 million. Capital expenditures for all of
fiscal year 2010 are anticipated to be approximately $50
million. We are investing in equipment to support the expected
revenue growth of our new products and technologies and are taking
advantage of low-cost equipment opportunities in the
marketplace.
|
- - more -
- -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
|
·
|
We
expect net cash generation during the March quarter of approximately $75
to $85 million before the dividend payment of $62.9 million announced
today. The amount of expected net cash generation is before the
effect of any stock buy back
activity.
|
|
·
|
Microchip’s
Board of Directors authorized a stock buy back of up to 10.0 million
shares in December 2007. At December 31, 2009, approximately
2.5 million shares remained available for purchase under this
program. Future purchases will depend upon market conditions,
interest rates and corporate
considerations.
|
|
1
|
Use of Non-GAAP
Financial Measures:
|
Our
Non-GAAP adjustments, where applicable, include the effect of share-based
compensation, any gain or loss on trading securities, the impact of our
acquisition activities, non-recurring tax events and non-cash interest expense
on our convertible debentures and the related income tax implications of these
items.
We are
required to estimate the cost of certain forms of share-based compensation,
including employee stock options, restricted stock units and our employee stock
purchase plan, and to record a commensurate expense in our income
statement. Share-based compensation expense is a non-cash expense
that varies in amount from period to period and is affected by the price of our
stock at the date of grant. The price of our stock is affected by
market forces that are difficult to predict and are not within the control of
management. The value of our trading securities varies in amount from
period to period and is affected by fluctuations in the market prices of such
securities that we cannot predict and are not within the control of
management. The non-GAAP adjustments related to the impact of our
acquisitions and a portion of our interest expense related to our convertible
debentures are non-cash expenses related to such transactions. Our
acquisitions of patent portfolio licenses and tax events related to IRS
settlements, changes in tax regulations and the reinstatement of the R&D tax
credit are non-recurring events in our business. Accordingly,
management excludes all of these items from its internal operating forecasts and
models.
We are
using non-GAAP gross profit margin, non-GAAP gross profit percentage, non-GAAP
operating expenses in dollars and as a percentage of sales including non-GAAP
research and development expenses and non-GAAP selling, general and
administration expenses, non-GAAP operating income, non-GAAP other income
(expense), non-GAAP income tax/tax rate, non-GAAP net income, and non-GAAP
diluted earnings per share which exclude the items noted in the immediately
preceding paragraph, to permit additional analysis of our
performance.
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- -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
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 and other 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. Specifically, we do not consider such items when developing
and monitoring our budgets and spending. As described above the
economic substance behind our decision to exclude such items relates either to
these charges being non-cash in nature or to the one-time nature of the events
or, in the case of our trading securities, because such item is difficult to
predict and not within the control of management. 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 amounts 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. Management compensates for this by presenting
information on both a GAAP and non-GAAP basis for investors and providing
reconciliations of the GAAP and non-GAAP results.
|
2
|
The
GAAP outlook for gross margin and operating expenses do not consider any
acquisition related costs or amortization of intangible assets associated
with acquisitions that were not completed as of December 31,
2009.
|
|
3
|
Generally,
gross margin fluctuates 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;
inventory reserves; pricing pressures in our non-proprietary product
lines; and competitive and economic conditions. Operating
expenses fluctuate over time, primarily due to revenue and profit
levels.
|
|
4
|
Diluted
Common Shares Outstanding can vary for, among other things, the trading
price of our common stock, the actual exercise of options or vesting of
restricted stock units, the potential for incremental dilutive shares from
our convertible debentures, and the repurchase or the issuance of stock or
the sale of treasury shares.
|
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- - more - -
|
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
|
(in
thousands except per share amounts)
(Unaudited)
|
||||||||||||||||
|
Three
Months Ended
December 31,
|
Nine
Months Ended
December 31,
|
|||||||||||||||
|
2009
|
2008
(1)
|
2009
|
2008
(1)
|
|||||||||||||
|
Net
sales
|
$ | 250,099 | $ | 192,166 | $ | 669,709 | $ | 730,044 | ||||||||
|
Cost
of sales
|
104,103 | 87,379 | 303,938 | 297,507 | ||||||||||||
|
Gross profit
|
145,996 | 104,787 | 365,771 | 432,537 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Research and
development
|
30,332 | 26,973 | 87,536 | 89,868 | ||||||||||||
|
Selling, general and
administrative
|
43,096 | 36,840 | 120,525 | 127,882 | ||||||||||||
|
Special charge
|
- | 500 | 1,238 | 500 | ||||||||||||
| 73,428 | 64,313 | 209,299 | 218,250 | |||||||||||||
|
Operating
income
|
72,568 | 40,474 | 156,472 | 214,287 | ||||||||||||
|
Other
expense, net
|
(2,689 | ) | (20,064 | ) | (2,656 | ) | (9,809 | ) | ||||||||
|
Income before
income taxes
|
69,879 | 20,410 | 153,816 | 204,478 | ||||||||||||
|
Income
tax provision (benefit)
|
476 | (51,946 | ) | 12,560 | (19,145 | ) | ||||||||||
|
Net
income
|
$ | 69,403 | $ | 72,356 | $ | 141,256 | $ | 223,623 | ||||||||
|
Basic
net income per share
|
$ | 0.38 | $ | 0.40 | $ | 0.77 | $ | 1.22 | ||||||||
|
Diluted
net income per share
|
$ | 0.37 | $ | 0.39 | $ | 0.76 | $ | 1.19 | ||||||||
|
Basic
shares used in calculation
|
183,856 | 181,963 | 183,301 | 183,414 | ||||||||||||
|
Diluted
shares used in calculation
|
187,861 | 183,999 | 186,770 | 187,661 | ||||||||||||
|
(1)
|
As
adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other
Options – Cash Conversion.
|
-
- - more - -
|
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(in
thousands)
|
||||||||
|
ASSETS
|
||||||||
|
December
31,
|
March
31,
|
|||||||
|
2009
|
2009
(1)
|
|||||||
|
(Unaudited)
|
||||||||
|
Cash
and short-term investments
|
$ | 1,077,974 | $ | 1,389,945 | ||||
|
Accounts
receivable, net
|
113,763 | 88,525 | ||||||
|
Inventories
|
112,784 | 131,510 | ||||||
|
Other
current assets
|
138,216 | 138,864 | ||||||
|
Total current
assets
|
1,442,737 | 1,748,844 | ||||||
|
Property,
plant & equipment, net
|
495,065 | 531,687 | ||||||
|
Long-term
investments
|
421,628 | 50,826 | ||||||
|
Other
assets
|
84,177 | 80,409 | ||||||
|
Total assets
|
$ | 2,443,607 | $ | 2,411,766 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable and other accrued liabilities
|
$ | 87,552 | $ | 71,714 | ||||
|
Deferred
income on shipments to distributors
|
97,583 | 83,931 | ||||||
|
Total current
liabilities
|
185,135 | 155,645 | ||||||
|
Convertible
debentures
|
339,000 | 334,184 | ||||||
|
Long-term
income tax payable
|
53,967 | 70,051 | ||||||
|
Deferred
tax liability
|
377,647 | 365,734 | ||||||
|
Other
long-term liabilities
|
3,983 | 3,834 | ||||||
|
Stockholders'
equity
|
1,483,875 | 1,482,318 | ||||||
|
Total liabilities and
stockholders' equity
|
$ | 2,443,607 | $ | 2,411,766 | ||||
|
(1)
As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other
Options – Cash Conversion.
|
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-
- - more - -
MICROCHIP
TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION
OF GAAP TO NON-GAAP MEASURES
(in
thousands except per share amounts and percentages)
(Unaudited)
RECONCILIATION
OF GROSS PROFIT TO NON-GAAP GROSS PROFIT
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Gross
profit, as reported
|
$ | 145,996 | $ | 104,787 | $ | 365,771 | $ | 432,537 | ||||||||
|
Share-based
compensation expense
|
1,266 | 967 | 4,845 | 4,645 | ||||||||||||
|
Acquisition-related
acquired inventory valuation costs and intangible asset
amortization
|
321 | 308 | 1,868 | 308 | ||||||||||||
|
Non-GAAP
gross profit
|
$ | 147,583 | $ | 106,062 | $ | 372,484 | $ | 437,490 | ||||||||
|
Non-GAAP
gross profit percentage
|
59.0 | % | 55.2 | % | 55.6 | % | 59.9 | % | ||||||||
RECONCILIATION
OF RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP
RESEARCH
AND DEVELOPMENT EXPENSES
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Research
and development expenses, as reported
|
$ | 30,332 | $ | 26,973 | $ | 87,536 | $ | 89,868 | ||||||||
|
Share-based
compensation expense
|
(3,108 | ) | (2,948 | ) | (9,205 | ) | (8,023 | ) | ||||||||
|
Non-GAAP
research and development expenses
|
$ | 27,224 | $ | 24,025 | $ | 78,331 | $ | 81,845 | ||||||||
|
Non-GAAP
research and development expenses as a percentage of net
sales
|
10.9 | % | 12.5 | % | 11.7 | % | 11.2 | % | ||||||||
RECONCILIATION
OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO
NON-GAAP
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Selling,
general and administrative expenses, as reported
|
$ | 43,096 | $ | 36,840 | $ | 120,525 | $ | 127,882 | ||||||||
|
Share-based
compensation expense
|
(4,463 | ) | (4,250 | ) | (13,285 | ) | (11,689 | ) | ||||||||
|
Acquisition-related
intangible asset amortization and other costs
|
(297 | ) | (128 | ) | (860 | ) | (128 | ) | ||||||||
|
Non-GAAP
selling, general and administrative expenses
|
$ | 38,336 | $ | 32,462 | $ | 106,380 | $ | 116,065 | ||||||||
|
Non-GAAP
selling, general and administrative expenses as a percentage of net
sales
|
15.3 | % | 16.9 | % | 15.9 | % | 15.9 | % | ||||||||
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- - more - -
RECONCILIATION
OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Operating
income, as reported
|
$ | 72,568 | $ | 40,474 | $ | 156,472 | $ | 214,287 | ||||||||
|
Share-based
compensation expense
|
8,837 | 8,165 | 27,335 | 24,357 | ||||||||||||
|
Acquisition-related
acquired inventory valuation costs, intangible asset amortization &
other costs
|
618 | 436 | 2,728 | 436 | ||||||||||||
|
Special
charge – patent license
|
- | - | 1,238 | - | ||||||||||||
|
Special
charge – Hampshire in-process R&D
|
- | 500 | - | 500 | ||||||||||||
|
Non-GAAP
operating income
|
$ | 82,023 | $ | 49,575 | $ | 187,773 | $ | 239,580 | ||||||||
|
Non-GAAP
operating income as a percentage of net sales
|
32.8 | % | 25.8 | % | 28.0 | % | 32.8 | % | ||||||||
RECONCILIATION
OF OTHER EXPENSE, NET TO NON-GAAP OTHER
(EXPENSE)
INCOME, NET
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008(1)
|
2009
|
2008(1)
|
|||||||||||||
|
Other
expense, net, as reported
|
$ | (2,689 | ) | $ | (20,064 | ) | $ | (2,656 | ) | $ | (9,809 | ) | ||||
|
Convertible
debt non-cash interest expense
|
1,595 | 1,321 | 4,662 | 3,850 | ||||||||||||
|
Loss
(gain) on trading securities
|
- | 19,272 | (7,518 | ) | 19,272 | |||||||||||
|
Non-GAAP
other (expense) income, net
|
$ | (1,094 | ) | $ | 529 | $ | (5,512 | ) | $ | 13,313 | ||||||
|
Non-GAAP
other (expense) income, net, as a percentage of net sales
|
-0.4 | % | 0.3 | % | -0.8 | % | 1.8 | % | ||||||||
|
(1)As
adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other
Options – Cash Conversion.
|
-
- - more - -
RECONCILIATION
OF INCOME TAX PROVISION (BENEFIT)
TO
NON-GAAP INCOME TAX PROVISION
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008(1)
|
2009
|
2008(1)
|
|||||||||||||
|
Income
tax provision (benefit), as reported
|
$ | 476 | $ | (51,946 | ) | $ | 12,560 | $ | (19,145 | ) | ||||||
|
Income
tax rate, as reported
|
0.7 | % | -254.5 | % | 8.2 | % | -9.4 | % | ||||||||
|
Share-based
compensation expense
|
1,180 | 1,454 | 3,585 | 4,384 | ||||||||||||
|
Acquisition-related
acquired inventory valuation costs, intangible asset amortization and
other costs
|
83 | 78 | 357 | 78 | ||||||||||||
|
Special
charge – patent license
|
- | - | 124 | - | ||||||||||||
|
Special
charge – Hampshire in-process R&D
|
- | 89 | - | 89 | ||||||||||||
|
R&D
tax credit reinstatement
|
- | 1,470 | - | 1,470 | ||||||||||||
|
Tax
benefit related to IRS settlement and clarification in tax
regulations
|
- | 49,847 | - | 49,847 | ||||||||||||
|
Tax
benefit on IRS settlement
|
8,452 | - | 8,452 | - | ||||||||||||
|
Convertible
debt non-cash interest expense
|
614 | 508 | 1,795 | 1,482 | ||||||||||||
|
Loss
(gain) on trading securities
|
- | 7,420 | (2,894 | ) | 7,420 | |||||||||||
|
Non-GAAP
income tax provision
|
$ | 10,805 | $ | 8,920 | $ | 23,979 | $ | 45,625 | ||||||||
|
Non-GAAP
income tax rate
|
13.4 | % | 17.8 | % | 13.2 | % | 18.0 | % | ||||||||
|
(1)As
adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other
Options – Cash Conversion.
|
-
- - more - -
RECONCILIATION
OF NET INCOME AND DILUTED NET INCOME PER SHARE TO
NON-GAAP
NET INCOME AND NON-GAAP DILUTED NET INCOME PER SHARE
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
December
31,
|
December
31,
|
|||||||||||||||
|
2009
|
2008(1)
|
2009
|
2008(1)
|
|||||||||||||
|
Net
income, as reported
|
$ | 69,403 | $ | 72,356 | $ | 141,256 | $ | 223,623 | ||||||||
|
Share-based
compensation expense, net of tax effect
|
7,657 | 6,711 | 23,750 | 19,973 | ||||||||||||
|
Acquisition-related
acquired inventory valuation costs, intangible asset amortization and
other costs, net of tax effect
|
535 | 358 | 2,371 | 358 | ||||||||||||
|
Special
charge – patent license, net of tax effect
|
- | - | 1,114 | - | ||||||||||||
|
Special
charge – Hampshire in-process R&D, net
of tax effect
|
- | 411 | - | 411 | ||||||||||||
|
R&D
tax credit reinstatement
|
- | (1,470 | ) | - | (1,470 | ) | ||||||||||
|
Tax
benefit related to IRS settlement and clarification in tax
regulations
|
- | (49,847 | ) | - | (49,847 | ) | ||||||||||
|
Tax
benefit on IRS settlement
|
(8,452 | ) | - | (8,452 | ) | - | ||||||||||
|
Convertible
debt non-cash interest expense, net of tax effect
|
981 | 813 | 2,867 | 2,368 | ||||||||||||
|
Loss
(gain) on trading securities, net of tax effect
|
- | 11,852 | (4,624 | ) | 11,852 | |||||||||||
|
Non-GAAP
net income
|
$ | 70,124 | $ | 41,184 | $ | 158,282 | $ | 207,268 | ||||||||
|
Non-GAAP
net income as a percentage of net sales
|
28.0 | % | 21.4 | % | 23.6 | % | 28.4 | % | ||||||||
|
Diluted
net income per share, as reported
|
$ | 0.37 | $ | 0.39 | $ | 0.76 | $ | 1.19 | ||||||||
|
Non-GAAP
diluted net income per share
|
$ | 0.38 | $ | 0.23 | $ | 0.85 | $ | 1.12 | ||||||||
|
(1)
As adjusted due to the adoption of ASC Subtopic 470-20, Debt with Conversion and Other
Options – Cash Conversion.
|
-
- - more - -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
Microchip
will host a conference call today, February 3, 2010 at 10:00 a.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 February 10, 2010.
A
telephonic replay of the conference call will be available at approximately 1:00
p.m. (Eastern Time) February 3, 2010 and will remain available until 5:00 p.m.
(Eastern Time) on February 10, 2010. Interested parties may listen to the replay
by dialing 719-457-0820 and entering access code 2375453.
Cautionary
Statement:
The
statements in this release relating to our $1 billion run rate, completing the
transaction with Silicon Storage Technology, Inc. in the second calendar quarter
of 2010, expecting 75 to 125 basis points of gross margin improvement in the
March quarter, improvements from increased production levels in our factories,
being positioned to achieve our record high non-GAAP gross margin by the end of
fiscal 2011, our analog revenue run rate, improving business conditions,
continuing to focus on having the appropriate levels of inventory in place to
support the needs of our customers, expecting our cash generation to continue to
be strong for the March quarter, excellent visibility, the impact of the Lunar
New Year holidays on our business in Asia, expecting revenue to be up 3% to 7%
sequentially, rapidly growing our nanoWatt product portfolio, strengthening our
wireless offerings, continued strong interest in our products, our fourth
quarter fiscal 2010 outlook (GAAP and Non-GAAP as applicable) for revenue, gross
margin, operating expenses, other income (expense), tax rate, diluted common
shares outstanding, earnings per share, inventory, capital expenditures for the
March quarter and for fiscal 2010 and net cash generation, 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: the strength of the economic recovery or any
unexpected fluctuations or weakness in the U.S. and global economies, 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 and our
ability to effectively ramp our production levels; 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; the impact of any
significant acquisitions that we make; costs and outcome of any current or
future tax audit or any litigation involving intellectual property, customers or
other issues; actual timing of the closing of the SST acquisition,
the
-
- - more - -
Microchip
Technology
Reports
Third Quarter
Fiscal
2010 Results
satisfaction
of the conditions to closing in the SST acquisition agreement, any termination
of the SST acquisition agreement, 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 February 3, 2010 press release, or to reflect the
occurrence of unanticipated events.
About
Microchip:
Microchip
Technology Incorporated 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 Inc. in the USA and other countries. mTouch, and PICDEM
are trademarks of Microchip Technology Inc. All other trademarks
mentioned herein are the property of their respective companies.
-
- - end - -