Atmel Reports Third Quarter Results; Revenues Up 14% from Last Year.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Oct. 12, 1998--Atmel Corporation (Nasdaq:ATML ATML Automatic Test Markup Language ATML Automated Test Markup Language ) today reported third quarter revenues of $273,814,000 and net income of $4,182,000 or $0.04 per share. Included in the third quarter results are the operations of the Temic Semiconductor Group (Temic), which Atmel acquired in March 1998. In last year's third quarter, the Company's revenues were $240,050,000 and net income was $30,349,000 or $0.30 per share. Revenues for the second quarter of 1998 were $288,205,000 and net income, excluding the $70 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , was approximately breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations . George Perlegos, President and Chief Executive Officer commented, "During the third quarter we made good progress in our cost reduction program, particularly in reducing our assembly and test costs. This progress, in combination with a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix, helped to improve our gross margin from 32% in the second quarter to 37% this quarter. Additionally, our balance sheet remains strong with $311 million in cash and cash equivalents at the end of the quarter. "By leveraging our expertise in mixed processes and embedded Inserted into. See embedded system. nonvolatile memory See non-volatile memory. , we have introduced new products during the quarter targeted at the communications, consumer and PC peripheral markets. We believe this positions us well to resume growth in our revenues going forward. In particular, we introduced two families of system-level-integration (SLI (Scalable Link Interface) A multi-GPU interface from NVIDIA for connecting two or four NVIDIA display adapters together for faster graphics rendering on one monitor or two monitors. ) ASICs incorporating several nonvolatile memory technologies, embedded 32-bit RISC RISC in full Reduced Instruction Set Computing Computer architecture that uses a limited number of instructions. RISC became popular in microprocessors in the 1980s. microcontrollers, custom analog cells and logic cells. These SLI products are entering into high volume production in the consumer, telecommunications, and computer peripheral markets, where integration, security, power consumption and time-to-market are key. "Also during the quarter we shipped the industry's first standard product ARM-based microcontroller A single chip that contains the processor (the CPU), non-volatile memory for the program (ROM or flash), volatile memory for input and output (RAM), a clock and an I/O control unit. . These standard products are ideally suited for low-power portable hand-held electronics equipment, consumer electronics and computer peripherals. Customer reception has been very positive, and Atmel has now become one of the leaders in units shipped by ARM based products." "Atmel's Temic subsidiary is on target to transfer the Silicon Germanium (SiGe) A semiconductor material made from silicon and germanium. Germanium is very similar to silicon, but when one layer is grown on top of the other to form the base of the transistor, the resulting transistor can switch faster and yield higher performance. (SiGe) process technology to our Colorado Springs Colorado Springs, city (1990 pop. 281,140), seat of El Paso co., central Colo., on Monument and Fountain creeks, at the foot of Pikes Peak; inc. 1886. It is a year-round resort and a booming military, technological, and commercial city. facility, where we will implement our BiCMOS process technology with SiGe to greatly enhance the performance capabilities for the wireless telecommunications end markets. Temic continues to show its strength in SiGe by commencing shipments this quarter of its BiPolar (1) See bipolar transmission. (2) One of two major categories of transistor; the other is "field effect transistor" (FET). Although the first transistors and first silicon chips were bipolar, most chips today are field effect transistors wired as CMOS logic, which SiGe chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). for DECT (Digital Enhanced Cordless Telecommunications) A cordless phone standard mostly used in Europe; however, DECT 6.0 is increasingly used worldwide. The first DECT standards were introduced by ETSI in 1992, and DECT phones have been used as cordless home phones as applications in Europe, and has demonstrated full Power Amplifier Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. efficiency for the GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. phone market." Mr. Perlegos added, "Continued weakness during the quarter in our EPROM EPROM in full erasable programmable read-only memory Form of computer memory that does not lose its content when the power supply is cut off and that can be erased and reused. and Flash commodity businesses contributed to the slightly lower revenue in the third quarter versus the second. However, our Flash revenue should resume growth due to a number of key new product introductions. This quarter we completed development of our 16 meg Flash with read-while-write capability in .35 micron technology Micron Technology ("Micron") NYSE: MU is a multinational company based in Boise, Idaho, USA, best known for producing many forms of semiconductor devices. This includes DRAM, SDRAM, flash memory, and CMOS image sensing chips. , targeted at the wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. end market. Additionally, we have begun sampling our 16 meg DataFlash, and have begun volume production on a number of new low-density Flash devices for the PC peripheral market." -0-
Q3 Business Review
-- ASIC, RF and other logic products increased to 71% of third
quarter sales, as compared to 68% last quarter, and 40% last
year.
-- Microcontroller unit shipments continued to increase during the
quarter, with growth led by strong customer demand in the
portable consumer electronics market.
-- ASIC product sales increased again this quarter, led by sales in
the telecomm and consumer end markets, and bookings were very
strong.
-- Serial EEPROM unit shipments increased during the quarter, and
ASPs remained relatively stable.
-- While EPROM and Flash were weak this quarter, we believe these
businesses have bottomed.
"As was the case last quarter, visibility in the near-term remains limited. However, with stable end market demand and the continued introduction of new products, we expect a resumption of growth from the fourth quarter," concluded Mr. Perlegos. Except for historical information contained herein, the matters set forth in this press release are forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, including the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, continued industry overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. , further deterioration of the financial situation in Asia, and other risks detailed from time to time in the Atmel's SEC reports and filings. Founded in 1984, Atmel Corporation is headquartered in San Jose, California San Jose (IPA: /ˌsænhoʊˈzeɪ/) is the third-largest city in California, and the tenth-largest in the United States. It is the county seat of Santa Clara County. with principal manufacturing facilities in Colorado Springs, Colorado The City of Colorado Springs is the second most populous city (after Denver) in the state of Colorado and the 48th most populous city in the United States.[4] The city is the county seat of El Paso County. , Nantes and Rousset, France, and Heilbronn, Germany. Atmel designs, develops, manufactures and markets on a worldwide basis advanced logic, mixed-signal, nonvolatile memory, and RF semiconductors. Atmel is also a leading provider of system level integration (SLI) semiconductor solutions using advanced CMOS (Complementary Metal Oxide Semiconductor) Pronounced "c-moss." The most widely used integrated circuit design. It is found in almost every electronic product from handheld devices to mainframes. , BiCMOS, BiPolar and SiGe process technologies. Atmel product and financial information can be retrieved from its Fax-on-Demand service. In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. call 1-800/292-8635. Internationally, from a fax phone, dial 1-408/441-0732. Requests for financial literature may be sent via e-mail to invest@atmel.com or by visiting Atmel's Web site at http://www.atmel.com -0-
Atmel Corporation
Condensed Consolidated Income Statements
(In thousands, except per-share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1997 1998 1997
-------------------- ---------------------
Net revenues $ 273,814 $ 240,050 $ 822,411 $ 717,932
Expenses:
Cost of sales 172,583 135,572 532,750 397,849
Research and
development 45,518 29,624 125,571 88,152
Selling, general
and administrative 40,796 24,459 107,737 74,763
Nonrecurring charges 0 0 102,241 0
--------- --------- --------- ---------
Total expenses 258,897 189,655 868,299 560,764
Operating income (loss) 14,917 50,395 (45,888) 157,168
Other expense, net (9,689) (3,701) (23,470) (8,715)
--------- --------- --------- ---------
Income (loss) before
taxes 5,228 46,694 (69,358) 148,453
Income tax provision
(benefit) 1,046 16,345 (3,026) 51,958
--------- --------- --------- ---------
Net income (loss) $ 4,182 $ 30,349 $ (66,332) $ 96,495
========= ========= ========= =========
Basic earnings (loss)
per share $ 0.04 $ 0.30 $ (0.67) $ 0.97
========= ========= ========= =========
Diluted earnings
(loss) per share $ 0.04 $ 0.30 $ (0.67) $ 0.95
========= ========= ========= =========
Shares outstanding -
Basic EPS 99,472 99,506 99,267 99,349
========= ========= ========= =========
Shares outstanding -
Diluted EPS 100,053 101,926 99,267 103,507
========= ========= ========= =========
Atmel Corporation
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, 1998
(Unaudited) Dec. 31, 1997
-------------- -------------
Current assets:
Cash and short-term investments $ 188,882 $ 237,532
Accounts receivable, net 246,954 216,991
Inventories 236,474 124,336
Other current assets 108,290 119,358
Total current assets 780,600 698,217
Other assets 102,285 42,338
Long-term investments 122,417 95,536
Fixed assets, net 981,225 985,949
========== ==========
Total assets $1,986,527 $1,822,040
========== ==========
Current liabilities:
Current portion, long-term debt $ 78,520 $ 67,522
Trade accounts payable and other
accrued liabilities 313,110 290,890
Income taxes payable 14,010 0
Deferred income on shipments to distributors 19,648 25,256
---------- ----------
Total current liabilities 425,288 383,668
Convertible notes 267,640 150,000
Long-term debt 503,648 421,389
Other long-term liabilities 19,063 34,499
---------- ----------
Total liabilities 1,215,639 989,556
---------- ----------
Put warrants 69,730 46,050
---------- ----------
Shareholders' equity:
Common stock 315,359 334,303
Retained earnings 385,799 452,131
---------- ----------
Total shareholders' equity 701,158 786,434
---------- ----------
Total liabilities and shareholders' equity $1,986,527 $1,822,040
========== ==========
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