SMSC Reports Fourth Quarter and Fiscal 2005 Results.HAUPPAUGE, N.Y. -- SMSC SMSC Short Message Service Center SMSC Standard Microsystems Corporation (New York) SMSC Spiritual Moral Social Cultural (education) SMSC Stephenville Medical and Surgical Clinic (Nasdaq: SMSC) today announced that revenues for the fourth quarter ended February 28, 2005 were $54.8 million, an increase of approximately 5% from last year's fourth quarter revenues of $52.1 million, and an increase of 8% from $50.8 million in the third quarter of fiscal 2005. SMSC previously disclosed a collectibility concern related to a Taiwan-based distributor, which prevented SMSC from recognizing $4.2 million of product sales in its third quarter of fiscal 2005. SMSC has not shipped product to this distributor since this issue first arose and there was no disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of supply to SMSC's end customers as shipments were rerouted through alternate channels. Although SMSC initially believed that the distributor was on a path to recovering its financial stability, conditions deteriorated in the latter part of SMSC's fourth fiscal quarter, and the distributor recently filed a petition for reorganization. Since there can be no assurance that SMSC will receive the remaining balance owed by the distributor, SMSC has recorded a charge of $2.7 million in the fourth quarter, fully reserving its remaining balance sheet exposure Balance sheet exposure See: Accounting exposure. on this issue. The $2.7 million charge is included in Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , as it represents the inventory value of the shipments on which revenue was not recognized. Gross profit percentage for the fourth quarter of fiscal 2005 was 38.1%, compared to 48.1% in the previous year's fourth quarter. The primary reason for the reduced percentage was the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. write off. The gross profit percentage for the fourth quarter of fiscal 2005 was also adversely affected by increased sales of lower margin parts and by shipments of inventory purchased at high prices during a period of perceived supply shortage. The gross profit percentage is expected to improve in the first quarter of fiscal 2006 to between 44% and 46%, as noted in the Business Outlook section below, and to improve further in subsequent quarters. Research and development expenses for the quarter were $10.5 million, compared to $10.2 million in the year-ago quarter, and selling, general and administrative expenses were $12.1 million, compared to $11.1 million in last year's fourth quarter, including litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs of $1.1 million in the fourth quarter of fiscal 2005 and $0.2 million in the same period last year. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter ended February 28, 2005 included a credit of $0.7 million to mark stock appreciation rights to market as a result of the decrease in SMSC's share price during the quarter. As previously disclosed, SMSC settled a patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. dispute with Analog Devices Analog Devices (NYSE: ADI) is an American multinational producer of semiconductor devices. Analog specializes in ADC, DAC, MEMS, and DSP chips for consumer and industrial goods. Analog is presently designing circuits in the 65 nanometer to 3 µm process feature sizes range. Inc. (ADI) in the fourth quarter of fiscal 2005. In connection with this settlement, SMSC made a one-time payment of $6 million to ADI, which was recorded in the same period. The litigation costs quoted in the preceding paragraph were directly related to the dispute with ADI and, as a result of the settlement, will no longer continue. Lastly, during the fourth quarter ended February 28, 2005, SMSC recorded a gain of $1.0 million on the sale of real estate. Due to the significance of the aggregate impact of the settlement charge, the distributor related asset write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. and the real estate gain in the fourth quarter of fiscal 2005, SMSC is presenting certain pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma information to facilitate a comparison of operating results. A schedule reconciling the non-GAAP measures to the most comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures is attached to the release. On a GAAP basis, the net loss in the fourth quarter of fiscal 2005 was $0.15 per share, including the impact of special items, which in the aggregate decreased SMSC's earnings per share by a net of $0.26. On a pro forma basis, SMSC's net income was $0.11 per share, which compares to net income of $0.17 per share in the fourth quarter of fiscal 2004. Fiscal 2005 Financial Highlights: --SMSC posted record annual semiconductor product revenues of $197.8 million for fiscal 2005. --The Company achieved strong growth in year-over-year sales of networking and connectivity products with collective revenue growth of more than 30% over the prior year. --As a of percentage of product revenues, PC I/O (Input/Output) The transfer of data between the CPU and a peripheral device. Every transfer is an output from one device and an input to another. See PC input/output. I/O - Input/Output sales comprised 59% and non-PC I/O sales were 41%, versus a split of 67% and 33% last year, respectively. --SMSC announced that it settled a patent infringement dispute with ADI, under which both parties agreed to dismiss all claims against each other. As part of the agreement, SMSC made a one-time payment of $6 million to ADI, and was granted a royalty-bearing license to the patents in question. --On a GAAP basis, net income per share for fiscal 2005 was $0.08 versus $1.16 in fiscal 2004. On a pro forma basis, excluding the impact of the special items mentioned above, net income per share for fiscal 2005 was $0.33 versus $1.14 in fiscal 2004. Slightly more than half of the year-to-year decrease in pro forma net income per share was due to the fact that intellectual property payments from Intel were much higher in fiscal 2004 than in fiscal 2005. --Cash and liquid investments at the end of fiscal 2005 increased to $172.6 million. Inventories at the end of the fiscal year totaled $33.3 million, and are appropriate relative to expected demand. The Company has no bank debt, and book value per share as of February 28, 2005 was $14.44, of which $9.24 was cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. "SMSC's total revenues for the fourth quarter increased on both a year-over-year and sequential comparison," said Steven J. Bilodeau, Chairman and Chief Executive Officer. "Though quarterly PC I/O sales were roughly flat with last year's fourth quarter and connectivity grew slightly, SMSC's networking business increased by 27%." Mr. Bilodeau continued, "Looking ahead, with the contributions of the OASIS acquisition, SMSC will experience an immediate acceleration in revenues, on top of organic growth." Fiscal 2005 Business Highlights: In fiscal 2005, SMSC: --Celebrated the unveiling of a new global brand identity at the opening of the NASDAQ Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. at the NASDAQ MarketSite NASDAQ MarketSite (or simply MarketSite) is the physical presence of the NASDAQ stock market. Located in Times Square in New York City, it occupies the bottom of the Condé Nast Building, located at 4 Times Square. in Times Square on April 26, 2004. Through this identity launch, SMSC placed a new emphasis on positioning the Company as a stronger and more competitive supplier of innovative solutions to a broad range of end markets. --Unveiled the industry's first USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. 2.0 2-port hub controller. Addressing the growing demand in applications such as digital media, mobile, printers and multi-functional devices, this hub controller offers a 2-port device for those applications where the primary system requirement is to double the available number of USB2.0 ports. --Unveiled five new USB2.0-based products, including a 3-port, second generation 4-port and 7-port hub controller; a controller for 12-in-1 flash card readers A peripheral device that reads and writes a flash memory card. Typically connecting to the computer via the USB port, readers were first available for only one type of card. Today, readers are available for all popular memory cards. ; and a second generation USB2.0 physical layer transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. (PHY See physical layer and physical. ). With this introduction, SMSC is offering the market the most comprehensive, highest performing line of USB2.0 hub controller products for a wide range of consumer and commercial connectivity applications. --Introduced its 10-in-1 USB2.0 card reader controllers delivering optimized, cost-effective performance with low power for flash media cards. With today's proliferation proliferation /pro·lif·er·a·tion/ (pro-lif?er-a´shun) the reproduction or multiplication of similar forms, especially of cells.prolif´erativeprolif´erous pro·lif·er·a·tion n. of flash cards, embedded Inserted into. See embedded system. hardware designers now have a better way to leverage fast USB2.0 data transfer speeds, while also addressing the requirements of advanced card formats, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , increased compatibility and lower system costs. --Introduced the Company's second generation 10/100 non-PCI Ethernet controller addressing the growing demand to connect multiple PCs with digital media in the home. Applications include video streaming See streaming video and video stream. , such as cable, HDTV (High Definition TV) A set of digital television (DTV) standards that offer the highest resolution and sharpest picture. Although some HDTV sets are available in standard (rather square) screen sizes, the overwhelming majority of sets are wide screen, which eliminates , digital video recorders See DVR. , home gateways, printers and more. --Announced that VOCAL Technologies, Ltd. selected SMSC's Ethernet controller for its reference design serving the Voice over IP market space. In addition, SMSC is VOCAL's silicon supplier for all IP interaction. --Targeting the consumer notebook PC market, introduced a family of integrated microcontrollers, which expand the role of the traditional keyboard controller A circuit that monitors keystrokes and generates the required data bits when pressed. to deliver the industry's first mobile embedded controller Controller circuitry built into a device or on the main system board, in contrast with a removable card or module. solution that integrates critical thermal, power and system management capabilities with keyboard scan, serial port and consumer infrared An invisible band of radiation at the lower end of the visible light spectrum. With wavelengths from 750 nm to 1 mm, infrared starts at the end of the microwave spectrum and ends at the beginning of visible light. functionality into a single device. --Introduced a super Input/Output (I/O) controller targeting the media-rich mobile PC market and the digital home. With the growing demand for mobility and the consumer's desire to access audio, video and data, this I/O controller is ideally suited for a market where cost, size and performance are critical benchmarks. --Launched a family of pin compatible system controller I/O chips. The suite of I/O controllers delivers a more flexible design that enables system design engineers to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on a single part across a wide range of applications with similar characteristics. --In response to customer challenges associated with overcoming heat dissipation Noun 1. heat dissipation - dissipation of heat chilling, cooling, temperature reduction - the process of becoming cooler; a falling temperature and cooling system cooling system: see air conditioning; internal-combustion engine; refrigeration. cooling system Apparatus used to keep the temperature of a structure or device from exceeding limits imposed by needs of safety and efficiency. issues, expanded its line of Environmental Monitoring and Control (EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. ) solutions to include four new temperature sensors
v. con·served, con·serv·ing, con·serves v.tr. 1. a. To protect from loss or harm; preserve: board space. --Shortly after the close of fiscal 2005, SMSC announced that it had acquired OASIS SiliconSystems Holding AG (OASIS), a leading provider of Media Oriented Systems Transport MOST (an acronym for Media Oriented Systems Transport) is a networking standard intended for interconnecting multimedia components in automobiles and other vehicles. (MOST(R)) technology, which enables the seamless transport of digital audio, video, and packet-based data, along with control information, within automobiles. The acquisition, which closed on March 30, 2005, marks another major step in SMSC's diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. strategy by moving into a new vertical market with the leader in automotive infotainment (INFOrmation enterTAINMENT) Refers to all the information and entertainment services delivered to the home, which are essentially telephone, TV and Internet access. networking in Europe. Business Outlook: The following expectations include the impact of the OASIS SiliconSystems acquisition for two months of the first quarter of fiscal 2006, beginning on March 31, 2005. For the first quarter, SMSC expects revenues to be between $63 million and $67 million, reflecting a year-over-year increase of 22% at the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of that range. Gross profit percentage is expected to be between 44% and 46%. Research and development expenses and selling, general and administrative expenses are both expected to be between $13.25 million and $14 million. The effective tax rate is estimated to be approximately 32%. Before in-process R&D charges and amortization of acquired intangibles, the Company expects first quarter net income to be between $0.08 and $0.12 per share. Sarbanes-Oxley: Pursuant to Section 404 of the Sarbanes-Oxley Act See SOX. of 2002, SMSC will report on the effectiveness of its internal controls as of fiscal 2005 in its upcoming Form 10K. This is the first annual period for which such an assessment has been required, and management and SMSC's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. are in the process of finalizing their evaluation of the design and tests of effectiveness of its internal controls as defined by Section 404. There can be no assurance that the Company's Form 10K will not include reportable deficiencies. About SMSC: Many of the world's most successful global technology companies rely upon SMSC as a go-to resource for semiconductor system solutions that span analog, digital and mixed-signal technologies. Leveraging substantial intellectual property, integration expertise and a comprehensive global infrastructure, SMSC solves design challenges and delivers performance, space, cost and time-to-market advantages to its customers. SMSC's application focus targets key vertical markets including mobile and desktop PCs, servers, consumer electronics, automotive infotainment and industrial applications. The Company has developed leadership positions in its select markets by providing application specific solutions such as mixed-signal PC system controllers, non-PCI Ethernet, ARCNET (Attached Resource Computer NETwork) The first local area network (LAN) introduced in 1968 by Datapoint Corporation. It connects up to 255 nodes in a star topology at 2.5 Mbits/sec over twisted pair or coax. A 20 Mbits/sec version was introduced in 1989. , MOST, USB2.0 and other high-speed serial communications See serial transmission and serial. . SMSC is headquartered in Hauppauge, New York Hauppauge (pronounced /hɔpɔg/) is a hamlet in the Town of Islip and the Town of Smithtown in Suffolk County, New York, United States. with operations 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. , Taiwan, Japan, Korea, China and Europe. Engineering design centers are located in Arizona, New York, Texas New York is a hamlet in Henderson County, Texas, USA, about 11 miles east of Athens. Geography New York lies at the intersection of FM 804 and FM 607 in a stereotypically flat portion of East Texas, surrounded mostly by farm land. and Karlsruhe, Germany. Additional information is available at www.smsc.com. Forward Looking Statements: Except for historical information contained herein, the matters discussed in this announcement are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about expected future events and financial and operating results that involve risks and uncertainties. These include the timely development and market acceptance of new products; the impact of competitive products and pricing; the effect of changing economic conditions in domestic and international markets; changes in customer order patterns, including loss of key customers or distributors, order cancellations or reduced bookings; and excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. and variations in inventory valuation, among others. Such statements are qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by the inherent risks and uncertainties surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. future expectations and may not reflect the potential impact of any future acquisitions, mergers or divestitures. SMSC competes in the semiconductor industry, which has historically been characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by intense competition, rapid technological change, cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. market patterns, price erosion and periods of mismatched supply and demand. In addition, sales of many of the Company's products depend largely on sales of personal computers and peripheral devices See peripheral. peripheral device - peripheral , as well as general industry and market conditions. Reductions in the rate of growth of the PC, consumer electronics, embedded or automotive markets could adversely affect its operating results. SMSC conducts business outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and is subject to tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic and import regulations and currency fluctuations, which may have an effect on its business. All forward-looking statements speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and are based upon the information available to SMSC at this time. Such information is subject to change, and the Company may not necessarily inform, or be required to inform, investors of such changes. These and other risks and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in the Company's reports filed with the SEC. Investors are advised to read the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission, particularly those sections entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Other Factors That May Affect Future Operating Results" for a more complete discussion of these and other risks and uncertainties. SMSC is a registered trademark of Standard Microsystems Corporation. Product names and company names are trademarks of their respective holders.
STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Fiscal Year Ended
February 28 or 29, February 28 or 29,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Sales and revenues:
Product sales $ 52,192 $ 49,218 $197,803 $191,969
Intellectual property
revenues 2,658 2,896 11,012 23,904
----------------------------------------------------------------------
54,850 52,114 208,815 215,873
Cost of goods sold 33,938 27,044 114,066 106,236
----------------------------------------------------------------------
Gross profit 20,912 25,070 94,749 109,637
Operating expenses (income):
Research and development 10,516 10,168 42,988 38,793
Selling, general and
administrative 12,066 11,120 48,759 42,168
Amortization of intangible
assets 265 317 1,113 1,311
Settlement charge 6,000 - 6,000 -
Gains on real estate
transactions (1,017) - (1,017) (1,444)
----------------------------------------------------------------------
Income (loss) from
operations (6,918) 3,465 (3,094) 28,809
Interest income 806 467 2,532 1,918
Other expense, net (45) (43) (103) (933)
----------------------------------------------------------------------
Income (loss) before
provision for (benefit
from) income taxes and
minority interest (6,157) 3,889 (665) 29,794
Provision for (benefit
from) income taxes (3,339) 461 (2,267) 8,051
Minority interest in net
income of subsidiary - 62 - 201
----------------------------------------------------------------------
Income (loss) from
continuing operations (2,818) 3,366 1,602 21,542
Gain (loss) from
discontinued operations
(net of income taxes of
$94 and $(14)) - 169 - (24)
----------------------------------------------------------------------
Net income (loss) (2,818) 3,535 1,602 21,518
Gain on redemption of
preferred stock of
subsidiary - 6,685 - 6,685
----------------------------------------------------------------------
Net income (loss) applicable
to common shareholders $(2,818) $ 10,220 $ 1,602 $ 28,203
======================================================================
Basic net income (loss) per
share:
Income (loss) from
continuing operations $ (0.15) $ 0.19 $ 0.09 $ 1.25
Gain (loss) from
discontinued operations - 0.01 - -
----------------------------------------------------------------------
Basic net income (loss)
per share (0.15) 0.20 0.09 1.25
Gain on redemption of
preferred stock of
subsidiary - 0.37 - 0.39
----------------------------------------------------------------------
Basic net income (loss) per
share applicable to common
shareholders $ (0.15) $ 0.57 $ 0.09 $ 1.64
======================================================================
Diluted net income (loss)
per share:
Income (loss) from
continuing operations $ (0.15) $ 0.17 $ 0.08 $ 1.17
Gain (loss) from
discontinued operations - 0.01 - -
----------------------------------------------------------------------
Diluted net income (loss)
per share (0.15) 0.18 0.08 1.16
Gain on redemption of
preferred stock of
subsidiary - 0.34 - 0.36
----------------------------------------------------------------------
Diluted net income (loss)
per share applicable to
common shareholders $ (0.15) $ 0.51 $ 0.08 $ 1.53
======================================================================
Weighted average common
shares outstanding:
Basic 18,552 18,007 18,376 17,226
Diluted 18,552 19,887 19,318 18,479
The sum of the income (loss)
per share amounts may not
total due to rounding.
STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Fiscal Year Ended
February 28 or 29, February 28 or 29,
------------------ -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Sales and revenues:
Product sales $ 52,192 $ 49,218 $197,803 $191,969
Intellectual property
revenues 2,658 2,896 11,012 23,904
----------------------------------------------------------------------
54,850 52,114 208,815 215,873
Cost of goods sold 31,204 27,044 111,332 106,236
----------------------------------------------------------------------
Gross profit 23,646 25,070 97,483 109,637
Operating expenses:
Research and development 10,516 10,168 42,988 38,793
Selling, general and
administrative 12,066 11,120 48,759 42,168
Amortization of intangible
assets 265 317 1,113 1,311
----------------------------------------------------------------------
Income from operations 799 3,465 4,623 27,365
Interest income 806 467 2,532 1,918
Other expense, net (45) (43) (103) (184)
----------------------------------------------------------------------
Income before provision for
(benefit from) income taxes
and minority interest 1,560 3,889 7,052 29,099
Provision for (benefit from)
income taxes (484) 461 588 7,794
Minority interest in net
income of subsidiary - 62 - 201
----------------------------------------------------------------------
Net income 2,044 3,366 6,464 21,104
======================================================================
Basic net income per share $ 0.11 $ 0.19 $ 0.35 $ 1.23
======================================================================
Diluted net income per share $ 0.11 $ 0.17 $ 0.33 $ 1.14
======================================================================
Weighted average common
shares outstanding:
Basic 18,552 18,007 18,376 17,226
Diluted 19,224 19,887 19,318 18,479
These pro forma Consolidated Statements of Operations exclude:
from fiscal 2005, a settlement charge, a distributor-related asset
write-off and a gain of the sale of real estate, and
from fiscal 2004, a gain on the sale of real estate, a loss on the
sale of Chartered Semiconductor stock and a gain(loss) from
discontinued operations.
STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP AND PRO FORMA INFORMATION (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Year Ended
February 28 or 29, February 28 or 29,
---------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------
Net income (loss)
As reported, per GAAP $(2,818) $ 3,535 $ 1,602 $21,518
Add (Deduct):*
Settlement charge 3,780 - 3,780 -
Write off of distributor-
related asset 1,723 - 1,723 -
Gains on real estate
transactions (641) - (641) (910)
Loss on sale of Chartered
Semiconductor stock - - - 472
(Gain) Loss from
discontinued operations - (169) - 24
---------------------------------------------------------------------
Pro forma net income $ 2,044 $ 3,366 $ 6,464 $21,104
=====================================================================
Diluted net income (loss) per
share:
As reported, per GAAP $ (0.15) $ 0.18 $ 0.08 $ 1.16
Pro forma $ 0.11 $ 0.17 $ 0.33 $ 1.14
Diluted weighted average
common shares outstanding:
As reported, per GAAP 18,552 19,887 19,318 18,479
Pro forma 19,224 19,887 19,318 18,479
* All amounts added and deducted in calculating pro forma net income
are presented net of applicable income taxes at 37%.
STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)
February 28, February 29,
2005 2004
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 116,126 $ 14,050
Short-term investments 56,519 144,247
Accounts receivable, net 23,788 21,946
Inventories 33,310 23,162
Deferred income taxes 17,701 15,064
Other current assets 4,295 8,549
---------------------------------------------------------------------
Total current assets 251,739 227,018
---------------------------------------------------------------------
Property, plant and equipment, net 22,630 23,430
Long-term investments - 15,600
Goodwill 29,435 29,595
Intangible assets, net 3,584 4,697
Deferred income taxes 7,163 6,493
Other assets 4,708 3,192
---------------------------------------------------------------------
$ 319,259 $ 310,025
=====================================================================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 15,995 $ 14,679
Deferred income on shipments to
distributors 7,689 7,972
Accrued expenses, income taxes and other
liabilities 13,400 13,168
---------------------------------------------------------------------
Total current liabilities 37,084 35,819
---------------------------------------------------------------------
Other liabilities 12,326 12,104
Shareholders' equity:
Preferred stock - -
Common stock 2,053 2,019
Additional paid-in capital 187,854 181,830
Retained earnings 100,612 99,010
Treasury stock, at cost (23,799) (23,454)
Deferred stock-based compensation (1,925) (1,962)
Accumulated other comprehensive income 5,054 4,659
---------------------------------------------------------------------
Total shareholders' equity 269,849 262,102
---------------------------------------------------------------------
$ 319,259 $ 310,025
=====================================================================
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