Semtech First Quarter Net Income Up 14 Percent Sequentially; Net Sales Increased 6 Percent Sequentially; Outlook for Fourth Consecutive Quarter of Sequential Sales Growth.Business Editors CAMARILLO Camarillo (kă'mərē`yō), city (1990 pop. 52,303), Ventura co., S Calif.; inc. 1964. It is the center of a fertile farm area where citrus fruits and flowers are grown. , Calif.--(BUSINESS WIRE)--May 21, 2002 Semtech
Semtech Corporation (NASDAQ: SMTC) is a supplier of analog and mixed-signal semiconductors. Corporation (Nasdaq:SMTC SMTC Southern Maine Technical College SMTC Science/Mathematics/Technology Center (Central Michigan University) SMTC Saluda Mountain Telephone Company (Knoxville, Tennessee) SMTC Short-To-Medium Term Control ) today announced results for its fiscal year 2003 first quarter that ended April 28, 2002. Sales for the first quarter of fiscal year 2003 were $49.2 million, an increase of 6 percent compared to sales of $46.4 million for the fourth quarter of fiscal year 2002. Gross margin was 57 percent in the quarter, up 100 basis points from the prior quarter. Net income for the first quarter of fiscal year 2003 increased sequentially by 14 percent to $10.0 million, or 13 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. First quarter results represent the third consecutive quarter of sequential improvement in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and a return to a 20 percent or better net after-tax profit margin After-Tax Profit Margin A ratio of financial performance calculated by dividing net income after taxes, by net sales. A company's after-tax profit margin is important as it tells investors the percentage of money a company actually earns per dollar of sales. . Sales for the first quarter of fiscal year 2003 were down 19 percent when compared to the first quarter of fiscal year 2002. Net income was down 28 percent in comparison to the same period last year, before one-time charges for headcount reductions and location consolidations in the prior year first quarter. New orders in the first quarter increased 23 percent from the fourth quarter level and the overall book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can was above one for the second time in the past 7 quarters. Sequentially, orders were generally higher across each product line and each geographic segment. New orders were strongest in the Portable Power Management and Protection Product lines. Demand for proprietary parts used in laptop computers A portable computer that has a flat LCD screen and usually weighs less than eight pounds. Often called just a "laptop," it uses batteries for mobile use and AC power for charging the batteries and desktop use. Today's high-end laptops provide all the capabilities of most desktop computers. and cellular phones exceeded expectations, as several key programs moved into production. Jack Poe, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said, "The first quarter was a continuation of the improvement in market conditions experienced during the second half of last year. The Company's growth, which recently has been driven by increases in content and market share gains in computers, graphics, gaming and cellular phones, has been bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by evidence that some of the capital equipment markets are beginning to improve. We expect the market for test equipment to improve ahead of communications equipment." In the first quarter, the Company reported 377 new design wins with the potential to generate more than $53 million of new annual business, compared to nearly 400 design wins in the fourth quarter representing about $46 million annually of potential new business. Product line design-win dollars were led by Portable Power Management, Desktop Power Management, Protection and SETS products. Significant New Product Launch In June 2002, Semtech will formally launch its newest product family, MicroBuddy(TM). MicroBuddy(TM) is a revolutionary series of fully programmable support ICs for microcontrollers that is far more advanced than any other product in the market today. The product's features include CPU CPU in full central processing unit Principal component of a digital computer, composed of a control unit, an instruction-decoding unit, and an arithmetic-logic unit. supervision, clock management, real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. support, auxiliary memory A high-speed memory bank used in mainframes and supercomputers. It is not directly addressable by the CPU; rather, it functions like a disk. Data are transferred from auxiliary memory to main memory over a high-bandwidth channel. See auxiliary storage. and serial interface. MicroBuddy(TM) can be used in any microcontroller-based application such as home automation, consumer products, portable computers and industrial equipment. The Company has applied for a series of patents and trademark registrations to protect this product family. Outlook and Buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may Semtech estimates that net sales for the second quarter of fiscal year 2003 will increase 5 to 7 percent over the first quarter. Turns orders of 31 percent are required to achieve this forecast. Gross margin is expected to increase 50 to 60 basis points during the second quarter. Earnings at these levels should be approximately 14 cents per diluted share. Mr. Poe remarked, "In comparing Semtech's second quarter of last year, our low point in the cycle, with our outlook for the second quarter of this year, sales should be up about 30 percent and net income, before one-time items, should increase roughly 80 percent. Net after-tax profit margins are now back over 20 percent and are 200 to 300 basis points higher than our previous results at similar sales levels." The Company spent $10.0 million on the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before during the first quarter. There is a remaining authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: balance of $24.2 million under the existing buyback plan. About Semtech Semtech Corporation is a leading supplier of analog and mixed-signal semiconductors used in a wide range of computer, industrial and communication applications. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provision Statements contained in this release that are not historical facts 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. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements, including projections and forecasts for revenue and gross margin, involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include worldwide economic conditions, the timing and duration of semiconductor market upturns or downturns, demand for personal computers, cellular phones and automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. test equipment, demand for semiconductor devices in general, competitors' actions, relations with large strategic customers and suppliers, manufacturing costs and yields, demand for the Company's products in particular, and risks associated with the businesses of major customers. Other factors that may cause actual results to differ from the forward-looking statements contained in this press release and that may affect the Company's prospects in general are described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward-looking statements to reflect subsequent events or changed assumptions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
SEMTECH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands - except per share amounts)
Three Months Ended
(Unaudited) (Unaudited)
April 28, April 29,
2002 2001
Net sales $ 49,188 $ 60,528
Cost of sales 21,108 25,442
Gross profit 28,080 35,086
Operating costs and expenses -
Selling, general and administrative 8,412 9,922
Product development and engineering 7,524 8,048
One-time costs - 951
Total operating costs and expenses 15,936 18,921
Operating income 12,144 16,165
Interest and other income, net 1,179 2,451
Income before provision for taxes 13,323 18,616
Provision for taxes 3,331 5,399
Net income $ 9,992 $ 13,217
Earnings per share:
Basic $ 0.14 $ 0.19
Diluted $ 0.13 $ 0.17
Weighted average number of shares:
Basic 72,681 68,467
Diluted 78,997 77,120
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
April 28, January 27,
2002 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $55,869 $46,300
Temporary investments 360,956 324,870
Receivables, less allowances 25,575 19,181
Inventories 20,854 22,728
Income taxes refundable - 2,019
Deferred income taxes 11,878 11,786
Other current assets 4,018 3,372
Total current assets 479,150 430,256
Property, plant and equipment, net 50,793 51,516
Investments, maturities in excess
of 1 year 125,704 172,332
Deferred income taxes 26,755 27,659
Other assets 8,023 8,638
TOTAL ASSETS $ 690,425 $ 690,401
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,001 $ 7,341
Accrued liabilities 11,042 16,845
Deferred revenue 1,690 1,936
Income taxes payable 1,241 1,099
Other current liabilities 74 65
Total current liabilities 22,048 27,286
Long-term debt 354,170 364,320
Total Stockholders' equity 314,207 298,795
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 690,425 $ 690,401
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