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 CHANDLER, Ariz., Jan. 13 /PRNewswire/ -- Microchip Technology Inc. (NASDAQ: MCHP), a leading semiconductor manufacturer of field programmable microcontrollers and specialty memory products, reported record net sales and net income for its third fiscal quarter ended Dec. 31, 1993. Net sales for the third quarter of fiscal 1994 were $37.6 million, a 65 percent increase over $22.8 million reported in the third quarter of fiscal 1993, and a 14 percent sequential increase over the $33.0 million reported in the immediately preceding second quarter of fiscal 1994. Net income for the third quarter of fiscal 1994 was $5.8 million, up 400 percent over net income of $1.2 million in the third quarter of fiscal 1993, and a 58 percent increase over the $3.7 million reported in the immediately preceding second quarter of fiscal 1994.
 Reported net income per share for the third quarter of fiscal 1994 was 41 cents on 14.1 million shares outstanding, compared to 12 cents in last year's third quarter on 9.9 million shares, and 28 cents in the immediately preceding second quarter of fiscal 1994. All per share figures and share amounts reflect the company's 2-for-1 stock split in September 1993.
 "In the December quarter, Microchip posted its ninth consecutive quarter of record sales and earnings performance," said Steve Sanghi, Microchip president and chief executive officer. "We believe the company's sound performance continues to reflect strong market acceptance of our family of high-performance, yet cost-effective, embedded control solutions. Our strategic embedded control products continued to grow in importance during the quarter," added Sanghi, "now accounting for 81 percent of the company's sales, up from 63 percent in last year's third quarter. And, Microchip's development systems, used during the design-in phase of the company's key microcontroller products, maintained a robust shipment level throughout the third quarter."
 Microchip is in the process of adding significantly to both its short-term and longer-term manufacturing capacity. Since August 1993, approximately $25 million in incremental process and test equipment has been added to the company's existing U.S. and Taiwan facilities, sufficient to boost wafer production by approximately 45 percent. Complementing this increase in wafer production capacity, Microchip announced in October a contract assembly and test agreement with Alphatec Electronics of Thailand which provides sufficient incremental capacity to increase the company's assembly and test output by nearly 100 percent. Additionally, to address Microchip's longer-term growth requirements, the company also announced in October the purchase of a second wafer fabrication facility in Tempe, Ariz. It is anticipated that this second fabrication facility will be facilitized in stages over several years, with an estimated fully facilitized capacity in excess of $400 million per year.
 Microchip Technology is a leading supplier of field programmable 8-bit microcontrollers and related specialty memory products for high- volume embedded control solutions. Microchip addresses the growing need for innovative embedded control applications in the consumer, automotive, office automation, communication and industrial markets with products that feature the industry's most economical OTP (one-time programmable) as well as ROM memory capability. The company is headquartered near Phoenix in Chandler, with wafer fabrication facilities in both Chandler and Tempe, and has a wholly owned subsidiary performing assembly and test in Kaohsiung, Taiwan. Microchip employs approximately 1,200 employees and has sales offices located throughout Asia, Europe, Japan and North America.
 The Microchip logo and name are registered trademarks of Microchip Technology Inc. All rights reserved.
 Consolidated Statements of Operations
 (In thousands except per share amounts)
 Three Months Ended Nine Months Ended
 Dec. 31, Dec. 31,
 1993 1992 1993 1992
 Net sales $37,613 $22,808 $97,682 $64,418
 Cost of sales 19,579 14,545 53,038 41,625
 Gross profit 18,034 8,263 44,644 22,793
 Operating expenses:
 Research and development 3,468 2,208 9,478 6,745
 Selling, general and
 administrative 7,763 5,074 20,835 13,830
 Amortization of negative
 goodwill (409) (409) (1,227) (1,227)
 Total 10,822 6,873 29,086 19,348
 Operating income 7,212 1,390 15,558 3,445
 Other income (expense):
 Interest income 218 46 507 156
 Interest expense (362) (562) (978) (1,591)
 Other, net 191 432 285 569
 Income before income taxes 7,259 1,306 15,372 2,579
 Income taxes 1,464 145 3,175 223
 Net income $5,795 $1,161 $12,197 $2,356
 Net income per common and
 common equivalent share $0.41 $0.12 $0.91 $0.25
 Shares used in calculation 14,063 9,911 13,430 9,520
 Condensed Consolidated Balance Sheets
 (In thousands except share amounts)
 Dec. 31, March 31,
 1993 1993
 Current assets:
 Cash and cash equivalents $41,486 $24,835
 Accounts receivable, net 22,665 14,554
 Inventories 21,758 19,239
 Prepaid expenses 2,870 512
 Other current assets 871 35
 Total current assets 89,650 59,175
 Property, plant & equipment, net 44,709 17,164
 Other assets 114 580
 Total assets $134,473 $76,919
 Liabilities and Stockholders'
 Current liabilities:
 Lines of credit $828 $7,356
 Accounts payable 15,549 7,511
 Current maturities of
 long-term debt 1,509 815
 Current maturities of
 capital lease obligations 3,000 2,528
 Accrued salaries and wages 3,153 1,758
 Short-term pension accrual 1,992 1,708
 Other accrued liabilities 10,834 3,010
 Deferred margin on
 shipments to distributors 6,521 2,044
 Total current liabilities 43,386 26,730
 Long-term debt,
 less current maturities 4,129 1,743
 Capital lease obligations,
 less current maturities 6,750 2,006
 pension accrual 637 900
 Negative goodwill 479 1,706
 Stockholders' equity:
 Common stock, $.001 par value 14 12
 Additional paid-in capital 67,231 44,172
 Retained earnings
 (accumulated deficit) 11,680 (517)
 Cumulative translation adjustment 167 167
 Net stockholders' equity 79,092 43,834
 Total liabilities and
 stockholders' equity $134,473 $76,919
 -0- 1/13/94
 /CONTACT: Philip Chapman, CFO, 602-786-7379, or Mike Zaporowski, investor relations, 602-786-7381/

CO: Microchip Technologies Inc. ST: Arizona IN: CPR SU: ERN

JL-EH -- LA019 -- 1866 01/13/94 16:03 EST
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Publication:PR Newswire
Date:Jan 13, 1994

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