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Atmel Reports First Quarter 2013 Financial Results

              Atmel Reports First Quarter 2013 Financial Results

PR Newswire

SAN JOSE, Calif., May 1, 2013

SAN JOSE, Calif., May1, 2013 /PRNewswire/ -- Atmel^® Corporation (Nasdaq:
ATML), a leader in microcontroller and touch solutions, today announced
financial results for its first quarter ended March31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120712/MM39691LOGO)

                  GAAP                          Non-GAAP
                  Q1 2013   Q4 2012   Q1 2012   Q1 2013  Q4 2012  Q1 2012
Net revenue       $ 329.1   $ 345.1   $ 357.8   $ 329.1  $ 345.1  $ 357.8
Gross margin      39.9%     38.1%     42.6%     40.5%    41.6%    43.2%
Operating margin  (19.0)%   (3.8)%    7.0%      4.3%     9.7%     9.9%
Net (loss) income $ (47.7)  $ (12.3)  $ 20.4    $ 13.6   $ 29.4   $ 35.3
Diluted EPS       $ (0.11)  $(0.03)   $ 0.05    $ 0.03   $ 0.07   $ 0.08
(In millions, except earnings per share data and percentages)



Revenue for the first quarter of 2013 was $329.1 million, a 5% decrease
compared to $345.1 million for the fourth quarter of 2012, and 8% lower
compared to $357.8 million for the first quarter of 2012. Adjusting for the
Serial Flash divestiture that occurred in September 2012, first quarter 2013
revenue decreased 4% sequentially and declined 5% from the first quarter of
the prior year.

GAAP net loss totaled $(47.7) million or $(0.11) per diluted share for the
first quarter of 2013, principally as a result of a $42.8 million charge
incurred primarily for restructuring activities and $21.6 million of
legal-related settlement charges. These charges were offset by a gain on the
sale of our Serial Flash product line of $4.4 million. This compares to GAAP
net loss of $(12.3) million or $(0.03) per diluted share for the fourth
quarter of 2012,and GAAP net income of $20.4 million or $0.05 per diluted
share for the first quarter of 2012.

Non-GAAP net income for the first quarter of 2013 totaled $13.6 million or
$0.03 per diluted share, compared to non-GAAP net income of $29.4 million or
$0.07 per diluted share in the fourth quarter of 2012, and non-GAAP net income
of $35.3 million or $0.08 per diluted share for the year-ago quarter. Refer to
the non-GAAP reconciliation table included in this release for more details.

GAAP gross margin was 39.9% in the first quarter of 2013, compared to 38.1% in
the fourth quarter of 2012 and 42.6% in the first quarter of 2012. Non-GAAP
gross margin was 40.5% in the first quarter of 2013 as compared to 41.6% in
the immediately preceding quarter and 43.2% in the first quarter of 2012.

"Improving business conditions, a healthier backlog, and our strong product
portfolio provide us increased confidence moving forward this year," said
Steve Laub, Atmel's President and Chief Executive Officer. "We are making good
progress enhancing our cost structure which we expect to materially benefit
our long-term margin profile."

First quarter 2013 loss from operations on a GAAP basis was $(62.4) million or
19.0% of revenue, compared to loss from operations of $(13.2) million or 3.8%
of revenue for the fourth quarter of 2012 and income from operations of $25.0
million or 7.0% of revenue for the first quarter of 2012. First quarter 2013
loss from operations was adversely affected by $42.8 million of charges
incurred primarily for restructuring activities, legal-related settlement
charges of $21.6 million and $2.3 million in acquisition-related charges.
These charges were offset by a gain on the sale of our Serial Flash product
line of $4.4 million. In comparison, fourth quarter 2012 loss from operations
was adversely affected by a $10.6 million loss incurred on purchase
commitments relating to a take-or-pay supply agreement, $11.0 million of
charges incurred primarily for restructuring activities, a $6.5 million
write-off of receivables from a foundry supplier, and $1.9 million in
acquisition-related charges, and first quarter 2012 income from operations
included a $10.7 million benefit from the release of reserves related to a
previously received R&D grant and $2.0 million in acquisition-related charges.

Non-GAAP income from operations in the first quarter of 2013 was $14.2 million
or 4.3% of revenue, compared to fourth quarter non-GAAP income from operations
of $33.3 million or 9.7% of revenue, and first quarter 2012 non-GAAP income
from operations of $35.6 million or 9.9% of revenue. Refer to the non-GAAP
reconciliation table included in this release for more details.

Income tax benefit, on a GAAP basis, totaled $14.4 million for the first
quarter of 2013. This compares to a benefit from income taxes of $2.2 million
for the fourth quarter of 2012 and a provision for income taxes of $4.3
million for the first quarter of 2012. Non-GAAP provision for income taxes
for the first quarter of 2013 was $1.0 million compared to non-GAAP income tax
provisions of $2.6 million for the fourth quarter of 2012 and $0.1 million for
the first quarter of 2012.

Cash used in operations totaled approximately $12.0 million for the first
quarter of 2013, compared to cash provided by operations of $78.7 million for
the fourth quarter of 2012 and $60.6 million for the first quarter of 2012.
Combined cash balances (cash and cash equivalents plus short-term investments)
totaled $244.8 million at the end of the first quarter of 2013, a decrease of
$51.2 million from the immediately preceding quarter. The decrease in cash
balances during the first quarter of 2013 resulted principally from payments
for two acquisitions, a prepayment made to Conductive Inject Technologies to
support XSense™ production, timing of vendor payables and customer receivables
and common stock repurchases.

Company Highlights

  oSamsung selects Atmel's low-power sensor hub solution for the Galaxy S4
    smartphone
  oAtmel expands smart energy portfolio with acquisition of IDT's smart
    metering product lines and technology
  oAtmel's ultra-low power Wi-Fi solution chosen for next-generation Roku
    remote control
  oLaunched a new ultra-low power 802.15.4 transceiver with ranging
    capability for industrial and consumer applications
  oThree new two-channel solid state lighting LED drivers launched for color
    control for two-color LED light engines
  oIntroduced maXTouch® T Series, next-generation single-chip controller
    family for large screen devices
  oNew product introductions featuring maXTouch include smartphones, Android
    and Windows 8 tablets, Ultrabooks, GPS devices and smart remote controls
  oExpanded third-party ecosystem of tools and software partners for ARM®
    Cortex®-A5 processor-based family of products
  oLaunched new hardware and software tools platform to further simplify
    microcontroller design process

Stock Repurchase
During the first quarter of 2013, Atmel repurchased 2.4 million shares of its
common stock in the open market at an average price of $6.52 per share.

Non-GAAP Metrics
Non-GAAP net income excludes charges related to losses on purchase commitments
relating to take-or-pay supply agreements, losses (gains) relating to
receivables from a foundry supplier, restructuring activities, settlement
charges, charges associated with acquisitions, gain or loss on sale of assets,
credit from reserved grant income, share-based compensation, as well as the
non-GAAP income tax adjustment and other non-recurring income tax items. A
reconciliation of GAAP results to non-GAAP results is included following the
financial statements below.

Conference Call
Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the first
quarter 2013 financial results. The conference call will be webcast live and
can also be monitored by dialing 1-800-374-0405 or 1-706-758-4519. The
conference ID number is 24392766 and participants are encouraged to initiate
their calls 10 minutes prior to the 2:00 p.m. PT start time to ensure a timely
connection. The webcast and earnings release will be accessible at
http://ir.atmel.com/ and will be archived for 12 months.

A replay of the May1, 2013 conference call will be available the same day at
approximately 5:00 p.m. PT and will be archived for 48 hours. The replay
access numbers are 1-800-585-8367 within the U.S. and 1-404-537-3406 for all
other locations. The access code is 24392766.

About Atmel
Atmel is a worldwide leader in the design and manufacture of microcontrollers,
capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory
and radio frequency (RF) components. Leveraging one of the industry's broadest
intellectual property (IP) technology portfolios, Atmel is able to provide the
electronics industry with complete system solutions focused on industrial,
consumer, communications, computing and automotive markets.

© 2013 Atmel Corporation. Atmel®, Atmel logo and combinations thereof, and
others are registered trademarks or trademarks of Atmel Corporation or its
subsidiaries. Other terms and product names may be trademarks of others.

Safe Harbor for Forward-Looking Statements
Information in this release regarding Atmel's forecasts, business outlook,
expectations, new product launches, and beliefs are forward-looking statements
that involve risks and uncertainties. These statements may include comments
about our future operating and financial performance, including our outlook
for 2013 and beyond, our expectations regarding market share and product
revenue growth, and Atmel's strategies. All forward-looking statements
included in this release are based upon information available to Atmel as of
the date of this release, which may change. These statements are not
guarantees of future performance and actual results could differ materially
from our current expectations. Factors that could cause or contribute to such
differences include, without limitation, general global macroeconomic
conditions (especially in Europe and Asia); the cyclical nature of the
semiconductor industry; the inability to realize the anticipated benefits of
transactions related to acquisitions, restructuring activities or other
initiatives in a timely manner or at all; the impact of competitive products
and pricing; disruption to our business caused by our increased dependence on
outside foundries; and the financial instability of those foundries in some
cases; industry and/or company overcapacity or undercapacity, including
capacity constraints of our independent assembly contractors; the success of
our customers' end products and timely design acceptance by our customers;
timely introduction of new products and technologies (including, for example,
our XSense and new maXTouch products) and implementation of new manufacturing
technologies; our ability to ramp new products into volume production; our
reliance on non-binding customer forecasts and the absence of long-term supply
contracts with most of our customers; financial stability in foreign markets
and the impact or volatility of foreign exchange rates; unanticipated changes
in environmental, health and safety regulations; our dependence on selling
through independent distributors; the complexity of our revenue recognition
policies; information technology system failures; business interruptions,
natural disasters and terrorist acts; unanticipated costs and expenses or the
inability to identify expenses which can be eliminated; the market price or
volatility of our common stock; disruptions in the availability of raw
materials; compliance with U.S. and international laws and regulations by us
and our distributors; our dependence on key personnel; our ability to protect
our intellectual property rights; litigation (including intellectual property
litigation in which we may be involved or in which our customers may be
involved, especially in the mobile device sector), and the possible
unfavorable results of legal proceedings; and other risks detailed from time
to time in Atmel's SEC reports and filings, including our Form 10-K for the
year ended December 31, 2012, filed on February 26, 2013. Atmel assumes no
obligation and does not intend to update any forward-looking statements,
whether as a result of new information, future events or otherwise.

Investor Contact:
Peter Schuman
Senior Director, Investor Relations
(408) 437-2026



ATMEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                         Three Months Ended
                                         March31,    December31,  March 31,

                                         2013         2012          2012
Net revenue                              $ 329,143    $  345,083    $ 357,837
Operating expenses
Cost of revenue                          197,838      213,544       205,470
Research and development                 68,308       58,872        66,289
Selling, general and administrative      63,577       66,376        69,855
Acquisition-related charges              2,255        1,946         1,956
Restructuring charges                    42,814       11,036        —
(Recovery) impairment of receivables     (439)        6,495         —
from foundry supplier
Credit from reserved grant income        —            —             (10,689)
Gain on sale of assets                   (4,430)      —             —
Settlement charges                       21,600       —             —
Total operating expenses                 391,523      358,269       332,881
(Loss) income from operations            (62,380)     (13,186)      24,956
Interest and other income (expense), net 352          (1,338)       (224)
(Loss) income before income taxes        (62,028)     (14,524)      24,732
Benefit from (provision for) income      14,361       2,192         (4,345)
taxes
Net (loss) income                        $ (47,667)   $  (12,332)   $ 20,387
Basic net (loss) income per share:
Net (loss) income per share              $ (0.11)     $  (0.03)     $ 0.05
Weighted-average shares used in basic    428,999      429,312       440,265
net (loss) income per share calculations
Diluted net (loss) income per share:
Net (loss) income per share              $ (0.11)     $  (0.03)     $ 0.05
Weighted-average shares used in diluted  428,999      429,312       444,927
net (loss) income per share calculations



ATMEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                             March 31,     December 31,

                                             2013          2012
Current assets
Cash and cash equivalents                    $ 242,721     $ 293,370
Short-term investments                       2,126         2,687
Accounts receivable, net                     196,358       188,488
Inventories                                  335,814       348,273
Prepaids and other current assets            118,555       125,019
Total current assets                         895,574       957,837
Fixed assets, net                            210,298       221,044
Goodwill                                     104,581       104,430
Intangible assets, net                       33,448        27,257
Other assets                                 153,148       122,965
Total assets                                 $ 1,397,049   $ 1,433,533
Current liabilities
Trade accounts payable                       74,818        103,980
Accrued and other liabilities                222,158       203,510
Deferred income on shipments to distributors 45,293        29,226
Total current liabilities                    342,269       336,716
Other long-term liabilities                  111,583       100,179
Total liabilities                            453,852       436,895
Stockholders' equity                         943,197       996,638
Total liabilities and stockholders' equity   $ 1,397,049   $ 1,433,533



ATMEL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(Unaudited)
                                         Three Months Ended
                                         March 31,    December 31,  March 31,

                                         2013         2012          2012
GAAP gross margin                        $ 131,305    $  131,539    $ 152,367
Loss related to foundry arrangement      —            10,628        —
Share-based compensation expense         1,844        1,329         2,255
Non-GAAP gross margin                    $ 133,149    $  143,496    $ 154,622
GAAP research and development expense    $ 68,308     $  58,872     $ 66,289
Share-based compensation expense         (4,608)      (5,257)       (6,763)
Non-GAAP research and development        $ 63,700     $  53,615     $ 59,526
expense
GAAP selling, general and administrative $ 63,577     $  66,376     $ 69,855
expense
Share-based compensation expense         (8,310)      (9,818)       (10,309)
Non-GAAP selling, general and            $ 55,267     $  56,558     $ 59,546
administrative expense
GAAP (loss) income from operations       $ (62,380)   $  (13,186)   $ 24,956
Share-based compensation expense         14,762       16,404        19,327
Acquisition-related charges              2,255        1,946         1,956
Restructuring charges                    42,814       11,036        —
Loss related to foundry arrangement      —            10,628        —
(Recovery) impairment of receivables     (439)        6,495         —
from foundry supplier
Credit from reserved grant income        —            —             (10,689)
Gain on sale of assets                   (4,430)      —             —
Settlement charges                       21,600       —             —
Non-GAAP income from operations          $ 14,182     $  33,323     $ 35,550
GAAP benefit from (provision for) income $ 14,361     $  2,192      $ (4,345)
taxes
Adjustments for cash tax and other tax   15,335       4,790         (4,274)
settlements
Non-GAAP provision for income taxes      $ (974)      $  (2,598)    $ (71)
GAAP net (loss) income                   $ (47,667)   $  (12,332)   $ 20,387
Share-based compensation expense         14,762       16,404        19,327
Acquisition-related charges              2,255        1,946         1,956
Restructuring charges                    42,814       11,036        —
Loss related to foundry arrangement      —            10,628        —
(Recovery) impairment of receivables     (439)        6,495         —
from foundry supplier
Credit from reserved grant income        —            —             (10,689)
Gain on sale of assets                   (4,430)      —             —
Settlement charges                       21,600       —             —
Tax adjustments                          (15,335)     (4,790)       4,274
Non-GAAP net income                      $ 13,560     $  29,387     $ 35,255
GAAP net (loss) income per share -       $ (0.11)     $  (0.03)     $ 0.05
diluted
Share-based compensation expense         0.03         0.04          0.04
Acquisition-related charges              0.01         0.01          —
Restructuring charges                    0.10         0.02          —
Loss related to foundry arrangement      —            0.02          —
(Recovery) impairment of receivables     (0.00)       0.01          —
from foundry supplier
Credit from reserved grant income        —            —             (0.02)
Gain on sale of assets                   (0.01)       —             —
Settlement charges                       0.05         —             —
Tax adjustments                          (0.04)       —             0.01
Non-GAAP net income per share - diluted  $ 0.03       $  0.07       $ 0.08
GAAP diluted shares                      428,999      429,312       444,927
Adjusted dilutive stock awards -         13,768       14,669        10,865
non-GAAP
Non-GAAP diluted shares                  442,767      443,981       455,792



Notes to Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with
GAAP, Atmel uses non-GAAP financial measures, including non-GAAP net income
and non-GAAP net income per diluted share, which are adjusted from the most
directly comparable GAAP financial measures to exclude certain items, as shown
above and described below. Management believes that these non-GAAP financial
measures reflect an additional and useful way of viewing aspects of Atmel's
operations that, when viewed in conjunction with Atmel's GAAP results, provide
a more comprehensive understanding of the various factors and trends affecting
Atmel's business and operations.

Atmel uses each of these non-GAAP financial measures for internal purposes and
believes that these non-GAAP measures provide meaningful supplemental
information regarding operational and financial performance. Management uses
these non-GAAP measures for strategic and business decision making, internal
budgeting, forecasting and resource allocation processes. Atmel may, in the
future, determine to present non-GAAP financial measures other than those
presented in this release, which it believes may be useful to investors. Any
such determinations will be made with the intention of providing the most
useful information to investors and will reflect information used by the
company's management in assessing its business, which may change from time to
time.

Atmel believes that providing these non-GAAP financial measures, in addition
to the GAAP financial results, is useful to investors because the non-GAAP
financial measures allow investors to see Atmel's results "through the eyes"
of management as these non-GAAP financial measures reflect Atmel's internal
measurement processes. Management believes that these non-GAAP financial
measures enable investors to better assess changes in each key element of
Atmel's operating results across different reporting periods on a consistent
basis. Thus, management believes that each of these non-GAAP financial
measures provides investors with another method for assessing Atmel's
operating results in a manner that is focused on the performance of its
ongoing operations. In addition, these non-GAAP financial measures may
facilitate comparisons to Atmel's historical operating results and to
competitors' operating results.

There are limitations in using non-GAAP financial measures because they are
not prepared in accordance with GAAP and may be different from non-GAAP
financial measures used by other companies. In addition, non-GAAP financial
measures may be limited in value because they exclude certain items that may
have a material impact upon Atmel's reported financial results. Management
compensates for these limitations by providing investors with reconciliations
of the non-GAAP financial measures to the most directly comparable GAAP
financial measures. The presentation of non-GAAP financial information is not
meant to be considered in isolation or as a substitute for or superior to the
most directly comparable GAAP financial measures. The non-GAAP financial
measures supplement, and should be viewed in conjunction with, GAAP financial
measures. Investors should review the reconciliations of the non-GAAP
financial measures to their most directly comparable GAAP financial measures
as provided above.

As presented in the "Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures" tables above, each of the non-GAAP financial measures
excludes one or more of the following items:

  oLoss related to foundry arrangement.

Loss related to foundry arrangement relates to the Company's assessment of the
probable loss with respect to a European foundry "take or pay" arrangement for
wafers to be delivered during the remaining term of the arrangement. Atmel
believes that it is appropriate to exclude loss related to foundry arrangement
from Atmel's non-GAAP financial measures, as it enhances the ability of
investors to compare Atmel's period-over-period operating results from
continuing operations.

  o(Recovery) impairment of receivables from foundry supplier.

(Recovery) impairment of receivables from foundry supplier relates to the
Company's assessment of the probability of collecting on receivables from a
European foundry supplier for certain services provided by Atmel to that
foundry. Atmel believes that it is appropriate to exclude (recovery)
impairment of receivables from foundry supplier from Atmel's non-GAAP
financial measures, as it enhances the ability of investors to compare Atmel's
period-over-period operating results from continuing operations.

  oShare-based compensation expense.

Share-based compensation expense relates primarily to equity awards such as
stock options and restricted stock units. This includes share-based
compensation expense related to performance-based restricted stock units for
which Atmel recognizes share-based compensation expense to the extent
management believes it probable that Atmel will achieve the performance
criteria which occurs before these awards actually vest. If the performance
goals are unlikely to be met, no compensation expense is recognized and any
previously recognized compensation expense is reversed. Share-based
compensation is a non-cash expense that varies in amount from period to period
and is dependent on market forces that are often beyond Atmel's control. As a
result, management excludes this item from Atmel's internal operating
forecasts and models. Management believes that non-GAAP measures adjusted for
share-based compensation provide investors with a basis to measure Atmel's
core performance against the performance of other companies without the
variability created by share-based compensation as a result of the variety of
equity awards used by other companies and the varying methodologies and
assumptions used.

  oAcquisition-related charges.

Acquisition-related charges include: (1) amortization of intangibles, which
include acquired intangibles such as customer relationships, backlog, core
developed technology, trade names and non-compete agreements and (2)
contingent compensation expense, which include compensation resulting from the
employment retention of certain key employees established in accordance with
the terms of the acquisitions. In most cases, these acquisition-related
charges are not factored into management's evaluation of potential
acquisitions or Atmel's performance after completion of acquisitions, because
they are not related to Atmel's core operating performance. In addition, the
frequency and amount of such charges can vary significantly based on the size
and timing of acquisitions and the maturities of the businesses being
acquired. Excluding acquisition-related charges from non-GAAP measures
provides investors with a basis to compare Atmel against the performance of
other companies without the variability caused by purchase accounting.

  oRestructuring charges.

Restructuring charges primarily relate to expenses necessary to make
infrastructure-related changes to Atmel's operating costs. Restructuring
charges are excluded from non-GAAP financial measures because they are not
considered core operating activities. Although Atmel has engaged in various
restructuring activities in recent years, each has been a discrete event based
on a unique set of business objectives. Atmel believes that it is appropriate
to exclude restructuring charges from Atmel's non-GAAP financial measures, as
it enhances the ability of investors to compare Atmel's period-over-period
operating results from continuing operations.

  oCredit from reserved grant income.

Atmel recognized a credit from reserved grant income as a result of a
ministerial decision executed by the Greek government providing for a partial
refund of an outstanding state grant previously made. Based on the execution
of this ministerial decision and the subsequent publication of that decision,
management determined that it would not be required to repay the full amount
of the outstanding grant. Atmel believes that it is appropriate to exclude
credit from reserved grant income from Atmel's non-GAAP financial measures, as
it enhances the ability of investors to compare Atmel's period-over-period
operating results from continuing operations.

  oGain on sale of assets.

Atmel recognizes gains resulting from the sale of certain non-strategic assets
that no longer align with Atmel's long-term operating plan. Atmel excludes
these items from its non-GAAP financial measures primarily because these gains
are individually discrete events and generally not reflective of the ongoing
operating performance of Atmel's business and can distort period-over-period
comparisons.

  oSettlement charges

Settlement charges related to legal settlements undertaken in connection with
actual, contemplated or anticipated litigation, or activities undertaken in
preparation for, or anticipation of, possible litigation related to
intellectual property, customer claims or other matters affecting the business
that are generally not reflective of ongoing company performance or ordinary
course of litigation expenses.

  oNon-GAAP tax adjustment.

In conjunction with the implementation of Atmel's global structure changes
which took effect January 1, 2011, the company changed its methodology for
reporting non-GAAP taxes. Beginning in the first quarter of 2011, Atmel's
non-GAAP tax amounts approximate operating cash tax expense, similar to the
liability reported on Atmel's tax returns. This approach is designed to
enhance the ability of investors to understand the company's tax expense on
its current operations, provide improved modeling accuracy, and substantially
reduce fluctuations caused by GAAP adjustments which may not reflect actual
cash tax expense.

Atmel forecasts its annual cash tax liability and allocates the tax to each
quarter in proportion to earnings for that period.

SOURCE Atmel Corporation

Website: http://www.atmel.com