Microchip Technology Announces Record Net Sales and Fourth Quarter and Fiscal Year 2013 Financial Results *FOR FISCAL YEAR 2013: *RECORD NON-GAAP NET SALES OF $1.606 BILLION *RECORD GAAP NET SALES OF $1.582 BILLION *ON A NON-GAAP BASIS: *GROSS MARGIN OF 57.2%; OPERATING INCOME OF $459.5 MILLION; NET INCOME OF $388.5 MILLION AND 24.2% OF NET SALES; EPS OF $1.89 PER DILUTED SHARE *ON A GAAP BASIS: *NET GROSS MARGIN OF 53%; OPERATING INCOME OF $178.6 MILLION; NET INCOME OF $127.4 MILLION AND 8.1% OF NET SALES; EPS OF 62 CENTS PER DILUTED SHARE *FOR THE QUARTER ENDING MARCH 31, 2013: *RECORD NET SALES OF $430.1 MILLION ON BOTH A NON-GAAP AND GAAP BASIS *ON A NON-GAAP BASIS: GROSS MARGINS OF 56.4%; OPERATING INCOME OF $119.5 MILLION; NET INCOME OF $109.3 MILLION; AND EPS OF 52 CENTS PER DILUTED SHARE INCLUDING A 3 CENTS BENEFIT FROM THE RETROACTIVE REINSTATEMENT OF THE R&D TAX CREDIT. THE FIRST CALL PUBLISHED ESTIMATE FOR NON-GAAP EPS WAS 47 CENTS. *ON A GAAP BASIS: GROSS MARGINS OF 55.6%; OPERATING INCOME OF $56.7 MILLION; NET INCOME OF $59.7 MILLION; AND EPS OF 28 CENTS PER DILUTED SHARE INCLUDING A 3 CENTS BENEFIT FROM THE RETROACTIVE REINSTATEMENT OF THE R&D TAX CREDIT. THERE WAS NO PUBLISHED FIRST CALL ESTIMATE FOR GAAP EPS. *RECORD NET SALES FOR OVERALL MICROCONTROLLERS, 16-BIT MICROCONTROLLERS AND ANALOG PRODUCTS *LICENSING NET SALES OF $22.1 MILLION, UP 3.4% SEQUENTIALLY Business Wire CHANDLER, Ariz. -- May 02, 2013 Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, today reported results for the three months and fiscal year ended March 31, 2013 as summarized in the following table: Three Months Ended March 31, 2013 Year Ended March 31, 2013 (in millions, except % of Non- % of % of Non- % of earnings per Net GAAP^1 Net Net GAAP^1 Net diluted GAAP Sales Sales GAAP Sales Sales share and percentages) Net Sales $ 430.1 $ 430.1 $ 1,581.6 $ 1,606.4 Gross Margin $ 239.0 55.6 % $ 242.6 56.4 % $ 838.5 53.0 % $ 918.6 57.2 % Operating $ 56.7 13.2 % $ 119.5 27.8 % $ 178.6 11.3 % $ 459.5 28.6 % Income Other Expense including Gains/Losses $ 7.2 $ 5.1 $ 26.4 $ 18.2 on Equity Method Investments Income Tax (Benefit) ($ 10.2 ) $ 5.1 $ 24.8 $ 52.9 Expense Net Income $ 59.7 13.9 % $ 109.3 25.4 % $ 127.4 8.1 % $ 388.5 24.2 % Earnings per 28 52 62 Diluted cents cents cents $ 1.89 Share^2 ^1 See the “Use of Non-GAAP Financial Measures” section of this release. Consolidated net sales for the fourth quarter of fiscal year 2013 were $430.1 million, up 3.4% sequentially from net sales of $416.0 million in the immediately preceding quarter, and up 26.9% from net sales of $338.9 million in the prior year’s fourth quarter. Consolidated GAAP net income for the fourth quarter of fiscal year 2013 was $59.7 million, or 28 cents per diluted share, up 486.7% from GAAP net income of $10.2 million, or 5 cents per diluted share, in the immediately preceding quarter, and down 26.0% from GAAP net income of $80.6 million, or 39 cents per diluted share, in the prior year’s fourth quarter. In the fourth quarter of fiscal 2013, GAAP net income includes amortization of acquired intangibles of $39.9 million, special charges of $7.2 million and various non-recurring tax benefits of $9.5 million. In the fourth quarter of fiscal 2012, GAAP net income includes amortization of acquired intangibles of $2.8 million and special charges of $1.5 million. Consolidated non-GAAP net income for the fourth quarter of fiscal year 2013 was $109.3 million, or 52 cents per diluted share, up 29.3% from non-GAAP net income of $84.5 million, or 41 cents per diluted share, in the immediately preceding quarter, and up 15.9% from non-GAAP net income of $94.3 million, or 46 cents per diluted share, in the prior year’s fourth quarter. Fourth quarter GAAP and non-GAAP net income included a one-time tax benefit of $6.5 million for the retroactive reinstatement of the R&D tax credit for calendar year 2012. Additionally, for the fourth quarters of fiscal 2013 and fiscal 2012, our non-GAAP results exclude the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, inventory valuation costs, severance costs, earn out adjustments and legal and other general and administrative expenses associated with acquisitions), non-recurring tax events and non-cash interest expense on our convertible debentures. A reconciliation of our non-GAAP and GAAP results is included in this press release. Consolidated GAAP net sales for the fiscal year ended March 31, 2013 were $1.582 billion, an increase of 14.4% from net sales of $1.383 billion in the prior fiscal year. On a GAAP basis, consolidated net income for the fiscal year ended March 31, 2013 was $127.4 million, or 62 cents per diluted share, a decrease of 62.2% from net income of $336.7 million, or $1.65 per diluted share in the prior fiscal year. On a non-GAAP basis, consolidated net sales for the fiscal year ended March 31, 2013 were $1.606 billion, an increase of 16.1% from net sales of $1.383 billion in the prior fiscal year. Non-GAAP consolidated net income for the fiscal year ended March 31, 2013 was $388.5 million, or $1.89 per diluted share, an increase of 1.2% from net income of $383.7 million, or $1.89 per diluted share, in the prior fiscal year. Microchip also announced today that its Board of Directors declared a quarterly cash dividend on its common stock of 35.35 cents per share. The quarterly dividend is payable on June 4, 2013 to stockholders of record on May 21, 2013. “We were very pleased with our execution in the March quarter,” said Steve Sanghi, President and CEO. “Our net sales were above the midpoint of our guidance and our gross margin, operating income and earnings per share all exceeded the high end of our guidance, as we more than delivered on our expectation that the December quarter would mark the bottom for this cycle.” Mr. Sanghi added, “Our net sales were up sequentially by 3.4%, fueled by broad based growth across our product lines. Our overall March quarter results were excellent and I thank all the employees of Microchip for their contributions to our success.” “Our microcontroller revenue grew 3.7% sequentially in the March quarter to achieve an all time record of $275.8 million,” said Ganesh Moorthy, Chief Operating Officer. “Microcontroller revenue was also up 20.5% compared to the year ago quarter and for fiscal year 2013 our microcontroller business was up 12.4% compared to fiscal year 2012.” Mr. Moorthy continued, “Our 16-bit microcontroller revenue was up 7.7% sequentially in the March quarter, achieving a new record. For fiscal year 2013, our 16-bit microcontroller revenue was up 74% compared to fiscal year 2012. Fiscal year 2013 also marks the 8^th consecutive year of revenue growth and new revenue records for our 16-bit microcontroller business. We continue to expand the breadth of innovative 16-bit solutions that we are offering, and customers that we are serving, as we continue to gain share in this market.” Mr. Moorthy concluded, “Our analog revenue grew 4.1% sequentially in the March quarter to achieve a new record, and continues to perform exceptionally well. For fiscal year 2013, our analog revenue was up 89.4% compared to fiscal year 2012, easily one of the best performing analog businesses in the industry. Analog revenue represented 22.6% of our overall revenue in the March quarter, the highest proportion we have ever achieved.” Eric Bjornholt, Microchip’s Chief Financial Officer, said, “We made great progress in reducing our inventory position in the March quarter. We ended the March quarter with 116 days of inventory which is in line with our target model. However, our internally produced inventory is still a bit high and the inventory we purchase from foundries is low. We will continue to work on right-sizing the various components of our inventory holdings in the June quarter.” Mr. Bjornholt added, “We had strong free cash flow generation in the March quarter at $123.3 million prior to our dividend payment of $69.2 million. We ended the quarter with $1.84 billion in cash and investments on the balance sheet.” Mr. Sanghi concluded, “We have continued to see exceptionally strong bookings and expedite requests in our business driven by strong demand and our design win pipeline. The bookings were an all time record in the March quarter. The starting backlog for the June quarter was significantly higher than the starting backlog for the March quarter. However, because of lead-times, many new bookings will be scheduled beyond the end of this quarter. Taking all these factors into account, we expect Microchip’s total net sales in the June quarter to be up between 2% and 6% sequentially.” Microchip’s Recent Highlights: *The Company made a major expansion of its embedded wireless portfolio with new Bluetooth^®, Wi-Fi^® and ZigBee^® products. Included was a PIC32 Bluetooth Digital Audio Kit that showcases Microchip’s 32-bit MCU capabilities, feature-rich Wi-Fi modules, an IEEE 802.15.4 and proprietary networking radio, and XBee^® compatible Bluetooth and Wi-Fi modules. *In partnership with Digilent^®, Microchip added the Arduino™ compatible chipKIT™ uC32™ development platform and Wi-Fi shield for its 32-bit PIC32 microcontrollers. *The latest microcontroller introductions included an expansion of the 16-bit PIC24 Lite portfolio with advanced analog integration, 5V operation and eXtreme Low Power Technology for cost-sensitive automotive, consumer, medical and industrial applications. Adding to Microchip’s 8-bit portfolio is the smallest and lowest-cost PIC MCU with I^2C™. In combination with low power consumption and a hardware CVD peripheral in an 8-pin package, this PIC12LF1552 MCU is ideal for general-purpose and touch-sensing applications. *In development-tool news, the Graphics Display Designer X is an enhanced visual design utility that provides a quick and easy way of creating Graphical User Interface screens for applications using 16 or 32-bit PIC MCUs. Additionally, it allows designers to work within the operating system of their choice, including Windows^®, Linux or Mac OS^®. *Microchip recently shipped its 12 billionth PIC^® microcontroller, approximately 10 months after delivering its 11 billionth. This milestone demonstrates the industry’s continued acceptance of Microchip’s 8, 16 and 32-bit PIC microcontrollers as the high-performance, low-power, cost-effective solution for embedded-control designs. *Building on its SMSC acquisition, Microchip announced the world’s first MOST150 Intelligent Network Interface Controller (INIC) with a USB 2.0 high-speed device port and an integrated coax transceiver. With this USB 2.0 port, including USB PHY and High-Speed Inter-Chip interface (HSIC), the OS81118 allows designers to create in-car mobile and Wi-Fi connectivity applications on the MOST150 network by connecting a standard Wi-Fi/3G/LTE module via USB. *Microchip introduced BodyCom™ technology, which is the world’s first to use the human body as a secure, low-power communication channel. The BodyCom framework provides a short-range, low-data-rate communication solution for securely connecting to a wide range of wireless applications. First Quarter Fiscal Year 2014 Outlook: The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Microchip Consolidated Guidance GAAP Non-GAAP Non-GAAP^1 Adjustments Net Sales $438.7 to $456 $438.7 to $456 million million Gross Margin^2 56.0% to 56.5% $2.2 to $2.3 56.5% to 57.0% million Operating 36.65% to $39 to $40.6 27.75% to Expenses^2 37.15% million 28.25% Other Expense $8.0 million $2.2 million $5.8 million Income Tax 13.1% to 14.1% $2.6 to $3.1 10.5% to 11.5% Expense million Net Income $64.2 to $71.5 $40.4 to $42.5 $104.6 to million million $114.2 million Diluted Common Approximately Approximately Approximately Shares 212.0 0.3 211.7 Outstanding^3 million shares million shares million shares Earnings per 30 to 34 cents about 20 cents 50 to 54 cents Diluted Share ^1 See the “Use of Non-GAAP Financial Measures” section of this release. ^2 Earnings per share have been calculated based on the diluted shares outstanding of Microchip on a consolidated basis. ^3 See Footnote 2 under the “Use of Non-GAAP Financial Measures” section of this release. *Microchip’s inventory days at June 30, 2013 are expected to be flat to up a few days. Our inventory position enables us to continue to service our customers with very short lead times while allowing us to control future capital expenditures. Our actual inventory level will depend on the inventory that our distributors decide to hold to support their customers, overall demand for our products and our production levels. *Capital expenditures for the quarter ending June 30, 2013 are expected to be approximately $35 million. Capital expenditures for all of fiscal year 2014 are anticipated to be approximately $80 million. We are continuing to take actions to selectively invest in the equipment needed to support the expected growth of our new products and technologies. *We expect net cash generation during the June quarter of approximately $100 million to $120 million prior to the dividend payment. Use of Non-GAAP Financial Measures: Our Non-GAAP adjustments, where applicable, include the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset ^1 amortization, inventory valuation costs, restructuring costs, severance costs, earn-out adjustments and legal and other general and administrative expenses associated with acquisitions), and non-cash interest expense on our convertible debentures, the related income tax implications of these items and nonrecurring tax events. We are required to estimate the cost of certain forms of share-based compensation, including employee stock options, restricted stock units and our employee stock purchase plan, and to record a commensurate expense in our income statement. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by the price of our stock at the date of grant. The price of our stock is affected by market forces that are difficult to predict and are not within the control of management. The value of our equity securities varies in amount from period to period and is affected by fluctuations in the market prices of such securities that we cannot predict and are not within the control of management. The non-GAAP adjustments related to the impact of our acquisitions, legal settlements, nonrecurring tax events and a portion of our interest expense related to our convertible debentures are either non-cash expenses or non-recurring expenses related to such transactions. Accordingly, management excludes all of these items from its internal operating forecasts and models. We are using non-GAAP net sales, non-GAAP gross profit, non-GAAP gross profit percentage, non-GAAP operating expenses in dollars and as a percentage of sales including non-GAAP research and development expenses and non-GAAP selling, general and administrative expenses, non-GAAP operating income, non-GAAP other expense, net, non-GAAP income tax/tax rate, non-GAAP net income, and non-GAAP diluted earnings per share which exclude the items noted in the immediately preceding paragraph, as applicable, to permit additional analysis of our performance. Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods. Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other charges that many investors feel may obscure our underlying operating results. Management uses these non-GAAP measures to manage and assess the profitability of its business. Specifically, we do not consider such items when developing and monitoring our budgets and spending. As described above, the economic substance behind our decision to exclude such items relates either to these charges being non-cash in nature, or to the one-time nature of the events, or in the case of distributor inventory acquired in an acquisition being recognized as net sales for non-GAAP purposes on sell-through to provide comparability between periods for the results of the acquired company, or in the case of our equity securities, because such item is difficult to predict and not within the control of management. Our determination of the above non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP. There are limitations associated with using non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results. Diluted Common Shares Outstanding can vary for, among other things, the trading price of our common stock, the actual exercise of options or vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures (additional information regarding our share count is available in the investor relations section of our ^2 website under the heading “Supplemental Financial Information”), and the repurchase or the issuance of stock. The diluted common shares outstanding presented in the guidance table above assumes an average Microchip stock price in the June 2013 quarter of $37 per share (however, we make no prediction as to what our actual share price will be for such period or any other period and we cannot estimate what our stock option exercise activity will be during the quarter). Generally, gross margin fluctuates over time, driven primarily by the mix of microcontrollers, analog products and memory products sold and licensing revenue; variances in manufacturing yields; fixed cost ^3 absorption; wafer fab loading levels; inventory reserves; pricing pressures in our non-proprietary product lines; and competitive and economic conditions. Operating expenses fluctuate over time, primarily due to net sales and profit levels. MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Net sales $ 430,144 $ 338,911 $ 1,581,623 $ 1,383,176 Cost of sales 191,105 143,265 743,164 583,882 Gross profit 239,039 195,646 838,459 799,294 Operating expenses: Research and 70,438 47,713 254,723 182,650 development Selling, general and 64,744 49,725 261,471 208,328 administrative Amortization of acquired 39,922 2,802 111,537 10,963 intangible assets Special 7,222 1,497 32,175 837 charges, net 182,326 101,737 659,906 402,778 Operating 56,713 93,909 178,553 396,516 income Losses on equity method (235 ) (135 ) (617 ) (195 ) investments Other expense, (6,976 ) (1,852 ) (25,759 ) (16,626 ) net Income before 49,502 91,922 152,177 379,695 income taxes Income tax (benefit) (10,188 ) 11,286 24,788 42,990 provision Net income $ 59,690 $ 80,636 $ 127,389 $ 336,705 Basic net income per $ 0.30 $ 0.42 $ 0.65 $ 1.76 common share Diluted net income per $ 0.28 $ 0.39 $ 0.62 $ 1.65 common share Basic common shares 195,908 192,570 194,595 191,283 outstanding Diluted common shares 209,446 206,017 205,776 203,519 outstanding MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) ASSETS March 31, March 31, 2013 2012 (Unaudited) Cash and short-term investments $ 1,578,597 $ 1,459,009 Accounts receivable, net 229,955 170,201 Inventories 242,334 217,278 Other current assets 260,396 169,373 Total current assets 2,311,282 2,015,861 Property, plant & equipment, net 514,544 516,611 Long-term investments 257,450 328,586 Other assets 841,962 222,718 Total assets $ 3,925,238 $ 3,083,776 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and other current $ 202,659 $ 139,164 liabilities Deferred income on shipments to distributors 138,952 108,709 Total current liabilities 341,611 247,873 Long-term line of credit 620,000 - Convertible debentures 363,385 355,050 Long-term income tax payable 182,723 70,490 Deferred tax liability 462,083 411,368 Other long-term liabilities 21,966 8,322 Stockholders’ equity 1,933,470 1,990,673 Total liabilities and stockholders’ equity $ 3,925,238 $ 3,083,776 MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP MEASURES (in thousands except per share amounts and percentages) (Unaudited) RECONCILIATION OF GAAP NET SALES TO NON-GAAP NET SALES Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Net sales, as $ 430,144 $ 338,911 $ 1,581,623 $ 1,383,176 reported Distributor revenue recognition - - 24,748 - adjustment Non-GAAP net sales $ 430,144 $ 338,911 $ 1,606,371 $ 1,383,176 RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Gross profit, as $ 239,039 $ 195,646 $ 838,459 $ 799,294 reported Distributor revenue recognition - - 15,868 - adjustment Share-based compensation 2,476 1,272 8,234 5,648 expense Acquisition-related acquired inventory 1,083 - 56,041 - valuation and other costs Non-GAAP gross $ 242,598 $ 196,918 $ 918,602 $ 804,942 profit Non-GAAP gross 56.4 % 58.1 % 57.2 % 58.2 % profit percentage RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Research and development $ 70,438 $ 47,713 $ 254,723 $ 182,650 expenses, as reported Share-based compensation (5,616 ) (3,899 ) (22,178 ) (14,719 ) expense Acquisition-related - - (17 ) - costs Non-GAAP research and development $ 64,822 $ 43,814 $ 232,528 $ 167,931 expenses Non-GAAP research and development expenses as a 15.1 % 12.9 % 14.5 % 12.1 % percentage of net sales RECONCILIATION OF GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Selling, general and administrative $ 64,744 $ 49,725 $ 261,471 $ 208,328 expenses, as reported Share-based compensation (5,264 ) (4,648 ) (27,603 ) (17,922 ) expense Acquisition-related (1,248 ) 46 (7,302 ) (817 ) costs Non-GAAP selling, general and $ 58,232 $ 45,123 $ 226,566 $ 189,589 administrative expenses Non-GAAP selling, general and administrative 13.5 % 13.3 % 14.1 % 13.7 % expenses as a percentage of net sales RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Operating income, $ 56,713 $ 93,909 $ 178,553 $ 396,516 as reported Distributor revenue recognition - - 15,868 - adjustment Share-based compensation 13,356 9,819 58,015 38,289 expense Acquisition-related acquired inventory 2,331 (46 ) 63,360 817 valuation and other costs Amortization of acquired intangible 39,922 2,802 111,537 10,963 assets Special charges, 7,222 1,497 32,175 837 net Non-GAAP operating $ 119,544 $ 107,981 $ 459,508 $ 447,422 income Non-GAAP operating income as a 27.8 % 31.9 % 28.6 % 32.3 % percentage of net sales RECONCILIATION OF GAAP OTHER EXPENSE, NET TO NON-GAAP OTHER (EXPENSE) INCOME, NET Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Other expense, net, $ (6,976 ) $ (1,852 ) $ (25,759 ) $ (16,626 ) as reported Convertible debt non-cash interest 2,091 1,932 8,197 7,512 expense Losses on equity - - - 1,878 securities Non-GAAP other (expense) income, $ (4,885 ) $ 80 $ (17,562 ) $ (7,236 ) net Non-GAAP other (expense) income, net, as a -1.1 % 0.0 % -1.1 % -0.5 % percentage of net sales RECONCILIATION OF GAAP INCOME TAX (BENEFIT) PROVISION TO NON-GAAP INCOME TAX PROVISION Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Income tax (benefit) $ (10,188 ) $ 11,286 $ 24,788 $ 42,990 provision, as reported Income tax rate, as -20.6 % 12.3 % 16.3 % 11.3 % reported Distributor revenue recognition - - 3,404 - adjustment Share-based compensation 1,542 1,234 9,038 4,889 expense Acquisition-related acquired inventory valuation costs, 727 192 13,530 656 intangible asset amortization and other costs Special charges 2,708 146 15,551 146 Convertible debt non-cash interest 784 724 3,075 2,817 expense Non-recurring tax 9,539 - (16,532 ) 4,075 events Losses on equity - - - 704 securities Non-GAAP income tax $ 5,112 $ 13,582 $ 52,854 $ 56,277 provision Non-GAAP income tax 4.5 % 12.6 % 12.0 % 12.8 % rate RECONCILIATION OF GAAP NET INCOME AND GAAP DILUTED NET INCOME PER SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER SHARE Three Months Ended Twelve Months Ended March 31, March 31, 2013 2012 2013 2012 Net income, as $ 59,690 $ 80,636 $ 127,389 $ 336,705 reported Distributor revenue recognition - - 12,464 - adjustment, net of tax effect Share-based compensation 11,814 8,585 48,977 33,400 expense, net of tax effect Acquisition-related acquired inventory valuation costs, intangible asset 41,526 2,564 161,367 11,124 amortization and other costs, net of tax effect Special charges, 4,514 1,351 16,624 691 net of tax effect Convertible debt non-cash interest 1,307 1,208 5,122 4,695 expense, net of tax effect Non-recurring tax (9,539 ) - 16,532 (4,075 ) events Losses on equity securities, net of - - - 1,174 tax effect Non-GAAP net income $ 109,312 $ 94,344 $ 388,475 $ 383,714 Non-GAAP net income as a percentage of 25.4 % 27.8 % 24.2 % 27.7 % net sales Diluted net income per share, as $ 0.28 $ 0.39 $ 0.62 $ 1.65 reported Non-GAAP diluted net income per $ 0.52 $ 0.46 $ 1.89 $ 1.89 share Diluted common shares outstanding, 209,237 205,603 205,483 202,969 non-GAAP Microchip will host a conference call today, May 2, 2013 at 5:00 p.m. (Eastern Time) to discuss this release. This call will be simulcast over the Internet at www.microchip.com. The webcast will be available for replay until May 9, 2013. A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) May 2, 2013 and will remain available until 8:00 p.m. (Eastern Time) on May 9, 2013. Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 6836779. Cautionary Statement: The statements in this release relating to the December quarter marking the bottom for this cycle, continuing to expand the breadth of our 16-bit solutions and customers that we are serving, continuing to gain share in the 16-bit market, continuing to perform exceptionally well, right-sizing the various components of our inventory holdings, exceptionally strong bookings and expedite requests in our business, strong demand and design win pipeline, expecting total net sales in the June 2013 quarter to be up between 2% and 6% percent sequentially, continued acceptance of our 8, 16 and 32-bit microcontrollers, our first quarter fiscal 2014 guidance (GAAP and Non-GAAP as applicable) including net sales, gross margin, operating expenses, other expense, income tax expense, net income, diluted common shares outstanding, earnings per diluted share, inventory days, ability to continue to service our customers with very short lead times while allowing us to control capital expenditures, capital expenditures for the June 2013 quarter and for fiscal 2014, expected growth of our new products and technologies, net cash generation and assumed average stock price in the June 2013 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: the continued economic uncertainty or any unexpected fluctuations or weakness in the U.S. and global economies, changes in demand or market acceptance of our products and the products of our customers; the mix of inventory we hold and our ability to satisfy short-term orders from our inventory; changes in utilization of our manufacturing capacity and our ability to effectively manage our production levels; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; the level of sell-through of our products through distribution; changes or fluctuations in customer order patterns and seasonality; foreign currency effects on our business; our ability to continue to realize the expected benefits of our SMSC acquisition; the impact of any other significant acquisitions that we may make; costs and outcome of any current or future tax audit or any litigation involving intellectual property, customers or other issues; our actual average stock price in the June 2013 quarter and the impact such price will have on our share count; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally. For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip’s website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services. Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this May 2, 2013 press release, or to reflect the occurrence of unanticipated events. About Microchip: Microchip Technology Incorporated is a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com. Note: The Microchip name and logo, PIC, MPLAB, and GestIC are registered trademarks of Microchip Technology Inc. in the USA and other countries. BodyCom, and chipKIT are trademarks of Microchip Technology Inc. in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies. Contact: Microchip Technology Incorporated INVESTOR RELATIONS CONTACTS: J. Eric Bjornholt, 480-792-7804 CFO
Microchip Technology Announces Record Net Sales and Fourth Quarter and Fiscal Year 2013 Financial Results
Press spacebar to pause and continue. Press esc to stop.