SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 27, 2002
Semtech Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-6395 95-2119684
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
200 Flynn Road
Camarillo, California 93012-8790
(Address of Principal Executive Offices) (Zip Code)
(805) 498-2111
(Registrant's telephone number, including area code)
Item 5. Other Events.
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The Registrant issued the press release, filed as Exhibit 99.1
hereto, on August 27, 2002.
Item 7. Financial Statements and Exhibits.
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Exhibit Number Description of Document
99.1 Press Release of the Registrant dated August 27, 2002.
INDEX TO EXHIBITS
Exhibit Number Description of Document
99.1 Press Release of the Registrant dated August 27, 2002.
Exhibit 99.1
SEMTECH ANNOUNCES SECOND QUARTER RESULTS
Net Sales Up 29 Percent Over Prior Year
Net Income of $11.1 million or 14 Cents Per Diluted Share
1:30 p.m. PT
Tuesday, August 27, 2002
CAMARILLO, CALIFORNIA, August 27, 2002 - SEMTECH CORPORATION (Nasdaq: SMTC)
today announced results for its fiscal year 2003 second quarter that ended July
28, 2002.
Sales for the second quarter of fiscal year 2003 were $52.1 million, an
increase of 29 percent compared to sales of $40.5 million in the second quarter
of fiscal year 2002. On a sequential basis, net sales were up 6 percent from the
first quarter.
Net income for the second quarter of fiscal year 2003 was $11.1 million
or 14 cents per diluted share. For the second quarter of fiscal year 2002, the
Company reported a net loss of $5.1 million or negative 7 cents per diluted
share.
Gross margin was 58 percent and net after-tax profit margin was 21
percent in the second quarter of fiscal year 2003, both up sequentially and
year-over-year. Results for the quarter included the recognition of $415,000
from the sale of inventory, which had been written off in the second quarter of
last year.
Sales for the six months ended July 28, 2002 were $101.3 million, up
slightly from $101.1 million in the prior year period. Net income for the first
six months of fiscal year 2003 was $21.1 million or 27 cents per diluted share,
which compared to net income of $8.1 million or 11 cents per diluted share in
the first six months of fiscal year 2002.
Included in the prior year second quarter results were one-time costs
of $15.8 million for the write-down of inventory, headcount reductions, and a
Superfund settlement. The prior year six-month results include these items and
additional one-time costs of $1.0 million associated with headcount reductions.
Orders for the second quarter of this year increased 41 percent over
the previous year, but decreased 14 percent from the first quarter. Order rates
in the first quarter of this year were especially strong, as many customers with
low inventory positions put backlog in place for expected improvements in the
end-markets.
Second quarter orders were impacted by several factors beyond the
traditional seasonality in the computer and cell phone markets. These factors
included: consumer demand dampened by declines in the financial markets; vendor
consolidation issues due to a recent computer industry merger; and a decline in
power consumption in desktop computers, although power needs are expected to
increase in future models. Test and Measurement Product order rates were very
robust in the quarter, and for the first time in six quarters exceeded shipments
for the product line.
Shipments of Portable Power, Telecom Power and Test and Measurement
Products grew sequentially in the second quarter by greater than 30 percent.
Portable and Telecom Power Management sales were benefited by market-share
gains, while sales of Test and Measurement Products reflected strength in
certain segments of the ATE market. Protection Product sales grew sequentially
29 percent due to strong beginning backlog. Sales of SETS and Human Interface
Products grew in the quarter, while Desktop Power Management Products declined
as compared to the first quarter.
The Company's cash and investments, net of debt, increased by
approximately $27.0 million in the second quarter. Inventory turns improved and
accounts receivables days of sales, calculated on a quarterly basis, declined to
approximately 37 days.
Design Wins and New Products
Proprietary products represented more than 80 percent of total
shipments in the second quarter, a reflection of design and marketing efforts.
The Company reported a substantial increase in design activity compared to the
prior quarter. A total of 461 new design wins were recorded that are expected to
generate $67.0 million of annual business. Included in these results were 43
line-item design wins for notebook computers and 84 line-item design wins for
cell phones, with a combined $30.0 million annual potential.
Nineteen new product families were introduced in the quarter, including
MicroBuddy(TM), a patented series of programmable support ICs for
micro-controllers. Semtech already has sale leads on more than 200 sockets and a
number of concepts for derivative products in this area. Two design wins for
MicroBuddy(TM) have been recorded so far, including a $500,000 design win for a
medical application. The Company believes the market opportunity for this
product is outstanding.
Outlook
Semtech estimates that net sales for the third quarter of fiscal year
2003 will be in the range of flat to down 5 percent as compared to the second
quarter. On a year-over-year basis, third quarter sales are forecasted to be
higher by 13 to 19 percent. Gross margin is expected to remain flat with the
second quarter and earnings are forecasted to be approximately 14 cents per
diluted share, based on current forecasts.
August orders were substantially lower than the Company's historical
seasonal trend, especially out of the computer market. Turns orders (orders
received and shipped in the same quarter) of approximately 47 percent are
required to achieve the mid-point of the revenue forecast. This rate is higher
than previous quarters due to low visibility and more just-in-time production
arrangements with customers.
Buyback Update
During the second quarter of fiscal year 2003, Semtech spent $30.7
million to buyback its convertible subordinated notes in the open market. The
Company recognized an approximate $600,000 gain on the repurchase of notes
during the quarter. An additional $50.0 million was authorized for buybacks in
June 2002, raising the total amount of the current buyback program to $150.0
million. Since January 2001, the Company has bought back $106.5 million in stock
and notes under this program.
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 Provision
Statements contained in this release that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act 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 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.
Investor Relations Contact
John Baumann, Treasurer, Telephone: 805-480-2010
SEMTECH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands - except per share amounts)
Three Months Ended Six Months Ended
------------------ ----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
July 28, July 29, July 28, July 29,
2002 2001 2002 2001
---------------- ----------------- ----------------- ----------------
Net sales $ 52,071 $ 40,532 $101,259 $101,060
Cost of sales 21,739 32,537 42,847 57,979
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Gross profit 30,332 7,995 58,412 43,081
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Operating costs and expenses:
Selling, general and administrative 8,816 8,008 17,228 17,930
Product development and engineering 8,273 7,319 15,797 15,367
One-time costs - 1,776 - 2,727
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Total operating costs and expenses 17,089 17,103 33,025 36,024
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Operating income (loss) 13,243 (9,108) 25,387 7,057
Interest and other income, net 1,540 1,799 2,719 4,250
-------- -------- -------- --------
Income (loss) before provision for taxes 14,783 (7,309) 28,106 11,307
Provision (benefit) for taxes 3,696 (2,232) 7,027 3,166
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Net income (loss) $ 11,087 $ (5,077) $ 21,079 $ 8,141
Earnings (loss) per share:
Basic $ 0.15 $ (0.07) $ 0.29 $ 0.12
Diluted $ 0.14 $ (0.07) $ 0.27 $ 0.11
Weighted average number of shares:
Basic 73,348 69,446 73,014 68,956
Diluted 78,627 69,446 78,796 77,244
SEMTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
July 28, January 27,
2002 2002
----- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $88,007 $46,300
Temporary investments 315,425 324,870
Receivables, less allowances 21,011 19,181
Inventories 20,916 22,728
Income taxes refundable - 2,019
Deferred income taxes 11,658 11,786
Other current assets 3,820 3,372
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Total current assets 460,837 430,256
Property, plant and equipment, net 52,514 51,516
Investments, maturities in excess of 1 year 134,051 172,332
Deferred income taxes 25,965 27,659
Other assets 6,850 8,638
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total assets $ 680,217 $ 690,401
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liabilities and sTOCKholders' equity
Current liabilities:
Accounts payable $ 6,705 $ 7,341
Accrued liabilities 14,287 16,845
Deferred revenue 2,037 1,936
Income taxes payable 2,705 1,099
Other current liabilities 68 65
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Total current liabilities 25,802 27,286
Long-term debt 322,170 364,320
Total Stockholders' equity 332,245 298,795
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Total Liabilities and Stockholders' Equity $ 680,217 $ 690,401
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: August 27, 2002 SEMTECH CORPORATON
By: /s/ David G. Franz, Jr.
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David G. Franz, Jr.
Chief Financial Officer