Semtech Announces First Quarter of Fiscal Year 2016 Results

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Semtech Announces First Quarter of Fiscal Year 2016 Results

Semtech Corporation, a leading supplier of analog and mixed-signal semiconductors, today reported unaudited financial results for its first quarter of fiscal year 2016, which ended April 26, 2015.

Highlights:

  • Net Sales of $130.1 Million
  • Record Distributor POS Net Sales of $78.8 Million
  • GAAP Gross Margin of 60.3% and 60.8% on a Non-GAAP Basis
  • Repurchased Approximately 734,650 Shares for Approximately $20 Million
  • Board Increases Stock Repurchase Authorization to $100 Million

The Company announced that its Board of Directors approved an increase of the existing stock repurchase authorization to $100.0 million. Prior to the increase, the Company had approximately $30.0 million remaining from the authorization that was expanded in November 2014.

Net sales for the first quarter of fiscal year 2016 were $130.1 million or flat with the fourth quarter of fiscal year 2015 and down 2 percent from the first quarter of fiscal year 2015.

Gross profit margin, computed in accordance with U.S. generally accepted accounting principles (GAAP), for the first quarter of fiscal year 2016 was 60.3 percent compared to 56.1 percent in the fourth quarter of fiscal year 2015 and 58.8 percent in the first quarter of fiscal year 2015.

GAAP net loss for the first quarter of fiscal year 2016 was $0.1 million or $0.00 per diluted share. This compares to a GAAP net loss of $15.4 million or a net loss of $0.23 per diluted share in the fourth quarter of fiscal year 2015 and GAAP net income of $7.9 million or $0.12 per diluted share in the first quarter of fiscal year 2015.

Included in the GAAP operating results for the fourth quarter of fiscal year 2015 were charges that included $23.3 million for the restructuring and impairment related costs associated with the Company’s reduction of its investment in the defense and microwave communications infrastructure markets and the further reduction of investment in the optical long-haul markets, of which $2.2 million was cash settled. The Company also incurred $2.1 million of acquisition related charges during the same period.

To facilitate the complete understanding of comparable financial performance between periods, the Company also presents performance results net of certain non-cash items or items that are not considered reflective of the Company’s core results over time. The Company’s non-GAAP measures of gross profit margin, net income and earnings per diluted share exclude certain items as described below under “Non-GAAP Financial Measures.”

Excluding such items, non-GAAP net income for the first quarter of fiscal year 2016 was $17.9 million or $0.27 per diluted share. Non-GAAP net income was $23.1 million or $0.34 per diluted share in the fourth quarter of fiscal year 2015 and was $21.8 million or $0.32 per diluted share in the first quarter of fiscal year 2015.

Non-GAAP gross profit margin for the first quarter of fiscal year 2016 was 60.8 percent. Non-GAAP gross profit margin for the fourth quarter of fiscal year 2015 was 60.1 percent and 59.8 percent in the first quarter of fiscal year 2015.

As of April 26, 2015, the Company had $211.5 million in cash, cash equivalents and marketable securities compared to $230.3 million in cash, cash equivalents and marketable securities at the end of fiscal year 2015.

Mohan Maheswaran, Semtech’s President and Chief Executive Officer, stated:
“We saw strong demand from our enterprise computing and communication end-markets driven by the datacenter and PON market segments. However, demand from our largest smartphone customer was much lower than anticipated, leading to results that were at the lower end of our guidance range.”

Maheswaran continued:

“Our numerous growth engines have very good momentum. Notably, demand for our LoRa™ wireless platforms targeted at the Internet of Things market is seeing an acceleration as LoRa is a perfect fit for several emerging segments including smart cities and smart buildings.”

The results announced today are preliminary, as they are subject to the Company finalizing its closing procedures and customary quarterly review by the Company’s independent registered public accounting firm. As such, these results are subject to revision until the Company will have filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2016.

Second Quarter of Fiscal Year 2016 Outlook (extract):

  • Net sales are expected to be in the range of $120 million to $130 million
  • GAAP gross profit margin is expected to be in the range of 59.6% to 60.0% (non-GAAP gross profit margin is expected to be in the range of 60.0% to 60.4%)
  • GAAP SG&A expense is expected to be in the range of $33.7 million to $34.7 million
  • GAAP R&D expense is expected to be in the range of $29.2 million to $30.3 million
  • GAAP earnings per diluted share are expected to be in the range of $0.00 to $0.06 (non-GAAP earnings per diluted share are expected to be in the range of $0.21 to $0.26)
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