MICROCHIP TECHNOLOGY INCORPORATED (Exact Name Of Registrant As Specified In Its Charter) |
Delaware | 0-21184 | 86-0629024 |
(State Or Other Jurisdiction Of Incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits | |
99.1 | Microchip Technology Announces Record Net Sales and Fourth Quarter and Fiscal Year 2013 Financial Results |
Dated: May 2, 2013 | Microchip Technology Incorporated (Registrant) |
By: /s/ J. Eric Bjornholt | |
J. Eric Bjornholt Vice President, Chief Financial Officer (Principal Accounting and Financial Officer) |
99.1 | Microchip Technology Announces Record Net Sales and Fourth Quarter and Fiscal Year 2013 Financial Results |
![]() | EXHIBIT 99.1 NEWS RELEASE INVESTOR RELATIONS CONTACT: J. Eric Bjornholt -- CFO..... (480) 792-7804 |
• | 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 |
Three Months Ended March 31, 2013 | Year Ended March 31, 2013 | |||||||||||||||||||
(in millions, except earnings per diluted share and percentages) | GAAP | % of Net Sales | Non-GAAP1 | % of Net Sales | GAAP | % of Net Sales | Non-GAAP1 | % of Net Sales | ||||||||||||
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 Income | $ | 56.7 | 13.2 | % | $ | 119.5 | 27.8 | % | $ | 178.6 | 11.3 | % | $ | 459.5 | 28.6 | % | ||||
Other Expense including Gains/Losses on Equity Method Investments | $ | 7.2 | $ | 5.1 | $ | 26.4 | $ | 18.2 | ||||||||||||
Income Tax (Benefit) Expense | $ | (10.2 | ) | $ | 5.1 | $ | 24.8 | $ | 52.9 | |||||||||||
Net Income | $ | 59.7 | 13.9 | % | $ | 109.3 | 25.4 | % | $ | 127.4 | 8.1 | % | $ | 388.5 | 24.2 | % | ||||
Earnings per Diluted Share2 | 28 cents | 52 cents | 62 cents | $ | 1.89 |
• | 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 |
• | 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 I2C™. 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. |
Microchip Consolidated Guidance | |||
GAAP | Non-GAAP Adjustments | Non-GAAP1 | |
Net Sales | $438.7 to $456 million | $438.7 to $456 million | |
Gross Margin2 | 56.0% to 56.5% | $2.2 to $2.3 million | 56.5% to 57.0% |
Operating Expenses2 | 36.65% to 37.15% | $39 to $40.6 million | 27.75% to 28.25% |
Other Expense | $8.0 million | $2.2 million | $5.8 million |
Income Tax Expense | 13.1% to 14.1% | $2.6 to $3.1 million | 10.5% to 11.5% |
Net Income | $64.2 to $71.5 million | $40.4 to $42.5 million | $104.6 to $114.2 million |
Diluted Common Shares Outstanding3 | Approximately 212.0 million shares | Approximately 0.3 million shares | Approximately 211.7 million shares |
Earnings per Diluted Share | 30 to 34 cents | about 20 cents | 50 to 54 cents |
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. |
1 | 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 amortization, inventory valuation costs, restructuring costs, severance costs, earn-out adjustments and legal and |
2 | 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 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). |
3 | 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 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 development | 70,438 | 47,713 | 254,723 | 182,650 | ||||||||||||
Selling, general and administrative | 64,744 | 49,725 | 261,471 | 208,328 | ||||||||||||
Amortization of acquired intangible assets | 39,922 | 2,802 | 111,537 | 10,963 | ||||||||||||
Special charges, net | 7,222 | 1,497 | 32,175 | 837 | ||||||||||||
182,326 | 101,737 | 659,906 | 402,778 | |||||||||||||
Operating income | 56,713 | 93,909 | 178,553 | 396,516 | ||||||||||||
Losses on equity method investments | (235) | (135) | (617) | (195) | ||||||||||||
Other expense, net | (6,976) | (1,852) | (25,759) | (16,626) | ||||||||||||
Income before income taxes | 49,502 | 91,922 | 152,177 | 379,695 | ||||||||||||
Income tax (benefit) provision | (10,188) | 11,286 | 24,788 | 42,990 | ||||||||||||
Net income | $ | 59,690 | $ | 80,636 | $ | 127,389 | $ | 336,705 | ||||||||
Basic net income per common share | $ | 0.30 | $ | 0.42 | $ | 0.65 | $ | 1.76 | ||||||||
Diluted net income per common share | $ | 0.28 | $ | 0.39 | $ | 0.62 | $ | 1.65 | ||||||||
Basic common shares outstanding | 195,908 | 192,570 | 194,595 | 191,283 | ||||||||||||
Diluted common shares outstanding | 209,446 | 206,017 | 205,776 | 203,519 |
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 liabilities | $ | 202,659 | $ | 139,164 | ||||
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 |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales, as reported | $ | 430,144 | $ | 338,911 | $ | 1,581,623 | $ | 1,383,176 | |||||||
Distributor revenue recognition adjustment | - | - | 24,748 | - | |||||||||||
Non-GAAP net sales | $ | 430,144 | $ | 338,911 | $ | 1,606,371 | $ | 1,383,176 |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross profit, as reported | $ | 239,039 | $ | 195,646 | $ | 838,459 | $ | 799,294 | |||||||
Distributor revenue recognition adjustment | - | - | 15,868 | - | |||||||||||
Share-based compensation expense | 2,476 | 1,272 | 8,234 | 5,648 | |||||||||||
Acquisition-related acquired inventory valuation and other costs | 1,083 | - | 56,041 | - | |||||||||||
Non-GAAP gross profit | $ | 242,598 | $ | 196,918 | $ | 918,602 | $ | 804,942 | |||||||
Non-GAAP gross profit percentage | 56.4 | % | 58.1 | % | 57.2 | % | 58.2 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Research and development expenses, as reported | $ | 70,438 | $ | 47,713 | $ | 254,723 | $ | 182,650 | |||||||
Share-based compensation expense | (5,616) | (3,899) | (22,178) | (14,719) | |||||||||||
Acquisition-related costs | - | - | (17) | - | |||||||||||
Non-GAAP research and development expenses | $ | 64,822 | $ | 43,814 | $ | 232,528 | $ | 167,931 | |||||||
Non-GAAP research and development expenses as a percentage of net sales | 15.1 | % | 12.9 | % | 14.5 | % | 12.1 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Selling, general and administrative expenses, as reported | $ | 64,744 | $ | 49,725 | $ | 261,471 | $ | 208,328 | |||||||
Share-based compensation expense | (5,264) | (4,648) | (27,603) | (17,922) | |||||||||||
Acquisition-related costs | (1,248) | 46 | (7,302) | (817) | |||||||||||
Non-GAAP selling, general and administrative expenses | $ | 58,232 | $ | 45,123 | $ | 226,566 | $ | 189,589 | |||||||
Non-GAAP selling, general and administrative expenses as a percentage of net sales | 13.5 | % | 13.3 | % | 14.1 | % | 13.7 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Operating income, as reported | $ | 56,713 | $ | 93,909 | $ | 178,553 | $ | 396,516 | |||||||
Distributor revenue recognition adjustment | - | - | 15,868 | - | |||||||||||
Share-based compensation expense | 13,356 | 9,819 | 58,015 | 38,289 | |||||||||||
Acquisition-related acquired inventory valuation and other costs | 2,331 | (46 | ) | 63,360 | 817 | ||||||||||
Amortization of acquired intangible assets | 39,922 | 2,802 | 111,537 | 10,963 | |||||||||||
Special charges, net | 7,222 | 1,497 | 32,175 | 837 | |||||||||||
Non-GAAP operating income | $ | 119,544 | $ | 107,981 | $ | 459,508 | $ | 447,422 | |||||||
Non-GAAP operating income as a percentage of net sales | 27.8 | % | 31.9 | % | 28.6 | % | 32.3 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Other expense, net, as reported | $ | (6,976 | ) | $ | (1,852 | ) | $ | (25,759 | ) | $ | (16,626 | ) | |||
Convertible debt non-cash interest expense | 2,091 | 1,932 | 8,197 | 7,512 | |||||||||||
Losses on equity securities | - | - | - | 1,878 | |||||||||||
Non-GAAP other (expense) income, net | $ | (4,885 | ) | $ | 80 | $ | (17,562 | ) | $ | (7,236 | ) | ||||
Non-GAAP other (expense) income, net, as a percentage of net sales | -1.1 | % | 0.0 | % | -1.1 | % | -0.5 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income tax (benefit) provision, as reported | $ | (10,188 | ) | $ | 11,286 | $ | 24,788 | $ | 42,990 | ||||||
Income tax rate, as reported | -20.6 | % | 12.3 | % | 16.3 | % | 11.3 | % | |||||||
Distributor revenue recognition adjustment | - | - | 3,404 | - | |||||||||||
Share-based compensation expense | 1,542 | 1,234 | 9,038 | 4,889 | |||||||||||
Acquisition-related acquired inventory valuation costs, intangible asset amortization and other costs | 727 | 192 | 13,530 | 656 | |||||||||||
Special charges | 2,708 | 146 | 15,551 | 146 | |||||||||||
Convertible debt non-cash interest expense | 784 | 724 | 3,075 | 2,817 | |||||||||||
Non-recurring tax events | 9,539 | - | (16,532 | ) | 4,075 | ||||||||||
Losses on equity securities | - | - | - | 704 | |||||||||||
Non-GAAP income tax provision | $ | 5,112 | $ | 13,582 | $ | 52,854 | $ | 56,277 | |||||||
Non-GAAP income tax rate | 4.5 | % | 12.6 | % | 12.0 | % | 12.8 | % |
Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Net income, as reported | $ | 59,690 | 80,636 | 127,389 | 336,705 | |||||||
Distributor revenue recognition adjustment, net of tax effect | - | - | 12,464 | - | ||||||||
Share-based compensation expense, net of tax effect | 11,814 | 8,585 | 48,977 | 33,400 | ||||||||
Acquisition-related acquired inventory valuation costs, intangible asset amortization and other costs, net of tax effect | 41,526 | 2,564 | 161,367 | 11,124 | ||||||||
Special charges, net of tax effect | 4,514 | 1,351 | 16,624 | 691 | ||||||||
Convertible debt non-cash interest expense, net of tax effect | 1,307 | 1,208 | 5,122 | 4,695 | ||||||||
Non-recurring tax events | (9,539 | ) | - | 16,532 | (4,075 | ) | ||||||
Losses on equity securities, net of tax effect | - | - | - | 1,174 | ||||||||
Non-GAAP net income | $ | 109,312 | 94,344 | 388,475 | 383,714 | |||||||
Non-GAAP net income as a percentage of net sales | 25.4 | % | 27.8 | % | 24.2 | % | 27.7 | % | ||||
Diluted net income per share, as reported | $ | 0.28 | 0.39 | 0.62 | 1.65 | |||||||
Non-GAAP diluted net income per share | $ | 0.52 | 0.46 | 1.89 | 1.89 | |||||||
Diluted common shares outstanding, non-GAAP | 209,237 | 205,603 | 205,483 | 202,969 |