EX-99.1 2 e19450ex99_1.txt PRESS RELEASE Exhibit 99.1 Atmel Reports Third Quarter Earnings Results 23% Year Over Year Revenue Growth for the Third Quarter SAN JOSE, Calif., Oct. 26 /PRNewswire-FirstCall/ -- Atmel Corporation (Nasdaq: ATML), a worldwide leader in the development, fabrication and sale of advanced semiconductors, today announced financial results for the third quarter ended September 30, 2004. Revenues for the third quarter of 2004 totaled $413,237,000, versus $420,803,000 in the second quarter of 2004 and $335,187,000 in the third quarter of 2003. Operating income for the third quarter of 2004 was $4,901,000. Net loss for the third quarter of 2004 totaled $28,147,000 or $0.06 per share. This is compared to a net income of $11,651,000 or $0.02 per share for the second quarter of 2004, and a net loss of $31,791,000 or $0.07 per share for the third quarter of 2003. The net loss for the third quarter of 2004 includes $28,005,000 of tax expense for certain profitable foreign subsidiaries. The Company uses the "effective tax rate" methodology, which has resulted in a large amount of the total year tax expense to be recognized in the third quarter as the Company's first half of 2004 profits exceed the profits now anticipated from the second half of the year. "During the quarter, we were able to grow the business over 20% on a year over year basis, however, our revenue was down 2% on a sequential basis. Our ASIC and RF businesses continue to grow due to our proprietary products. Our memory business was approximately flat because of pricing pressure, while lower demand in military and aerospace caused our Microcontroller business to decline this quarter," stated George Perlegos, Atmel's President and Chief Executive Officer. "During the quarter, sales from the ASIC business unit grew 22% year over year and 7% sequentially, led by our proprietary ASIC products. Also doing well in our ASIC group are our smart card ICs, which continue to receive strong design wins based on an architecture that is faster and more flexible than our competitors. "We also experienced year over year sales growth of 11% in our Microcontroller business unit, while we had a sequential sales decline of 22%. Although we experienced a weakening of demand in our military and aerospace products, sales of our proprietary AVR products were up slightly. "Sales in our RF and Automotive business unit were up 32% year over year and 18% sequentially. We accomplished this by ramping the production of our 8" Silicon Germanium technology, and we continue to supply BiCMOS RF products for CDMA phones. "During the third quarter, our memory products experienced 29% year over year sales growth with a 6% sequential decrease. This sequential decline is mainly due to lower Serial EEPROM sales and pricing pressure for our Flash products," concluded Mr. Perlegos. "As we begin the fourth quarter, we see strength in our ASIC, RF and Microcontroller businesses as demand for our proprietary products increases. However, we anticipate that memory revenue will be down in the quarter as we continue to see pricing pressure. Outlook The Company anticipates that in the fourth quarter of 2004, revenues should be about flat. Additionally, R&D should be approximately $65-68 million, while SG&A should be between $44-47 million. Gross margins should be flat to down a point during the fourth quarter. Net interest expense should be around $5.5 million for the fourth quarter. During the fourth quarter, the Company expects to realize a tax benefit of about $8 million, which is also a result of using the "effective tax rate" method. We anticipate that depreciation and amortization will be approximately $72-73 million. Teleconference Atmel will hold a teleconference for the financial community at 3:00 p.m. Pacific Time today to discuss third quarter financial results. Atmel will provide a real-time audio broadcast of the teleconference from the Investor Relations page of its website at http://www.atmel.com . Investors may access the live teleconference by dialing 800-374-0405, and using the passcode 1426694. A webcast replay will be available for one year after the teleconference at http://www.atmel.com . Atmel will also provide a telephone recording of the teleconference, which will be available shortly after the completion of the call. Interested parties may listen to the playback of the teleconference by calling the following number: 800-642-1687, and using the passcode 1426694, within 48 hours of completion of the call. Information in this release regarding Atmel's forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about Atmel's expected fourth quarter operating results, including revenue, operating costs, gross margins, demand levels, new product shipments and market conditions. 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, and we assume no obligation to update any such forward-looking statement. 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 the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets, and other risks detailed from time to time in Atmel's SEC reports and filings, including our Form 10-K, filed on March 15, 2004 and subsequent Form 10-Q reports. CONTACT: Steven Horwitz, Director, Investor Relations: 408-487-2677 Atmel Corporation Condensed Consolidated Income Statements (In thousands, except per-share data) (Unaudited) Three Months Ended Nine Months Ended September 30 September 30 2004 2003 2004 2003 Net revenues: $413,237 $335,187 $1,241,435 $950,137 Expenses: Cost of sales 298,103 261,608 885,952 752,575 Research and development 65,732 61,698 179,684 191,952 Selling, general and administrative 44,501 34,345 131,668 102,749 Restructuring and Asset Impairment Charge -- -- -- (360) Total expenses 408,336 357,651 1,197,304 1,046,916 Operating income (loss) 4,901 (22,464) 44,131 (96,779) Interest and other expense, net (5,043) (6,327) (13,651) (23,209) Income (loss) before taxes (142) (28,791) 30,480 (119,988) Income tax provision (28,005) (3,000) (35,966) (9,000) Net loss ($28,147) ($31,791) ($5,487)($128,988) Basic net loss per share ($0.06) ($0.07) ($0.01) ($0.28) Diluted net loss per share ($0.06) ($0.07) ($0.01) ($0.28) Shares used in basic net loss per-share calculation 476,677 470,494 475,529 468,914 Shares used in diluted net loss per-share calculation 476,677 470,494 475,529 468,914 Atmel Corporation Condensed Consolidated Balance Sheets (In thousands) (Unaudited) Sept. 30, 2004 Dec. 31, 2003 Current assets: Cash and cash equivalents $353,889 $385,887 Short-term investments 59,579 45,167 Accounts receivable, net 251,245 215,303 Inventories 323,288 268,074 Other current assets 82,036 54,198 Total current assets 1,070,037 968,629 Fixed assets, net 1,115,716 1,121,367 Other assets 34,655 37,859 Restricted cash -- 26,835 Total assets $2,220,408 $2,154,690 Current liabilities: Current portion of long-term debt $141,709 $155,299 Trade accounts payable 238,690 144,476 Accrued liabilities and other 273,926 232,251 Deferred income on shipments to distributors 22,722 19,160 Total current liabilities 677,047 551,186 Long-term debt less current portion 103,853 154,182 Convertible notes 211,160 203,849 Other long-term liabilities 215,177 227,356 Total liabilities 1,207,237 1,136,573 Stockholders' equity: 1,013,171 1,018,117 Total liabilities and stockholders' equity $2,220,408 $2,154,690 SOURCE Atmel Corporation -0- 10/26/2004 /CONTACT: Steven Horwitz, Director, Investor Relations, Atmel Corporation, +1-408-487-2677/ /Web site: http://www.atmel.com / (ATML) CO: Atmel Corporation ST: California IN: CPR STW SU: ERN ERP CCA