-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SYGDmd2M4e8RMcUK+N8v9LTY1mPEgM3A9CxCyA+C6hVUbEcJZU7AMqG78XKTv5Fe Fis/qAYW/54TdeDtq20EQg== 0000891618-97-002084.txt : 19970509 0000891618-97-002084.hdr.sgml : 19970509 ACCESSION NUMBER: 0000891618-97-002084 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATMEL CORP CENTRAL INDEX KEY: 0000872448 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770051991 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19032 FILM NUMBER: 97597727 BUSINESS ADDRESS: STREET 1: 2325 ORCHARD PKWY CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4084410311 MAIL ADDRESS: STREET 1: 2325 ORCHARD PKWY CITY: SAN JOSE STATE: CA ZIP: 95131 10-Q 1 FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _________ COMMISSION FILE NUMBER 0-19032 ATMEL CORPORATION (Registrant) CALIFORNIA 77-0051991 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2325 ORCHARD PARKWAY, SAN JOSE, CALIFORNIA 95131 (Address of principal executive offices) (408) 441-0311 Registrant's telephone number Indicate by a check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ON MARCH 31, 1997, REGISTRANT HAD OUTSTANDING 99,259,282 SHARES OF COMMON STOCK. 2 ATMEL CORPORATION FORM 10-Q QUARTER ENDED MARCH 31, 1997 INDEX
PAGE ---- PART I: FINANCIAL INFORMATION Item 1 Financial Statements Condensed Consolidated Balance Sheets at March 31, 1997 and December 31, 1996 1 Condensed Consolidated Income Statements for the three months ended March 31, 1997 and March 31, 1996 2 Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and March 31, 1996 3 Notes to Consolidated Financial Statements 4 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 4 PART II: OTHER INFORMATION 8 Item 6 Exhibits and Reports on Form 8-K 10 SIGNATURES
-i- 3 PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ATMEL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
March 31, December 31, 1997 1996 ---------- ----------- (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 110,012 $ 104,113 Short-term investments 46,241 53,165 Accounts receivable 193,082 174,515 Inventories 84,519 70,320 Prepaid taxes and other current assets 64,336 57,910 ---------- ---------- TOTAL CURRENT ASSETS 498,190 460,023 Other assets 26,789 23,849 Long-term investments 108,924 104,619 Fixed assets, net 937,516 867,423 ---------- ---------- TOTAL ASSETS $1,571,419 $1,455,914 ========== ========== CURRENT LIABILITIES Current portion of long-term debt $ 69,184 $ 71,615 Trade accounts payable and other accrued liabilities 252,313 236,852 Income taxes payable 20,859 0 Deferred income on shipments to distributors 29,751 27,935 ---------- ---------- TOTAL CURRENT LIABILITIES 372,107 336,402 Long-term debt less current portion 318,607 278,576 Deferred income taxes 22,935 22,935 Put warrants 0 28,250 SHAREHOLDERS' EQUITY Common stock 368,702 339,421 Retained earnings 489,068 450,330 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 857,770 789,751 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,571,419 $1,455,914 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. -1- 4 ATMEL CORPORATION CONDENSED CONSOLIDATED INCOME STATEMENTS (In thousands, except per-share data) (Unaudited)
Three Months Ended March 31, 1997 1996 --------- --------- NET REVENUES $ 252,946 $ 240,096 EXPENSES Cost of sales 136,377 120,643 Research and development 29,171 23,856 Selling, general and administrative 25,943 27,609 --------- --------- TOTAL EXPENSES 191,491 172,108 --------- --------- OPERATING INCOME 61,455 67,988 Interest income (expense), net (1,858) 1,102 --------- --------- INCOME BEFORE TAXES 59,597 69,090 Taxes on income 20,859 24,181 --------- --------- NET INCOME $ 38,738 $ 44,909 ========= ========= EARNINGS PER SHARE $ 0.38 $ 0.45 ========= ========= COMMON SHARES AND EQUIVALENTS 101,844 100,371 ========= =========
The accompanying notes are an integral part of these consolidated financial statements. -2- 5 ATMEL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended March 31, 1997 1996 --------- --------- CASH FROM OPERATING ACTIVITIES Net income $ 38,738 $ 44,909 Items not requiring the use of cash Depreciation and amortization 34,176 20,432 Other 4,775 0 Changes in operating assets and liabilities Accounts receivable (19,588) (11,984) Inventories (14,199) (6,483) Prepaid taxes and other assets (6,426) (11,144) Trade accounts payable and other accrued liabilities (3,743) 54,415 Income taxes payable 20,859 15,324 Deferred income on shipments to distributors 1,816 6,199 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 56,408 111,668 --------- --------- CASH FROM INVESTING ACTIVITIES Acquisition of fixed assets (100,863) (127,236) Sale (acquisition) of other assets (1,072) 326 Purchase of investments (16,265) (22,304) Sale or maturity of investments 18,884 20,649 --------- --------- NET CASH USED BY INVESTING ACTIVITIES (99,316) (128,565) --------- --------- CASH FROM FINANCING ACTIVITIES Proceeds from capital leases and notes 69,329 30,121 Principal payments on notes (1,172) (2,019) Principal payments on capital leases (20,566) (11,434) Proceeds from settlement of warrants 4,425 0 Issuance of common stock 3,601 3,895 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 55,617 20,563 --------- --------- EFFECT OF FOREIGN CURRENCY TRANSLATION ADJUSTMENT (6,810) (2,041) --------- --------- NET CASH PROVIDED 5,899 1,625 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 104,113 105,534 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 110,012 $ 107,159 ========= ========= INTEREST PAID $ 6,303 $ 2,337 INCOME TAXES PAID $ 2,115 $ 9,491 FIXED ASSET PURCHASES IN ACCOUNTS PAYABLE $ 70,907 $ 11,625
The accompanying notes are an integral part of these consolidated financial statements. -3- 6 ATMEL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 (In thousands) (Unaudited) 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES These unaudited interim financial statements reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly, in all material respects, the financial position of Atmel Corporation (Company or Atmel) and its subsidiaries as of March 31, 1997 and the results of operations and cash flows for the three month periods ended March 31, 1997 and 1996. Because all of the disclosures required by generally accepted accounting principles are not included, these interim statements should be read in conjunction with the audited financial statements and notes thereto in the Company's Annual Report to Shareholders for the year ended December 31, 1996. The year-end condensed balance sheet data was derived from the audited financial statements and does not include all of the disclosures required by generally accepted accounting principles. The income statements for the periods presented are not necessarily indicative of results to be expected for any future period, nor for the entire year. 2. INVENTORIES Inventories are stated at the lower of cost (first-in, first-out for materials and purchased parts and average cost for work in progress) or market and comprise the following:
MARCH 31, 1997 DECEMBER 31, 1996 -------------- ----------------- Materials and purchased parts $12,502 $11,123 Work in progress 72,017 59,197 ------- ------- TOTAL $84,519 $70,320 ======= =======
3. EARNINGS PER SHARE Earnings per share is computed using the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of outstanding stock options. The Financial Accounting Standards Board recently issued Statement No. 128 (SFAS 128), Accounting for Earning Per Share, which establishes standards for computing and presenting earnings per share (EPS) and applies to entities with publicly held common stock or potential common stock. SFAS 128 simplifies the standards for computing EPS and makes them comparable to international standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. The Company plans to adopt the provisions of SFAS 128 in its financial statements for the year ending December 31, 1997. -4- 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Investors are cautioned that the Management's Discussion and Analysis of Financial Condition and Results of Operation contains certain trend analysis and other forward looking statements that involve risks and uncertainties. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward looking statements. These statements are based on current expectations and projections about the semiconductor industry and assumptions made by the management and are not guarantees of future performance. Therefore, actual events and results may differ materially from those expressed or forecasted in the forward looking statements due to factors such as the effect of changing economic conditions, material changes in currency exchange rates, conditions in the overall semiconductor market (including the historic cyclicality of the industry), risks associated with product demand and market acceptance risks, the impact of competitive products and pricing, delays in new product development and technological risks and other risk factors identified in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K Report. The following table sets forth for the periods indicated certain operating data as a percentage of net revenues:
THREE MONTHS ENDED MARCH 31, 1997 1996 ----- ---- NET REVENUES 100.0% 100.0% ----- ----- EXPENSES Cost of sales 53.9 50.2 Research and development 11.5 10.0 Selling, general and administrative 10.3 11.5 ----- ----- TOTAL EXPENSES 75.7 71.7 OPERATING INCOME 24.3 28.3 Interest income (expense), net (0.7) 0.5 ----- ----- INCOME BEFORE TAXES 23.6 28.8 Taxes on income 8.2 10.1 ----- ----- NET INCOME 15.4% 18.7% ===== =====
Net revenues increased 5.4 percent to $252.9 million in the quarter ended March 31, 1997 from $240.1 million in the corresponding quarter of 1996. This moderate growth was attributable to increased demand for microcontroller and serial-interface electronically erasable programmable read-only memories (EEPROMs) products in the telecommunications and consumer markets. -5- 8 Cost of sales as a percentage of net revenues increased to 53.9 percent in the first quarter of 1997, from 50.2 percent in the corresponding period of 1996. The increase in cost of sales as a percentage of net revenues was primarily due to the capital and operating costs associated with the expansion of our existing fabrication facilities in Colorado Springs, Colorado and Rousset, France as well as the abnormal decline in average selling price related to mature products and the impact on net revenues of the strengthening of the U.S. dollar against international currencies. The Company plans to incur substantial capital expenditures during 1997 to increase its wafer fabrication capacity in its existing facilities and also for installation of equipment at its new facility in Rousset, France. As a result of the increase in fixed costs and operating expenses related to this planned expansion of capacity, the Company expects that its gross margin could deteriorate further in the future. As a percentage of net revenues, research and development cost increased to 11.5 percent in the first quarter of 1997, from 10.0 percent in the corresponding quarter of 1996. Research and development expense increased 22.3 percent from $23.9 million in the first quarter of 1996 to $29.2 million in the first quarter of 1997. The increase was primarily due to the Company's continued investment in the shrinking of the die size of its integrated circuits from 0.65-micron to 0.5-micron line widths, enhancement of mature products, development of new products, advanced CMOS process technology, manufacturing improvements and the costs associated with increasing production capacity in Colorado Springs and Rousset. The Company believes that continued investment in process technology and product development are essential for it to remain competitive in the markets it serves and is committed to high levels of expenditures for research and development. Selling, general and administrative expense decreased in absolute dollars to $25.9 million in the first quarter of 1997 from $27.6 million in the first quarter of 1996, and declined as a percentage of net revenues from 11.5 percent in 1996 to 10.3 percent in 1997. The decrease was primarily due to the fact that the Company's selling, general and administrative expense in the first quarter of 1996 included provisions for bad debts and legal expenses. The Company reported $1.9 million of net interest expense for the first quarter of 1997, compared to $1.1 million of net interest income for the corresponding period of 1996. The decline in net interest income was primarily due to higher interest expense associated with the increase in borrowings used to finance the expansion and construction of our fabrication facilities in Colorado Springs, and Rousset, respectively, and realized foreign exchange losses on our receivables due to the strengthening of the U.S. dollar. The Company's effective tax rate remained at 35.0 percent for the first quarter of 1997. Net income of $38.7 million for the first quarter of 1997 decreased by 13.7 percent from $44.9 million in the corresponding period of the prior year. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997, the Company had $156.3 million in cash and short-term investments, a decrease of $1.0 million from December 31, 1996, and $126.1 million in net working capital, an increase of $2.5 million from December 31, 1996. At March 31, 1997, the Company also had long-term investments of $108.9 million, an increase of $4.3 million from December 31, 1996. These investments consisted of state and municipal securities and United States government obligations. -6- 9 During the three months ended March 31, 1997, the Company generated net cash flows from operations of $56.4 million and spent $100.9 million on fixed assets, principally for expanding fabrication capacities at Colorado Springs and Rousset. The Company plans to spend an additional $300.0 million through 1997 to continue the expansion of its wafer fabrication facilities. The Company believes that its existing sources of liquidity, together with cash flows from operations, leasing financing on equipment and other short- and medium-term bank borrowing, will be sufficient to meet the Company's liquidity and capital requirements through 1997. The Company may, however, seek additional equity or debt financing to fund the expansion of its wafer fabrication capacity or other projects; the timing and amount of such capital requirements cannot be precisely determined at this time. There can be no assurance that such financing would be available in amounts or terms acceptable to the Company. -7- 10 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits: 11.1 Statement of Computation of Earnings Per Share. 27.1 Financial Data Schedule. (B) Reports on Form 8-K: There were no reports filed on Form 8-K during the quarter ended March 31, 1997. -8- 11 SIGNATURES 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, thereunto duly authorized. ATMEL CORPORATION -------------------------------------------- (Registrant) MAY 5, 1997 /S/ GEORGE PERLEGOS -------------------------------------------- GEORGE PERLEGOS President, Chief Executive Officer (Principal Executive Officer) MAY 5, 1997 /S/ KRIS CHELLAM KRIS CHELLAM -------------------------------------------- Vice President, Finance and Administration (Principal Financial and Accounting Officer) -9- 12 EXHIBIT INDEX Exhibit Number Description ------- ----------- 11.1 Statement of Computation of Earnings Per Share. 27.1 Financial Data Schedule. EX-11.1 2 STATEMENT OF COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11.1 ATMEL CORPORATION STATEMENT OF COMPUTATION OF EARNINGS PER SHARE (In thousands, except per-share data) (Unaudited)
THREE MONTHS ENDED MARCH 31, 1997 1996 -------- -------- WEIGHTED AVERAGE SHARES OUTSTANDING FOR THE PERIOD Common stock 99,038 97,520 Dilutive employee stock options and warrants 2,806 2,851 -------- -------- TOTAL COMMON AND COMMON EQUIVALENT SHARES 101,844 100,371 ======== ======== NET INCOME $ 38,738 $ 44,909 ======== ======== EARNINGS PER SHARE $ 0.38 $ 0.45 ======== ========
Fully diluted earnings per share does not differ significantly from primary earnings per share. EX-27.1 3 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1 110,012 46,241 193,082 0 84,519 498,190 937,560 0 1,571,419 372,107 0 0 0 368,702 0 1,571,419 252,946 252,946 136,377 191,491 0 0 6,303 59,597 20,859 0 0 0 0 38,738 0.38 0.38
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