8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

May 4, 2010

ATMEL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-19032	77-0051991
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2325 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)

(408) 441-0311
(Registrant’s telephone number, including area code)

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 (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     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

On May 4, 2010, Atmel Corporation (“Atmel” or the “Company”) issued a press release discussing its financial results for the first quarter ended March 31, 2010. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
99.1	Press release, dated as of May 4, 2010, entitled “Atmel Reports First Quarter 2010 Financial Results.”

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 hereunto duly authorized.

	Atmel Corporation
Date: May 4, 2010	By:	/s/ Stephen Cumming
		Stephen Cumming
		Vice President Finance and Chief Financial Officer
Date: May 4, 2010	By:	/s/ David McCaman
		David McCaman
		Vice President Finance and Chief Accounting Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release, dated as of May 4, 2010, entitled “Atmel Reports First Quarter 2010 Financial Results.”

EX-99.1

Exhibit 99.1

®

NEWS RELEASE

Atmel Reports First Quarter 2010 Financial Results

Record Microcontroller Revenues

Gross Margins Increase 140 Basis Points over Q4

SAN JOSE, Calif., May 4, 2010 — Atmel(R) Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced financial results for its first quarter ended March 31, 2010.

Revenues in the first quarter of 2010 were $348.6 million, up 1.4 percent from $343.6 million in the fourth quarter of 2009 and up 28.4 percent from the $271.5 million reported in the first quarter of 2009.

Net income, on a GAAP basis, was $16.6 million or $0.04 per diluted share in the first quarter of 2010. This compares with a GAAP net loss of $83.3 million or a loss of $0.18 per diluted share in the fourth quarter of 2009 and a net income of $3.6 million or $0.01 per diluted share in the first quarter of 2009.

Non-GAAP net income in the first quarter of 2010 totaled $25.5 million or $0.05 per diluted share, compared with a non-GAAP net income of $11.3 million or $0.02 per diluted share in the fourth quarter of 2009 and a non-GAAP net income of $20.1 million or $0.04 per diluted share in the first quarter of 2009.

Gross margin increased to 38.4 percent in the first quarter of 2010, up from 37.0 percent in the fourth quarter and 35.1 percent in the first quarter of 2009. The sequential gross margin improvement was the result of increased factory utilization levels and an improved mix of higher margin microcontroller products during the quarter.

“We are especially pleased to have achieved record revenues for our microcontroller business,” said Steve Laub, president and chief executive officer. “Our Microcontroller and Touch solutions continue to gain substantial design wins, and we expect robust growth for these products throughout the year,” he said.

Atmel Corporation • 2325 Orchard Parkway • San Jose CA 95131 • Phone (408) 441-0311 • Fax (408) 487-2600

Income from operations in the first quarter of 2010 was $14.9 million, compared with a fourth quarter loss of $71.8 million, which included an asset impairment charge of $79.8 million. This compares with a loss from operations of $20.5 million in the first quarter of 2009.

Stock-based compensation expense was $10.0 million in the first quarter of 2010, compared with $10.7 million in the fourth quarter of 2009 and $5.4 million in the first quarter of 2009.

Income tax provision totaled $2.6 million in the first quarter of 2010, compared with an income tax provision of $10.5 million in the fourth quarter of 2009 and an income tax benefit of $27.7 million in the first quarter of 2009. The income tax benefit for the first quarter of 2009 was the result of the release of reserves related to certain foreign R&D tax credits that the company realized in the quarter.

Cash provided from operations totaled approximately $70.4 million in the first quarter of 2010, compared with $55.2 million in the fourth quarter of 2009 and $5.6 million in the first quarter of 2009. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $521.3 million at the end of the first quarter of 2010, an increase of $45.1 million from the end of the prior quarter.

The company’s effective average exchange rate in the first quarter of 2010 was approximately $1.42 to the Euro, compared with $1.48 to the Euro in the fourth quarter of 2009 and $1.32 to the Euro in the year-ago period. A $0.01 change in the dollar/Euro exchange rate changes operating income by approximately $0.3 million each quarter.

Recent Operational Highlights

• Record microcontroller revenues of $151 million

• Gross margin increased 140 bps to 38.4 percent

• Increased Microcontroller Market Share in 2009; now Ranked 11^th Largest Supplier

• Received French worker approval for sale of Rousset wafer manufacturing business

• Announced proposed sale of SMS business (Smart Card) to INSIDE Contactless

• Opened new research and development center in Taiwan

Recent Product/Company Highlights

• Won Embedded 2010 Special Merits Award for Capacitive Touchscreen Controller

• Announced a New Family of Single-Key Touch Controllers for the Portable Device Market

• Began Shipping Tiny 20 product family with high-performance, low-power capabilities for general purpose applications

• Shipped Low-Power Tiny 10/20 Microcontroller (MCU) Families Optimized for Touch Sensing Support of Buttons, Sliders and Wheels; announced the Tiny 40 family

• Shipped ARM926-based Microprocessor for High Quality Video Decoding

• Announced Single-chip AES-128 Immobilizer and Remote Keyless Entry MCU for Combi-Key Applications

• Announced Two New Transceiver Families for LIN Automotive Networking Applications

Non-GAAP Metrics

Non-GAAP net income excludes charges related to restructuring activities, acquisitions, grant repayments, asset impairment charges, gain on sale of assets, and stock-based compensation, as well as distributor bad debt recovery, unsolicited M&A expense and the income tax effect of these excluded items. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

Proposed Sale of SMS Business

Also today, Atmel announced INSIDE Contactless S.A., based in Aix-en-Provence, France, has submitted to Atmel a signed agreement offering to purchase, for cash consideration, Atmel’s Secure Microcontroller Solutions (SMS or Smart Card) business based in Rousset, France and East Kilbride, UK. As part of the proposed transaction, Atmel would make a minority investment in INSIDE. In addition, INSIDE would enter into a multi-year supply agreement to continue sourcing wafers from the fabrication operation in Rousset that Atmel recently agreed to sell to LFoundry GmbH.

In accordance with French law, Atmel will present the purchase agreement signed by INSIDE to the employee representatives of the Works Council in Rousset. After completion of the information and consultation process with the

Works Council, Atmel will seek authorization from its Board of Directors to enter into the purchase agreement with INSIDE, with the transaction expected to close in the second half of 2010. Financial terms of the purchase transaction and the minority investment by Atmel were not disclosed.

Conference Call

Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the first quarter 2010 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405. The conference ID number is 70682721 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2:00 p.m. PT start time to ensure a timely connection. The webcast can be accessed at http://www.atmel.com/ir/ and will be archived for 12 months.

A replay of the conference call will be available today at approximately 5:00 p.m. PT and will run for 48 hours. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations. The access code is 70682721.

About Atmel

Atmel is a worldwide leader in the design and manufacture of microcontrollers, capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry’s broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics industry with complete system solutions focused on industrial, consumer, security, communications, computing and automotive markets.

Safe Harbor for Forward-Looking Statements

Information in this release regarding Atmel’s forecasts, business outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about our future operating and financial performance including outlook for 2010 and expectations regarding market share and product revenue growth, statements about the potential sale of the Company’s wafer fabrication operation in Rousset, France and other portions of the Company’s ASIC business, and Atmel’s strategies. 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 statements. 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 general economic conditions; risk relating to the negotiation, signing and closing of any potential transaction regarding Atmel’s ASIC business and related manufacturing assets, including the risk that the parties may not sign definitive agreements, that required approvals may not be obtained in a timely manner or at all, or that other conditions are not satisfied; the inability to realize the anticipated benefits of any potential transaction or series of transactions regarding Atmel’s ASIC business and related manufacturing assets, if consummated, or of our other recent strategic transactions, restructuring plans and other initiatives in a timely manner or at all; the impact of competitive products and pricing; timely design acceptance by our customers; timely introduction of new products and technologies; ability to ramp new products into volume production; 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 the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; the market price of our common stock; compliance with U.S. and international laws and regulations by us and our distributors; unfavorable results of legal proceedings; and other risks detailed from time to time in Atmel’s SEC reports and filings, including our Form 10-K for the year ended December 31, 2009, filed on March 1, 2010, and our subsequent Form 10-Q reports. Atmel assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.

Investor Contact:	Media Contact:
Deborah Stapleton	Barrett Golden / Jaime Wert
Stapleton Communications Inc.	Joele Frank, Wilkinson Brimmer Katcher
Investor Relations Counsel	212-355-4449
650.470.4200

###

Atmel Corporation
Condensed Consolidated Balance Sheets

(In thousands)
(Unaudited)

	March 31,		December 31,
	2010		2009
Current assets
Cash and cash equivalents	$	483,525	$	437,509
Short-term investments		37,744		38,631
Accounts receivable, net		183,720		194,099
Inventories		217,223		226,296
Current assets held for sale		15,816		16,139
Prepaids and other current assets		78,641		83,434
Total current assets		1,016,669		996,108
Fixed assets, net		205,674		203,219
Goodwill		53,011		56,408
Intangible assets, net		27,356		29,841
Non-current assets held for sale		78,501		83,260
Other assets		22,732		24,006
Total assets	$	1,403,943	$	1,392,842
Current liabilities
Current portion of long-term debt	$	80,661	$	85,462
Trade accounts payable		116,993		105,692
Accrued and other liabilities		157,710		152,572
Current liabilities held for sale		12,077		11,284
Deferred income on shipments to distributors		37,817		44,691
Total current liabilities		405,258		399,701
Long-term debt less current portion		3,480		9,464
Long-term liabilities held for sale		4,074		4,014
Other long-term liabilities		218,022		215,256
Total liabilities		630,834		628,435
Stockholders’ equity		773,109		764,407
Total liabilities and stockholders’ equity	$	1,403,943	$	1,392,842

Atmel Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2010			2009			2009
Net revenues	$	348,549		$	343,580		$	271,493
Operating expenses
Cost of revenues		214,775			216,541			176,088
Research and development		58,044			55,842			52,557
Selling, general and administrative		61,481			58,560			54,918
Acquisition-related (credits) charges		(1,901	)		3,604			5,499
Charges for grant repayments		265			276			765
Restructuring charges		969			679			2,352
Asset impairment charges		—			79,841			—
Gain on sale of assets		—			—			(164	)
Total operating expenses		333,633			415,343			292,015
Income (loss) from operations		14,916			(71,763	)		(20,522	)
Interest and other income (expense), net		4,342			(1,010	)		(3,545	)
Income (loss) before income taxes		19,258			(72,773	)		(24,067	)
(Provision for) benefit from income taxes		(2,643	)		(10,494	)		27,693
Net income (loss)	$	16,615		$	(83,267	)	$	3,626
Basic net income (loss) per share:
Net income (loss)	$	0.04		$	(0.18	)	$	0.01
Weighted-average shares used in basic income (loss) per share calculations		456,797			454,040			449,685
Diluted net income (loss) per share:
Net income (loss)	$	0.04		$	(0.18	)	$	0.01
Weighted-average shares used in diluted net income (loss) per share calculations		462,384			454,040			456,431

Atmel Corporation
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2010			2009			2009
GAAP net income (loss)	$	16,615		$	(83,267	)	$	3,626
Special items:
Stock-based compensation expense		9,972			10,680			5,382
Acquisition-related (credits) charges		(1,901	)		3,604			5,499
Charges for grant repayments		265			276			765
Restructuring charges		969			679			2,352
Asset impairment charges		—			79,841			—
Gain on sale of assets		—			—			(164	)
Distributor bad debt recovery		—			—			(2,000	)
Unsolicited M&A expense		—			—			4,934
Income tax effect of non-GAAP items		(435	)		(500	)		(322	)
Total special items		8,870			94,580			16,446
Non-GAAP net income	$	25,485		$	11,313		$	20,072
Diluted non-GAAP net income per share:
Non-GAAP net income	$	0.05		$	0.02		$	0.04
Non-GAAP weighted-average shares used in diluted non-GAAP net income per share calculations		474,512			476,633			467,126

Reconciliation of GAAP to non-GAAP shares used in diluted net income (loss) per share calculations:

	Three Months Ended
	March 31,		December 31,		March 31,
	2010		2009		2009
Diluted weighted-average shares used in per share calculations — GAAP		462,384		454,040		456,431
Adjusted dilutive stock awards for non-GAAP		12,128		22,593		10,695
Diluted weighted-average shares used in per share calculations — non-GAAP		474,512		476,633		467,126

Notes to Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, Atmel uses non-GAAP financial measures, including non-GAAP net income and non-GAAP net income per diluted share, which are adjusted from the most directly comparable GAAP financial measures to exclude certain items, as shown above and described below. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of Atmel’s operations that, when viewed in conjunction with Atmel’s GAAP results, provide a more comprehensive understanding of the various factors and trends affecting Atmel’s business and operations.

Atmel uses each of these non-GAAP financial measures for internal purposes and believes that these non-GAAP measures provide meaningful supplemental information regarding operational and financial performance. Management uses these non-GAAP measures for strategic and business decision making, internal budgeting, forecasting and resource allocation processes.

Atmel believes that providing these non-GAAP financial measures, in addition to the GAAP financial results, is useful to investors because the non-GAAP financial measures allow investors to see Atmel’s results “through the eyes” of management as these non-GAAP financial measures reflect Atmel’s internal measurement processes. Management believes that these non-GAAP financial measures enable investors to better assess changes in each key element of Atmel’s operating results across different reporting periods on a consistent basis. Thus, management believes that each of these non-GAAP financial measures provides investors with another method for assessing Atmel’s operating results in a manner that is focused on the performance of its ongoing operations. In addition, these non-GAAP financial measures facilitate comparisons to Atmel’s historical operating results and to competitors’ operating results.

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. In addition, non-GAAP financial measures may be limited in value because they exclude certain items that may have a material impact upon Atmel’s reported financial results. Management compensates for these limitations by providing investors with reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for or superior to the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in above.

As presented in the “Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income” tables above, each of the non-GAAP financial measures excludes one or more of the following items:

• Stock-based compensation expense.

Stock-based compensation expense relates primarily to equity awards such as stock options and restricted stock units. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Atmel’s control. As a result, management excludes this item from Atmel’s internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure Atmel’s core performance against the performance of other companies without the variability created by stock-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.

• Acquisition-related (credits) charges.

Acquisition-related (credits) charges include: (1) in-process research and development, which relates to projects in process as of the acquisition date that have not reached technological feasibility and are immediately expensed, (2) amortization of intangibles, which include acquired intangibles such as customer relationships, backlog, core developed technology, trade name and non-compete agreement, and (3) contingent compensation expense, which include compensation resulting from the employment retention of certain key employees established in accordance with the terms of the acquisitions. In most cases, these acquisition-related charges are not factored into management’s evaluation of potential acquisitions or Atmel’s performance after completion of acquisitions, because they are not related to Atmel’s core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related charges from non-GAAP measures provides investors with a basis to compare Atmel against the performance of other companies without the variability caused by purchase accounting.

• Charges for grant repayments.

Grant repayments primarily relate to contractual obligations to repay incentive amounts received from various government entities recorded in prior periods (including interest) as a result of restructuring activity. Atmel excludes these amounts from non-GAAP financial measures primarily because these costs are not incurred on an on-going basis, consistent with restructuring charges and other non-recurring types of charges included in the condensed consolidated statements of operations.

• Restructuring charges.

Restructuring charges primarily relate to expenses necessary to make infrastructure- related changes to Atmel’s operating costs. Restructuring charges are excluded from non-GAAP financial measures because they are not considered core operating activities and such costs have not historically occurred in each year. Although Atmel has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. Management believes that it is appropriate to exclude restructuring charges from Atmel’s non-GAAP financial measures, as it enhances the ability of investors to compare Atmel’s period-over-period operating results from continuing operations.

• Asset impairment charges

The Company records an impairment charge, when certain criteria are met, for the difference between the fair value and the carrying value of the assets. Management believes that it is appropriate to exclude these non-cash charges from Atmel’s non-GAAP financial measures, as it enhances the ability of investors to compare Atmel’s period-over-period operating results from continuing operations.

• Gain on sale of assets.

Atmel recognizes gains resulting from the sale of certain non-strategic business assets that no longer align with Atmel’s long-term operating plan. Atmel excludes these items from its non-GAAP financial measures primarily because these gains are one-time in nature and generally not reflective of the ongoing operating performance of Atmel’s business and can distort the period-over-period comparison.

• Distributor bad debt recovery.

Distributor bad debt recovery related to a reserve and subsequent partial collection for receivables from an Asian distributor whose business was extraordinarily impacted following their addition to the US government’s Entity List which prohibits the Company from shipping products to the distributor. Management believes that it is appropriate to exclude this recovery from Atmel’s non-GAAP financial measures, as it enhances the ability of investors to compare Atmel’s period-over-period operating results from continuing operations.

• Unsolicited M&A expense.

The Company incurred certain expenses to advise the Company concerning the take-over bid from Microchip Technology, Inc. Management believes that it is appropriate to exclude these expenses from Atmel’s non-GAAP financial measures, as it enhances the ability of investors to compare Atmel’s period-over-period operating results from continuing operations.

• Income tax effect of non-GAAP items.

Atmel adjusts for the income tax effect resulting from the non-GAAP adjustments as described above.