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):

July 30, 2008

ATMEL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-19032	77-0051991
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		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))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

On July 30, 2008, Atmel Corporation (“Atmel” or the “Company”) issued a press release discussing its financial results for the second quarter ended June 30, 2008. 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 July 30, 2008, entitled “Atmel Reports Second Quarter 2008 Financial Results.”

2

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: July 30, 2008	By:	/s/ Stephen Cumming
		Stephen Cumming
		Vice President Finance and Chief Financial Officer
Date: July 30, 2008	By:	/s/ David McCaman
		David McCaman
		Vice President Finance and Chief Accounting Officer

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release, dated as of July 30, 2008, entitled “Atmel Reports Second Quarter 2008 Financial Results.”

4

EX-99.1

Exhibit 99.1

N E W S  R E L E A S E

Atmel Reports Second Quarter 2008 Financial Results

Microcontroller Revenues Reach New Record
Rise 9% Sequentially and 29% Compared to the Year-Ago Quarter

SAN JOSE, CA, July 30, 2008 . . . Atmel^® Corporation (NASDAQ: ATML) today announced financial results for the quarter ended June 30, 2008.

Revenues for the second quarter of 2008 were $420.9 million, a 2.4% increase compared to $411.2 million for the first quarter of 2008 and a 4.1% increase compared to $404.2 million for the second quarter ended June 30, 2007. Microcontrollers, a core business, continued to deliver solid revenue growth rising 9% sequentially and 29% compared to the year-ago quarter, driven by the Company’s proprietary AVR^®, standard ARM^® and touch sensing products.

Net loss for the second quarter of 2008 totaled $(4.9) million or $(0.01) per diluted share. This compares to net income of $6.8 million or $0.02 per diluted share for the first quarter of 2008 and net income of $0.7 million or $0.00 per diluted share for the year-ago quarter.

Non-GAAP net income for the second quarter of 2008 totaled $17.3 million or $0.04 per diluted share compared to $13.3 million or $0.03 per diluted share for the first quarter of 2008 and $1.3 million or $0.00 per diluted share for the year-ago quarter. Non-GAAP net income excludes charges (credits) related to restructuring activities, acquisitions, grant repayments, and stock-based compensation, as well as the loss (gain) on sale of assets 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.

“We are pleased to have reached the upper end of our revenue guidance in spite of the challenging macroeconomic environment,” said Steven Laub, Atmel’s President and Chief Executive Officer. “In addition to achieving record microcontroller revenues, gross profit continued to increase. The restructuring initiatives and manufacturing disciplines we’ve implemented are enabling Atmel to drive technological leadership with innovative and cost-effective products that offer the best opportunity for profitable growth.”

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

Gross profit, as a percent of revenue, was 36.5% for the second quarter of 2008. This compares to gross profit of 35.5% for the first quarter of 2008 and 35.0% for the year-ago quarter. Gross profit for the second quarter of 2008 was influenced by a favorable mix of higher margin core products as well as improved wafer fab utilization following the closure of the North Tyneside, United Kingdom manufacturing facility.

Operating profit was $0.2 million for the second quarter of 2008, or 0.1% of revenue, which includes charges of $16.5 million primarily related to restructuring and charges resulting from the Quantum Research Group acquisition completed in March of this year. This compares to an operating profit of $15.4 million for the first quarter of 2008 and $7.1 million for the second quarter of 2007. Included in the prior period operating results were net charges of $0.7 million for the first quarter related to the North Tyneside restructuring and Quantum Research acquisition and a benefit of $2.6 million for the second quarter of 2007 for restructuring related adjustments. Stock-based compensation expense was $6.4 million for the second quarter of 2008, compared to $6.3 million for the first quarter of 2008 and $3.3 million for the year-ago quarter.

Income tax provision was $4.3 million for the second quarter of 2008. This compares to an income tax provision of $3.2 million for the first quarter of 2008 and $7.1 million for the second quarter of 2007.

Combined cash balances (cash and cash equivalents plus short-term investments) totaled $375.8 million at the end of the second quarter of 2008, an increase of $39.0 million from the end of the prior quarter and a $54.2 million decrease from $429.9 million at December 31, 2007. Cash provided from operations totaled approximately $50.0 million for the second quarter of 2008 compared to cash used in operations of $40.2 million for the first quarter of 2008 and $1.5 million for the second quarter of 2007. In the first quarter of 2008, cash used in operations included approximately $54.0 million of cash used for repayment of grants and for restructuring charges that required cash payments related to the closure of North Tyneside. Also, in the first quarter of 2008, the Company received approximately $82.0 million of proceeds from the sale of North Tyneside fabrication equipment, which was classified as proceeds from investing activities.

The Company’s effective average exchange rate in the second quarter of 2008 was approximately $1.56 to the euro, compared to $1.47 to the euro in the first quarter of 2008 and $1.35 to the euro in the year-ago period. A $0.01 increase in the dollar/euro exchange rate reduced operating income by approximately $0.5 million during the second quarter of 2008, which was an improvement over the $1.0 million impact to operating income at the end of 2007 as a result of the dollar/euro exchange rate.

Second Quarter 2008 and Recent Highlights

• Achieved Highest Level of Gross Profit since the First Quarter of 2001

• Appointed Stephen Cumming as Vice President Finance and Chief Financial Officer

• Introduced a Touch Controller for Slider and Buttons with Integrated LED Control and GPIO Functions

• Introduced a family of AVR Microcontrollers for Automotive LIN Networking Applications

• Introduced picoPower tinyAVR Microcontrollers for Battery-based and Cost-sensitive Applications

• Won Reader’s Choice Award in Indian Electronics Magazine for AVR Microcontrollers

• Introduced 800/900 MHz IEEE 802.15.4 Compliant Transceiver for Zigbee

• Won the Electron d’Or Award for CAP Customizable Microcontroller

Business Outlook

To better manage distribution resources, on July 1^st, 2008, Atmel implemented a change in revenue recognition with regards to its independent distributors in Europe converting from a sell-in to a sell-through revenue model. As a result, the Company expects that there will be a one time revenue reduction of approximately $28 million to $34 million to third quarter revenues. Including this one time accounting adjustment, third quarter 2008 revenues are expected to be down 3% to 7% sequentially. Exclusive of this change and consistent with business seasonality and macro economic trends, the Company anticipates third quarter 2008 revenues would be up 1% to 4% on a sequential basis.

Atmel is continuing to evaluate ways to safeguard its ability to compete in the market. In this context, the French management is commencing a consultation procedure with the works councils in France in relation to potential redundancies in the operations in Rousset and Nantes, France. Atmel is also continually reviewing potential changes in its business and asset portfolio throughout its worldwide operations, including those located in Europe in order to enhance its overall competitiveness and viability.

Conference Call

Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the second quarter 2008 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405 or 1-706-634-5185. The conference ID number is 55624651 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 July 30, 2008 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 55624651.

About Atmel

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

Safe Harbor for Forward-Looking Statements

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 new product introductions, markets for our products, restructuring initiatives, manufacturing disciplines, strategies and third quarter business outlook. 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, 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, the inability to realize the anticipated benefits of our recent strategic transactions, restructuring plans and other initiatives in a timely manner or at all, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, the market price of our common stock 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, 2007, filed on February 29, 2008, and our subsequent Form 10-Q reports.

Investor Contact:	Media Contact:
Robert Pursel	Barrett Golden / Sharon Stern
Director of Investor Relations	Joele Frank, Wilkinson Brimmer Katcher
408-487-2677	212-355-4449

###

Atmel Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

	June 30,		March 31,		December 31,
	2008		2008		2007
Current assets
Cash and cash equivalents	$	354,003	$	308,365	$	374,130
Short-term investments		21,786		28,455		55,817
Accounts receivable, net		220,956		223,615		209,189
Inventories		336,415		348,603		357,301
Assets held for sale		—		47,414		—
Prepaids and other current assets		94,215		99,665		88,781
Total current assets		1,027,375		1,056,117		1,085,218
Fixed assets, net		471,569		499,717		579,566
Goodwill and intangible assets, net		109,395		112,623		19,552
Other assets		42,118		45,150		18,417
Total assets	$	1,650,457	$	1,713,607	$	1,702,753
Current liabilities
Current portion of long-term debt	$	133,654	$	135,558	$	142,471
Trade accounts payable		127,596		113,335		191,856
Accrued and other liabilities		227,225		291,885		266,987
Deferred income on shipments to distributors		19,541		21,334		19,708
Total current liabilities		508,016		562,112		621,022
Long-term debt less current portion		18,641		20,251		20,408
Other long-term liabilities		245,738		253,809		237,844
Total liabilities		772,395		836,172		879,274
Stockholders’ equity		878,062		877,435		823,479
Total liabilities and stockholders’ equity	$	1,650,457	$	1,713,607	$	1,702,753

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

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2008			2008			2007			2008			2007
Net revenues	$	420,908		$	411,237		$	404,247		$	832,145		$	795,560
Operating expenses
Cost of revenues		267,382			265,183			262,605			532,565			513,981
Research and development		68,218			66,377			69,266			134,595			136,565
Selling, general and administrative		68,573			63,562			67,881			132,135			125,940
Acquisition-related charges		6,709			3,711			—			10,420			—
Charges for (credit from) grant repayments		292			(119	)		—			173			—
Restructuring charges (credits)		8,676			27,908			(2,640	)		36,584			(858	)
Loss (gain) on sale of assets		810			(30,758	)		—			(29,948	)		—
Total operating expenses		420,660			395,864			397,112			816,524			775,628
Income from operations		248			15,373			7,135			15,621			19,932
Interest and other (expense) income, net		(859	)		(5,387	)		610			(6,246	)		1,589
(Loss) income from continuing operations before income taxes		(611	)		9,986			7,745			9,375			21,521
Provision for income taxes		(4,296	)		(3,198	)		(7,067	)		(7,494	)		8,097
Net (loss) income	$	(4,907	)	$	6,788		$	678		$	1,881		$	29,618
Basic net (loss) income per share:
Net (loss) income	$	(0.01	)	$	0.02		$	0.00		$	0.00		$	0.06
Weighted-average shares used in basic net (loss) income per share calculations		445,793			444,670			488,916			445,225			488,879
Diluted net (loss) income per share:
Net (loss) income	$	(0.01	)	$	0.02		$	0.00		$	0.00		$	0.06
Weighted-average shares used in diluted net (loss) income per share calculations		445,793			447,643			494,244			450,337			494,285

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

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2008			2008			2007			2008			2007
GAAP net (loss) income	$	(4,907	)	$	6,788		$	678		$	1,881		$	29,618
Special items:
Stock-based compensation expense		6,353			6,307			3,310			12,660			6,620
Acquisition-related charges		6,709			3,711			—			10,420			—
Charges for (credit from) grant repayments		292			(119	)		—			173			—
Restructuring charges (credits)		8,676			27,908			(2,640	)		36,584			(858	)
Loss (gain) on sale of assets		810			(30,758	)		—			(29,948	)		—
Income tax effect of non-GAAP items		(658	)		(500	)		—			(1,158	)		(300	)
Total special items		22,182			6,549			670			28,731			5,462
Non-GAAP net income	$	17,275		$	13,337		$	1,348		$	30,612		$	35,080
Diluted non-GAAP net income per share:
Net income	$	0.04		$	0.03		$	0.00		$	0.07		$	0.07

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 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 (Loss) Income 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 charges.

Acquisition-related 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 (credit from) 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 (credits).

Restructuring charges (credits) primarily relate to expenses necessary to make infrastructure-related changes to Atmel’s operating costs. Restructuring charges (credits) 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 (credits) 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.

• Loss (gain) on sale of assets.

Atmel recognizes losses (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 losses (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.

• Income tax effect of non-GAAP items.

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