EX-99.1 2 ac3172ex991.txt Exhibit 99.1 ATMEL REPORTS RESULTS FOR THE SECOND QUARTER OF 2005 COMPANY REPORTS IMPROVED MARGINS, EVALUATING COST CUTTING AND OUTSOURCING SAN JOSE, Calif., July 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 second quarter ended June 30, 2005. Revenues for the second quarter of 2005 totaled $412.2 million, versus $419.8 million in the first quarter of 2005 and $420.8 million in the second quarter of 2004. Net loss for the second quarter of 2005 totaled $42.6 million or $0.09 per share. These results compare to a net loss of $43.0 million or $0.09 per share for the first quarter of 2005, as well as a net income of $11.7 million or $0.02 per share for the second quarter of 2004. "We were pleased to have gross margins rebound during the quarter, with the lower costs being primarily related to improvements in the manufacturing of our smart card ICs," stated George Perlegos, Atmel's President and Chief Executive Officer. "While we are always looking to make our manufacturing more efficient, we are continuing to evaluate cost cutting measures and a move towards outsourcing in an attempt to better position the company for a return to profitability. "To lower costs, we continue to evaluate reductions in our workforce and we expect to increase the amount of manufacturing that is outsourced. By shifting our manufacturing strategy, we expect lower costs and lower capital expenditures, helped by selling or closing some of our older overseas facilities. We also expect to reduce our research and development costs by eliminating low potential projects and by reducing the number of process technologies in our fabs. "Our ASIC revenues grew about 2% sequentially in the second quarter. During the quarter, we were able to increase the percentage of our smart card ICs being produced on 0.18-micron line width to just over 50% and materially increase the yields being achieved. These improvements in our manufacturing were the main reason for the company's increase in gross margin during the quarter. "During the second quarter of 2005, our microcontroller sales were flat sequentially. However, booking levels for our proprietary AVR microcontroller continue to be strong, providing the basis for a better second half of the year. "Sales in our RF and Automotive business unit in the second quarter were down 5% sequentially. Although our RF BiCMOS business was down during the quarter, we see forecasted volume increasing in future quarters. In addition, we have several new designs for future phones with an existing CDMA customer. "During the second quarter, our Non Volatile Memory business declined sequentially as we focus on serial based products. However, within the segment, our serial EEPROM products grew 4% due to strength in the consumer and PC applications," concluded Mr. Perlegos. Outlook The Company anticipates that for the third quarter of 2005, revenues and gross margins should be slightly up when compared to the second quarter of 2005. Additionally, R&D should be approximately $69-$73 million, while SG&A should be between $47-$51 million. Net interest expense for the quarter should be approximately $5-$8 million, while income taxes should be approximately $3-$5 million. We anticipate that depreciation and amortization will be approximately $68-$72 million. Teleconference Atmel will hold a teleconference for the financial community at 3:00 p.m. Pacific Time today to discuss the second 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 7861408. 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 7861408, 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 third quarter operating results, including revenues, gross margins, operating expenses, 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 25, 2005 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 Six Months Ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Net revenues: $ 412,200 $ 420,803 $ 831,977 $ 828,198 Operating expenses: Cost of sales 319,420 301,088 652,195 587,849 Research and development 71,561 57,307 140,282 113,951 Selling, general and administrative 53,312 43,951 105,628 87,168 Total expenses 444,293 402,346 898,105 788,968 Operating income (loss) (32,093) 18,457 (66,128) 39,230 Interest and other expenses, net (9,050) (2,712) (12,973) (8,608) Income (loss) before income taxes (41,143) 15,745 (79,101) 30,622 Income tax provision (1,437) (4,094) (6,500) (7,962) Net income (loss) $ (42,581) $ 11,651 $ (85,601) $ 22,660 Basic net income (loss) per share $ (0.09) $ 0.02 $ (0.18) $ 0.05 Diluted net income (loss) per share $ (0.09) $ 0.02 $ (0.18) $ 0.05 Shares used in basic net income (loss) per-share calculation 480,793 475,381 480,203 474,954 Shares used in diluted net income (loss) per-share calculation 480,793 485,536 480,203 485,726
Atmel Corporation Condensed Consolidated Balance Sheets (In thousands) (Unaudited) June 30, December 31, 2005 2004 ----------- ------------ Current assets: Cash and cash equivalents $ 303,148 $ 346,350 Short-term investments 45,621 58,858 Accounts receivable, net 231,737 228,544 Inventories 320,326 346,589 Other current assets 81,603 91,588 Total current assets 982,435 1,071,929 Fixed assets, net 1,025,342 1,204,852 Other assets 43,509 46,742 Total assets $ 2,051,286 $ 2,323,523 Current liabilities: Current portion of long-term debt $ 133,564 $ 141,383 Convertible notes, short-term portion 218,437 -- Trade accounts payable 164,192 245,240 Accrued and other liabilities 216,913 208,942 Deferred income on shipments to distributors 16,060 18,124 Total current liabilities 749,166 613,689 Long-term debt less current portion 159,517 110,302 Convertible notes 287 213,648 Other long-term liabilities 255,687 274,288 Total liabilities 1,164,657 1,211,927 Stockholders' equity 886,629 1,111,596 Total liabilities and stockholders' equity $ 2,051,286 $ 2,323,523 SOURCE Atmel Corporation -0- 07/26/2005 /CONTACT: Steven Horwitz, Director, Investor Relations of Atmel Corporation, +1-408-487-2677/ /Web site: http://www.atmel.com /