8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 25, 2007

_____________________

MICREL, INCORPORATED

(Exact Name of Registrant as Specified in its Charter)

_____________________

CALIFORNIA

(State or Other Jurisdiction of Incorporation)

0-25236	94-2526744
(Commission File Number)	(I.R.S. Employer Identification No.)
2180 Fortune Drive, San Jose, CA	95131
(Address of Principal Executive Offices)	(Zip Code)

(408) 944-0800

(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):

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

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

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

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN REPORT

Item 2.02. Results of Operations and Financial Condition

On July 25, 2007, Micrel Incorporated issued a press release announcing its financial results for the three and six month periods ended June 30, 2007. A copy of the press release is furnished as Exhibit 99 to this report. Such Information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 8.01. Other Events

The Company also announced in its press release that it will pay a cash dividend of $0.03 per share on August 22, 2007 to shareholders of record on August 7, 2007.

Item 9.01. Financial Statements and Exhibits

(d) The following items are filed as exhibits to this report:

99.1 Press release, dated July 25, 2007 issued by Micrel Incorporated.

SIGNATURE

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.

MICREL, INCORPORATED

(the Registrant)

By: /s/ Richard D. Crowley

Richard D. Crowley

Vice President, Finance and

Chief Financial Officer

(Principal Financial and

Accounting Officer)

Dated: July 25, 2007

EX-99

EXHIBIT 99

Contact: Richard Crowley

Micrel, Incorporated

2180 Fortune Drive

San Jose, CA 95131

Phone: (408) 944-0800

Press Release

MICREL REPORTS SECOND QUARTER 2007 FINANCIAL RESULTS

· Second quarter revenues of $65.1 million, up 3% sequentially

· Second quarter net income of $0.11 per diluted share within expectations

· Board of Directors declares quarterly dividend of $0.03 per common share

San Jose, CA, July 25, 2007 — Micrel, Incorporated (Nasdaq NM: MCRL), an industry leader in analog, high bandwidth communications and Ethernet IC solutions, today announced financial results for the second quarter ending June 30, 2007.

Revenues for the second quarter were $65.1 million, a sequential increase of 3% over the $63.1 million recorded in the first quarter, and 7% lower than the $70.2 million posted in the year-ago period. Second quarter net income was $8.6 million, or $0.11 per diluted share. This compares with first quarter 2007 net income of $17.9 million, or $0.23 per diluted share, and net income of $9.0 million, or $0.11 per share, in the year ago period. First quarter 2007 results included a one-time $15.5 million pre-tax gain associated with a legal settlement, equivalent to $0.13 per diluted share, net of income taxes.

“Micrel’s second quarter results were solid and I was pleased with our operating execution,” stated Ray Zinn, president and CEO of Micrel. “Our revenues grew sequentially driven by sales to the high-speed communications end market. The Company released a record number of new products in the second quarter and customer design activity remained strong. Earnings per share were in-line with guidance and during the quarter the Company managed to reduce its inventory to targeted levels without significant impact to gross margin.”

MICREL REPORTS SECOND QUARTER 2007 RESULTS

July 25, 2007

Page 2 of  6

The Company also announced today that Micrel’s Board of Directors has authorized a quarterly dividend payment of $0.03 per share of common stock. The payment will be made on August 22, 2007 to shareholders of record as of August 7, 2007.

Outlook

Order lead times for the Company’s products remain at four to six weeks, but a relatively high proportion of quarterly revenue must still be booked and shipped within the quarter to OEM customers, or resold through the Company’s distributors. The Company estimates third quarter 2007 revenues will increase sequentially by 3% to 6%, and earnings per diluted share will be in a range of $0.12 to $0.13.

Zinn concluded, “We are encouraged by continued strong customer interest in the Company’s new products and the second quarter’s positive book-to-bill ratio. These factors bode well for sustained revenue growth for Micrel as we move into the seasonally stronger second half of the year. While we did not hit the high end of our revenue guidance in the second quarter, we are still confident that our design win momentum is going to yield better than average growth for Micrel over the next twelve months.”

Conference Call

The Company will host a conference call at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) on July 25, 2007. Chief Executive Officer Raymond Zinn and Chief Financial Officer Richard Crowley will present an overview of second quarter financial results, discuss current business conditions and then respond to questions.

The call is available, live, to any interested party on a listen only basis by dialing (800) 817-4887. For international callers, please dial (913) 981-4913. Interested callers should dial in at least five minutes before the scheduled start time and ask to be connected to the Micrel, Incorporated Conference Call. A live webcast will also be available through www.vcall.com. An audio replay of the conference call will be available through August 1, 2007, by dialing (719) 457-0820 or (888) 203-1112 and entering access code number 2474525. The webcast replay will also be available on the Company’s website at: www.micrel.com.

MICREL REPORTS SECOND QUARTER 2007 RESULTS

July 25, 2007

Page 3 of  6

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about the following topics: our expectations regarding future financial results, including revenues, earnings per share, order lead times, customer demand, customer and supply chain inventory levels and the nature of macro-economic and industry trends. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Those risks and uncertainties include, but are not limited to, such factors as: softness in demand for our products; customer decisions to cancel, reschedule, or delay orders for our products; the effect that lead times and channel inventories have on the demand for our products; economic or financial difficulties experienced by our customers; the effect of business conditions in the computer, telecommunications and industrial markets; the impact of any previous or future acquisitions; changes in demand for networking or high bandwidth communications products; the impact of competitive products and pricing and alternative technological advances; the accuracy of estimates used to prepare the Company’s financial statements; the global economic situation; the ability of the Company’s vendors and subcontractors to supply or manufacture the Company’s products in a timely manner; the timely and successful development and market acceptance of new products and upgrades to existing products; softness in the economy and the U.S. stock markets as a whole; fluctuations in the market price of Micrel’s common stock and other market conditions; the difficulty of predicting our future cash needs; the nature of other investment opportunities available to the Company from time to time; and Micrel’s operating cash flow. For further discussion of these risks and uncertainties, we refer you to the documents the Company files with the SEC from time to time, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. All forward-looking statements are made as of today, and the Company disclaims any duty to update such statements.

MICREL REPORTS SECOND QUARTER 2007 RESULTS

July 25, 2007

Page 4 of  6

About Micrel

Micrel Inc., is a leading global manufacturer of IC solutions for the worldwide analog, Ethernet and high bandwidth markets.   The Company’s products include advanced mixed-signal, analog and power semiconductors; high performance communication, clock management, Ethernet switch and physical layer transceiver ICs.  Company customers include leading manufacturers of enterprise, consumer, industrial, mobile, telecommunications, automotive, and computer products.  Corporation headquarters and state-of-the-art wafer fabrication facilities are

located in San Jose, CA, with regional sales and support offices and advanced technology design centers situated throughout the Americas, Europe and Asia.  In addition, the Company maintains an extensive network of distributors and sales representatives worldwide. 

For further information, contact Richard Crowley at: Micrel, Incorporated, 2180 Fortune Drive, San Jose, California, 95131, (408) 944-0800; or visit our website at: http://www.micrel.com.

-Financial Tables to Follow-

MICREL REPORTS SECOND QUARTER 2007 RESULTS

July 25, 2007

Page 5 of  6

MICREL, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
	Three Months Ended								Six Months Ended
	June 30,		March 31,			June 30,			June 30,			June 30,
	2007		2007			2006			2007			2006
Net revenues	$	65,101	$	63,113		$	70,192		$	128,214		$	138,343
Cost of revenues(1)		27,994		26,426			29,940			54,420			58,197
Gross profit		37,107		36,687			40,252			73,794			80,146
Operating expenses:
Research and development(1)		14,191		13,252			13,152			27,443			26,190
Selling, general and administrative(1)		11,115		12,137			12,253			23,252			25,664
Other operating expense		86		--			935			86			935
Restructuring expense		28		44			66			72			66
Total operating expenses		25,420		25,433			26,406			50,853			52,855
Income from operations		11,687		11,254			13,846			22,941			27,291
Other income (expense):
Interest Income		1,661		1,501			1,603			3,162			3,014
Interest Expense		80		(152	)		(297	)		(72	)		(460	)
Other income		9		15,514			8			15,523			12
Total other income (expense)		1,750		16,863			1,314			18,613			2,566
Income before income taxes		13,437		28,117			15,160			41,554			29,857
Provision for income taxes		4,796		10,249			6,169			15,045			12,165
Net income	$	8,641	$	17,868		$	8,991		$	26,509		$	17,692
Net income per share:
Basic	$	0.11	$	0.23		$	0.11		$	0.34		$	0.21
Diluted	$	0.11	$	0.23		$	0.11		$	0.34		$	0.21
Shares used in computing per
amounts:
Basic		77,740		77,738			83,201			77,739			83,611
Diluted		79,018		78,750			84,696			78,908			85,255
(1) Includes amortization of stock-
based compensation as follows:
Cost of revenues	$	286	$	302		$	520		$	588		$	702
Research and development		656		479			1,046			1,135			2,111
Selling, general and administrative		738		489			1,042			1,227			2,151

MICREL REPORTS SECOND QUARTER 2007 RESULTS

July 25, 2007

Page 6 of  6

MICREL, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
	March 31,			December 31,
	2007			2006
ASSETS
CURRENT ASSETS:
Cash, cash equivalents, restricted cash and short-term investments	$	125,406		$	109,938
Accounts receivable, net		32,262			31,092
Inventories		34,874			37,183
Deferred income taxes		19,852			23,096
Prepaid expenses and other		4,562			3,084
Total current assets		216,956			204,393
PROPERTY, PLANT AND EQUIPMENT, NET		79,942			78,665
DEFERRED INCOME TAXES(1)		9,493			11,158
INTANGIBLE ASSETS, NET		3,870			4,714
OTHER ASSETS		1,349			1,343
TOTAL	$	311,610		$	300,273
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,126		$	17,429
Deferred income on shipments to distributors		20,936			21,705
Other current liabilities		13,177			22,564
Current portion of long-term debt		42			80
Total current liabilities		47,281			61,778
LONG-TERM INCOME TAXES PAYABLE(1)		2,406			--
OTHER LONG-TERM OBLIGATIONS		356			453
SHAREHOLDERS’ EQUITY:
Common stock		14,932			15,585
Accumulated other comprehensive loss		(34	)		(35	)
Retained earnings		246,669			222,492
TOTAL SHAREHOLDERS' EQUITY		261,567			238,042
TOTAL	$	311,610		$	300,273
(1) On January 1, 2007, Micrel adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"). Implementation of FIN 48 resulted in a $2.1 million reclassification from current taxes payable to long-term taxes payable and an additional $2.5 million was reclassified from current taxes payable to reduce long term deferred tax assets.