-----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, RzKFnczB55O+KVES3cyF74dbX6HDTtRNv1IxPEqU1q8LAeWXjlHWKs0+SxOmjvaO kBN1tfnvU5fC4NwpOVN1OA== 0000093384-04-000030.txt : 20041221 0000093384-04-000030.hdr.sgml : 20041221 20041221144313 ACCESSION NUMBER: 0000093384-04-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041130 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041221 DATE AS OF CHANGE: 20041221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD MICROSYSTEMS CORP CENTRAL INDEX KEY: 0000093384 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 112234952 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-07422 FILM NUMBER: 041216878 BUSINESS ADDRESS: STREET 1: 80 ARKAY DRIVE CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 6314342904 MAIL ADDRESS: STREET 1: 80 ARKAY DR CITY: HAUPPAUGE STATE: NY ZIP: 11788 8-K 1 form_8k-q3fy05.txt Q3 FY05 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): December 20, 2004 STANDARD MICROSYSTEMS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 0-7422 11-2234952 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation) Number) Identification No.) 80 Arkay Drive, Hauppauge, New York 11788 (Address of principal executive offices) (Zip Code) (631) 435-6000 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) 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: |_| 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)) Section 2 - Financial Information Item 2.02 - Results of Operations and Financial Condition On December 20, 2004, Standard Microsystems Corporation issued a press release announcing its financial results for the third quarter of fiscal 2005. A copy of the press release is attached as Exhibit 99.1. The information in Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. Section 9 - Financial Statements and Exhibits Item 9.01 - Financial Statements and Exhibits ( c ) Exhibits 99.1 - Press release dated December 20, 2004, reporting Standard Microsystems Corporation financial results for the third quarter of fiscal 2005. 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. STANDARD MICROSYSTEMS CORPORATION (Registrant) Date: December 21, 2004 By: /s/ ANDREW M. CAGGIA ------------------------------- Andrew M. Caggia Senior Vice President and Chief Financial Officer, and Director (Principal Financial Officer) Exhibit Index Exhibit No. Description 99.1 Press release dated December 20, 2004, reporting Standard Microsystems Corporation financial results for the third quarter of fiscal 2005. EX-99.1 2 exhibit_99-1.txt SMSC REPORTS THIRD QUARTER FISCAL 2005 RESULTS Hauppauge, NY - December 20, 2004 - SMSC (Nasdaq: SMSC) today announced that revenues for the third quarter ended November 30, 2004 were $50.8 million, compared to $72.7 million in the third quarter of fiscal 2004, and $50.2 million in the second quarter of fiscal 2005. Excluding intellectual property revenues, the Company reported $48.0 million of product sales for the third quarter of fiscal 2005 versus $52.3 million in last year's third quarter, and $47.2 million in the second quarter of fiscal 2005. The lower than expected revenues in the third quarter resulted from accounts receivable collectibility concerns with a Taiwan-based distributor that have just become apparent. Generally accepted accounting principles preclude the recognition of revenue in cases where collectibility is not reasonably assured. SMSC has concluded that this standard had not been met with respect to shipments to this distributor that remained uncollected at November 30, 2004. Had these collectibility concerns not arisen, SMSC would have reported an additional $4.2 million of product revenues in the third quarter of fiscal 2005. In the event that the distributor recovers its financial stability, SMSC will recognize the appropriate portions of the additional $4.2 million of revenues as payments are received or if collectibility otherwise becomes reasonably assured. Gross profit percentage on total revenues was 45.9% for the third quarter of fiscal 2005, compared to 58.3% in the previous year's third quarter. Gross profit percentage on product sales was 42.8% in this year's third quarter compared to 41.9% a year ago. Research and development expenses for the third quarter were $10.4 million, compared to $10.2 million in the year-ago quarter, and selling, general and administrative expenses were $13.0 million, compared to $11.6 million in last year's third quarter. The year-over-year increase in operating expenses includes an expense provision of $0.8 million to mark Stock Appreciation Rights to market as a result of the increase in SMSC's share price in the quarter. In addition, litigation costs were $0.9 million higher than in the third quarter of fiscal 2004. The provisions for, or benefits from, income taxes in the quarters ended November 30, 2004 and 2003 included tax benefits related to prior years of $0.3 million and $0.8 million, respectively. These benefits were primarily due to better than expected settlements of open tax audits. Net income for the third quarter of fiscal 2005 was $0.6 million, or $0.03 per share, compared to $14.8 million, or $0.77 per share, in the third quarter of fiscal 2004. Net income included $0.09 per share and $0.66 per share from intellectual property revenues in the quarters ended November 30, 2004 and 2003, respectively. Cash and liquid investments at November 30, 2004 were $180.9 million as compared to $182.0 million at August 31, 2004. Inventories at November 30, 2004 totaled $38.0 million, up $10.2 million from August 31, 2004. This increase was a result of the replenishment of buffer stocks, as well as accelerated purchases of high-volume parts in response to apparent shortages in the supply chain earlier in the year. SMSC estimates that inventories will be below $35 million by the end of the fiscal year and should return to normal turnover levels by the end of the first quarter of fiscal 2006. The Company has no bank debt, and book value per share was $14.58 as of November 30, 2004. "Exclusive of the potential distributor collectibility issue, demand for SMSC's PC I/O and non-PC I/O products grew sequentially. This is encouraging following a period of industry-wide inventory adjustment in SMSC's second quarter," said Steven J. Bilodeau, Chairman and Chief Executive Officer. Mr. Bilodeau added, "During the third quarter, SMSC introduced the industry's broadest line of USB2.0 hubs, USB2.0 card readers, mobile Super I/O and embedded Ethernet controllers for consumer and commercial connectivity applications. Supported by these industry first and second-generation solutions, we are providing designers of consumer electronics flexible, low-cost ways to drive performance enhancements and maximize the end user experience. "The expansion of these product groups is in line with our commitment to further diversify our business in consumer electronics and embedded applications. Looking ahead, we expect to leverage the strength of a broad product portfolio into continued revenue growth." Business Outlook: For the fourth quarter of fiscal 2005, SMSC expects revenues to be between $51 million and $55 million. Gross profit percentage is expected to be between 45% and 46%. Research and development expenses are expected to be between $10.5 million and $11.5 million, and selling, general and administrative expenses are expected to be between $11.5 million and $13.0 million. Amortization of acquired intangibles is expected to be approximately $0.3 million. The effective tax rate is estimated to be approximately 25%, and the Company expects fourth quarter net income to be between $0.03 and $0.07 per share. The revenue estimate for the quarter excludes approximately $3 million of revenue associated with expected shipments of products by the above-referenced distributor to end customers. Those products were purchased from SMSC before the current collectibility issue became apparent. SMSC will not recognize any revenue from those products until payment begins or collectibility otherwise becomes reasonably assured. If that happens before the end of the fourth quarter, the revenue expectation for that quarter could increase by up to $7.2 million, representing the $3 million discussed in this projection plus the $4.2 million of revenue that could not be recognized in the third quarter. If some portion of the amount due is paid but collectibility of the full amount owed to SMSC does not become reasonably assured, then an appropriate portion of the potential $7.2 million of revenue would be recognized. As of November 30, 2004, Other current assets included a $4.6 million receivable from the above-referenced distributor, of which $1.3 million has been recovered subsequently. SMSC's current expectation is that the remaining $3.3 million will be recovered. About SMSC: Many of the world's most successful global technology companies rely upon SMSC as a go-to resource for integrated circuits and semiconductor system solutions that span analog, digital and mixed-signal technologies. SMSC delivers products that solve the challenges of space, cost and time-to-market for high-speed computing, connectivity and embedded networking applications. SMSC addresses computing, communications and consumer electronics markets through leading positions in Input/Output and non-PCI Ethernet products; innovations in USB 2.0 and other high-speed serial solutions; and integrated networking products employed in a broad range of applications. Leveraging substantial intellectual property and a comprehensive global infrastructure, SMSC thrives at the intersection of silicon, software and customized OEM applications. SMSC is based in Hauppauge, New York with operations in North America, Taiwan, Japan, Korea, China and Europe. Engineering design centers are located in Arizona, New York and Texas. Additional information is available at www.smsc.com. Forward Looking Statements: Except for historical information contained herein, the matters discussed in this announcement are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. These include the timely development and market acceptance of new products; the impact of competitive products and pricing; the effect of changing economic conditions in domestic and international markets; changes in customer order patterns, including loss of key customers, order cancellations or reduced bookings; and excess or obsolete inventory and variations in inventory valuation, among others. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and may not reflect the potential impact of any future acquisitions, mergers or divestitures. SMSC competes in the semiconductor industry, which has historically been characterized by intense competition, rapid technological change, cyclical market patterns, price erosion and periods of mismatched supply and demand. In addition, sales of many of the Company's products depend largely on sales of personal computers and peripheral devices, and reductions in the rate of growth of the PC, consumer electronics and embedded markets could adversely affect its operating results. SMSC conducts business outside the United States and is subject to tariff and import regulations and currency fluctuations, which may have an effect on its business. All forward-looking statements speak only as of the date hereof and are based upon the information available to SMSC at this time. Such information is subject to change, and the Company may not necessarily inform, or be required to inform, investors of such changes. These and other risks and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in the Company's reports filed with the SEC. Investors are advised to read the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, particularly those sections entitled "Other Factors That May Affect Future Operating Results" for a more complete discussion of these and other risks and uncertainties. SMSC is a registered trademark of Standard Microsystems Corporation. Product names and company names are trademarks of their respective holders. Contact: Carolynne Borders Director of Corporate Communications SMSC Voice: 631-435-6626 Fax: 631-273-5550 carolynne.borders STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)
Three Months Ended Nine Months Ended November 30, November 30, ---------------------------------- ---------------------------------- 2004 2003 2004 2003 ---- ---- ---- ---- Sales and revenues: Product sales $ 48,026 $ 52,282 $ 145,611 $ 142,751 Intellectual property revenues 2,729 20,467 8,354 21,008 - ----------------------------------------------------------------------------------------------------------------------- 50,755 72,749 153,965 163,759 Cost of goods sold 27,483 30,350 80,128 79,192 - ----------------------------------------------------------------------------------------------------------------------- Gross profit 23,272 42,399 73,837 84,567 Operating expenses (income): Research and development 10,390 10,244 32,472 28,625 Selling, general and administrative 12,989 11,570 36,693 31,048 Amortization of intangible assets 265 317 848 994 Gain on real estate transaction - - - (1,444) - ----------------------------------------------------------------------------------------------------------------------- Income (loss) from operations (372) 20,268 3,824 25,344 Interest income 704 617 1,726 1,451 Other expense, net (20) (145) (58) (890) - ----------------------------------------------------------------------------------------------------------------------- Income before provision for income taxes and minority interest 312 20,740 5,492 25,905 Provision for (benefit from) income taxes (301) 5,910 1,072 7,590 Minority interest in net income of subsidiary - 43 - 139 - ----------------------------------------------------------------------------------------------------------------------- Income from continuing operations 613 14,787 4,420 18,176 Loss from discontinued operations (net of income tax benefits of $2 and $108) - (3) - (193) - ----------------------------------------------------------------------------------------------------------------------- Net income $ 613 $ 14,784 $ 4,420 $ 17,983 ======================================================================================================================= Basic net income per share: Income from continuing operations $ 0.03 $ 0.84 $ 0.24 $ 1.06 Loss from discontinued operations - - - (0.01) - ----------------------------------------------------------------------------------------------------------------------- Basic net income per share $ 0.03 $ 0.84 $ 0.24 $ 1.05 ======================================================================================================================= Diluted net income per share: Income from continuing operations $ 0.03 $ 0.77 $ 0.23 $ 1.00 Loss from discontinued operations - - - (0.01) - ----------------------------------------------------------------------------------------------------------------------- Diluted net income per share $ 0.03 $ 0.77 $ 0.23 $ 0.99 ======================================================================================================================= Weighted average common shares outstanding: Basic 18,395 17,577 18,321 17,120 Diluted 19,035 19,242 19,375 18,143
STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) November 30, February 29, 2004 2004 ---- ---- Assets Current assets: Cash and cash equivalents $ 119,767 $ 135,161 Short-term investments 61,113 23,136 Accounts receivable, net 16,782 21,946 Inventories 38,009 23,162 Deferred income taxes 14,648 15,064 Other current assets 8,840 8,549 - ------------------------------------------------------------------------------ Total current assets 259,159 227,018 - ------------------------------------------------------------------------------ Property, plant and equipment, net 22,767 23,430 Long-term investments - 15,600 Goodwill 29,435 29,595 Intangible assets, net 3,849 4,697 Deferred income taxes 5,971 6,493 Other assets 3,707 3,192 - ------------------------------------------------------------------------------ $ 324,888 $ 310,025 ============================================================================== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 19,783 $ 14,679 Deferred income on shipments to distributors 6,808 7,972 Accrued expenses, income taxes and other liabilities 14,367 13,168 - ------------------------------------------------------------------------------ Total current liabilities 40,958 35,819 - ------------------------------------------------------------------------------ Other liabilities 11,967 12,104 Shareholders' equity: Preferred stock - - Common stock 2,050 2,019 Additional paid-in capital 187,239 181,830 Retained earnings 103,430 99,010 Treasury stock, at cost (23,799) (23,454) Deferred stock-based compensation (2,163) (1,962) Accumulated other comprehensive income 5,206 4,659 - ------------------------------------------------------------------------------ Total shareholders' equity 271,963 262,102 - ------------------------------------------------------------------------------ $ 324,888 $ 310,025 ============================================================================== -----END PRIVACY-ENHANCED MESSAGE-----