SMSC Reports Fourth Quarter and Full Fiscal Year 2012 Financial Results

HAUPPAUGE, N.Y. — (BUSINESS WIRE) — April 10, 2012 — SMSC (NASDAQ: SMSC) today announced financial results for its fourth quarter and full fiscal year 2012, ended February 29, 2012.

Highlights:

  • Record annual revenue of $412.1 million,
  • Double digit year-over-year growth in sales of consumer electronics and automotive products,
  • Strong annual cash generation from operations of $55.1 million,
  • Share repurchases of $30 million in fiscal 2012,
  • Year-end cash and investments of $172.7 million.

Total revenue for the fourth quarter of fiscal 2012 was $89.9 million, a decrease of approximately 11 percent when compared to the same prior year period and a decrease of approximately 15 percent sequentially. Fourth quarter fiscal 2012 revenue included $7.0 million in sales related to the BridgeCo acquisition. Non-GAAP gross margin was 53.9 percent compared to 52.2 percent for the same prior year period and 52.7 percent in the third quarter of fiscal 2012. GAAP gross margin was 51.6 percent compared to 48.1 percent for the same prior year period and 50.1 percent in the third quarter of fiscal 2012. Non-GAAP net income was $1.1 million, or $0.05 per diluted share, compared to non-GAAP net income of $6.0 million, or $0.26 per diluted share for the same prior year period and $4.8 million, or $0.21 per diluted share in the third quarter of fiscal 2012. GAAP net loss for the fourth quarter of fiscal 2012 was $4.1 million, or $0.19 per diluted share, compared to GAAP net income of $1.7 million, or $0.07 per diluted share for the same prior year period and a GAAP net loss of $3.3 million, or $0.15 per diluted share in the third quarter of fiscal 2012.

Total revenue for fiscal year 2012 was $412.1 million, an increase of approximately 1 percent when compared to the same prior year period. Non-GAAP gross margin was 54.4 percent compared to 55.1 percent for the same prior year period. GAAP gross margin was 52.3 percent compared to 52.5 percent for the same prior year period. Non-GAAP net income was $25.3 million, or $1.09 per diluted share, compared to non-GAAP net income of $37.2 million, or $1.61 per diluted share for the same prior year period. GAAP net income was $10.7 million, or $0.46 per diluted share, compared to $10.6 million, or $0.46 per diluted share for the same prior year period.

"Revenue in SMSC's fiscal 2012 reached a record level despite a difficult economy, with sales from our Consumer Electronics and Automotive markets generating double digit annual growth," said Christine King, President and Chief Executive Officer of SMSC. "The fourth quarter sequential revenue decline of 15 percent was driven by normal year-end seasonality and a weak demand environment. On a non-GAAP basis, gross margin was roughly in line with expectations and operating expenses were lower than anticipated as we continued to focus on our cost structure. Finally, we delivered non-GAAP earnings per share of $0.05, exceeding guidance, mainly driven by a lower than expected effective tax rate."

Ms. King continued, "As we enter the new fiscal year, orders are improving and we expect strong sequential revenue growth in all of our vertical markets."

Business Outlook

Looking ahead to the first quarter of fiscal 2013, the Company expects:

  • Revenue in the range of $98 to $102 million,
  • Non-GAAP gross margin to be approximately 55 percent,
  • Non-GAAP operating expenses to be up 3 to 4 percent sequentially,
  • The non-GAAP effective tax rate is estimated to be approximately 25 percent to 30 percent,
  • Non-GAAP earnings per diluted share in the range of $0.29 to $0.38.

The unaudited non-GAAP financial measures in this release, including the business outlook, exclude charges and credits for stock appreciation rights (SARs), restricted stock units and stock options associated with the accounting pursuant to FASB ASC 718, the amortization of acquired intangible assets, restructuring charges, executive transition costs, gains and losses on equity investments, costs associated with business acquisition related activities including transaction costs, an acquisition termination fee gain, inventory write-up and write-off’s on acquisitions, the revaluation of contingent consideration, compensation expense on acquisitions, impairment losses, transaction costs related to the sale of our corporate headquarters and the gain on release of a claim liability.

Conference Call and Webcast Information

Christine King, President and Chief Executive Officer of SMSC, will host a conference call and webcast on April 10, 2012 at 5:00 PM ET, to discuss the Company’s fourth quarter fiscal 2012 financial results and its business outlook. The teleconference may be accessed by dialing 1-877-627-6544 in the U.S. or 1-719-325-4933 from outside of the U.S. The teleconference confirmation code is 8054366. A replay of the call will also be available from April 10 through April 17, 2012. The replay dial-in number is 888-203-1112 in the U.S. or 719-457-0820 for international callers. The replay passcode is 8054366. A webcast, along with presentation materials, will be accessible via the investor relations section of SMSC’s website at www.smsc.com .

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