Micrel Reports 2014 First Quarter Financial Results

Non-GAAP Reporting

The Company presents non-GAAP financial measures only because investors and financial analysts use non-GAAP results in their analysis of historical results and projections of the Company's future operating results. In order to facilitate the computation of non-GAAP results for the financial analyst community and investors, the Company makes reference to non-GAAP net income and earnings per share. These non-GAAP results exclude the impact of share-based compensation, restructuring charges and amortization of acquisition-related intangible assets with related income tax effects and R&D tax credit. Micrel references those results to allow a better comparison of results in the current period to those in prior periods and to provide insight to the Company's on-going operating performance after exclusion of these items. The Company has reconciled such non-GAAP results to the most directly comparable GAAP financial measures in the financial tables at the end of this press release.

Reference to these non-GAAP results should be considered in addition to results that are prepared under current accounting standards, but should not be considered a substitute for results that are presented in accordance with GAAP. It should also be noted that Micrel's non-GAAP information may be different from the non-GAAP information provided by other companies.

About Micrel

Micrel, Inc. is a leading global manufacturer of IC solutions for the worldwide high-performance linear and power, LAN and timing and communications markets. The Company's products include advanced mixed-signal, analog and power semiconductors; high performance communication, clock management, MEMs-based clock oscillators and crystal-less clock generators, 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 reps worldwide. Web: www.micrel.com.

-Financial Tables to Follow-

                                                                            
                                                                            
                            MICREL, INCORPORATED                            
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                    (In thousands, except share amounts)                    
                                (Unaudited)                                 
                                                                            
                                                 Three Months Ended         
                                        ----------------------------------- 
                                        March 31,  December 31,   March 31, 
                                           2014         2013         2013   
                                        ---------  ------------  ---------- 
Net revenue                             $  59,857  $     60,007  $   59,733 
Cost of revenue *                          28,638        29,594      28,653 
                                        ---------  ------------  ---------- 
Gross profit                               31,219        30,413      31,080 
Gross profit %                               52.2%         50.7%       52.0%
                                                                            
Operating expenses:                                                         
  Research and development *               15,481        14,526      13,771 
  Selling, general and administrative *    12,436        11,325      11,861 
  Restructuring charges                         -         1,376                -  
                                                                                ---------    ------------    ----------  
        Total  operating  expenses                              27,917                27,227            25,632  
Income  from  operations                                            3,302                  3,186              5,448  
Interest  and  other  income  (expense):                                                                                
    Interest  income                                                          103                      109                  126  
    Other  expense                                                              (72)                    (34)                (91)
                                                                                ---------    ------------    ----------  
        Interest  and  other  income                                                                                              
          (expense),  net                                                        31                        75                    35  
Income  before  provision  for  income                                                                                    
  taxes                                                                            3,333                  3,261              5,483  
Provision  for  (benefit  from)  income                                                                                  
  taxes                                                                            1,044                    (103)                238  
                                                                                ---------    ------------    ----------  
Net  income                                                            $      2,289    $            3,364    $        5,245  
                                                                                =========    ============    ==========  
                                                                                                                                                        
  Net  income  per  share:                                                                                                            
    Basic                                                                  $        0.04    $              0.06    $          0.09  
                                                                                =========    ============    ==========  
    Diluted                                                              $        0.04    $              0.06    $          0.09  
                                                                                =========    ============    ==========  
                                                                                                                                                        
Shares  used  in  computing  per  share                                                                                    
  amounts:                                                                                                                                      
    Basic                                                                        56,388                56,908            58,270  
                                                                                =========    ============    ==========  
    Diluted                                                                    57,208                57,546            59,030  
                                                                                =========    ============    ==========  
                                                                                                                                                        
*  Share-based  compensation  expense                                                                                    
  included  in:                                                                                                                              
    Cost  of  revenue                                              $          234    $                276    $            244  
    Research  and  development                                        690                      867                  652  
    Selling,  general  and  administrative                  798                      878                  723  
                                                                                ---------    ------------    ----------  
                                                                                $      1,722    $            2,021    $        1,619  
                                                                                =========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        MICREL,  INCORPORATED                                                        
                    SUPPLEMENTAL  RECONCILIATIONS  OF  GAAP  TO  NON-GAAP  RESULTS                    
                                        (In  thousands,  except  share  amounts)                                        
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                                                                Three  Months  Ended                    
                                                                              ------------------------------------  
                                                                                March  31,    December  31,      March  31,  
                                                                                      2014                  2013                  2013      
                                                                              ----------    ------------    ----------  
GAAP  net  income                                                $        2,289    $            3,364    $        5,245  
    Adjustments:                                                                                                                            
        Share-based  compensation  included                                                                              
          in:                                                                                                                                        
            Cost  of  revenues                                                234                      276                  244  
            Research  and  development                                690                      867                  652  
            Selling,  general  and                                                                                                    
              administrative                                                  798                      878                  723  
        Restructuring  charges                                              -                  1,376                      -  
        Amortization  of  acquisition-                                                                                        
          related  intangible  assets                                426                      330                  275  
        Tax  effect  of  adjustments                                (708)              (1,229)              (644)
        R&D  tax  credit                                                            -                (1,062)                    -  
                                                                              ----------    ------------    ----------  
    Total  adjustments  to  GAAP  net  income            1,440                  1,436              1,250  
                                                                              ----------    ------------    ----------  
                                                                                                                                                        
Non-GAAP  net  income*                                      $        3,729    $            4,800    $        6,495  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
Shares  used  in  computing  non-GAAP  net                                                                              
  income  per  share:                                                                                                                    
    Basic                                                                        56,388                56,908            58,270  
                                                                              ==========    ============    ==========  
    Diluted                                                                    57,208                57,546            59,030  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
GAAP  net  income  per  share  -  basic            $          0.04    $              0.06    $          0.09  
Total  adjustments  to  GAAP  net  income                  0.03                    0.02                0.02  
                                                                              ----------    ------------    ----------  
Non-GAAP  net  income  per  share  -  basic    $          0.07    $              0.08    $          0.11  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
GAAP  net  income  per  share  -  diluted        $          0.04    $              0.06    $          0.09  
Total  adjustments  to  GAAP  net  income                  0.03                    0.02                0.02  
                                                                              ----------    ------------    ----------  
Non-GAAP  net  income  per  share  -                                                                                          
  diluted                                                              $          0.07    $              0.08    $          0.11  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
*  Non-GAAP  results  were  reached  by  excluding  share-based  compensation              
  expense,  restructuring  charges,  amortization  of  acquisition-related                
  intangible  assets  with  related  income  tax  effects  and  R&D  tax  credit.  Non-  
  GAAP  results  were  presented  to  supplement  our  GAAP  consolidated  financial    
  statements  to  allow  a  better  comparison  of  results  in  the  current  period      
  to  those  in  prior  periods  and  to  provide  meaningful  insight  to  the                  
  Company's  on-going  operating  performance  after  exclusion  of  these  items.      
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        MICREL,  INCORPORATED                                                        
                                        CONDENSED  CONSOLIDATED  BALANCE  SHEETS                                      
                                        (In  thousands,  except  share  amounts)                                        
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                                                                                      March  31,        December  31,
                                                                                                            2014                    2013        
                                                                                                  -------------  -------------
ASSETS                                                                                                                                            
                                                                                                                                                        
CURRENT  ASSETS:                                                                                                                          
    Cash,  cash  equivalents  and  short-term                                                                          
      investments                                                                      $            90,243  $            88,593
    Restricted  cash                                                                                1,116                  1,116
    Accounts  receivable,  net                                                            35,934                29,437
    Inventories                                                                                      41,989                43,201
    Prepaid  taxes                                                                                        878                  4,513
    Prepaid  expenses  and  other                                                          2,324                  2,698
    Deferred  income  taxes                                                                  22,321                21,662
                                                                                                  -------------  -------------
        Total  current  assets                                                              194,805              191,220
                                                                                                                                                        
LONG-TERM  INVESTMENTS                                                                        4,325                  4,195
PROPERTY,  PLANT  AND  EQUIPMENT,  NET                                            55,966                57,779
LONG-TERM  PREPAID  TAXES                                                                    1,725                          -
DEFERRED  INCOME  TAXES                                                                        1,975                  1,581
GOODWILL                                                                                                  8,655                  8,554
INTANGIBLE  ASSETS,  NET                                                                    10,910                11,749
OTHER  ASSETS                                                                                          1,583                  1,046
                                                                                                  -------------  -------------
TOTAL                                                                                        $          279,944  $          276,124
                                                                                                  =============  =============
                                                                                                                                                        
LIABILITIES  AND  SHAREHOLDERS'  EQUITY                                                                                
                                                                                                                                                        
CURRENT  LIABILITIES:                                                                                                                
    Accounts  payable                                                              $            14,427  $            13,502
    Deferred  income  on  shipments  to  distributors                    28,989                27,026
    Other  current  liabilities                                                          13,343                12,874
                                                                                                  -------------  -------------
        Total  current  liabilities                                                      56,759                53,402
                                                                                                                                                        
LONG-TERM  INCOME  TAXES  PAYABLE                                                      3,692                  3,575
LONG-TERM  DEFERRED  INCOME  TAXES                                                    1,220                      973
OTHER  LONG-TERM  LIABILITIES                                                                201                      201
                                                                                                                                                        
SHAREHOLDERS'  EQUITY                                                                                                                
TOTAL  SHAREHOLDERS'  EQUITY                                                          218,072              217,973
                                                                                                  -------------  -------------
TOTAL  LIABILITIES  AND  SHAREHOLDERS'  EQUITY              $          279,944  $          276,124
                                                                                                  =============  =============
 




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