Atmel Reports Third Quarter 2014 Financial Results

Cash provided by operations totaled $43.9 million for the third quarter of 2014, compared to $52.5 million for the second quarter of 2014 and $82.1 million for the third quarter of 2013. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $219.9 million at the end of the third quarter of 2014, a decrease of $44.1 million from the immediately preceding quarter resulting principally from the purchase of Newport Media for $139.6 million net of cash acquired, and the repurchase of $25.0 million in common stock during the third quarter offset by improved operating performance and $90 million drawn from a credit facility.

Company Highlights

  • Completed acquisition of Newport Media, a leading provider of advanced Wi-Fi and Bluetooth solutions
  • Expanded Atmel SmartConnect wireless portfolio with the release of 2 new 802.11b/g/n turn-key system-on-chip solutions (WILC1000 and WINC1500) and 4 new modules optimized for battery-powered IoT applications featuring these SoCs
  • Developed Wi-Fi Shield 101 with Arduino, enabling secure Wi-Fi connectivity for all Arduino platforms
  • Released Atmel® | SMART™ SAMA5D4 microprocessor featuring 720p video playback and enhanced security features
  • Sampling new family of high-performance Atmel | SMART ARM™ Cortex-M7 based microcontrollers enabling next-generation IoT, industrial, and automotive applications
  • Expanded next-generation system-on-chip solution for smart metering with dual-core architecture, integration, metrology and extensive security features
  • Announced partnership with ARM on their mbed Internet of Things device platform
  • Collaboration with IHR to drive innovation in Automotive electronics

Stock Repurchase
During the third quarter of 2014, Atmel repurchased 2.9 million shares of its common stock in the open market at an average price of $8.50 per share.

Non-GAAP Metrics
Non-GAAP net income excludes (gain) loss from manufacturing facility damage and shutdown, French building underutilization and other, (gain) loss related to foundry arrangements, recovery of receivables from foundry suppliers, restructuring (credits) charges, settlement charges, acquisition-related charges, (gain) on sale of assets, fair value adjustments to inventory from businesses acquired, write-down of investments in privately held companies, share-based compensation expense, as well as the non-GAAP income tax adjustment and other non-recurring income tax items.  A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

Conference Call
Atmel will hold a teleconference at 2 p.m. PT today to discuss the third quarter 2014 financial results. The conference call will be webcast live and can also be monitored by dialing 1-706-758-4519.  The conference ID number is 93822367 and participants are encouraged to initiate their calls 10 minutes prior to the 2 p.m. PT start time to ensure a timely connection. The webcast and earnings release will be accessible at http://ir.atmel.com/ and will be archived for 12 months.

A replay of the October 29, 2014 conference call will be available the same day at approximately 5 p.m. PT and will be archived for 48 hours. The replay access number is 1-404-537-3406. The access code is 93822367.

About Atmel
Atmel is a worldwide leader in the design and manufacture of microcontrollers, capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics industry with intelligent and connected solutions focused on the industrial, consumer, communications, computing and automotive markets.

©2014 Atmel Corporation. Atmel®, Atmel logo and combinations thereof, Enabling Unlimited Possibilities®, and others are registered trademarks or trademarks of Atmel Corporation in the U.S. and other countries. Other terms and product names may be trademarks of others.

Safe Harbor for Forward-Looking Statements
Statements in this release, including those regarding Atmel's forecasts, business outlook, expectations, new product launches, and beliefs, among others, are forward-looking statements that involve risks and uncertainties. These statements may include comments about our future operating and financial performance, including our outlook for 2014 and beyond, our expectations regarding market share and product revenue growth, and Atmel's strategies. 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. 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, without limitation, general global macroeconomic and geo-political conditions; the cyclical nature of the semiconductor industry; the inability to realize the anticipated benefits of transactions related to acquisitions, restructuring activities or other initiatives in a timely manner or at all; the impact of competitive products and pricing; disruption to our business caused by our increased dependence on outside foundries, financial instability or insolvency proceedings affecting some of those foundries, and associated litigation involving us in some cases; industry and/or company overcapacity or undercapacity, including capacity constraints of our independent assembly contractors; the success of our customers' end products and timely design acceptance by our customers; timely introduction of new products and technologies (including, for example, our XSense® and new maXTouch® products) and implementation of new manufacturing technologies; our ability to ramp new products into volume production; our reliance on non-binding customer forecasts and the absence of long-term supply contracts with most of our customers; financial stability in foreign markets and the impact or volatility of foreign exchange rates; unanticipated changes in environmental, health and safety regulations; our dependence on selling through independent distributors; the complexity of our revenue recognition policies; information technology system failures; business interruptions, natural disasters or terrorist acts; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; the market price or increased volatility of our common stock; disruptions in the availability of raw materials; compliance with U.S. and international laws and regulations by us and our distributors; our dependence on key personnel; our ability to protect our intellectual property rights; litigation (including intellectual property litigation in which we may be involved or in which our customers may be involved, especially in the mobile device sector), and the possible unfavorable results of legal proceedings; and other risks detailed from time to time in Atmel's SEC reports and filings, including our Form 10-K for the year ended December 31, 2013, filed on February 28, 2014. Atmel assumes no obligation and does not intend to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:   
Peter Schuman
Senior Director, Investor Relations
(408) 437-2026                            

                               


ATMEL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)






















Three Months Ended


Nine Months Ended


September 30, 


June 30, 


September 30, 


September 30, 


September 30, 


2014


2014


2013


2014


2013











Net revenue

$            374,485


$  355,534


$            356,268


$        1,067,380


$        1,033,227











Operating expenses










Cost of revenue

197,642


194,296


212,801


589,309


610,530

Research and development

69,917


70,082


66,790


209,751


202,460

Selling, general and administrative

65,324


64,783


55,793


194,186


178,282

Acquisition-related charges

7,162


1,497


1,685


10,287


5,699

Restructuring charges (credits)

840


(1,583)


8,149


(967)


51,545

Recovery of receivables from foundry suppliers

-


-


-


-


(522)

Gain on sale of assets

-


-


-


-


(4,430)

Settlement charges

-


-


-


-


21,600

Total operating expenses

340,885


329,075


345,218


1,002,566


1,065,164

Income (loss) from operations

33,600


26,459


11,050


64,814


(31,937)











Interest and other (expense) income, net

(4,731)


(1,202)


1,414


(5,856)


1,028

Income (loss) before income taxes

28,869


25,257


12,464


58,958


(30,909)

(Provision for) benefit from income taxes

(11,619)


(6,021)


(7,038)


(20,306)


1,644

Net income (loss)

$              17,250


$    19,236


$                 5,426


$              38,652


$            (29,265)











Basic net income (loss) per share:










Net income (loss) per share

$                   0.04


$         0.05


$                   0.01


$                   0.09


$                 (0.07)

Weighted-average shares used in basic net income (loss) per share calculations

418,954


421,090


426,621


421,791


427,944

Diluted net income (loss) per share:










Net income (loss) per share

$                   0.04


$         0.05


$                   0.01


$                   0.09


$                 (0.07)

Weighted-average shares used in diluted net income (loss) per share calculations

420,964


422,834


429,639


423,700


427,944


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