Microchip Technology Posts Record Net Sales for Fiscal Second Quarter 2009 (Revenue up 4%)

Use of Non-GAAP Financial Measures:

SFAS 123(R) requires us to estimate the cost of certain forms of share-based compensation, including employee stock options and awards under our employee stock purchase plan (ESPP Plan), and to record a commensurate expense in our income statement. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by market forces that are difficult to predict and are not within the control of management, such as the price of our common stock. Our sale of Fab 3 in Puyallup, Washington is a one-time event in our business. Accordingly, management excludes these items from its internal operating forecasts and models.

We are using non-GAAP profit, non-GAAP research and development expenses, non-GAAP selling, general and administration expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP diluted earnings per share, which excludes share-based compensation expense and our sale of Fab 3 in the second quarter of fiscal 2008, to permit additional analysis of our performance. Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods. Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other special charges that many investors feel may obscure our true operating costs. Management uses these non-GAAP measures to manage and assess the profitability of its business. Specifically, we do not consider share-based compensation expense when developing and monitoring budgets and spending. The economic substance behind our decision to exclude share-based compensation relates to these charges being non-cash in nature. The exclusion of our sale of Fab 3 in our non-GAAP disclosures is based on the one-time nature of this event. Our determination of the above non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for gross margin; research and development expenses; selling, general and administrative expenses; operating income; net income and diluted earnings per share determined in accordance with GAAP. There are limitations associated with using non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results.

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)

Three Months Ended
September 30,

Six Months Ended
September 30,

2008 2007 2008 2007
Net sales $ 269,706 $ 258,647 $ 537,878 $ 522,719
Cost of sales 105,553 103,935 210,128 209,462
Gross profit 164,153 154,712 327,750 313,257
Operating expenses:
Research and development 31,343 29,306 62,895 59,052
Selling, general and administrative 45,629 42,969 91,042 86,749
Special charge sale of Fab 3 - 26,763 - 26,763
76,972 99,038 153,937 172,564
Operating income 87,181 55,674 173,813 140,693
Other income, net 6,241 14,470 12,784 30,194
Income before income taxes 93,422 70,144 186,597 170,887
Income taxes 16,910 9,465 33,775 29,915
Net income $ 76,512 $ 60,679 $ 152,822 $ 140,972
Basic net income per share $ 0.42 $ 0.28 $ 0.83 $ 0.65
Diluted net income per share $ 0.41 $ 0.27 $ 0.81 $ 0.63
Basic shares used in calculation 183,615 216,797 184,139 217,432
Diluted shares used in calculation 187,936 222,004 189,493 222,806
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS

September 30,
2008

March 31,
2008

(Unaudited)
Cash and short-term investments

$

1,108,415

$

1,324,790

Accounts receivable, net 120,888 138,319
Inventories 126,835 124,483
Other current assets 130,422 130,138
Total current assets 1,486,560 1,717,730
Property, plant & equipment, net 543,122 522,305
Long-term investments 411,281 194,274
Other assets 76,021 77,998
Total assets

$

2,516,984

$

2,512,307

LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable and other accrued liabilities $ 117,972 $ 95,640
Deferred income on shipments to distributors 103,507 95,441
Total current liabilities 221,479 191,081
Convertible debentures 1,149,504 1,150,128
Long-term income tax payable 122,830 112,311
Deferred tax liability 32,941 21,460
Other long-term liabilities 1,062 1,104
Stockholders' equity 989,168 1,036,223
Total liabilities and stockholders' equity

$

2,516,984

$

2,512,307

MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)
(in thousands except per share amounts and percentages)

RECONCILIATION OF GROSS PROFIT TO NON-GAAP GROSS PROFIT

Three Months Ended
September 30,

Six Months Ended
September 30,

2008 2007 2008 2007
Gross profit, as reported $ 164,153 $ 154,712 $ 327,750 $ 313,257
Share-based compensation expense 2,053 1,493 3,678 3,083
Non-GAAP gross profit $ 166,206 $ 156,205 $ 331,428 $ 316,340
Non-GAAP gross profit percentage 61.6 % 60.4 % 61.6 % 60.5 %

RECONCILIATION OF RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES

Three Months Ended
September 30,

Six Months Ended
September 30,

2008 2007 2008 2007
Research and development expenses, as reported $ 31,343 $ 29,306 $ 62,895 $ 59,052
Share-based compensation expense (2,640 ) (2,509 ) (5,075 ) (5,095 )
Non-GAAP research and development expenses $ 28,703 $ 26,797 $ 57,820 $ 53,957
Non-GAAP research and development expenses as a percentage of net sales 10.6 % 10.4 % 10.7 % 10.3 %

RECONCILIATION OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Three Months Ended
September 30,

Six Months Ended
September 30,
2008 2007 2008 2007
Selling, general and administrative expenses, as reported $ 45,629 $ 42,969 $ 91,042 $ 86,749
Share-based compensation expense (3,800 ) (3,769 ) (7,439 ) (7,626 )
Non-GAAP selling, general and administrative expenses $ 41,829 $ 39,200 $ 83,603 $ 79,123
Non-GAAP selling, general and administrative expenses as a percentage of net sales 15.5 % 15.2 % 15.5 % 15.1 %
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
Three Months Ended
September 30,
Six Months Ended
September 30,
2008 2007 2008 2007
Operating income, as reported $ 87,181 $ 55,674 $ 173,813 $ 140,693
Share-based compensation expense 8,493 7,771 16,192 15,804
Special charge sale of Fab 3 - 26,763 - 26,763
Non-GAAP operating income $ 95,674 $ 90,208 $ 190,005 $ 183,260
Non-GAAP operating income as a percentage of net sales 35.5 % 34.9 % 35.3 % 35.1 %
RECONCILIATION OF NET INCOME AND DILUTED NET INCOME PER SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER SHARE
Three Months Ended
September 30,
Six Months Ended
September 30,
2008 2007 2008 2007
Net income, as reported $ 76,512 $ 60,679 $ 152,822 $ 140,972

Share-based compensation expense, net of tax effect

6,956 6,185 13,262 12,587
Special charge sale of Fab 3 - 16,459 - 16,459
Non-GAAP net income $ 83,468 $ 83,323 $ 166,084 $ 170,018
Non-GAAP net income as a percentage of net sales 30.9 % 32.2 % 30.9 % 32.5 %
Diluted net income per share, as reported $ 0.41 $ 0.27 $ 0.81 $ 0.63

Share-based compensation expense, net of tax effect

0.04 0.04 0.07 0.07
Special charge sale of Fab 3 0.00 0.07 0.00 0.07
Non-GAAP diluted net income per share $ 0.45 $ 0.38 $ 0.88 $ 0.77

« Previous Page 1 | 2 | 3 | 4  Next Page »



Review Article Be the first to review this article
CST: Webinar

Aldec Simulator Evaluate Now

Featured Video
Jobs
ASIC Hardware Engineer for BAE Systems Intelligence & Security at Arlington, VA
Applications Engineer for intersil at Palm Bay, FL
Acoustic Systems Test Engineer for Cirrus Logic, Inc. at Austin, TX
ASIC Design Engineer for Infinera Corp at Sunnyvale, CA
Senior PIC Test Development Engineer for Infinera Corp at Sunnyvale, CA
Upcoming Events
Essentials of Electronic Technology: A Crash Course at Columbia MD - Jan 16 - 18, 2018
Essentials of Digital Technology at MD - Feb 13 - 14, 2018
IPC APEX EXPO 2018 at San Diego Convention Center San Diego CA - Feb 24 - 1, 2018
CST: Webinar series



Internet Business Systems © 2017 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise