Atmel Reports Fourth Quarter and Full Year 2009 Financial Results

Microcontroller Revenues Grew 16% Sequentially

SAN JOSE, Calif., Feb. 8 — (PRNewswire) — Atmel® Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced financial results for the fourth quarter and full year ended December 31, 2009.

Revenues for the fourth quarter of 2009 were $343.6 million, an 8% increase compared to $317.7 million for the third quarter of 2009, and a 3% increase compared to $334.6 million for the fourth quarter ended December 31, 2008. For the full year 2009, revenues were $1.22 billion, compared to $1.57 billion for 2008, a 22% decrease.

Net loss, on a GAAP basis, totaled $76.9 million or a loss of $0.17 per diluted share for the fourth quarter of 2009 and included an asset impairment charge of $79.8 million. This compares to a net loss of $17.5 million or a loss of $0.04 per diluted share for the third quarter of 2009 and a net loss of $24.4 million or a loss of $0.05 per diluted share for the year-ago quarter. For the full year, net loss was $103.2 million or a loss of $0.23 per diluted share, compared to a net loss of $27.2 million or a loss of $0.06 per diluted share for 2008.

Non-GAAP net income for the fourth quarter of 2009 totaled $17.6 million or $0.04 per diluted share compared to non-GAAP net loss of $4.0 million or $0.01 per diluted share for the third quarter of 2009, and non-GAAP net income of $4.8 million or $0.01 per diluted share for the year-ago quarter. For the full year, non-GAAP net income was $33.1 million or $0.07 per diluted share, compared to $78.0 million or $0.17 per diluted share for 2008.

Gross profit, as a percent of revenue, was 37.0% for the fourth quarter of 2009. This compares to gross profit of 31.1% for the third quarter of 2009 and 39.7% for the year-ago quarter. The sequential gross profit improvement was the result of increased factory utilization levels and an improved mix of higher margin microcontroller products during the quarter. For the full year, gross profit was 33.9%, compared to 37.7% for 2008.

"We are pleased to have delivered revenue growth and gross profit expansion that exceeded the upper end of our guidance range this quarter, as demand strengthened and factory utilizations improved," said Steve Laub, Atmel's President and Chief Executive Officer. "Microcontroller sales of 8- and 32-bit products, as well as our capacitive touch solutions, grew strongly as we continued to outperform the market. Based on our solid design win momentum and booking activity we are excited about the outlook for 2010, particularly for our microcontroller and touch products."

Loss from operations for the fourth quarter of 2009 was $71.8 million, which included an asset impairment charge of $79.8 million. This compares to a loss from operations of $14.7 million for the third quarter of 2009 and $18.2 million for the year-ago quarter. For the full year, loss from operations was $124.6 million, compared to $13.9 million for 2008.

Stock-based compensation expense was $10.7 million for the fourth quarter of 2009, compared to $7.6 million for the third quarter of 2009 and $9.1 million for the year-ago quarter. For the full year, stock-based compensation totaled $30.1 million, compared to $29.1 million for 2008.

Income tax provision totaled $4.2 million for the fourth quarter of 2009. This compares to an income tax provision of $0.4 million for the third quarter of 2009 and a provision of $3.5 million for the fourth quarter of 2008. For the full year, income tax benefit was $32.9 million, primarily due to certain foreign R&D credits that the Company realized in the first and second quarters of 2009. This compares to an income tax provision of $7.0 million for 2008.

In the fourth quarter of 2009, the Company recorded an out-of-period expense of $4.8 million for tax reserves related to withholding tax on deemed dividends associated with certain foreign intercompany loans.

Cash provided from operations totaled approximately $55.2 million for the fourth quarter of 2009, compared to $59.4 million for the third quarter of 2009 and $33.7 million for the fourth quarter of 2008.   Combined cash balances (cash and cash equivalents plus short-term investments) totaled $476.1 million at the end of the fourth quarter of 2009, an increase of $30.0 million from the end of the prior quarter.  During 2009, the Company repaid $45.0 million of its revolving credit facility.

The Company's effective average exchange rate in the fourth quarter of 2009 was approximately $1.48 to the euro, compared to $1.41 to the euro in the third quarter of 2009 and $1.35 to the euro in the year-ago period. A $0.01 increase in the dollar/euro exchange rate decreases operating income by approximately $0.2 million each quarter.

Fourth Quarter 2009 Operational Highlights

  • Revenues increased 8% sequentially, exceeding guidance of 3% to 7%
  • Microcontroller revenues grew 16% sequentially
  • Gross margins increased from 31% to 37% sequentially
  • Announced exclusive negotiations for the proposed sale of Atmel's Rousset wafer fab to LFoundry GmbH
  • Completed comprehensive review of strategic alternatives for the ASIC business and concluded that the Company will continue to explore the potential sale of the Smart Card (SMS) business and discontinue potential sale discussions for its Customer Specific Products (CSP) and Aerospace businesses

Recent Product Highlights

  • Recognized in EDN's Hot Products of 2009 for the maXTouch Touchscreen Controller
  • Named CES Innovations 2010 Design and Engineering Honoree for Capacitive Touchscreen Controller
  • Selected in EE Times Top 10 Best Products of 2009 for the SAM3U Flash MCU
  • Delivered Complete, Easy-to-Use Capacitive Touch Development Suite for AVR Microcontrollers
  • Received ZigBee RF4CE Platform Certification Using ATmega128RFA1
  • Introduced Low-Power, Single-Chip Wireless Microcontroller Family for Growing IEEE 802.15.4 Market

Non-GAAP Metrics

Non-GAAP net (loss) income excludes charges related to restructuring activities, acquisitions, grant repayments, asset impairment charges, pension benefit related to fab sale, gain on sale of assets, and stock-based compensation, as well as distributor bad debt recovery, unsolicited M&A expense and the income tax effect of these excluded 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 2:00 p.m. PT today to discuss the fourth quarter 2009 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405 or 1-706-634-5185. The conference ID number is 53447931 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2:00 p.m. PT start time to ensure a timely connection. The webcast can be accessed at http://www.atmel.com/ir/ and will be archived for 12 months.

A replay of the conference call will be available today at approximately 5:00 p.m. PT and will run for 48 hours. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations. The access code is 53447931.

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