Micrel Reports 2010 Fourth Quarter and Full Year-End Financial Results

(PRNewswire) —

  • Fourth quarter revenues of $75.6 million; GAAP EPS of $0.22 per diluted share
  • Full year revenues of $297.4 million, compared to $218.9 million in 2009, or 36 percent growth compared to 2009
  • Full year GAAP EPS of $0.81 per diluted share, compared to $0.26 per diluted share in 2009, or 212 percent growth compared to 2009
  • Fourth quarter gross margin of 55.8 percent
  • Full year gross margin of 57 percent
  • Year-end cash and short term investment balance of $109.2 million; Fourth quarter cash flows from operating activities of $14.3 million
  • Re-purchased 0.3 million shares for $2.9 million during the fourth quarter and 1.6 million shares for $16.1 million during the full year
  • Aggregate dividends to shareholders in 2010 of $8.6 million for an average yield of 1.3 percent

Micrel, Incorporated (Nasdaq: MCRL), an industry leader in analog, high bandwidth communications and Ethernet IC solutions, today announced financial results for the fourth quarter and full year ended December 31, 2010.

Fourth quarter revenues of $75.6 million were within the Company's expected range and decreased by $5.0 million, or 6.2 percent, from $80.6 million in the third quarter of 2010.  The sequential decrease in revenues was primarily due to lower demand in the computer and communications end markets.  Compared to the same period last year, revenues were higher by $14.4 million, or 23.5 percent, due to higher overall demand from customers in most geographies and end markets.  This is reflective of the Company's successful initiatives to penetrate new high-growth markets, the release of a significant number of new products that are gaining market traction, an expanded sales force, solid operational execution and improved macro-economic conditions.

Fourth quarter 2010 GAAP net income of $13.7 million, or $0.22 per diluted share, compares to third quarter 2010 GAAP net income of $14.9 million, or $0.24 per diluted share, and GAAP net income of $4.1 million, or $0.07 per diluted share in the same period in 2009.  Fourth quarter 2010 non-GAAP net income of $14.5 million, or $0.23 per diluted share, compares to third quarter 2010 non-GAAP net income of $15.7 million, or $0.25 per diluted share, and non-GAAP net income of $8.7 million, or $0.14 per diluted share in the same period in 2009.  A reconciliation of the GAAP net income to non-GAAP net income is provided in the financial tables of this press release.  Non-GAAP results exclude the impact of stock-based compensation expense, equipment impairment charges, proxy contest expenses, and the related tax effects.

For the year ended December 31, 2010, revenue was $297.4 million, compared to revenue of $218.9 million in 2009.  GAAP net income for 2010 was $50.7 million, or $0.81 per diluted share, compared with GAAP net income of $16.3 million, or $0.26 per diluted share in 2009.  Non-GAAP net income in 2010 was $53.8 million, or $0.85 per diluted share, compared with non-GAAP net income of $22.9 million, or $0.36 per diluted share in 2009.  Gross margins for 2010 were 57% compared to 52% in 2009.  

"Micrel generated solid fourth quarter results as both revenues and earnings per share were within our expected range," commented Ray Zinn, President and CEO of Micrel.  "With the recovery of the semiconductor industry essentially complete, customer demand moderated in the fourth quarter.  Fourth quarter bookings seasonally declined from the third quarter levels, resulting in a book-to-bill ratio below one for the quarter.  However, the Company's book-to-bill remained above one for the full year consistent with bookings being unusually high due to long lead times in the first half followed by softer demand and shorter (more normal) lead times in the second half."

"These fourth quarter results wrapped up an excellent year for Micrel.  On an annual basis, earnings per diluted share was at an all-time record while revenues and net income were both at the second highest level in the history of the Company.  I remain pleased with our operational execution as full year gross margin of 57 percent increased substantially from the prior year.  Our full year operating margin of 25.2 percent was at the highest level in a decade.  Importantly, operating income and net income continued to grow much faster than our revenue growth rate, reflecting our focus on controlling costs and the operating leverage inherent our business model.  The strong financial and operational performance we delivered in 2010 has enabled us to further improve Micrel's balance sheet.  Cash, cash equivalents and short term investments increased more than 50 percent during the year to $109 million and cash flows from operating activities of $73 million in 2010 nearly doubled compared to the prior year.  Our strong balance sheet continues to provide Micrel with significant financial flexibility to enhance long-term shareholder value.  In addition to maintaining our quarterly cash dividend, during 2010, we repurchased 1.6 million shares of Micrel common stock for a total of $16.1 million."


Zinn continued, "Looking ahead, the higher than anticipated demand we experienced in the first half of 2010 and the resulting inventory build is expected to impact demand from our customers early in 2011.  As a result, we anticipate the sequential decrease in revenues normally experienced in the first quarter will likely be more pronounced in 2011.  However, we are pleased with the record number of new products we introduced last year.  Design wins in 2010 were up significantly compared to the prior year and we are happy with the traction our products are generating in popular consumer devices such as smart phones and tablets.  With the exception of the slower start in the first quarter, overall, we expect that 2011 will be another good year for Micrel."

Based upon current backlog levels and demand estimates, the Company projects first quarter 2011 revenues will be lower by a range of 2 percent to 6 percent on a sequential basis.  Gross profit margin is expected to be approximately 56 percent.  In addition, the Company estimates that first quarter 2011 GAAP net income will be approximately $0.17 to $0.19 per diluted share.


The Company announced today that Micrel's Board of Directors has authorized a quarterly cash dividend of $0.035 per share of common stock.  The payment of this dividend will be made on February 23, 2011, to shareholders of record as of February 9, 2011.

Conference Call

The Company will host a conference call at 4:30 p.m. eastern time (1:30 p.m. Pacific time), on January 27, 2011.  Chief Executive Officer Raymond Zinn and Chief Financial Officer Ray Wallin will present an overview of the 2010 fourth quarter and full year financial results; discuss current business conditions and then respond to questions.

The call is available, live, to any interested party on a listen only basis by dialing 877-941-1465.  For international callers, please dial 480-629-9644.  Interested callers should dial in at least five minutes before the scheduled start time and ask to be connected to the Micrel, Incorporated Conference Call.  A live webcast will also be available through www.investorcalendar.com.  An audio replay of the conference call will be available through February 3, 2011, by dialing 800-406-7325 or 303-590-3030, and entering access code number 4402938.  The webcast replay will also be available on the Company's website at: http://www.micrel.com .

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