Micrel, Incorporated : Micrel Reports 2011 Fourth Quarter and Full Year-End Financial Results
01/26/2012| 04:05pm US/Eastern
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SAN JOSE, Calif., Jan. 26, 2012 /PRNewswire/ -- Micrel, Incorporated (Nasdaq NM: 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, 2011.
Fourth quarter revenues of $58.8 million decreased by $5.5 million, or 8.5 percent, from $64.2 million in the third quarter of 2011. The sequential decrease in revenues was primarily due to lower demand across the Company's product lines. Compared to the same period last year, revenues were lower by $16.9 million, or 22.3 percent, due to lower overall demand from customers in most geographies and end markets.
Fourth quarter 2011 GAAP net income of $5.0 million, or $0.08 per diluted share, compares to third quarter 2011 GAAP net income of $9.2 million, or $0.15 per diluted share, and GAAP net income of $13.7 million, or $0.22 per diluted share in the same period in 2010. Fourth quarter 2011 non-GAAP net income of $6.1 million, or $0.10 per diluted share, compares to third quarter 2011 non-GAAP net income of $10.2 million, or $0.16 per diluted share, and non-GAAP net income of $14.5 million, or $0.23 per diluted share in the same period in 2010. 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 and the related tax effects.
For the year ended December 31, 2011, revenue was $259.0 million, compared to revenue of $297.4 million in 2010. GAAP net income for 2011 was $34.0 million, or $0.55 per diluted share, compared with GAAP net income of $50.7 million, or $0.81 per diluted share in 2010. Non-GAAP net income in 2011 was $37.8 million, or $0.60 per diluted share, compared with non-GAAP net income of $53.8 million, or $0.85 per diluted share in 2010. Gross margin for 2011 was 55.3% compared to 56.8% in 2010.
"The moderation in orders that we began to see toward the end of our second quarter continued throughout our fourth quarter across all end markets," commented Ray Zinn, president and CEO of Micrel. "Gross margin declined in the quarter to 50.5% primarily due to a mix shift to lower margin products and lower factory capacity utilization as we attempt to reduce inventories. During the quarter, we recognized approximately $0.02 per share for income tax benefits."
"Our fourth quarter book-to-bill ratio was below one. We continue to maintain a strong balance sheet and ended the year with cash, cash equivalents and short term investments of $138 million, or $2.25 per share at the end of the fourth quarter. We repurchased approximately 762,000 shares during the quarter for a total of $7.8 million. For the full year 2011, we repurchased approximately 1.9 million shares for a total of $20.3 million."
Outlook
Zinn continued, "We believe that inventories are bottoming and are now falling below demand. Combining that with economic conditions that appear to be stabilizing, we believe that orders will rebound sometime in February or March, 2012. With that in mind, we have revised our semiconductor industry growth projections for 2012 to be flat or up slightly depending on the strength of the economic growth in the second half of 2012."
Currently, we estimate revenues for the first quarter of 2012 will be in the range of flat to up 4%. EPS is expected to be in the range of $0.04 to $0.07 per diluted share. Gross profit margin is expected to be approximately 50% to 51.0%.
Dividend
The Company announced today that Micrel's Board of Directors has authorized a quarterly cash dividend of $0.04 per share of common stock. The payment of this dividend will be made on February 22, 2012, to shareholders of record as of February 8, 2012.
Conference Call
The Company will host a conference call at 4:30 p.m. eastern time (1:30 p.m. Pacific time), on January 26, 2012. Chief Executive Officer Raymond Zinn and Chief Financial Officer Ray Wallin will present an overview of the fourth quarter 2011 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 (866) 551-3680 and entering the participant code: 95308480 followed by the # key. For international callers, please dial (212) 401-6760 and enter the participant code: 95308480 followed by the # key. A live webcast will also be available at the 'Investors' section of Micrel's website at: www.micrel.com. An audio replay of the conference call will be available through February 2, 2012 by dialing (866) 551-4520 or (212) 401-6750 and entering the participant code 279076 followed by the # key. The webcast replay will also be available on the Company's website.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about the following topics: our expectations regarding future financial results, including revenues, customer demand and inventories, order lead times, backlog, turns-fill requirements, net income, earnings per share, gross margin, average selling prices, the effect of cost-control efforts, supply chain constraints, channel inventory levels and trends, capacity utilization, development of new products, design wins and customer order patterns and the nature and extent of macro-economic and industry trends. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Those risks and uncertainties include, but are not limited to, such factors as: softness in demand for our products; customer decisions to cancel, reschedule, or delay orders for our products; the effect that lead times and channel inventories have on the demand for our products; economic or financial difficulties experienced by our customers; the effect of business conditions in the computer, wireless, telecommunications and industrial markets; the impact of any previous or future acquisitions; changes in demand for networking or high bandwidth communications products; the impact of competitive products and pricing and alternative technological advances; the accuracy of estimates used to prepare the Company's financial statements and forecasts; the global economic situation; the ability of the Company's vendors and subcontractors to supply or manufacture the Company's products in a timely manner; the timely and successful development and market acceptance of new products and upgrades to existing products; softness in the economy and the equity markets as a whole; fluctuations in the market price of Micrel's common stock and other market conditions; the difficulty of predicting our future cash needs; the nature of investment opportunities available to the Company from time to time; Micrel's operating cash flow, and economic and industry projections. For further discussion of these risks and uncertainties, please refer to the documents the Company files with the SEC from time to time, including the Company's Annual Report on Form 10-K for the year ended December 31, 2010. All forward-looking statements are made as of today, and the Company disclaims any duty to update such statements.
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. The Company's management uses non-GAAP measures on a limited basis, primarily for employee performance-based compensation. 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 stock-based compensation expense and the related tax effects. 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 analog, Ethernet and high bandwidth markets. The Company's products include advanced mixed-signal, analog and power semiconductors; high-performance communication, clock management, Ethernet switch and physical layer transceiver ICs. Company's 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. For further information, contact Ray Wallin at: Micrel, Incorporated, 2180 Fortune Drive, San Jose, California 95131, (408) 944-0800; or visit the Micrel website at: www.micrel.com
MICREL, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
September December
December 31, 30, 31, December 31,
------------ ---------- --------- ------------
2011 2011 2010 2011 2010
---- ---- ---- ---- ----
Net
revenues $58,777 $64,244 $75,637 $259,025 $297,366
Cost
of
revenues* 29,084 28,567 33,403 115,881 128,535
------ ------ ------ ------- -------
Gross
profit 29,693 35,677 42,234 143,144 168,831
------ ------ ------ ------- -------
Operating
expenses:
Research
and
development* 12,563 12,637 11,677 49,952 46,271
Selling,
general
and
administrative* 11,667 10,985 11,852 46,415 47,590
Total
operating
expenses 24,230 23,622 23,529 96,367 93,861
------ ------ ------ ------ ------
Income
from
operations 5,463 12,055 18,705 46,777 74,970
Other
income
(expense):
Interest
income 150 186 150 703 566
Interest
expense (1) - (32) (19) (223)
Other
income - 66 34 141 149
Total
other
income 149 252 152 825 492
Income
before
income
taxes 5,612 12,307 18,857 47,602 75,462
Provision
for
income
taxes 594 3,095 5,136 13,586 24,754
--- ----- ----- ------ ------
Net
income $5,018 $9,212 $13,721 $34,016 $50,708
====== ====== ======= ======= =======
Net
income
per
share:
Basic $0.08 $0.15 $0.22 $0.55 $0.82
===== ===== ===== ===== =====
Diluted $0.08 $0.15 $0.22 $0.55 $0.81
===== ===== ===== ===== =====
Shares
used
in
computing
per
share
amounts:
Basic 61,379 62,043 61,501 61,609 62,030
====== ====== ====== ====== ======
Diluted 61,938 62,465 62,559 62,371 62,557
====== ====== ====== ====== ======
*
Includes
amortization
of
stock-
based
compensation
as
follows:
Cost
of
revenues $237 $246 $209 $1,009 $798
Research
and
development 735 615 499 2,401 1,808
Selling,
general
and
administrative 707 629 580 2,444 2,119
MICREL, INCORPORATED
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
December September December
31, 30, 31, December 31,
--------- ---------- --------- ------------
2011 2011 2010 2011 2010
---- ---- ---- ---- ----
GAAP
Net
income $5,018 $9,212 $13,721 $34,016 $50,708
Adjustments
to
GAAP
Net
Income:
Stock-
based
compensation
included
in:
Cost
of
revenues 237 246 209 1,009 798
Research
and
development 735 615 499 2,401 1,808
Selling,
general
and
administrative 707 629 580 2,444 2,119
Tax
effect
of
adjustments
to
GAAP
income (600) (512) (549) (2,104) (1,657)
Total
Adjustments
to
GAAP
Net
Income 1,079 978 739 3,750 3,068
----- --- --- ----- -----
Non-
GAAP
income* $6,097 $10,190 $14,460 $37,766 $53,776
====== ======= ======= ======= =======
Non-
GAAP
shares
used
in
computing
non-
GAAP
income
per
share
(in
thousands):
Basic 61,379 62,043 61,501 61,609 62,030
====== ====== ====== ====== ======
Diluted** 62,266 62,788 62,823 62,676 62,927
====== ====== ====== ====== ======
GAAP
income
per
share
-
Basic $0.08 $0.15 $0.22 $0.55 $0.82
Total
Adjustments
to
GAAP
Net
Income 0.02 0.01 0.02 0.06 0.05
Non-
GAAP
income
per
share
-
Basic $0.10 $0.16 $0.24 $0.61 $0.87
===== ===== ===== ===== =====
GAAP
income
per
share
-
Diluted $0.08 $0.15 $0.22 $0.55 $0.81
Total
Adjustments
to
GAAP
Net
Income 0.02 0.01 0.01 0.05 0.04
Non-
GAAP
income
per
share
-
Diluted $0.10 $0.16 $0.23 $0.60 $0.85
===== ===== ===== ===== =====
* Non-GAAP results were reached by excluding the stock-based
compensation expense and related income tax effects.
Non-GAAP results are 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.
** Non-GAAP shares have been adjusted from diluted outstanding
shares calculated under ASC 718.
MICREL, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December December
31, 31,
2011 2010
---- ----
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and short-term
investments $137,875 $109,235
Accounts receivable, net 25,385 34,131
Inventories 36,286 36,709
Income taxes receivable 6,881 6,547
Deferred income taxes 22,854 25,022
Other current assets 2,883 2,718
Total current assets 232,164 214,362
LONG-TERM INVESTMENTS 6,857 12,166
PROPERTY, PLANT AND EQUIPMENT, NET 60,884 64,517
INTANGIBLE ASSETS, NET - 255
DEFERRED INCOME TAXES 8,657 9,740
OTHER ASSETS 1,413 1,413
----- -----
TOTAL $309,975 $302,453
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $17,096 $19,672
Deferred income on shipments to distributors 30,671 38,646
Current portion of Long-term debt - 2,857
Other current liabilities 9,329 11,973
Total current liabilities 57,096 73,148
LONG-TERM INCOME TAXES PAYABLE 6,450 5,664
SHAREHOLDERS' EQUITY:
TOTAL SHAREHOLDERS' EQUITY 246,429 223,641
------- -------
TOTAL $309,975 $302,453
======== ========
SOURCE Micrel, Inc
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