February 6, 2013

Atmel Reports Fourth Quarter and Full Year 2012 Financial Results

SAN JOSE, Calif., Feb. 6, 2013 /PRNewswire/ -- Atmel® Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced financial results for its fourth quarter ended December 31, 2012.  

(Logo: http://photos.prnewswire.com/prnh/20120712/MM39691LOGO)

   

GAAP

     

Non-GAAP

 

Q4 2012

Q3 2012

Q4 2011

   

Q4 2012

Q3 2012

Q4 2011

Net revenue

$345.1

$361.0

$383.6

   

$345.1

$361.0

$383.6

Gross margin

38.1%

43.1%

48.1%

   

41.6%

43.7%

48.7%

Operating margin

(3.8)%

7.6%

12.8%

   

9.7%

12.7%

17.9%

Net (loss) income

$(12.3)

$21.6

$32.9

   

$29.4

$43.0

$67.5

Diluted EPS

$(0.03)

$0.05

$0.07

   

$0.07

$0.10

$0.14

 

(In millions, except earnings per share data and percentages)


 

  

 

 

 

 

 


 

Revenue for the fourth quarter of 2012 was $345.1 million, a 4% decrease compared to $361.0 million for the third quarter of 2012, and 10% lower compared to $383.6 million for the fourth quarter of 2011.  Fourth quarter results for 2012 exclude the Serial Flash product families divested at the end of the third quarter of 2012.  Adjusting for the Serial Flash divestiture, fourth quarter revenue decreased 2% sequentially and declined 8% from the fourth quarter of the prior year.  For the full year 2012, revenue of $1.43 billion decreased 21% compared to $1.80 billion for 2011. Adjusting for the Serial Flash divestiture, full year 2012 revenue decreased 19% from 2011. 

GAAP net loss totaled $(12.3) million or $(0.03) per diluted share for the fourth quarter of 2012, principally as a result of a $10.6 million loss incurred on purchase commitments relating to a take-or-pay supply agreement, $11.0 million of charges incurred primarily for restructuring activities, and a $6.5 million write-off of receivables from a foundry supplier. This compares to GAAP net income of $21.6 million or $0.05 per diluted share for the third quarter of 2012, and $32.9 million or $0.07 per diluted share for the fourth quarter of 2011.  For the full year of 2012, GAAP net income was $30.4 million or $0.07 per diluted share, compared to GAAP net income of $315.0 million or $0.68 per diluted share for 2011.

Non-GAAP net income for the fourth quarter of 2012 totaled $29.4 million or $0.07 per diluted share, compared to non-GAAP net income of $43.0 million or $0.10 per diluted share in the third quarter of 2012, and non-GAAP net income of $67.5 million or $0.14 per diluted share for the year-ago quarter.  For the full year 2012, non-GAAP net income was $145.1 million or $0.32 per diluted share, compared to $438.0 million or $0.92 per diluted share for 2011.  Refer to the non-GAAP reconciliation table included in this release for more details.

GAAP gross margin was 38.1% in the fourth quarter of 2012, compared to 43.1% in the third quarter of 2012 and 48.1% in the fourth quarter of 2011. For the full year 2012, GAAP gross margin was 42.0%, compared to 50.4% for 2011.  Non-GAAP gross margin was 41.6% in the fourth quarter of 2012 as compared to 43.7% in the immediately preceding quarter and 48.7% in the fourth quarter of 2011. Non-GAAP gross margin excludes a $10.6 million loss on purchase commitments relating to a take-or-pay supply agreement and stock-based compensation expense.  For the full year 2012, non-GAAP gross margin was 43.3% compared to 50.8% for 2011.

"Our microcontroller business grew four consecutive quarters in what was a challenging year for the semiconductor industry," said Steve Laub, Atmel's President and Chief Executive Officer. "As we enter 2013, we are well positioned with multiple growth opportunities to drive our revenue, while we remain committed to improving our cost structure which should result in improved earnings growth and cash flow generation."

Fourth quarter 2012 loss from operations on a GAAP basis was $(13.2) million or (3.8)% of revenue, compared to income from operations of $27.4 million or 7.6% of revenue for the third quarter of 2012 and $49.0 million or 12.8% of revenue for the fourth quarter of 2011. Fourth quarter 2012 loss from operations was adversely affected by a $10.6 million loss incurred on purchase commitments relating to a take-or-pay supply agreement, $11.0 million of charges incurred primarily for restructuring activities, a $6.5 million write-off of receivables from a foundry supplier, and $1.9 million in acquisition related charges.  In comparison, third quarter 2012 income from operations included a $1.4 million credit to restructuring charges and $1.5 million in acquisition related charges, and fourth quarter 2011 income from operations included a $1.1 million restructuring credit and $2.3 million in acquisition related charges.  The 2012 GAAP full year income from operations was $47.4 million compared to $382.0 million for 2011.

Non-GAAP income from operations in the fourth quarter of 2012 was $33.3 million or 9.7% of revenue, compared to third quarter non-GAAP income from operations of $45.8 million or 12.7% of revenue, and fourth quarter 2011 non-GAAP income from operations of $68.7 million or 17.9% of revenue.  For the full year 2012, non-GAAP income from operations was $157.6 million compared to $440.3 million for 2011.  Refer to the non-GAAP reconciliation table included in this release for more details.

Income tax benefit, on a GAAP basis, totaled $2.2 million for the fourth quarter of 2012. This compares to a provision for income taxes of $5.9 million for the third quarter of 2012 and a provision for income taxes of $14.4 million for the fourth quarter of 2011.  Non-GAAP provision for income taxes for the fourth quarter of 2012 was $2.6 million compared to $2.9 million for the third quarter of 2012 and a non-GAAP income tax benefit of $0.5 million for the fourth quarter of 2011. For the full year 2012, the non-GAAP tax provision was $7.4 million compared to $1.5 million for 2011.

Cash provided from operations totaled approximately $78.7 million for the fourth quarter of 2012, compared to $53.6 million for the third quarter of 2012 and $43.4 million for the fourth quarter of 2011. For calendar 2012, operating cash flow exceeded $200 million. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $296.1 million at the end of the fourth quarter of 2012, an increase of $6.9 million from the immediately preceding quarter.

Company Highlights

  • Acquired Ozmo, Inc., a leader in ultra-low power Wi-Fi solutions
  • Atmel and Celeno Communications collaborate on Wi-Fi Direct remote controls for consumer products
  • Atmel introduced new family of ARM® Cortex™-A5 processor-based MPUs for embedded industrial and consumer applications
  • Expanded ARM® Cortex™-M4 processor-based Flash family to include the SAM4E Series, featuring advanced  connectivity peripherals, a floating point unit, advanced analog capabilities, and higher processing power
  • Introduced  new ATmegaRFR2 AVR® family of devices, offering industry's lowest power wireless microcontrollers for 2.4GHz industrial, scientific, and medical band (ISM) applications
  • Joined G3-PLC Alliance, expanding development in standards-based smart grid communications
  • Atmel and Wasion Group signed memorandum of understanding to develop PRIME power line communication solutions for smart metering
  • ASUS selected XSense™ touch sensor for their next-generation tablet
  • Demonstrated XSense with curved and ultra-thin 0.55mm Corning® Gorilla® Glass
  • Won 2013 CES Innovations Award for XSense
  • Expanded Atmel maXTouch® S family of touchscreen controllers with mXT540S
  • Google selected maXTouch to power the touchscreen Nexus 10"Android tablet
  • Windows 8 tablets and Ultrabooks featuring maXTouch include:  ASUS' Vivo Tab, Vivo Tab RT, X202E, S400, and S56, Bluebird's Pidion BP80 tablet, DELL's XPS10,  XPS 12 Convertible Touch Ultrabook and Inspiron 15z, Fujitsu's Arrows Tab QH55, HP's Envy, Envy X2, and Spectre XT TouchSmart Ultrabook,  Lenovo's Think Pad Tablet 2 and X230, LG's H160 and Z160 Tab-Books, Samsung's ATIV Tab RT, Series 5 Slate, and Series 7 Slate, and Toshiba's 925t
  • Recent smartphone introductions with maXTouch inside include: Samsung's I9105 Galaxy S II Plus, SCH-W889, and GT-B9388, Nokia's Lumia 510 and 620, Kyocera's Digno S, Sharp's Aquos SH930W, Fujitsu's F-03E Arrows Kiss, Gionee's GN700W, Meizu's MX2 and Xiaomi's MI2 
  • Introduced new LIN family for automotive switch scan and ambient lighting applications
  • Launched industry's first integrated app store and collaboration workspace for embedded microcontroller designers in Atmel Studio 6

 

Stock Repurchase
During the fourth quarter of 2012, Atmel repurchased 3.3 million shares of its common stock in the open market at an average price of $4.87 per share.

Non-GAAP Metrics
Non-GAAP net income excludes charges related to losses on purchase commitments relating to the take-or-pay supply agreements, losses relating to receivables from a foundry supplier, restructuring activities, charges associated with acquisitions, gain or loss on sale of assets, credit from reserved grant income, stock-based compensation, as well as the non-GAAP income tax adjustments 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 2:00 p.m. PT today to discuss the fourth quarter 2012 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405 or 1-706-758-4519. The conference ID number is 84526682 and participants are encouraged to initiate their calls 10 minutes prior to the 2:00 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 February 6, 2013 conference call will be available the same day at approximately 5:00 p.m. PT and will be archived for 48 hours. The replay access numbers are 1-800-585-8367 within the U.S. and 1-404-537-3406 for all other locations. The access code is 84526682.

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 complete system solutions focused on industrial, consumer, communications, computing and automotive markets.

© 2013 Atmel Corporation. Atmel®, Atmel logo and combinations thereof, and others are registered trademarks or trademarks of Atmel Corporation or its subsidiaries. Other terms and product names may be trademarks of others.

Safe Harbor for Forward-Looking Statements
Information in this release regarding Atmel's forecasts, business outlook, expectations, new product launches, and beliefs 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 2013 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 conditions (especially in Europe and Asia); 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 and the financial instability of those foundries 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 maXTouch® products); 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 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 and terrorist acts; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; the market price or 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, 2011, filed on February 28, 2012, and our subsequent Form 10-Q reports. 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
Director, Investor Relations
(408) 437-2026

Atmel Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

             
 

Three Months Ended 

 

Twelve Months Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

2012

2012

2011

 

2012

2011

             
             

Net revenue

$       345,083

$        360,990

$       383,609

 

$    1,432,110

$    1,803,053

             

Cost of revenue

213,544

205,464

198,952

 

830,791

894,820

Research and development

58,872

59,966

63,669

 

251,519

255,653

Selling, general and administrative

66,376

68,036

70,817

 

275,257

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