Company reports Q1 Net Income of $9.2 Million, or $0.02 per diluted share
Revenues for the first quarter of 2006 totaled $436.8 million, a sequential increase of 2.8% compared to the $425.2 million reported in the fourth quarter of 2005, and a 4.0% increase compared to the $419.8 million reported in the first quarter of 2005. Net income for the first quarter of 2006 totaled $9.2 million or $0.02 per diluted share and included $3.4 million of stock-based compensation expense due to the implementation of SFAS 123(R), effective January 1, 2006. These results compare to a net income of $53.8 million (including a $43.1 million arbitration award) or $0.11 per share for the fourth quarter of 2005, and a net loss of $43.0 million or $0.09 per share for the first quarter of 2005.
"We are very pleased to have delivered another quarter of strong financial results highlighted by revenue growth and positive earnings momentum," stated George Perlegos, Atmel's President and Chief Executive Officer. "For the first quarter, we saw record shipments of our proprietary AVR(R) microcontroller as we introduced our new 32-bit and picoPower(R) AVR architecture."
"Continuing to build on our balance sheet strength during the quarter, our cash and short-term investments position improved by $50 million while we reduced total liabilities by $7 million," said Robert Avery, Atmel's Vice President Finance and Chief Financial Officer. "Our goal is to continue to achieve sustainable and profitable growth in those areas that build on our core strengths in microcontrollers, RF and security."
Outlook
The Company anticipates that for the second quarter of 2006, revenues should be up 1 to 3% on a sequential basis. Gross margins should be in the range of 31 to 33%. Additionally, R&D expense should be approximately $71 to $73 million, while SG&A expense should be between $48 and $50 million. Stock- based compensation, expected to total about $3 million, is included in these estimates. Net interest expense for the second quarter should be approximately $3 million, while the income tax provision should be in the range of $5 to $7 million. Depreciation and amortization is expected to be $58 to $60 million.
Teleconference
Atmel will hold a teleconference for the financial community at 2:00 p.m. PDT today to discuss first quarter financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405. The conference ID number is 7700382 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2 p.m. PDT start time to ensure a timely connection. The webcast link is located at http://www.atmel.com/ir/ and will be archived for 12 months.
A replay of the April 25 conference call will be available the same day at approximately 5:00 p.m. PDT 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 passcode is 7700382.
Information in this release regarding Atmel's forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about Atmel's expected second quarter 2006 operating results, including revenues, gross margins, operating expenses, demand levels and market conditions. 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, and we assume no obligation to update any such forward-looking statement. 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 the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets, and other risks detailed from time to time in Atmel's SEC reports and filings, including our Form 10-K, filed on March 16, 2006 and subsequent Form 10-Q reports.
Contact: Robert Pursel, Director of Investor Relations, 408-487-2677
Atmel Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2006 2005
Net revenues $436,784 $419,777
Operating Expenses
Cost of revenues 295,498 332,775
Research and development 70,698 68,721
Selling, general and administrative 47,166 52,316
Restructuring charges 202 --
Total operating expenses 413,564 453,812
Income (loss) from operations 23,220 (34,035)
Interest and other (expenses), net (6,375) (3,923)
Income (loss) before income taxes 16,845 (37,958)
Provision for income taxes (7,606) (5,063)
Net income (loss) $9,239 ($43,021)
Basic net income (loss) per share $0.02 ($0.09)
Diluted net income (loss) per share $0.02 ($0.09)
Shares used in basic net income (loss)
per share calculation 485,575 479,609
Shares used in diluted net income (loss)
per share calculation 490,819 479,609
Atmel Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2006 2005
Current assets
Cash and cash equivalents $343,400 $300,323
Short-term investments 54,774 47,932
Accounts receivable, net 253,261 235,341
Inventories 316,730 309,702
Other current assets 93,654 105,407
Total current assets 1,061,819 998,705
Fixed assets, net 862,427 890,948
Intangible and other assets 36,533 37,692
Total assets $1,960,779 $1,927,345
Current liabilities
Current portion of long-term debt $104,783 $112,107
Convertible notes 144,085 142,401
Trade accounts payable 150,009 140,717
Accrued and other liabilities 207,512 201,398
Deferred income on shipments to distributors 19,643 18,345
Total current liabilities 626,032 614,968
Long-term debt less current portion 116,873 133,184
Convertible notes less current portion 299 295
Other long-term liabilities 236,838 238,607
Total liabilities 980,042 987,054
Stockholders' equity 980,737 940,291
Total liabilities and stockholders'
equity $1,960,779 $1,927,345
