Revenue for the first quarter of 2013 was $329.1 million, a 5% decrease compared to $345.1 million for the fourth quarter of 2012, and 8% lower compared to $357.8 million for the first quarter of 2012. Adjusting for the Serial Flash divestiture that occurred in September 2012, first quarter 2013 revenue decreased 4% sequentially and declined 5% from the first quarter of the prior year.

GAAP net loss totaled $(47.7) million or $(0.11) per diluted share for the first quarter of 2013, principally as a result of a $42.8 million charge incurred primarily for restructuring activities and  $21.6 million of legal-related settlement charges. These charges were offset by a gain on the sale of our Serial Flash product line of $4.4 million. This compares to GAAP net loss of $(12.3) million or $(0.03) per diluted share for the fourth quarter of 2012, and GAAP net income of $20.4 million or $0.05 per diluted share for the first quarter of 2012.

Non-GAAP net income for the first quarter of 2013 totaled $13.6 million or $0.03 per diluted share, compared to non-GAAP net income of $29.4 million or $0.07 per diluted share in the fourth quarter of 2012, and non-GAAP net income of $35.3 million or $0.08 per diluted share for the year-ago quarter. Refer to the non-GAAP reconciliation table included in this release for more details.

GAAP gross margin was 39.9% in the first quarter of 2013, compared to 38.1% in the fourth quarter of 2012 and 42.6% in the first quarter of 2012. Non-GAAP gross margin was 40.5% in the first quarter of 2013 as compared to 41.6% in the immediately preceding quarter and 43.2% in the first quarter of 2012.

"Improving business conditions, a healthier backlog, and our strong product portfolio provide us increased confidence moving forward this year," said Steve Laub, Atmel's President and Chief Executive Officer. "We are making good progress enhancing our cost structure which we expect to materially benefit our long-term margin profile."

First quarter 2013 loss from operations on a GAAP basis was $(62.4) million or 19.0% of revenue, compared to loss from operations of $(13.2) million or 3.8% of revenue for the fourth quarter of 2012 and income from operations of $25.0 million or 7.0% of revenue for the first quarter of 2012. First quarter 2013 loss from operations was adversely affected by $42.8 million of charges incurred primarily for restructuring activities, legal-related settlement charges of $21.6 million and $2.3 million in acquisition-related charges. These charges were offset by a gain on the sale of our Serial Flash product line of $4.4 million. In comparison, 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, and first quarter 2012 income from operations included a $10.7 million benefit from the release of reserves related to a previously received R&D grant and $2.0 million in acquisition-related charges.

Non-GAAP income from operations in the first quarter of 2013 was $14.2 million or 4.3% of revenue, compared to fourth quarter non-GAAP income from operations of $33.3 million or 9.7% of revenue, and first quarter 2012 non-GAAP income from operations of $35.6 million or 9.9% of revenue.    Refer to the non-GAAP reconciliation table included in this release for more details.

Income tax benefit, on a GAAP basis, totaled $14.4 million for the first quarter of 2013. This compares to a benefit from income taxes of $2.2 million for the fourth quarter of 2012 and a provision for income taxes of $4.3 million for the first quarter of 2012.  Non-GAAP provision for income taxes for the first quarter of 2013 was $1.0 million compared to non-GAAP income tax provisions of $2.6 million for the fourth quarter of 2012 and $0.1 million for the first quarter of 2012.

Cash used in operations totaled approximately $12.0 million for the first quarter of 2013, compared to cash provided by operations of $78.7 million for the fourth quarter of 2012 and $60.6 million for the first quarter of 2012. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $244.8 million at the end of the first quarter of 2013, a decrease of $51.2 million from the immediately preceding quarter. The decrease in cash balances during the first quarter of 2013 resulted principally from payments for two acquisitions, a prepayment made to Conductive Inject Technologies to support XSense™ production, timing of vendor payables and customer receivables and common stock repurchases.

Company Highlights

• Samsung selects Atmel's low-power sensor hub solution for the Galaxy S4 smartphone
• Atmel expands smart energy portfolio with acquisition of IDT's smart metering product lines and technology
• Atmel's ultra-low power Wi-Fi solution chosen for next-generation Roku remote control
• Launched a new ultra-low power 802.15.4 transceiver with ranging capability for industrial and consumer applications
• Three new two-channel solid state lighting LED drivers launched for color control for two-color LED light engines
• Introduced maXTouch® T Series, next-generation single-chip controller family for large screen devices
• New product introductions featuring maXTouch include smartphones, Android and Windows 8 tablets, Ultrabooks, GPS devices and smart remote controls
• Expanded third-party ecosystem of tools and software partners for ARM® Cortex®-A5 processor-based family of products
• Launched new hardware and software tools platform to further simplify microcontroller design process

Stock Repurchase
During the first quarter of 2013, Atmel repurchased 2.4 million shares of its common stock in the open market at an average price of $6.52 per share.

Non-GAAP Metrics
Non-GAAP net income excludes charges related to losses on purchase commitments relating to take-or-pay supply agreements, losses (gains) relating to receivables from a foundry supplier, restructuring activities, settlement charges, charges associated with acquisitions, gain or loss on sale of assets, credit from reserved grant income, share-based compensation, as well as the non-GAAP income tax adjustment 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 first quarter 2013 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 24392766 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 May 1, 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 24392766.

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.

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