GAAP net income totaled $4.5 million or $0.01 per diluted share for the fourth quarter of 2013. This compares to $5.4 million or $0.01 per diluted share for the third quarter of 2013, and a loss of $(12.3) million or $(0.03) per diluted share for the fourth quarter of 2012. GAAP net income for the fourth quarter 2013 was reduced by discrete tax expenses of $23.2 million primarily related to reserves established for non-U.S. tax audits. For the full year of 2013, GAAP net loss was $(24.8) million or $(0.06) per diluted share, compared to GAAP net income of $30.4 million or $0.07 per diluted share for 2012.
GAAP gross margin was 42.7% in the fourth quarter of 2013, which included a $2.2 million loss resulting from facility damage and an unplanned manufacturing shutdown at our Colorado Springs plant. This compares to GAAP gross margin of 40.3% for the third quarter of 2013, which included an $8.9 million loss related to a foundry arrangement, and 38.1% for the fourth quarter of 2012. For the full year 2013, GAAP gross margin was 41.4%, compared to 42.0% for 2012.
Non-GAAP net income for the fourth quarter of 2013 totaled $43.6 million or $0.10 per diluted share, compared to $37.7 million or $0.09 per diluted share in the third quarter of 2013, and $29.4 million or $0.07 per diluted share for the year-ago quarter. For the full year 2013, non-GAAP net income was $120.2 million or $0.27 per diluted share, compared to $145.1 million or $0.32 for 2012. Refer to the non-GAAP reconciliation table included in this release for more details.
Non-GAAP gross margin was 43.7% in the fourth quarter of 2013 compared to 43.1% in the preceding quarter and 41.6% in the fourth quarter of 2012. For the full year 2013, non-GAAP gross margin was 42.5% compared to 43.3% for 2012. Refer to the non-GAAP reconciliation table included in this release for more details.
"Revenue for our microcontroller business increased during 2013, with the core microcontroller business generating robust growth," said Steve Laub, Atmel's President and Chief Executive Officer. "We are well positioned for 2014 with multiple growth drivers tied to our extensive new product introductions and significant margin expansion from ongoing operational initiatives."
Cash provided by operations totaled approximately $49.0 million for the fourth quarter of 2013, compared to $82.1 million for the third quarter of 2013 and $78.7 million for the fourth quarter of 2012. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $279.1 million at the end of the fourth quarter of 2013, an increase of $8.2 million from the immediately preceding quarter, even after taking into account the repurchase of $24.2 million in common stock. Cash increases resulted principally from improved operating performance and a reduction in inventory.
Company Highlights
- Introduced over 125 new core 32-bit microcontroller products during 2013
- Launched new family of ARM Cortex-M4-based ultra-low power microcontrollers for sensor hub and battery-operated consumer applications
- Expanded family of ARM Cortex-A5 microprocessors with smaller packaging and extended temperature range for wearables, industrial, automotive and medical applications
- Turtle Beach selected Atmel's ultra-low power Wi-Fi system-on-chip solution for the i60 and Z300 EarForce media headset products
- maXStylus® mXTS200 second generation Windows 8.1-certified capacitive active stylus controller shipping in volume quantities to tier-one OEMs
- Windows 8.1 designs featuring maXTouch® include ASUS Vivo Tab Note 8, Toshiba Encore WT8, Nokia's Lumia 2520, HP Omni 10 5600us tablet, HP EliteBook Revolve 810 G2, Lenovo ThinkPad 8, LG Electronics Tab-Book H160 and Z160
- maXTouch selected for Sony's new PlayStation 4
- New Samsung Smart TV remote control touch powered by maXTouch
- Showcased Atmel's AvantCar™ concept, a next-generation automotive center console featuring maXTouch, XSense®, LIN transceivers and 8-bit AVR microcontrollers
- XSense shipping in both HP Omni 10 5600us tablet and HP EliteBook Revolve 810 G2
- Closed on an oversubscribed $300 million revolving credit facility
Stock Repurchase
During the fourth quarter of 2013, Atmel repurchased 3.3 million shares of its common stock in the open market at an average price of $7.36 per share.
Non-GAAP Metrics
Non-GAAP net income excludes loss from manufacturing facility damage and shutdown, French building underutilization and other, loss related to foundry arrangements, (recovery) impairment of receivables from foundry suppliers, restructuring (credits) charges, settlement charges, acquisition-related (credits) charges, gain on sale of assets, credit from reserved grant income, share-based compensation expense, 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 fourth quarter and full year 2013 financial results. The conference call will be webcast live and can also be monitored by dialing 1-706-758-4519. The conference ID number is 23012404 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 5, 2014 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 number is 1-404-537-3406. The access code is 23012404.
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.
©2014 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 2014 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) and possible fiscal and budget uncertainties in the United States; 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 or insolvency proceedings of those foundries, and associated litigation involving us 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 new maXTouch products) and implementation of new manufacturing technologies; 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 or volatility 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 or terrorist acts; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; the market price or increased 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, 2012 , filed on February 26, 2013 . 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.
