GAAP net sales for the first quarter of fiscal 2022 were a record $1.569 billion, up 19.8% from net sales of $1.310 billion in the prior year's first fiscal quarter.

GAAP net income for the first quarter of fiscal 2022 was $252.8 million, or $0.89 per diluted share, up from GAAP net income of $123.6 million, or $0.48 per diluted share, in the prior year's first fiscal quarter. For the first quarters of fiscal 2022 and fiscal 2021, GAAP net income was significantly adversely impacted by purchase accounting adjustments associated with our acquisitions.

Non-GAAP net income for the first quarter of fiscal 2022 was a record at $558.8 million, or $1.98 per diluted share, up from non-GAAP net income of $401.9 million, or $1.56 per diluted share, in the prior year's first fiscal quarter. For the first quarters of fiscal 2022 and fiscal 2021, our non-GAAP results exclude the effect of share-based compensation, COVID-19 shelter-in-place restrictions on manufacturing activities, expenses related to our acquisition activities (including intangible asset amortization, severance and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters, IT security remediation costs, non-cash interest expense on our convertible debentures, losses on the settlement of debt, and gains related to equity investments. For the first quarters of fiscal 2022 and fiscal 2021, our non-GAAP income tax expense is presented based on projected cash taxes for the applicable fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act. A reconciliation of our non-GAAP and GAAP results is included in this press release.

Microchip announced today that its Board of Directors has declared a record quarterly cash dividend on its common stock of 43.7 cents per share, up 5.8% from the cash dividend paid last quarter and up 18.75% from a year ago quarter. The quarterly dividend is payable on September 3, 2021 to stockholders of record on August 20, 2021.

"Our June quarter results continued to be strong leading off our fiscal year 2022 on a positive note," said Ganesh Moorthy, President and Chief Executive Officer. "June quarter revenue, non-GAAP gross margin, non-GAAP operating margin, and non-GAAP EPS were all records, as every key aspect of our business over-performed our guidance. Our September 2021 quarter guidance essentially completes our journey towards our long-term operating model of 65% non-GAAP gross margin and 42% non-GAAP operating margin. We expect to update our long-term business model later this year."

Mr. Moorthy added, "Business conditions remained exceptionally strong through the June quarter with record bookings and backlog for product to be shipped over multiple quarters, accentuated by our Preferred Supply Program which continues to be greater than 50% of our aggregate backlog and 100% of our backlog in the most constrained capacity areas. Demand outpaced the capacity improvements we implemented during the June quarter resulting in our unsupported backlog continuing to climb and our lead times stretching out."

Steve Sanghi, Microchip's Executive Chair, said, "Microchip's Board of Directors initiated a path to higher dividends in our February 2021 dividend announcement with a sequential increase in our dividend of 5.8% and followed that up with a dividend increase of 5.9% with our May 2021 dividend announcement. We are continuing on this path as we announced today that the Board of Directors has approved a sequential increase in our dividend of 5.8%, which represents an 18.75% year-over-year increase, to 43.7 cents per share, up from our May dividend of 41.3 cents. We expect to continue to increase dividends quarterly as part of our cash return strategy."

Eric Bjornholt, Microchip's Chief Financial Officer, said, "We continued to aggressively pay down our debt with another $388.0 million of payments during the June quarter, reflecting a cumulative debt pay down of $3.99 billion over the past 12 quarters, as we have actively managed the working capital requirements for the business. In the June quarter, we issued a $1 billion senior secured note maturing on September 1, 2024 and bearing interest at 0.983%. We used the proceeds from this bond offering to repay a $1 billion senior secured note that matured on June 1, 2021 that had an interest rate of 3.922%. We believe this is another excellent transaction for us as we continue to enhance our capital structure on our path to becoming an investment grade rated company."

Mr. Moorthy concluded, "Our backlog for the September quarter is very strong. In addition, we have considerable backlog requested by customers in the September quarter that currently cannot be fulfilled until later quarters despite us growing capacity from the last quarter. This is because the entire semiconductor supply chain remains constrained. Given this backdrop, we expect our net sales in the September quarter to be up between 3% and 7% sequentially. At the mid-point of our guidance for the September quarter, net sales will be 25.8% higher than the year ago quarter."

Microchip's Highlights for the Quarter Ended June 30, 2021:

• Introduced its maXTouch^® MXT2912TD-UW touchscreen controller, the industry’s first automotive-qualified, single-chip solution that addresses display sizes up to 45 inches with a wide aspect ratio and supporting liquid-crystal display (LCD) and organic light emitting diode (OLED) display technologies.
  
  
• Introduced the first multiport, multigigabit Power over Ethernet (PoE) power sourcing equipment injector that enables deployment of today’s Wi-Fi^® 6 access points (APs) and 5G small cell access nodes where AC power is unavailable.
  
  
• Announced that it integrated its BlueSky™ GNSS Firewall with its TimePictra^® 11synchronization monitoring and management platform to protect 5G networks and critical timing infrastructure from Global Positioning System signal jamming and spoofing while providing single-console visibility across the entire timing architecture.
  
  
• Expanded its Gallium Nitride (GaN) radio frequency portfolio with the GMICP2731-10 Ka-band Monolithic Microwave Integrated Circuit (MMIC) for satellite communication terminals.
  
  
• Expanded its FPGA family’s security with the DesignShield development tool that further helps prevent data, intellectual property and other private information from being extracted for malicious purposes.
  
  
• Announced the first JEDEC qualification for a radiation-tolerant FPGA in a plastic package – its low-power RTG4 FPGA, offering space system designers the industry’s highest reliability at lowest cost with shortest lead times.
  
  
• Unveiled an open-source power delivery software that enables code integration for USB system differentiation, the first solution offering the comprehensive programming environment and code base for power delivery.
  
  
• Unveiled the latest enhancements to its Trust Platform for its CryptoAuthenticaion™ family, with the Trust Platform Design Suite (TPDS) dedicated software platform for device configuration and onboarding to secure provisioning services for embedded security.
  
  
• Announced the qualification of its SAMRH71 Arm-based microprocessor (MPU) and the availability of the SAMRH707 microcontroller (MCU), both implementing Arm^® Cortex^®-M7 SoC radiation-hardened technology.
  
  
• Announced the qualification of its M6 MRH25N12U3 radiation-hardened 250V, 0.21 Ohm Rds(on), metal-oxide-semiconductor field-effect transistor (MOSFET) for commercial aerospace and defense space applications.
  
  
• Unveiled the MPLAB^® Cloud Tools Ecosystem, a platform combining configuration and collaboration tools with knowledge-based search to modernize the development workflow for its PIC^® and AVR^® microcontrollers.
  
  
• Announced open registration for Microchip University, online education courses for embedded control engineers to learn how best to use Microchip products in a broad range of popular embedded system applications.
  

Second Quarter Fiscal Year 2022 Outlook:

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. We are not able to predict whether inventory at our distributors will increase or decrease during the quarter and are therefore providing a range of GAAP net sales guidance. In recent years, we have seen net inventory at our distributors increase or decrease by a significant amount in a single quarter.