A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on May 4, 2023 and will remain available until 5:00 p.m. (Eastern Time) on May 18, 2023. Interested parties may listen to the replay by dialing 201-612-7415/877-660-6853 and entering access code 13736836.
Cautionary Statement:
The statements in this release relating to positioning ourselves for a soft landing as lead times continue to improve for many of our products, helping customers with their inventory positions, that we see very little obsolescence risk with the higher inventory balances, that we believe we are well-positioned to respond to growth when the macro environment strengthens, that our total systems solutions strategy combined with our focus on key market megatrends is driving a robust pipeline of new-design opportunities, that we plan to introduce an exciting lineup of innovative new products throughout fiscal 2024 to address the growing demand for our solutions, actively managing the working capital requirements for the business, actions in motion to reduce inventory on our balance sheet by 5 to 10 days in the June quarter, with further reductions planned in fiscal 2024, that our operating model has been, and remains, a strong cash generator and continues to demonstrate significant operating leverage as we execute on our Microchip 3.0 strategy, targeting to return $349.2 million to our shareholders in the June quarter through dividends and share repurchases, that our board remains committed to increasing cash returns to shareholders with the goal of returning 100% of our adjusted free cash flow to shareholders by the March 2025 quarter, that more supply is becoming available, taking active steps to help customers with inventory positions to push out some of their backlog, that we expect net sales in the June quarter to be up between 1% and 4% sequentially, that at the mid-point of our guidance for the June quarter, net sales would be 16.5% higher than the year-ago quarter, our multi-year initiative aiming to triple semiconductor production at our Oregon facility, that the increased staffing and capital equipment investments are on track to meet expanded production goals, our plans to invest $880 million to expand our Silicon Carbide (SiC) and Silicon (Si) capacity in our Colorado facility, that ramping up production at the Colorado Springs fabrication campus will enable us to respond to growing semiconductor demand across a wide swath of industries, our first quarter fiscal 2024 guidance for net sales and GAAP and non-GAAP gross margin, operating expenses, operating income, other expense, net, income tax provision, net income, diluted common shares outstanding, earnings per diluted share, expected inventory days in the June 2023 quarter, capital expenditures for the June 2023 quarter and for all of fiscal 2024, continuing to add capital equipment to maintain, grow and operate our internal manufacturing capabilities to support the expected growth of our business, our belief that non-GAAP measures are useful to investors and our assumed average stock price in the June 2023 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: any continued uncertainty, fluctuations or weakness in the U.S. and world economies (including China) due to rising interest rates, high inflation or the impact of the COVID-19 pandemic (including lock-downs in China), actions taken or which may be taken by the Biden administration or the U.S. Congress, monetary policy, political, geopolitical, trade or other issues in the U.S. or internationally (including the Ukraine-Russia military conflict), changes in demand or market acceptance of our products and the products of our customers and our ability to meet any continued increases in market demand or customer requests to reschedule or cancel orders; the impact that the CHIPS Act will have on increasing manufacturing capacity in our industry by providing incentives for us, our competitors and foundries to build new wafer manufacturing facilities or expand existing facilities; the amount and timing of any incentives we may receive under the CHIPS Act, the impact of current and future changes in U.S. corporate tax laws (including the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017), foreign currency effects on our business; the mix of inventory we hold, our ability to satisfy short-term orders from our inventory and our ability to effectively manage our inventory levels; changes in utilization of our manufacturing capacity and our ability to effectively manage and expand our production levels to meet any continued increases in market demand; the impact of inflation on our business; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; our ability to realize the expected benefits of our preferred supply program and our long-term supply assurance program; changes or fluctuations in customer order patterns and seasonality; our ability to obtain a sufficient supply of wafers from third party wafer foundries to meet our increasing needs and the cost of such wafers, our ability to obtain additional capacity from our suppliers to increase production to meet any continued increases in market demand; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions; the impact of any future significant acquisitions or strategic transactions we may make; the costs and outcome of any current or future litigation or other matters involving our Microsemi acquisition, the Microsemi business, intellectual property, customers, or other issues; the costs and outcome of any current or future tax audit or investigation regarding our business or the business of Microsemi, our actual average stock price in the June quarter and the impact such price will have on our share count; fluctuations in our stock price and trading volume which could impact the number of shares we acquire under our share repurchase program and the timing of such repurchases; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns (including the COVID-19 pandemic) or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip's website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services.
Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this May 4, 2023 press release, or to reflect the occurrence of unanticipated events.
About Microchip:
Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. Our solutions serve more than 125,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.
Note: The Microchip name and logo, the Microchip logo, and MPLAB are registered trademarks of Microchip Technology Incorporated in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies.
INVESTOR RELATIONS CONTACT:
J. Eric Bjornholt -- CFO..... (480) 792-7804
