SAN JOSE, Calif., Feb. 4, 2015 /PRNewswire/ -- Atmel®
Corporation (Nasdaq: ATML), a leader in microcontroller and touch
solutions, today announced financial results for its fourth quarter
ended December 31, 2014.
|
GAAP
|
|
|
Non-GAAP
|
|
Q4
2014
|
Q3
2014
|
Q4
2013
|
|
Q4
2014
|
Q3
2014
|
Q4
2013
|
Net
revenue
|
$ 346.0
|
$ 374.5
|
$ 353.2
|
|
$ 346.0
|
$ 374.5
|
$ 353.2
|
Gross
margin
|
40.6%
|
47.2%
|
42.7%
|
|
49.0%
|
47.0%
|
43.7%
|
Operating
margin
|
(1.6)%
|
9.0%
|
8.3%
|
|
14.1%
|
14.7%
|
12.4%
|
Net income
(loss)
|
$ (6.5)
|
$ 17.3
|
$ 7.2
|
|
$
49.2
|
$ 49.8
|
$ 43.6
|
Diluted
EPS
|
$ (0.02)
|
$ 0.04
|
$ 0.02
|
|
$
0.12
|
$ 0.12
|
$ 0.10
|
(In millions,
except earnings per share data and percentages)
|
Revenue for the fourth quarter of 2014 was $346.0 million, an 8% decrease compared to
$374.5 million for the third quarter
of 2014, and 2% lower compared to $353.2
million for the fourth quarter of 2013. For the full year,
revenue of $1.41 billion increased 2%
compared to $1.39 billion for
2013.
GAAP gross margin was 40.6% in the fourth quarter of 2014, and
includes a $26.6 million charge for
the impairment of manufacturing assets related to the XSense
business.
Non-GAAP gross margin was 49.0% in the fourth quarter of 2014
compared to 47.0% in the immediately preceding quarter and 43.7% in
the fourth quarter of 2013. For the full year 2014, non-GAAP
gross margin was 46.3% compared to 42.5% for 2013. Refer to
the non-GAAP reconciliation table included in this release for more
details.
GAAP net loss totaled $(6.5)
million or $(0.02) per diluted
share for the fourth quarter of 2014, principally as a result of
the impairment of manufacturing assets and a $14.8 million charge incurred for restructuring
activities associated with workforce reductions. This
compares to $17.3 million or
$0.04 per diluted share for the third
quarter of 2014, and $7.2 million or
$0.02 per diluted share for the
fourth quarter of 2013. For the full year 2014, GAAP net
income attributable to Atmel Corporation was $32.2 million or $0.08 per diluted share compared to GAAP net loss
of $(22.1) million or $(0.05) per diluted share for 2013.
Non-GAAP net income for the fourth quarter of 2014 totaled
$49.2 million or $0.12 per diluted share, compared to non-GAAP net
income of $49.8 million or
$0.12 per diluted share in the third
quarter of 2014, and $43.6 million or
$0.10 per diluted share for the
year-ago quarter. For the full year 2014, non-GAAP net income was
$166.4 million or $0.39 per diluted share compared to $120.2 million or $0.27 for 2013. Refer to the non-GAAP
reconciliation table included in this release for more details.
"We are pleased with full year 2014 financial performance as our
core microcontroller business generated solid growth, Atmel's
operating model was transformed to sustainably higher margins and
we delivered a record number of new products in the
high-growth IoT and security markets," said Steve Laub, Atmel's President and Chief
Executive Officer. "Today's initiation of a dividend reflects
our confidence in Atmel's long-term business prospects."
Cash provided by operations totaled $37.2
million for the fourth quarter of 2014, compared to
$43.9 million for the third quarter
of 2014 and $48.4 million for the
fourth quarter of 2013. For the full year 2014, cash provided
by operating activities totaled $179.8
million compared to $127.1
million for 2013. Combined cash balances (cash and
cash equivalents plus short-term investments) totaled $206.9 million at the end of the fourth quarter
of 2014, a decrease of $13.0 million
from the immediately preceding quarter resulting principally from
the repurchase of $21.9 million in
common stock during the fourth quarter and a $15 million repayment of debt.
Company Highlights
- Announced initiation of first cash dividend in Atmel's 30-year
history
- Expanded Atmel | SMART wireless portfolio with the SAM W25
standalone low-power, secure Wi-Fi modules for IoT edge nodes
- Announced ultra-low power Bluetooth Smart (BLE) platform
delivering the industry's lowest power consumption and smallest
package
- Expanded SmartConnect wireless portfolio with a new
Wi-Fi/Bluetooth combo platform (WILC3000) for connected home and
wearable applications
- Joined Thread Group, an alliance created to develop a low-power
wireless networking protocol designed for IoT applications in and
around the home
- Unveiled new Atmel® | SMART SAM L21 platform setting a new
low-power standard for ARM® Cortex® -M0+ based microcontrollers for
IoT, portable and battery powered applications
- Delivered new SAM G ARM® Cortex® -M4 microcontrollers featuring
high-performance, ultra-low power and the industry's smallest
form factor, for rapidly growing IoT and wearable markets chosen by
EDN as one of the Hot 100 Products of 2014
- Sampled industry's highest performance ARM® Cortex®-M7-based
microcontrollers for IoT, industrial, and automotive markets
- Launched next-generation low-power 8-bit AVR microcontrollers
for industrial, consumer and IoT applications
- Expanded QTouch® SMART portfolio of capacitive touch buttons,
sliders and wheels for the safety critical home appliance
market
- Extended partnership with IAR Systems® to include over
1,400 new example projects in their development tools to
support Atmel | SMART microcontrollers and
microprocessors
- Launched maXTouch® U Series powering next-generation
advanced displays, offering the highest hover distance in the
industry and enabling the fastest touch response for users compared
to any competing solution today
- Entered strategic partnership with Fingerprint Cards AB for
biometric fingerprint solutions
- Launched new family of local interconnect networking (LIN)
transceivers for in-vehicle networking
- Achieved volume production for new family of control area
network (CAN) transceivers for the automotive and industrial
markets
Stock Repurchase
During the fourth quarter of 2014,
Atmel repurchased 2.9 million shares of its common stock in the
open market at an average price of $7.63 per share.
Non-GAAP Metrics
Non-GAAP net income excludes share-based compensation expense,
acquisition-related charges (credits), restructuring charges
(credits), loss from the impairment of manufacturing assets related
to the XSense business, (gain) loss from manufacturing facility
damage and shutdown, French building underutilization and other,
(gain) loss related to foundry arrangements, recovery of
receivables from foundry suppliers, settlement charges, gain on
sale of assets, fair value adjustments to inventory from businesses
acquired, write-down of investments in privately held companies,
interest income from sale of assets, non-GAAP income tax adjustment
and other non-recurring income tax items, as well as net income
attributable to noncontrolling interest. 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 p.m.
PT today to discuss the fourth quarter 2014 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 52908067 and participants are encouraged to initiate their calls
10 minutes prior to the 2 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 4, 2015
conference call will be available the same day at approximately
5 p.m. PT and will be archived for 48
hours. The replay access number is 1-404-537-3406. The access code
is 52908067.
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 intelligent and
connected solutions focused on the industrial, consumer,
communications, computing and automotive markets.
©2015 Atmel Corporation. Atmel®, Atmel logo and combinations
thereof, Enabling Unlimited Possibilities®, and others are
registered trademarks or trademarks of Atmel Corporation in
the U.S. and other countries. Other terms and product names may be
trademarks of others.
Safe Harbor for Forward-Looking Statements
Statements in this release, including those regarding Atmel's
forecasts, business outlook, expectations, new product launches,
and beliefs, among others, 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 2015 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 and geo-political conditions; 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, financial instability or insolvency proceedings
affecting some 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 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, 2013, filed on
February 28, 2014. 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.
Investor Contact:
Peter Schuman
Senior Director, Investor Relations
(408) 437-2026
ATMEL
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except for per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
345,954
|
|
$
374,485
|
|
$
353,220
|
|
$
1,413,334
|
|
$
1,386,447
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
205,395
|
|
197,642
|
|
202,292
|
|
794,704
|
|
812,822
|
Research and
development
|
64,817
|
|
69,917
|
|
63,948
|
|
274,568
|
|
266,408
|
Selling, general and
administrative
|
67,845
|
|
65,324
|
|
59,277
|
|
262,031
|
|
237,559
|
Acquisition-related
charges (charges)
|
3,480
|
|
7,162
|
|
(165)
|
|
13,767
|
|
5,534
|
Restructuring charges
(credits)
|
14,849
|
|
840
|
|
(1,519)
|
|
13,882
|
|
50,026
|
Recovery of
receivables from foundry suppliers
|
(485)
|
|
-
|
|
(78)
|
|
(485)
|
|
(600)
|
Gain on sale of
assets
|
(4,364)
|
|
-
|
|
-
|
|
(4,364)
|
|
(4,430)
|
Settlement
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
21,600
|
Total operating
expenses
|
351,537
|
|
340,885
|
|
323,755
|
|
1,354,103
|
|
1,388,919
|
(Loss) income from
operations
|
(5,583)
|
|
33,600
|
|
29,465
|
|
59,231
|
|
(2,472)
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense), net
|
3,851
|
|
(4,731)
|
|
931
|
|
(2,005)
|
|
1,959
|
(Loss) income
before income taxes
|
(1,732)
|
|
28,869
|
|
30,396
|
|
57,226
|
|
(513)
|
Provision for income
taxes
|
(1,712)
|
|
(11,619)
|
|
(23,186)
|
|
(22,018)
|
|
(21,542)
|
Net (loss)
income
|
(3,444)
|
|
17,250
|
|
7,210
|
|
35,208
|
|
(22,055)
|
Less: net income
attributable to noncontrolling interest
|
(3,013)
|
|
-
|
|
-
|
|
(3,013)
|
|
-
|
Net (loss) income
attributable to Atmel Corporation
|
$
(6,457)
|
|
$
17,250
|
|
$
7,210
|
|
$
32,195
|
|
$
(22,055)
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss)
income per share attributable to Atmel Corporation:
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share
|
$
(0.02)
|
|
$
0.04
|
|
$
0.02
|
|
$
0.08
|
|
$
(0.05)
|
Weighted-average
shares used in basic net (loss) income per share
calculations
|
417,797
|
|
418,954
|
|
426,021
|
|
419,103
|
|
427,460
|
Diluted net (loss)
income per share attributable to Atmel Corporation:
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share
|
$
(0.02)
|
|
$
0.04
|
|
$
0.02
|
|
$
0.08
|
|
$
(0.05)
|
Weighted-average
shares used in diluted net (loss) income per share
calculations
|
417,797
|
|
420,964
|
|
428,008
|
|
420,910
|
|
427,460
|
ATMEL
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
206,937
|
|
$
276,881
|
Short-term
investments
|
-
|
|
2,181
|
Accounts receivable,
net
|
222,021
|
|
206,757
|
Inventories
|
278,242
|
|
274,967
|
Prepaids and other
current assets
|
88,422
|
|
92,234
|
Total current
assets
|
795,622
|
|
853,020
|
Fixed assets,
net
|
158,281
|
|
184,983
|
Goodwill
|
191,088
|
|
108,240
|
Intangible assets,
net
|
50,286
|
|
28,116
|
Other
assets
|
166,164
|
|
178,167
|
Total
assets
|
$
1,361,441
|
|
$
1,352,526
|
|
|
|
|
Current
liabilities
|
|
|
|
Trade accounts
payable
|
$
97,467
|
|
$
95,872
|
Accrued and other
liabilities
|
147,109
|
|
155,406
|
Deferred income on
shipments to distributors
|
49,059
|
|
42,594
|
Total current
liabilities
|
293,635
|
|
293,872
|
Other long-term
liabilities
|
198,670
|
|
120,727
|
Total
liabilities
|
492,305
|
|
414,599
|
|
|
|
|
Stockholders'
equity
|
869,136
|
|
937,927
|
Total liabilities
and stockholders' equity
|
$
1,361,441
|
|
$
1,352,526
|
ATMEL
CORPORATION
|
RECONCILIATION OF
GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
$
140,559
|
|
$
176,843
|
|
$
150,928
|
|
$
618,630
|
|
$
573,625
|
(Gain) loss from
manufacturing facility damage and shutdown
|
-
|
|
(3,571)
|
|
2,205
|
|
3,485
|
|
2,205
|
(Gain) loss related
to foundry arrangements
|
-
|
|
(454)
|
|
-
|
|
(2,583)
|
|
7,424
|
Impairment of XSense
assets
|
26,624
|
|
-
|
|
-
|
|
26,624
|
|
-
|
Fair value
adjustments to inventory from businesses acquired
|
774
|
|
1,548
|
|
-
|
|
2,322
|
|
-
|
Share-based
compensation expense
|
1,463
|
|
1,605
|
|
1,301
|
|
6,355
|
|
5,889
|
Non-GAAP gross
margin
|
$
169,420
|
|
$
175,971
|
|
$
154,434
|
|
$
654,833
|
|
$
589,143
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expense
|
$
64,817
|
|
$
69,917
|
|
$
63,948
|
|
$
274,568
|
|
$
266,408
|
Share-based
compensation expense
|
(3,825)
|
|
(4,632)
|
|
(4,126)
|
|
(17,569)
|
|
(14,851)
|
French building
underutilization and other
|
317
|
|
(608)
|
|
(766)
|
|
(1,903)
|
|
(766)
|
Non-GAAP research
and development expense
|
$
61,309
|
|
$
64,677
|
|
$
59,056
|
|
$
255,096
|
|
$
250,791
|
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expense
|
$
67,845
|
|
$
65,324
|
|
$
59,277
|
|
$
262,031
|
|
$
237,559
|
Share-based
compensation expense
|
(8,578)
|
|
(8,680)
|
|
(7,361)
|
|
(35,755)
|
|
(22,383)
|
French building
underutilization and other
|
9
|
|
(214)
|
|
(179)
|
|
(1,055)
|
|
(179)
|
Non-GAAP selling,
general and administrative expense
|
$
59,276
|
|
$
56,430
|
|
$
51,737
|
|
$
225,221
|
|
$
214,997
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss) income
from operations
|
$
(5,583)
|
|
$
33,600
|
|
$
29,465
|
|
$
59,231
|
|
$
(2,472)
|
Share-based
compensation expense
|
13,866
|
|
14,917
|
|
12,788
|
|
59,679
|
|
43,124
|
(Gain) loss from
manufacturing facility damage and shutdown
|
-
|
|
(3,571)
|
|
2,205
|
|
3,485
|
|
2,205
|
Acquisition-related
charges (credits)
|
3,480
|
|
7,162
|
|
(165)
|
|
13,767
|
|
5,534
|
French building
underutilization and other
|
(326)
|
|
822
|
|
945
|
|
2,957
|
|
945
|
Restructuring charges
(credits)
|
14,849
|
|
840
|
|
(1,519)
|
|
13,882
|
|
50,026
|
(Gain) loss related
to foundry arrangements
|
-
|
|
(454)
|
|
-
|
|
(2,583)
|
|
7,424
|
Fair value
adjustments to inventory from businesses acquired
|
774
|
|
1,548
|
|
-
|
|
2,322
|
|
-
|
Recovery of
receivables from foundry suppliers
|
(485)
|
|
-
|
|
(78)
|
|
(485)
|
|
(600)
|
Gain on sale of
assets
|
(4,364)
|
|
-
|
|
-
|
|
(4,364)
|
|
(4,430)
|
Settlement
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
21,600
|
Impairment of XSense
assets
|
26,624
|
|
-
|
|
-
|
|
26,624
|
|
-
|
Non-GAAP income
from operations
|
$
48,835
|
|
$
54,864
|
|
$
43,641
|
|
$
174,515
|
|
$
123,356
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
(1,712)
|
|
$
(11,619)
|
|
$
(23,186)
|
|
$
(22,018)
|
|
$
(21,542)
|
Adjustments for cash
tax and other tax settlements
|
517
|
|
(9,522)
|
|
(22,257)
|
|
(15,444)
|
|
(16,428)
|
Non-GAAP provision
for income taxes
|
$
(2,229)
|
|
$
(2,097)
|
|
$
(929)
|
|
$
(6,574)
|
|
$
(5,114)
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income attributable to Atmel Corporation
|
$
(6,457)
|
|
$
17,250
|
|
$
7,210
|
|
$
32,195
|
|
$
(22,055)
|
Share-based
compensation expense
|
13,866
|
|
14,917
|
|
12,788
|
|
59,679
|
|
43,124
|
(Gain) loss from
manufacturing facility damage and shutdown
|
-
|
|
(3,571)
|
|
2,205
|
|
3,485
|
|
2,205
|
Acquisition-related
charges (credits)
|
3,480
|
|
7,162
|
|
(165)
|
|
13,767
|
|
5,534
|
French building
underutilization and other
|
(326)
|
|
822
|
|
945
|
|
2,957
|
|
945
|
Restructuring charges
(credits)
|
14,849
|
|
840
|
|
(1,519)
|
|
13,882
|
|
50,026
|
(Gain) loss related
to foundry arrangements
|
-
|
|
(454)
|
|
-
|
|
(2,583)
|
|
7,424
|
Fair value
adjustments to inventory from businesses acquired
|
774
|
|
1,548
|
|
-
|
|
2,322
|
|
-
|
Recovery of
receivables from foundry suppliers
|
(485)
|
|
-
|
|
(78)
|
|
(485)
|
|
(600)
|
Gain on sale of
assets
|
(4,364)
|
|
-
|
|
-
|
|
(4,364)
|
|
(4,430)
|
Settlement
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
21,600
|
Impairment of XSense
assets
|
26,624
|
|
-
|
|
-
|
|
26,624
|
|
-
|
Interest income from
sale of assets
|
(1,295)
|
|
-
|
|
-
|
|
(1,295)
|
|
-
|
Write-down of
investments in privately-held companies
|
-
|
|
1,805
|
|
-
|
|
1,805
|
|
-
|
Tax
adjustments
|
(517)
|
|
9,522
|
|
22,257
|
|
15,444
|
|
16,428
|
Net income
attributable to noncontrolling interest
|
3,013
|
|
-
|
|
-
|
|
3,013
|
|
-
|
Consolidated
non-GAAP net income
|
$
49,162
|
|
$
49,841
|
|
$
43,643
|
|
$
166,446
|
|
$
120,201
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income per share - diluted attributable to Atmel
Corporation
|
$
(0.02)
|
|
$
0.04
|
|
$
0.02
|
|
$
0.08
|
|
$
(0.05)
|
Share-based
compensation expense
|
0.03
|
|
0.04
|
|
0.02
|
|
0.14
|
|
0.10
|
(Gain) loss from
manufacturing facility damage and shutdown
|
-
|
|
(0.01)
|
|
0.01
|
|
0.01
|
|
-
|
Acquisition-related
charges (credits)
|
0.01
|
|
0.02
|
|
-
|
|
0.03
|
|
0.01
|
French building
underutilization and other
|
-
|
|
-
|
|
-
|
|
0.01
|
|
-
|
Restructuring charges
(credits)
|
0.03
|
|
-
|
|
-
|
|
0.03
|
|
0.11
|
(Gain) loss related
to foundry arrangements
|
-
|
|
-
|
|
-
|
|
(0.01)
|
|
0.02
|
Fair value
adjustments to inventory from businesses acquired
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Recovery of
receivables from foundry suppliers
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Gain on sale of
assets
|
(0.01)
|
|
-
|
|
-
|
|
(0.01)
|
|
(0.01)
|
Settlement
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
0.05
|
Impairment of XSense
assets
|
0.07
|
|
-
|
|
-
|
|
0.07
|
|
-
|
Interest income from
sale of assets
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Write-down of
investments in privately-held companies
|
-
|
|
0.01
|
|
-
|
|
-
|
|
-
|
Tax
adjustments
|
-
|
|
0.02
|
|
0.05
|
|
0.04
|
|
0.04
|
Net income per share
attributable to noncontrolling interest
|
0.01
|
|
-
|
|
-
|
|
0.01
|
|
-
|
Consolidated
non-GAAP net income per share - diluted
|
$
0.12
|
|
$
0.12
|
|
$
0.10
|
|
$
0.39
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
shares
|
417,797
|
|
420,964
|
|
428,008
|
|
420,910
|
|
427,460
|
Adjusted dilutive
stock awards - non-GAAP
|
9,482
|
|
7,297
|
|
9,503
|
|
5,788
|
|
11,841
|
Non-GAAP diluted
shares
|
427,279
|
|
428,261
|
|
437,511
|
|
426,698
|
|
439,301
|
Notes to Non-GAAP Financial Measures
To supplement its consolidated financial results presented in
accordance with GAAP, Atmel uses non-GAAP financial measures,
including non-GAAP net income and non-GAAP net income per diluted
share, which are adjusted from the most directly comparable GAAP
financial measures to exclude certain items, as shown above and
described below. Management believes that these non-GAAP financial
measures reflect an additional and useful way of viewing aspects of
Atmel's operations that, when viewed in conjunction with Atmel's
GAAP results, provide a more comprehensive understanding of the
various factors and trends affecting Atmel's business and
operations.
Atmel uses each of these non-GAAP financial measures for
internal purposes and believes that these non-GAAP measures provide
meaningful supplemental information regarding operational and
financial performance. Management uses these non-GAAP measures for
strategic and business decision making, internal budgeting,
forecasting and resource allocation processes. Atmel may, in the
future, determine to present non-GAAP financial measures other than
those presented in this release, which it believes may be useful to
investors. Any such determinations will be made with the intention
of providing the most useful information to investors and will
reflect information used by the company's management in assessing
its business, which may change from time to time.
Atmel believes that providing these non-GAAP financial measures,
in addition to the GAAP financial results, is useful to investors
because the non-GAAP financial measures allow investors to see
Atmel's results "through the eyes" of management as these non-GAAP
financial measures reflect Atmel's internal measurement processes.
Management believes that these non-GAAP financial measures enable
investors to better assess changes in each key element of Atmel's
operating results across different reporting periods on a
consistent basis. Thus, management believes that each of these
non-GAAP financial measures provides investors with another method
for assessing Atmel's operating results in a manner that is focused
on the performance of its ongoing operations. In addition, these
non-GAAP financial measures may facilitate comparisons to Atmel's
historical operating results and to competitors' operating
results.
There are limitations in using non-GAAP financial measures
because they are not prepared in accordance with GAAP and may be
different from non-GAAP financial measures used by other companies.
In addition, non-GAAP financial measures may be limited in value
because they exclude certain items that may have a material impact
upon Atmel's reported financial results. Management
compensates for these limitations by providing investors with
reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures. The presentation of
non-GAAP financial information is not meant to be considered in
isolation or as a substitute for or superior to the most directly
comparable GAAP financial measures. The non-GAAP financial measures
supplement, and should be viewed in conjunction with, GAAP
financial measures. Investors should review the reconciliations of
the non-GAAP financial measures to their most directly comparable
GAAP financial measures as provided above.
As presented in the "Reconciliation of GAAP Financial Measures
to Non-GAAP Financial Measures" tables above, each of the non-GAAP
financial measures excludes one or more of the following items:
- Share-based compensation expense.
Share-based compensation expense relates primarily to equity
awards such as stock options and restricted stock units. This
includes share-based compensation expense related to
performance-based restricted stock units for which Atmel recognizes
share-based compensation expense to the extent management believes
it is probable that Atmel will achieve the performance criteria
which occurs before these awards actually vest. If the performance
goals are unlikely to be met, no compensation expense is recognized
and any previously recognized compensation expense is
reversed. Share-based compensation is a non-cash expense that
varies in amount from period to period and is dependent on market
forces that are often beyond Atmel's control. As a result,
management excludes this item from Atmel's internal operating
forecasts and models. Management believes that non-GAAP measures
adjusted for share-based compensation provide investors with a
basis to measure Atmel's core performance against the performance
of other companies without the variability created by share-based
compensation as a result of the variety of equity awards used by
other companies and the varying methodologies and assumptions
used.
- Acquisition-related charges (credits).
Acquisition-related charges (credits) include: (1) amortization
of purchased intangibles, which include acquired intangibles such
as customer relationships, backlog, core developed technology,
trade names and non-compete agreements, (2) contingent compensation
expense, which includes compensation resulting from the employment
retention of certain key employees established in accordance with
the terms of the acquisitions, (3) adjustments to previously
recognized earn-out liability on contingent compensation expense
related to acquisitions, and (4) direct costs related to
acquisitions such as banker, legal and accounting fees. In most
cases, these acquisition-related charges are not factored into
management's evaluation of potential acquisitions or Atmel's
performance after completion of acquisitions, because they are not
related to Atmel's core operating performance. In addition, the
frequency and amount of such charges can vary significantly based
on the size and timing of acquisitions and the maturities of the
businesses being acquired. Excluding acquisition-related charges
(credits) from non-GAAP measures provides investors with a basis to
compare Atmel against the performance of other companies without
the variability caused by purchase accounting.
- Restructuring charges (credits)
Restructuring charges (credits) primarily relate to expenses
necessary to make infrastructure-related changes to Atmel's
operating costs. Restructuring charges (credits) are excluded
from non-GAAP financial measures because they are not considered
core operating activities. Although Atmel has engaged in various
restructuring activities in recent years, each has been a discrete
event based on a unique set of business objectives. Atmel believes
that it is appropriate to exclude restructuring charges (credits)
from Atmel's non-GAAP financial measures as it enhances the ability
of investors to compare Atmel's period-over-period operating
results from continuing operations.
- Impairment of XSense manufacturing assets.
Impairment of XSense manufacturing assets reflects a
$26.6 million charge for the
write-down of assets used in the manufacture of XSense touch
sensors. The company has determined to discontinue its
investment in the XSense business and to exit the business.
- (Gain) loss from manufacturing facility damage and
shutdown.
Atmel experienced an unplanned shutdown of its semiconductor
manufacturing operations in Colorado
Springs, Colorado in the fourth quarter of 2013 due to
damage to the facility's nitrogen plant. All repairs were
completed in the first quarter of 2014 and the facility has resumed
normal operations. During the third quarter 2014 we received
an insurance payment of $3.6 million
related to our facility damage claim. Atmel believes that the
gain and loss from the manufacturing facility damage and shutdown
is an individually discrete event that is not generally reflective
of ongoing operating performance and should be excluded from
period-over-period comparisons.
- (Gain) loss related to foundry arrangements.
(Gain) loss related to foundry arrangements relates to the
reduction of estimated (gain) loss previously recorded with respect
to European foundry "take or pay" arrangements for wafers that were
delivered during the term of the arrangement. Atmel
believes that it is appropriate to exclude (gain) loss related to
foundry arrangements from Atmel's non-GAAP financial measures, as
it enhances the ability of investors to compare Atmel's
period-over-period operating results from continuing
operations.
- French building underutilization and other.
French building underutilization and other relates to charges
incurred as a result of the insolvency of our tenant in
France in the first quarter of
2014, and prior year real estate taxes relating to an audit
assessment of the same facilities in France. Atmel believes
that it is appropriate to exclude these charges as they are
individually discrete events and generally not reflective of the
ongoing operating performance and should be excluded from
period-over-period comparisons.
- Recovery of receivables from foundry suppliers.
Recovery of receivables from foundry suppliers relates to the
company's assessment of the probability of collecting on
receivables from European foundry suppliers for certain services
provided by Atmel to those foundries. Atmel believes that it
is appropriate to exclude recovery of receivables from foundry
suppliers from Atmel's non-GAAP financial measures as it enhances
the ability of investors to compare Atmel's period-over-period
operating results from continuing operations.
Atmel recognizes gains resulting from the sale of certain
non-strategic assets that no longer align with Atmel's long-term
operating plan. Atmel excludes these items from its non-GAAP
financial measures primarily because these gains are individually
discrete events and generally not reflective of the ongoing
operating performance of Atmel's business and can distort
period-over-period comparisons.
Settlement charges related to legal settlements undertaken in
connection with actual or anticipated litigation, or activities
undertaken in preparation for, or anticipation of, possible
litigation related to intellectual property, customer claims or
other matters affecting the business that are generally not
reflective of ongoing company performance or ordinary course of
litigation expenses.
- Write-down of investments in privately-held companies.
Write-down of investments in privately-held companies relates to
Atmel's proportional share of income or losses from investments
accounted for under the equity method which is recorded in interest
and other (expense) income, net. Atmel excludes this item
from its non-GAAP financial measures primarily because this is
generally not reflective of ongoing operating performance of
Atmel's business and can distort period-over-period
comparisons.
- Fair value adjustments to inventory from businesses
acquired.
In connection with the acquisition of businesses, Atmel
recognizes the assets acquired and liabilities assumed based on
their estimated fair value at the date of acquisition. In
connection with the Newport Media, Inc. acquisition in the third
quarter of 2014, Atmel recorded a fair value increase to inventory
which is amortized over the expected inventory turns and recognized
in cost of revenue. Excluding the fair value adjustments from
businesses acquired from non-GAAP measures provides investors with
a basis to compare Atmel against the performance of other companies
without the variability caused by purchase accounting.
- Interest income from sale of assets.
Atmel recognized interest income from the sale proceeds of
certain non-strategic assets that were not aligned with
Atmel's long-term operating plan. Atmel excludes these items from
its non-GAAP financial measures primarily because these gains are
individually discrete events and generally not reflective of the
ongoing operating performance of Atmel's business and can distort
period-over-period comparisons.
- Non-GAAP tax adjustments.
In conjunction with the implementation of Atmel's global
structure changes which took effect January
1, 2011, the company changed its methodology for reporting
non-GAAP taxes. Beginning in the first quarter of 2011, Atmel's
non-GAAP tax amounts approximate operating cash tax expense,
similar to the liability reported on Atmel's tax returns for the
current period/year. This approach is designed to enhance the
ability of investors to understand the company's tax expense on its
current operations, provide improved modeling accuracy, and
substantially reduce fluctuations caused by GAAP adjustments which
may not reflect actual cash tax expense.
Atmel forecasts its annual cash tax liability and allocates the
tax to each quarter in proportion to earnings for that period.
- Net income attributable to noncontrolling interest.
Net income attributable to noncontrolling interest relates the
share of profit and loss allocated to a noncontrolling interest in
one of Atmel's subsidiaries. Atmel excludes these items from
its non-GAAP financial measures primarily because these gains are
individually discrete events and generally not reflective of the
ongoing operating performance of Atmel's business and can distort
period-over-period comparisons.
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SOURCE Atmel