SAN JOSE, Calif., May 6, 2015 /PRNewswire/
-- Atmel® Corporation (Nasdaq: ATML), a leader in
microcontroller and touch solutions, today announced financial
results for its first quarter ended March
31, 2015.
|
GAAP
|
|
|
Non-GAAP
|
|
|
Q1
2015
|
Q4
2014
|
Q1
2014
|
|
Q1
2015
|
Q4
2014
|
Q1
2014
|
Net
revenue
|
$ 318.3
|
$ 346.0
|
$ 337.4
|
|
$ 316.9
|
$ 346.0
|
$ 337.4
|
Gross
margin
|
46.3%
|
40.6%
|
41.5%
|
|
47.6%
|
49.0%
|
44.0%
|
Operating
margin
|
6.5%
|
(1.6%)
|
1.4%
|
|
13.6%
|
14.1%
|
8.9%
|
Net income
(loss)
|
$ 16.5
|
$ (6.5)
|
$ 2.2
|
|
$ 45.1
|
$
49.2
|
$ 29.1
|
Diluted
EPS
|
$ 0.04
|
$ (0.02)
|
$ 0.01
|
|
$ 0.11
|
$
0.12
|
$ 0.07
|
|
(In millions,
except earnings per share data and percentages)
|
Revenue for the first quarter of 2015 was $318.3 million, an 8% decrease compared to
$346.0 million for the fourth quarter
of 2014, and 6% lower compared to $337.4
million for the first quarter of 2014. Non-GAAP
revenue of $316.9 million for the
first quarter 2015 excludes the XSense business which has been
exited. Quarterly results prior to the first quarter of 2015
have not been recast to reflect the exit from the XSense
business.
GAAP gross margin was 46.3% in the first quarter of 2015
compared with 40.6% in the fourth quarter of 2014 which included a
$26.6 million charge for the
impairment of manufacturing assets related to the XSense business,
and 41.5% in the first quarter of 2014 which included a
$7.1 million loss from manufacturing
facility damage and related shutdown.
Non-GAAP gross margin was 47.6% in the first quarter of 2015
compared to 49.0% in the immediately preceding quarter and 44.0% in
the first quarter of 2014. Non-GAAP gross margin excludes the
XSense cost of revenue for the first quarter 2015 only. Refer
to the non-GAAP reconciliation table included in this release for
more details.
GAAP net income totaled $16.5
million or $0.04 per diluted
share for the first quarter of 2015. This compares to a net
loss of $(6.5) million or
$(0.02) per diluted share for the
fourth quarter of 2014 and net income of $2.2 million or $0.01 per diluted share for the first quarter of
2014.
Non-GAAP net income for the first quarter of 2015 totaled
$45.1 million or $0.11 per diluted share, compared to non-GAAP net
income of $49.2 million or
$0.12 per diluted share in the fourth
quarter of 2014, and $29.1 million or
$0.07 per diluted share for the
year-ago quarter. Refer to the non-GAAP reconciliation table
included in this release for more details.
"We are well positioned in attractive markets for long-term
growth and profitability, with a renewed emphasis on our core
businesses, sharper focus on our traditional end markets, and a
substantially improved operating model generating consistent
positive cash flow," said Steve
Laub, Atmel's President and Chief Executive Officer.
"Our lower cost structure should allow us to deliver significantly
improved profitability throughout the remainder of 2015."
Cash provided by operations totaled $40.1
million for the first quarter of 2015, compared to
$37.2 million for the fourth quarter
of 2014 and $46.2 million for the
first quarter of 2014. Combined cash balances (cash and cash
equivalents plus short-term investments) totaled $200.8 million at the end of the first quarter of
2015, a decrease of $6.1 million from
the immediately preceding quarter resulting principally from
improved operating performance offset by the $16.7 million common stock dividend, repurchase
of $9.1 million in common stock
during the first quarter and a $10.0
million repayment of debt.
Company Highlights
- Sampling Atmel® | SMART SAM L21 family, breaking
ultra-low-power performance barriers with world's lowest power ARM®
Cortex® M based solution for IoT, portable, wearable and battery
powered applications
- Launched SAM DA1 family of automotive-qualified ARM®
Cortex® -M0+ microcontrollers featuring capacitive touch hardware
support for HMI and LIN applications
- Shipping low-cost, easy-to-use Xplained extension board
featuring Bosch intelligent 9-axis sensor ideal for prototyping
projects for IoT and wearable applications
- First company to achieve PRIME v1.4 Profile 2 certification for
Atmel | SMART SAM4CP16B and ATPL230A platforms for smart metering
applications
- Launched next-generation CryptoAuthentication™ product
featuring advanced elliptic curve cryptography capabilities for the
IoT market, delivering extremely low power and compatibility with
any microcontroller or microprocessor
- Xiaomi awards Atmel with "Best Technology Award" for our
maXTouch solutions
- Announced sale of XSense touch sensor assets
- Paid first cash dividend in Atmel's 30-year history
Stock Repurchase
During the first quarter of 2015, Atmel repurchased 1.1 million
shares of its common stock in the open market at an average price
of $8.24 per share.
Outlook – Q2 2015
- Revenue between $310 and $326
million
- Non-GAAP gross margin 48.0% plus or minus 100 basis points
- Non-GAAP operating expenses $108
million, plus or minus $2
million
Non-GAAP Metrics
Non-GAAP net income excludes share-based compensation expense,
acquisition-related charges, restructuring charges (credits), loss
from the impairment of manufacturing assets related to the XSense
business and operating results of the XSense business for the first
quarter 2015, loss from manufacturing facility damage and shutdown,
French building underutilization and other (credits), loss (gain)
related to foundry arrangements, recovery of receivables from
foundry suppliers, gain on sale of assets, fair value adjustments
to inventory from businesses acquired, 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 first quarter 2015 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 5515713 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 May 6, 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 5515713.
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, automotive, consumer, communications,
and computing 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
financial outlook for the second quarter of 2015, long-term
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, including our second quarter 2015 outlook, 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; consolidation occurring within the semiconductor industry
through mergers and acquisitions; 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 and significant devaluation beginning at the end of 2014 of
the Euro against the U.S. dollar; 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,
2014, filed on February 26,
2015. 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
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
Net
revenue
|
$ 318,288
|
|
$
345,954
|
|
$ 337,361
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
Cost of
revenue
|
170,991
|
|
205,395
|
|
197,371
|
Research and
development
|
59,129
|
|
64,817
|
|
69,752
|
Selling, general and
administrative
|
62,073
|
|
67,845
|
|
64,079
|
Acquisition-related
charges
|
4,403
|
|
3,480
|
|
1,628
|
Restructuring charges
(credits)
|
1,147
|
|
14,849
|
|
(224)
|
Recovery of
receivables from foundry suppliers
|
-
|
|
(485)
|
|
-
|
Gain on sale of
assets
|
-
|
|
(4,364)
|
|
-
|
Total operating
expenses
|
297,743
|
|
351,537
|
|
332,606
|
Income (loss) from
operations
|
20,545
|
|
(5,583)
|
|
4,755
|
Interest and other
income, net
|
3,700
|
|
3,851
|
|
77
|
Income (loss)
before income taxes
|
24,245
|
|
(1,732)
|
|
4,832
|
Provision for income
taxes
|
(7,699)
|
|
(1,712)
|
|
(2,666)
|
Net income
(loss)
|
16,546
|
|
(3,444)
|
|
2,166
|
Less: net income
attributable to noncontrolling interest
|
(51)
|
|
(3,013)
|
|
-
|
Net income (loss)
attributable to Atmel Corporation
|
$ 16,495
|
|
$
(6,457)
|
|
$ 2,166
|
|
|
|
|
|
|
Basic net income
(loss) per share attributable to Atmel Corporation:
|
|
|
|
|
|
Net income (loss) per
share
|
$
0.04
|
|
$
(0.02)
|
|
$
0.01
|
Weighted-average
shares used in basic net income (loss) per share
calculations
|
417,038
|
|
417,797
|
|
425,390
|
Diluted net income
(loss) per share attributable to Atmel Corporation:
|
|
|
|
|
|
Net income (loss) per
share
|
$
0.04
|
|
$
(0.02)
|
|
$
0.01
|
Weighted-average
shares used in diluted net income (loss) per share
calculations
|
418,462
|
|
417,797
|
|
427,276
|
Cash dividends
declared and paid per share
|
$
0.04
|
|
$
-
|
|
$
-
|
ATMEL
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$ 200,847
|
|
$
206,937
|
Accounts receivable,
net
|
196,653
|
|
222,021
|
Inventories
|
274,192
|
|
278,242
|
Prepaids and other
current assets
|
81,553
|
|
89,101
|
Total current
assets
|
753,245
|
|
796,301
|
Fixed assets,
net
|
154,809
|
|
158,281
|
Goodwill
|
188,554
|
|
191,088
|
Intangible assets,
net
|
46,900
|
|
50,286
|
Other
assets
|
164,839
|
|
166,348
|
Total
assets
|
$ 1,308,347
|
|
$
1,362,304
|
|
|
|
|
Current
liabilities
|
|
|
|
Trade accounts
payable
|
$ 83,538
|
|
$
97,467
|
Accrued and other
liabilities
|
126,736
|
|
147,109
|
Deferred income on
shipments to distributors
|
47,913
|
|
49,059
|
Total current
liabilities
|
258,187
|
|
293,635
|
Other long-term
liabilities
|
186,364
|
|
198,670
|
Total
liabilities
|
444,551
|
|
492,305
|
|
|
|
|
Stockholders'
equity
|
863,796
|
|
869,999
|
Total liabilities
and stockholders' equity
|
$ 1,308,347
|
|
$
1,362,304
|
ATMEL
CORPORATION
|
RECONCILIATION OF
GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES
|
(in thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
2015
|
|
2014
|
|
2014
|
GAAP net
revenue
|
$
318,288
|
|
$
345,954
|
|
$
337,361
|
Revenue from XSense
business
|
(1,371)
|
|
-
|
|
-
|
Non-GAAP net
revenue
|
$
316,917
|
|
$
345,954
|
|
$
337,361
|
|
|
|
|
|
|
GAAP gross
margin
|
$
147,297
|
|
$
140,559
|
|
$
139,990
|
Loss from
manufacturing facility damage and shutdown
|
-
|
|
-
|
|
7,056
|
Loss (gain) related
to foundry arrangements
|
1,192
|
|
-
|
|
(58)
|
Impairment of XSense
assets
|
-
|
|
26,624
|
|
-
|
Fair value
adjustments to inventory from businesses acquired
|
-
|
|
774
|
|
-
|
Share-based
compensation expense
|
1,115
|
|
1,463
|
|
1,316
|
Gross margin from
XSense business
|
1,138
|
|
-
|
|
-
|
Non-GAAP gross
margin
|
$
150,742
|
|
$
169,420
|
|
$
148,304
|
|
|
|
|
|
|
GAAP research and
development expense
|
$
59,129
|
|
$
64,817
|
|
$
69,752
|
Share-based
compensation expense
|
(3,578)
|
|
(3,825)
|
|
(4,729)
|
French building
underutilization and other (credits)
|
296
|
|
317
|
|
(961)
|
Research and
development expense from XSense business
|
(1,457)
|
|
-
|
|
-
|
Non-GAAP research
and development expense
|
$
54,390
|
|
$
61,309
|
|
$
64,062
|
|
|
|
|
|
|
GAAP selling,
general and administrative expense
|
$
62,073
|
|
$
67,845
|
|
$
64,079
|
Share-based
compensation expense
|
(8,994)
|
|
(8,578)
|
|
(9,572)
|
French building
underutilization and other (credits)
|
(8)
|
|
9
|
|
(335)
|
Selling, general and
administrative expense from XSense business
|
64
|
|
-
|
|
-
|
Non-GAAP selling,
general and administrative expense
|
$
53,135
|
|
$
59,276
|
|
$
54,172
|
|
|
|
|
|
|
GAAP income (loss)
from operations
|
$
20,545
|
|
$
(5,583)
|
|
$
4,755
|
Share-based
compensation expense
|
13,687
|
|
13,866
|
|
15,617
|
Loss from
manufacturing facility damage and shutdown
|
-
|
|
-
|
|
7,056
|
Acquisition-related
charges
|
4,403
|
|
3,480
|
|
1,628
|
French building
underutilization and other (credits)
|
(288)
|
|
(326)
|
|
1,296
|
Restructuring charges
(credits)
|
1,147
|
|
14,849
|
|
(224)
|
Loss (gain) related
to foundry arrangements
|
1,192
|
|
-
|
|
(58)
|
Fair value
adjustments to inventory from businesses acquired
|
-
|
|
774
|
|
-
|
Recovery of
receivables from foundry suppliers
|
-
|
|
(485)
|
|
-
|
Gain on sale of
assets
|
-
|
|
(4,364)
|
|
-
|
Impairment of XSense
assets
|
-
|
|
26,624
|
|
-
|
Operating loss from
the XSense business
|
2,531
|
|
-
|
|
-
|
Non-GAAP income
from operations
|
$
43,217
|
|
$
48,835
|
|
$
30,070
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
(7,699)
|
|
$
(1,712)
|
|
$
(2,666)
|
Adjustments for cash
tax and other tax settlements
|
(5,867)
|
|
517
|
|
(1,651)
|
Non-GAAP provision
for income taxes
|
$
(1,832)
|
|
$
(2,229)
|
|
$
(1,015)
|
|
|
|
|
|
|
GAAP net income
(loss) attributable to Atmel Corporation
|
$
16,495
|
|
$
(6,457)
|
|
$
2,166
|
Share-based
compensation expense
|
13,687
|
|
13,866
|
|
15,617
|
Loss from
manufacturing facility damage and shutdown
|
-
|
|
-
|
|
7,056
|
Acquisition-related
charges
|
4,403
|
|
3,480
|
|
1,628
|
French building
underutilization and other (credits)
|
(288)
|
|
(326)
|
|
1,296
|
Restructuring charges
(credits)
|
1,147
|
|
14,849
|
|
(224)
|
Loss (gain) related
to foundry arrangements
|
1,192
|
|
-
|
|
(58)
|
Fair value
adjustments to inventory from businesses acquired
|
-
|
|
774
|
|
-
|
Recovery of
receivables from foundry suppliers
|
-
|
|
(485)
|
|
-
|
Gain on sale of
assets
|
-
|
|
(4,364)
|
|
-
|
Impairment of XSense
assets
|
-
|
|
26,624
|
|
-
|
Interest income from
sale of assets
|
-
|
|
(1,295)
|
|
-
|
Operating loss from
the XSense business
|
2,531
|
|
-
|
|
-
|
Tax
adjustments
|
5,867
|
|
(517)
|
|
1,651
|
Net income
attributable to noncontrolling interest
|
51
|
|
3,013
|
|
-
|
Consolidated
non-GAAP net income
|
$
45,085
|
|
$
49,162
|
|
$
29,132
|
|
|
|
|
|
|
GAAP net (loss)
income per share - diluted attributable to Atmel
Corporation
|
$
0.04
|
|
$
(0.02)
|
|
$
0.01
|
Share-based
compensation expense
|
0.03
|
|
0.03
|
|
0.04
|
Loss from
manufacturing facility damage and shutdown
|
-
|
|
-
|
|
0.02
|
Acquisition-related
charges
|
0.01
|
|
0.01
|
|
-
|
French building
underutilization and other (credits)
|
-
|
|
-
|
|
-
|
Restructuring charges
(credits)
|
-
|
|
0.03
|
|
-
|
Loss (gain) related
to foundry arrangements
|
-
|
|
-
|
|
-
|
Fair value
adjustments to inventory from businesses acquired
|
-
|
|
-
|
|
-
|
Recovery of
receivables from foundry suppliers
|
-
|
|
-
|
|
-
|
Gain on sale of
assets
|
-
|
|
(0.01)
|
|
-
|
Impairment of XSense
assets
|
-
|
|
0.07
|
|
-
|
Interest income from
sale of assets
|
-
|
|
-
|
|
-
|
Operating loss from
the XSense business
|
0.01
|
|
-
|
|
-
|
Tax
adjustments
|
0.02
|
|
-
|
|
-
|
Net income per share
attributable to noncontrolling interest
|
-
|
|
0.01
|
|
-
|
Consolidated
non-GAAP net income per share - diluted
|
$
0.11
|
|
$
0.12
|
|
$
0.07
|
|
|
|
|
|
|
GAAP diluted
shares
|
418,462
|
|
417,797
|
|
427,276
|
Adjusted dilutive
stock awards - non-GAAP
|
7,070
|
|
9,482
|
|
8,501
|
Non-GAAP diluted
shares
|
425,532
|
|
427,279
|
|
435,777
|
Segment
Revenue
|
|
|
|
|
|
|
(In
thousands)
|
|
Q1
2015
|
|
Q4
2014
|
|
Q1
2014
|
|
|
|
|
|
|
|
Microcontroller
|
|
$ 218,786
|
|
$ 239,721
|
|
$ 235,141
|
Nonvolatile
Memory
|
|
43,748
|
|
44,029
|
|
35,651
|
Automotive
|
|
35,745
|
|
38,983
|
|
40,971
|
Multi-Market and
Other
|
|
20,009
|
|
23,221
|
|
25,598
|
|
|
|
|
|
|
|
Total
Company Revenue
|
|
$ 318,288
|
|
$ 345,954
|
|
$ 337,361
|
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.
- XSense related activities
- Operating results of exited XSense business.
Operating results of exited XSense business include
revenue, gross margin, research and development, and operating loss
from the XSense business which assets were sold on April 16, 2015 and have been excluded from
non-GAAP results beginning in the first quarter of 2015 after
management determined to discontinue its investment and exit this
business. Management believes that excluding the XSense operating
results from non-GAAP measures provides investors a basis to
compare 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 determined in the fourth quarter 2014 to
discontinue its investment and exit this business.
- Acquisition-related charges.
Acquisition-related charges 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. Management believes that excluding
acquisition-related charges 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.
- 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
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.
- Loss (gain) related to foundry arrangements.
Loss (gain) related to foundry arrangements relates to the
reduction of estimated loss (gain) 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 loss (gain)
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 (credits).
French building underutilization and other (credits) 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.
- 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.
Logo -
http://photos.prnewswire.com/prnh/20120712/MM39691LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/atmel-reports-first-quarter-2015-financial-results-300078698.html
SOURCE Atmel