Microcontroller Revenues Grew 18% Sequentially
Revenues for the third quarter of 2009 were $317.7 million, a 12% increase compared to $284.5 million for the second quarter of 2009, and a 21% decrease compared to $400.0 million for the third quarter ended September 30, 2008.
Net loss, on a GAAP basis, for the third quarter of 2009 totaled $(17.5) million or $(0.04) per diluted share. This compares to a net loss of $(12.4) million or $(0.03) per diluted share for the second quarter of 2009 and a net loss of $(4.7) million or $(0.01) per diluted share for the year-ago quarter.
Non-GAAP net loss for the third quarter of 2009 totaled $(4.0) million or $(0.01) per diluted share compared to non-GAAP net loss of $(0.6) million or $(0.00) per diluted share for the second quarter of 2009, and non-GAAP net income of $42.6 million or $0.09 per diluted share for the year-ago quarter.
Gross profit, as a percent of revenue, was 31.1% for the third quarter of 2009. This compares to gross profit of 32.3% for the second quarter of 2009 and 39.5% for the year-ago quarter. Gross profit has been adversely impacted by a reduction in factory utilization at the Company's two wafer fabrication facilities.
"We are pleased to have exceeded our revenue guidance this quarter with growth coming from all business segments and geographies," said Steve Laub, Atmel's President and Chief Executive Officer. "Sales of our microcontrollers grew 18% sequentially and we are excited by the production release of our maXTouch(TM) products, a leading family of capacitive touchscreen controllers, which are now being designed for use at top-tier OEMs."
Loss from operations was $(14.7) million for the third quarter of 2009. This compares to a loss from operations of $(17.6) million for the second quarter of 2009 and $(11.3) million for the third quarter of 2008.
Stock-based compensation expense was $7.6 million for the third quarter of 2009, compared to $6.4 million for the second quarter of 2009 and $7.4 million for the year-ago quarter.
Income tax provision totaled $(0.4) million for the third quarter of 2009. This compares to an income tax benefit of $9.7 million for the second quarter of 2009 and a benefit of $4.1 million for the third quarter of 2008. The prior quarter income tax benefits were the result of R&D tax credits as well as the reversal of tax liabilities no longer needed as a result of settlement of certain foreign tax audits.
Cash provided from operations totaled $59.4 million for the third quarter of 2009, compared to $1.6 million for the second quarter of 2009 and $67.2 million for the third quarter of 2008. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $446.2 million at the end of the third quarter of 2009, an increase of $26.8 million from the end of the prior quarter. During the quarter, the Company repaid $21.5 million of its revolving credit facility; in the previous quarter the company repaid $20.0 million of its revolving credit facility.
The Company's effective average exchange rate in the third quarter of 2009 was approximately $1.41 to the euro, compared to $1.33 to the euro in the second quarter of 2009 and $1.54 to the euro in the year-ago period. A $0.01 increase in the dollar/euro exchange rate decreases operating income by approximately $0.3 million each quarter.
Third Quarter 2009 Operational Highlights
-- Revenues increased 12% sequentially, exceeding guidance of up 4% to 8% -- Microcontroller revenues grew 18% sequentially -- Cash flow from operations of $59 million returns to historical levels -- Inventories decreased by $27 million; inventory days of 102 lowest level since September 2006
Recent Product Highlights
-- Production released Industry Leading Touchscreen Solutions with New Family of maXTouch(TM) Products -- Introduced Newest Release of QTouch(TM) Library Adding Capacitive Touch Capabilities to all AVR and AVR32 Microcontrollers -- Introduced New Family of AVR Microcontrollers For Industrial Motor Control -- Launched Industry's Safest Battery Management Solution for Automotive and Industrial Li-Ion Batteries -- Released to Production MegaAVR picoPower with 128 KB of Flash for Ultra Low Power Applications -- Received ZigBee Smart Energy Certification For BitCloud Software Stack -- Introduced Next-generation, Feature-rich Active AM/FM Antenna ICs
For the fourth quarter of 2009, the Company expects revenue will increase 3% to 7% on a sequential basis.
Non-GAAP net (loss) income excludes charges related to restructuring activities, acquisitions, grant repayments, asset impairment charges, gain on sale of assets, and stock-based compensation, as well as distributor bad debt recovery, unsolicited M&A expense and the income tax effect of these excluded items. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.
Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the third quarter 2009 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405 or 1-706-634-5185. The conference ID number is 38575340 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2:00 p.m. PT start time to ensure a timely connection. The webcast can be accessed at www.atmel.com/ir/ and will be archived for 12 months.
A replay of the conference call will be available today at approximately 5:00 p.m. PT and will run for 48 hours. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations. The access code is 38575340.
Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel provides the electronics industry with complete system solutions focused on consumer, industrial, security, communications, computing and automotive markets.
Safe Harbor for Forward-Looking Statements
Information in this release regarding Atmel's forecasts, business outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about our ability to capitalize on improving market dynamics and future operating and financial performance including fourth quarter 2009 revenues. 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, and we assume no obligation to update any such forward-looking statements. 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 general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or Company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, the ability to realize the anticipated benefits of our recent strategic transactions, restructuring plans and other initiatives in a timely manner or at all, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, the market price of our common stock, compliance with U.S. and international laws and regulations by us and our distributors, 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, 2008, filed on March 2, 2009, and our subsequent Form 10-Q reports. Atmel assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.