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Semtech Announces Fourth Quarter and Fiscal Year 2020 Results

SMTC

CAMARILLO, Calif.

Semtech Corporation (Nasdaq: SMTC), a leading supplier of high performance analog and mixed-signal semiconductors and advanced algorithms, today reported unaudited financial results for its fourth quarter and fiscal year 2020, which ended January 26, 2020.

Highlights for the Fourth Quarter and Fiscal Year 2020

  • Q4 FY2020 net sales of $138.0 million, GAAP EPS of $0.04 and non-GAAP EPS of $0.40
  • FY2020 net sales of $547.5 million, GAAP EPS of $0.47 and non-GAAP EPS of $1.52
  • Cash flow from operations was $45.3 million, or 33% of net sales, in Q4 FY2020 and was $118.6 million, or 22% of net sales, in FY2020
  • Refinanced the prior credit facility with a new $600.0 million revolving credit facility
  • Repurchased 0.5 million shares for $27.6 million in Q4 FY2020 and 1.5 million shares for $70.2 million in FY2020

Results on a GAAP basis for the Fourth Quarter and Fiscal Year 2020

($ in millions, except for earnings per diluted share data)

Q4 FY2020

FY2020

Net Sales

$

138.0

$

547.5

GAAP Gross Margin

61.1

%

61.5

%

GAAP SG&A Expense

$

43.0

$

163.1

GAAP R&D Expense

$

27.4

$

107.4

GAAP Operating Expense

$

74.1

$

284.7

GAAP Operating Margin

7.4

%

9.5

%

GAAP Net Income Attributable To Common Stockholders

$

2.9

$

31.9

GAAP Earnings Per Diluted Share

$

0.04

$

0.47

To facilitate a complete understanding of comparable financial performance between periods, the Company also presents performance results that exclude certain non-cash items and items that are not considered reflective of the Company’s core results over time. These non-GAAP financial measures exclude certain items and are described below under “Non-GAAP Financial Measures.”

Results on a Non-GAAP basis for the Fourth Quarter and Fiscal Year 2020 (see the list of non-GAAP items and the reconciliation of these to the most comparable GAAP items set forth in the tables below):

($ in millions, except for earnings per diluted share data)

Q4 FY2020

FY2020

Non-GAAP Gross Margin

61.5

%

61.8

%

Non-GAAP SG&A Expense

$

29.8

$

117.5

Non-GAAP R&D Expense

$

24.1

$

96.2

Non-GAAP Operating Expense

$

54.0

$

213.7

Non-GAAP Operating Margin

22.5

%

22.7

%

Non-GAAP Net Income Attributable To Common Stockholders

$

26.8

$

102.7

Non-GAAP Earnings Per Diluted Share

$

0.40

$

1.52

Mohan Maheswaran, Semtech’s President and Chief Executive Officer, stated, “We delivered fiscal Q4 results at the upper end of our guidance and ended with a solid finish to a challenging year. In fiscal year 2020, we continued to invest in our disruptive product platforms while delivering strong operating cash flow and are very well positioned in our target markets including hyper scale data centers and 5G infrastructure, Internet Of Things (IOT) and mobile systems." Maheswaran continued, "Despite the ongoing geopolitical challenges and the uncertainties associated with the coronavirus, we believe the long-term sustainability of our secular growth drivers, along with our balanced end-market approach and strong customer relationships, should enable the Company to deliver a strong financial performance in fiscal year 2021 and beyond.”

First Quarter of Fiscal Year 2021 Outlook

Both the GAAP and non-GAAP first quarter of fiscal year 2021 outlook below take into account, based on the Company's current estimates, the anticipated, but uncertain, impact to the Company of the export restrictions pertaining to Huawei and certain of its affiliates imposed by the U.S. Department of Commerce, as well as of the coronavirus. The Company is unable to predict the full impact such challenges may have on its future results of operations.

GAAP First Quarter of Fiscal Year 2021 Outlook

  • Net sales are expected to be in the range of $125.0 million to $135.0 million
  • GAAP Gross margin is expected to be in the range of 60.6% to 61.6%
  • GAAP SG&A expense is expected to be in the range of $35.5 million to $36.5 million
  • GAAP R&D expense is expected to be in the range of $27.5 million to $28.5 million
  • GAAP Intangible amortization expense is expected to be approximately $2.8 million
  • GAAP Effective tax rate is expected to be in the range of 23% to 27%
  • GAAP Earnings per diluted share are expected to be in the range of $0.10 to $0.15
  • Fully-diluted share count is expected to be approximately 67.0 million shares
  • Share-based compensation is expected to be approximately $10.5 million, categorized as follows: $0.5 million cost of sales, $7.0 million SG&A, and $3.0 million R&D
  • Capital expenditures are expected to be approximately $6.0 million
  • Depreciation expense is expected to be approximately $5.7 million

Non-GAAP First Quarter of Fiscal Year 2021 Outlook (see the list of non-GAAP items and the reconciliation of these to the most comparable GAAP items set forth in the tables below)

  • Non-GAAP Gross margin is expected to be in the range of 61.0% to 62.0%
  • Non-GAAP SG&A expense is expected to be in the range of $28.0 million to $29.0 million
  • Non-GAAP R&D expense is expected to be in the range of $24.0 million to $25.0 million
  • Non-GAAP Effective tax rate is expected to be in the range of 14% to 16%
  • Non-GAAP Earnings per diluted share are expected to be in the range of $0.30 to $0.36

Correction of Immaterial Errors

During the fourth quarter of fiscal year 2020, management identified certain immaterial errors related to share-based compensation expense of market-based awards granted during fiscal years 2018, 2019 and 2020. The errors resulted from adjustments to the grant date fair value of the market-based awards that were incorrectly accounted for as performance-based awards. The Company concluded that the impact of these errors was immaterial and has corrected its consolidated financial statements for these errors for all prior periods presented in this press release.

Webcast and Conference Call

Semtech will be hosting a conference call today to discuss its fourth quarter and fiscal year 2020 results at 2:00 p.m. Pacific time. An audio webcast will be available on Semtech’s website at www.semtech.com in the “Investor Relations” section under “Investor News.” A replay of the call will be available through April 8, 2020 at the same website or by calling (877) 660-6853 and entering conference ID 13692226.

Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements prepared in accordance with GAAP, this release includes a presentation of select non-GAAP metrics.The Company's measure of free cash flow is calculated as cash flow from operations less net capital expenditures. The Company’s non-GAAP measures of gross margin, SG&A expenses, R&D expenses, operating expenses, operating margin, effective tax rate, net income attributable to common stockholders and earnings per diluted share exclude the following items, if any:

  • Share-based compensation
  • Amortization of purchased intangibles and impairments
  • Restructuring, transaction and other acquisition or disposition-related gains or losses
  • Litigation expenses or dispute settlement charges or gains
  • Cumulative other reserves associated with historical activity including environmental and pension
  • Equity in net gains or losses of equity method investments
  • Loss on early extinguishment of debt

To provide additional insight into the Company's first quarter outlook, this release also includes a presentation of forward-looking non-GAAP measures. Management believes that the presentation of these non-GAAP financial measures provide useful information to investors regarding the Company’s financial condition and results of operations because these non-GAAP financial measures are adjusted to exclude the items identified above because such items are either operating expenses which would not otherwise have been incurred by the Company in the normal course of the Company’s business operations or are not reflective of the Company’s core results over time. These excluded items may include recurring as well as non-recurring items, and no inference should be made that all of these adjustments, charges, costs or expenses are unusual, infrequent or non-recurring. For example: certain restructuring and integration-related expenses (which consist of employee termination costs, facility closure or lease termination costs, and contract termination costs) may be considered recurring given the Company’s ongoing efforts to be more cost effective and efficient; certain acquisition and disposition-related adjustments or expenses may be deemed recurring given the Company's regular evaluation of potential transactions and investments; and certain litigation expenses or dispute settlement charges or gains (which may include estimated losses for which we may have established a reserve, as well as any actual settlements, judgments, or other resolutions against, or in favor of, the Company related to litigation, arbitration, disputes or similar matters, and insurance recoveries received by the Company related to such matters) may be viewed as recurring given that the Company may from time to time be involved in, and may resolve, litigation, arbitration, disputes, and similar matters.

Notwithstanding that certain adjustments, charges, costs or expenses may be considered recurring, in order to provide meaningful comparisons, the Company believes that it is appropriate to exclude such items because they are not reflective of the Company's core results and tend to vary based on timing, frequency and magnitude.

As noted in its first quarter fiscal year 2019 earnings release, the Company is no longer adjusting prior-period non-GAAP performance metrics of net sales and gross margin to exclude the cost of the Comcast Warrant as the Comcast Warrant was fully vested in the first quarter of fiscal year 2019. The Company in previous periods had excluded the recognized cost of the Comcast Warrant from non-GAAP net sales and non-GAAP gross margin because the cost related to a non-routine, non-cash equity award that was provided to Comcast as an incentive to deploy a network based on technology developed by the Company and because the Comcast Warrant would not have had an ongoing impact on revenues in future periods.

These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company's comparable financial performance between periods. In addition, the Company’s management generally excludes the items noted above when managing and evaluating the performance of the business. The financial statements provided with this release include reconciliations of these non-GAAP measures to their most comparable GAAP measures for the fourth quarter of fiscal year 2019, the third and fourth quarters of fiscal year 2020, and the full-year fiscal 2020 and fiscal 2019 periods, along with a reconciliation of forward-looking non-GAAP measures (other than the non-GAAP effective tax rate) to their most comparable GAAP measures for the first quarter of fiscal year 2021. The Company is unable to include a reconciliation of the forward-looking non-GAAP measureof the non-GAAP effective tax rate to the corresponding GAAP measure as this is not available without unreasonable efforts due to the high variability and low visibility with respect to the charges that are excluded from this non-GAAP measure. We expect the variability of the above charges to have a potentially significant impact on our GAAP financial results. These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may be inconsistent with similar measures presented by other companies.

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on the Company’s current expectations, estimates and projections about its operations, industry, financial condition, performance, results of operations, and liquidity. Forward-looking statements are statements other than historical information or statements of current condition and relate to matters such as future financial performance including the first quarter of fiscal year 2021 outlook; the negative impact of the novel coronavirus outbreak on global economic conditions and on the Company's business operations, sales and operating results; the Company’s expectations concerning the negative impact on the Company’s results of operations from its inability to ship certain products and provide certain support services due to the export restrictions related to Huawei; future operational performance; the anticipated impact of specific items on future earnings; and the Company’s plans, objectives and expectations. Statements containing words such as “may,” “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “should,” “will,” “designed to,” “projections,” or “business outlook,” or other similar expressions constitute forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected. Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: potential differences between the unaudited results disclosed in this release and the Company’s final results when disclosed in its Annual Report on Form 10-K as a result of the completion of the Company’s financial closing procedures, final adjustments, annual audit by the Company’s independent registered public accounting firm, and other developments arising between now and the disclosure of the final results; the uncertainty surrounding the impact and duration of the novel coronavirus outbreak on global economic conditions and on the Company's business and results of operations; export restrictions and laws affecting the Company's trade and investments including with respect to Huawei, and tariffs or the occurrence of trade wars; competitive changes in the marketplace including, but not limited to, the pace of growth or adoption rates of applicable products or technologies; downturns in the business cycle, decreased average selling prices of the Company’s products; the Company’s reliance on a limited number of suppliers and subcontractors for components and materials; changes in projected or anticipated end-user markets; the Company’s ability to forecast its effective tax rates due to changing income in higher or lower tax jurisdictions and other factors that contribute to the volatility of the Company’s effective tax rates and impact anticipated tax benefits; and the Company's ability to forecast and achieve anticipated net sales and earnings estimates in light of periodic economic uncertainty, to include impacts arising from Asian, European and global economic dynamics. Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended January 27, 2019, subsequent Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission, and in material incorporated therein, including, without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” In light of the significant risks and uncertainties inherent in the forward-looking information included herein that may cause actual performance and results to differ materially from those predicted, any such forward-looking information should not be regarded as representations or guarantees by the Company of future performance or results, or that its objectives or plans will be achieved or that any of its operating expectations or financial forecasts will be realized. Reported results should not be considered an indication of future performance. Investors are cautioned not to place undue reliance on any forward-looking information contained herein, which reflect management’s analysis only as of the date hereof. Except as required by law, the Company assumes no obligation to publicly release the results of any update or revision to any forward-looking statements that may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated or future events, or otherwise.

About Semtech

Semtech Corporation is a leading supplier of high performance analog, mixed-signal semiconductors and advanced algorithms for high-end consumer, enterprise computing, communications and industrial equipment. Products are designed to benefit the engineering community as well as the global community. The Company is dedicated to reducing the impact it, and its products, have on the environment. Internal green programs seek to reduce waste through material and manufacturing control, use of green technology and designing for resource reduction. Publicly traded since 1967, Semtech is listed on the NASDAQ Global Select Market under the symbol SMTC. For more information, visit http://www.semtech.com.

Semtech and the Semtech logo are registered trademarks or service marks of Semtech Corporation or its subsidiaries.

SMTC-F

SEMTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Net sales

$

138,001

$

141,011

$

160,006

$

547,512

$

627,196

Cost of sales

53,724

54,763

61,139

210,828

250,174

Gross profit

84,277

86,248

98,867

336,684

377,022

Operating costs and expenses:

Selling, general and administrative

43,032

37,777

36,525

163,106

145,246

Product development and engineering

27,356

26,976

28,447

107,368

109,047

Intangible amortization

3,725

3,770

6,728

16,546

26,649

Changes in the fair value of contingent earn-out obligations

(32

)

(152

)

(2,345

)

(9,419

)

Total operating costs and expenses

74,081

68,371

71,700

284,675

271,523

Operating income

10,196

17,877

27,167

52,009

105,499

Interest expense

(1,859

)

(2,183

)

(2,457

)

(9,106

)

(9,202

)

Non-operating (expense) income, net

(7

)

644

1,909

2,893

3,823

Investment impairments

(1,211

)

(1,211

)

(30,000

)

Income before taxes and equity in net gains (losses) of equity method investments

7,119

16,338

26,619

44,585

70,120

Provision for taxes

4,190

2,693

12,861

12,828

1,040

Net income before equity in net gains (losses) of equity method investments

2,929

13,645

13,758

31,757

69,080

Equity in net gains (losses) of equity method investments

352

(85

)

109

(126

)

Net income

2,929

13,997

13,673

31,866

68,954

Net loss attributable to noncontrolling interest

(5

)

(5

)

Net income attributable to common stockholders

$

2,934

$

13,997

$

13,673

$

31,871

$

68,954

Earnings per share:

Basic

$

0.04

$

0.21

$

0.21

$

0.48

$

1.05

Diluted

$

0.04

$

0.21

$

0.20

$

0.47

$

1.01

Weighted average number of shares used in computing earnings per share:

Basic

66,041

66,387

65,525

66,263

65,982

Diluted

67,051

67,318

68,165

67,418

68,481

SEMTECH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

January 26, 2020

January 27, 2019

ASSETS

Current assets:

Cash and cash equivalents

$

293,324

$

312,120

Accounts receivable, net

61,927

79,223

Inventories

73,010

63,679

Prepaid taxes

10,718

8,406

Other current assets

21,757

21,876

Total current assets

460,736

485,304

Non-current assets:

Property, plant and equipment, net

124,418

118,488

Deferred tax assets

19,409

13,576

Goodwill

351,141

351,141

Other intangible assets, net

20,012

36,558

Other assets

76,032

57,028

Total assets

$

1,051,748

$

1,062,095

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

48,009

$

43,183

Accrued liabilities

50,632

68,462

Current portion, long term debt

18,269

Total current liabilities

98,641

129,914

Non-current liabilities:

Deferred tax liabilities

3,600

3,363

Long term debt, less current portion

194,743

192,845

Other long-term liabilities

78,249

54,078

Stockholders’ equity

676,269

681,895

Noncontrolling interest

246

Total liabilities & equity

$

1,051,748

$

1,062,095

SEMTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL INFORMATION

(in thousands)

(unaudited)

Twelve Months Ended

January 26,
2020

January 27,
2019

Net income

$

31,866

$

68,954

Net cash provided by operations

118,616

183,563

Net cash used in investing activities

(34,334

)

(36,218

)

Net cash used in financing activities

(103,078

)

(143,148

)

Net (decrease) increase in cash and cash equivalents

(18,796

)

4,197

Cash and cash equivalents at beginning of period

312,120

307,923

Cash and cash equivalents at end of period

$

293,324

$

312,120

Three Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

Q420

Q320

Q419

Free Cash Flow:

Cash Flow from Operations

$

45,255

$

33,268

$

47,198

Net Capital Expenditures

(2,647

)

(3,516

)

(4,124

)

Free Cash Flow:

$

42,608

$

29,752

$

43,074

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(in thousands, except per share data)

(unaudited)

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Gross Margin–GAAP

61.1

%

61.2

%

61.8

%

61.5

%

60.1

%

Share-based compensation

0.4

%

0.4

%

0.3

%

0.3

%

0.3

%

Adjusted Gross Margin (Non-GAAP)

61.5

%

61.6

%

62.1

%

61.8

%

60.4

%

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Selling, general and administrative–GAAP

$

43,032

$

37,777

$

36,525

$

163,106

$

145,246

Share-based compensation

(10,762

)

(9,323

)

(9,914

)

(38,556

)

(35,431

)

Transaction and integration related

(141

)

258

(41

)

(1,118

)

(1,993

)

Restructuring and other reserves

(1,910

)

(252

)

(4,621

)

(1,021

)

Litigation cost, net of recoveries

(410

)

(205

)

575

(1,340

)

6,921

Adjusted selling, general and administrative (Non-GAAP)

$

29,809

$

28,507

$

26,893

$

117,471

$

113,722

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Product development and engineering–GAAP

$

27,356

$

26,976

$

28,447

$

107,368

$

109,047

Share-based compensation

(3,282

)

(3,180

)

(2,075

)

(11,565

)

(8,268

)

Transaction and integration related

67

593

(186

)

427

(783

)

Restructuring and other reserves

252

Litigation cost, net of recoveries

(784

)

Adjusted product development and engineering (Non-GAAP)

$

24,141

$

24,389

$

26,186

$

96,230

$

99,464

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Operating cost and expense–GAAP

$

74,081

$

68,371

$

71,700

$

284,675

$

271,523

Share-based compensation

(14,044

)

(12,503

)

(11,989

)

(50,121

)

(43,697

)

Intangible amortization

(3,725

)

(3,770

)

(6,728

)

(16,546

)

(26,649

)

Transaction and integration related

(74

)

851

(226

)

(691

)

(2,777

)

Restructuring and other reserves

(1,910

)

(252

)

(4,621

)

(769

)

Litigation cost, net of recoveries

(410

)

(205

)

575

(1,340

)

6,137

Changes in the fair value of contingent earn-out obligations

32

152

2,345

9,419

Adjusted operating cost and expense (Non-GAAP)

$

53,950

$

52,896

$

53,080

$

213,701

$

213,187

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Operating Margin–GAAP

7.4

%

12.7

%

17.0

%

9.5

%

16.8

%

Share-based compensation

10.6

%

9.2

%

7.8

%

9.5

%

7.3

%

Intangible amortization

2.7

%

2.7

%

4.2

%

3.0

%

4.2

%

Transaction and integration related

0.1

%

(0.6

)%

0.1

%

0.1

%

0.4

%

Restructuring and other reserves

1.4

%

%

0.2

%

0.8

%

0.2

%

Litigation cost, net of recoveries

0.3

%

0.1

%

(0.4

)%

0.2

%

(1.0

)%

Changes in the fair value of contingent earn-out obligations

%

(0.1

)%

%

(0.4

)%

(1.5

)%

Adjusted Operating Margin (Non-GAAP)

22.5

%

24.0

%

28.9

%

22.7

%

26.4

%

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

GAAP net income attributable to common stockholders

$

2,934

$

13,997

$

13,673

$

31,871

$

68,954

Adjustments to GAAP net income attributable to common stockholders:

Share-based compensation

14,590

13,055

12,517

52,049

45,336

Intangible amortization

3,725

3,770

6,728

16,546

26,649

Transaction and integration related

74

(851

)

227

691

2,777

Restructuring and other reserves

1,910

252

4,621

769

Litigation cost, net of recoveries

410

205

(575

)

1,340

(6,137

)

Changes in the fair value of contingent earn-out obligations

(32

)

(152

)

(2,345

)

(9,419

)

Investment impairments

1,211

1,211

30,000

Investment gain

(1,288

)

(1,288

)

Loss on early extinguishment of debt

514

514

Total Non-GAAP adjustments before taxes

22,402

16,027

17,861

74,627

88,687

Associated tax effect

1,474

(2,276

)

5,929

(3,701

)

(25,350

)

Equity in net (gains) losses of equity method investments

(352

)

85

(109

)

126

Total of supplemental information, net of taxes

23,876

13,399

23,875

70,817

63,463

Non-GAAP net income attributable to common stockholders

$

26,810

$

27,396

$

37,548

$

102,688

$

132,417

Diluted GAAP earnings per share

$

0.04

$

0.21

$

0.20

$

0.47

$

1.01

Adjustments per above

0.36

0.20

0.35

1.05

0.92

Diluted non-GAAP earnings per share

$

0.40

$

0.41

$

0.55

$

1.52

$

1.93

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

Three Months Ended

Twelve Months Ended

January 26,
2020

October 27,
2019

January 27,
2019

January 26,
2020

January 27,
2019

Q420

Q320

Q419

Q420

Q419

Comcast Warrant*

Impact on Net Sales

$

$

$

$

$

(21,501

)

Associated tax effect

3,678

Impact on EPS

$

$

$

$

$

(0.26

)

*In consideration of discussions held with the Securities and Exchange Commission, we will no longer adjust net sales for the impact of the Warrant for any comparable historical periods presented. The Company will instead provide GAAP net sales for historical periods presented and will separately disclose the impact of the Warrant on the financial statement line items impacted by the Warrant.

SEMTECH CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

First Quarter of Fiscal Year 2021 Outlook

(in millions, except per share data)

Q1 FY21 Outlook

April 26, 2020

Low

High

Gross Margin–GAAP

60.6

%

61.6

%

Share-based compensation

0.4

%

0.4

%

Adjusted Gross Margin (Non-GAAP)

61.0

%

62.0

%

Low

High

Selling, general and administrative–GAAP

$

35.5

$

36.5

Share-based compensation

(7.0

)

(7.0

)

Transaction and integration related

(0.5

)

(0.5

)

Adjusted selling, general and administrative (Non-GAAP)

$

28.0

$

29.0

Low

High

Product development and engineering–GAAP

$

27.5

$

28.5

Share-based compensation

(3.0

)

(3.0

)

Transaction and integration related

(0.5

)

(0.5

)

Adjusted product development and engineering (Non-GAAP)

$

24.0

$

25.0

Low

High

Diluted GAAP earnings per share

$

0.10

$

0.15

Share-based compensation

0.16

0.16

Transaction, restructuring, and acquisition related expenses

0.02

0.02

Amortization of acquired intangibles

0.04

0.04

Associated tax effect

(0.02

)

(0.01

)

Diluted adjusted earnings per share (Non-GAAP)

$

0.30

$

0.36

Sandy Harrison
Semtech Corporation
(805) 480-2004
webir@semtech.com



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