Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, reported results for the three months ended June 30, 2014.
Consolidated GAAP net sales for the first quarter of fiscal 2015 were a record $528.9 million, up 7.2% sequentially from net sales of $493.4 million in the immediately preceding quarter, and up 14.3% from net sales of $462.8 million in the prior year’s first quarter. Consolidated GAAP net income for the first quarter of fiscal 2015 was $89.9 million, or 40 cents per diluted share, down 19.4% from GAAP net income of $111.5 million, or 50 cents per diluted share, in the immediately preceding quarter, and up 14.4% from GAAP net income of $78.6 million, or 37 cents per diluted share, in the prior year’s first quarter.
Consolidated non-GAAP net sales for the first quarter of fiscal 2015 were a record $531.3 million, up 7.7% sequentially from net sales of $493.4 million in the immediately preceding quarter, and up 14.8% from net sales of $462.8 million in the prior year’s first quarter. Non-GAAP net sales in the first quarter of fiscal 2015 were $2.5 million higher than GAAP net sales due to the sell-through of inventory held by distributors of Supertex at the date of our acquisition not being included in our GAAP results. Consolidated non-GAAP net income for the first quarter of fiscal 2015 was a record $151.6 million, or 68 cents per diluted share, up 7.3% from non-GAAP net income of $141.3 million, or 64 cents per diluted share, in the immediately preceding quarter, and up 26.0% from non-GAAP net income of $120.4 million, or 57 cents per diluted share, in the prior year’s first quarter. For the first quarters of fiscal 2015 and fiscal 2014, our non-GAAP results exclude the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, inventory valuation costs, severance costs, and legal and other general and administrative expenses associated with acquisitions), non-cash interest expense on our convertible debentures, and non-recurring tax events. A reconciliation of our non-GAAP and GAAP results is included in this press release.
Microchip also announced today that its Board of Directors declared a quarterly cash dividend on its common stock of 35.6 cents per share. The quarterly dividend is payable on September 4, 2014 to stockholders of record on August 21, 2014.
“We are very pleased with our execution in the June quarter. All of our non-GAAP financial metrics including net sales, gross margin percentage, operating expense percentage, operating profit percentage and earnings per share were better than the mid-point of our guidance provided on May 6,” said Steve Sanghi, President and CEO. “Excluding the results of Supertex, our non-GAAP gross margin was an outstanding 60%, and our non-GAAP operating profit was 33.5%.”
Mr. Sanghi added, “Including the results of Supertex, our consolidated non-GAAP gross margin was 59.8% and our non-GAAP operating profit was 33.2%. We are making excellent progress towards our long term goal of 35% non-GAAP operating profit. Consolidated non-GAAP earnings per share was a record 68 cents and was 2 cents better than the mid-point of our guidance.”
Mr. Sanghi added further, “We are seeing a seasonally normal business environment with strengths in many of our end markets like industrial, automotive, housing, consumer electronics and personal computing. We are seeing exceptional strength in some of our new products and technologies which are growing revenue at double digit percentages sequentially. As a result, our product delivery lead times have stretched out and we are selectively capacity constrained in fab, wafer sort, assembly and test operations particularly on our newest products and technologies. Our inventory of 108 days is below our targeted level of 115 and is expected to go lower this quarter. We are ramping all of our factories, but are limited by equipment lead times. We have increased our planned capital expenditures for fiscal year 2015 to $175 million.”
