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SAN JOSE, Calif. — Atmel® Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced financial results for its third quarter ended September 30, 2010.
Revenues in the third quarter of 2010 were $444.3 million, up 13 percent from $393.4 million in the second quarter of 2010 and up 40 percent from $317.7 million in the third quarter of 2009.
Net income on a GAAP basis was $219.8 million or $0.47 per diluted share in the third quarter of 2010. Included in net income for the third quarter was a significant tax benefit from the settlement of an IRS tax audit of $150.4 million. The third quarter net income compares with a GAAP net loss of $36.4 million or a loss of $(0.08) per diluted share in the second quarter of 2010 and a net loss of $17.5 million or a loss of $(0.04) per diluted share in the third quarter of 2009.
Non-GAAP net income in the third quarter of 2010 totaled $88.6 million or $0.18 per diluted share, compared with non-GAAP net income of $50.8 million or $0.11 per diluted share in the second quarter of 2010 and a non-GAAP net loss of $4.0 million or a loss of $(0.01) per diluted share in the third quarter of 2009.
Gross margin increased to 47 percent in the third quarter of 2010, the highest level achieved since the fourth quarter of 1996, compared to 41 percent in the second quarter of 2010 and 31 percent in the third quarter of 2009. The sequential gross margin improvement was the result of the sale during the second quarter of the Rousset manufacturing operations, increased factory utilization levels, and a favorable mix of higher margin microcontroller products.
“The strong financial results are a reflection of our outstanding product portfolio, streamlined manufacturing operations and our focus on growing higher margin businesses. Our microcontroller business achieved record revenues again in the third quarter and gained substantial market share as our products continue to be the preferred choice among design engineers. Atmel’s touchscreen shipments experienced a particularly strong ramp as customers continue to demand the superior performance offered by our maXTouch™ products,” said Steve Laub, President and Chief Executive Officer of Atmel. “Additionally, we are pleased to have completed the sale of the Smart Card business increasing our focus on our core microcontroller business.”
Third quarter 2010 income from operations of $77.7 million compared with a second quarter loss from operations of $78.9 million and a loss from operations of $14.7 million in the third quarter of 2009. Third quarter income from operations included a $5.7 million loss from the sale of the Smart Card business.
Stock-based compensation expense was $13.2 million in the third quarter of 2010, compared with $21.7 million in the second quarter of 2010 and $7.6 million in the third quarter of 2009.
Income tax benefit of $136.6 million in the third quarter of 2010 included a $150.4 million, or $0.32 per diluted share, tax benefit from the settlement of an IRS tax audit resulting from the release of tax reserves of approximately $102.0 million, plus a $48.4 million tax refund. This compares to an income tax benefit of $39.7 million in the second quarter of 2010 and an income tax provision of $0.4 million in the third quarter of 2009.
Cash provided from operations totaled approximately $95.3 million in the third quarter of 2010, compared with $49.2 million in the second quarter of 2010, and $59.4 million in the third quarter of 2009. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $597.4 million at the end of the third quarter of 2010, an increase of $45.1 million from the end of the prior quarter, and the company had a record net cash balance (cash balances less the current and long-term debt) of $513.3 million at the end of third quarter 2010.
{complink 520|Atmel Corp.}
The challenge of managing the high-tech business is getting more complicated with the complexities coming from outside the sector. Apple's insistence on holding billions in cash has only made the job even more difficult.
As you say, yes, there are some advantages to the weakening US dollar, but there are so many negative things that (usually) more than negate those small positive things.
I know it's important to look on the bright side, but it's a little like having your house burn down and having somebody say, “well, at least now you'll be saving a lot of money on your electric bills!”
Anyways, I'm looking forward to your article later this week because out of all the high-tech companies out there, Apple probably has the least to worry about. They have a pretty thick cushion of cash they can sit on to help ease the pain of this currency crisis.
It sounds like this is really beginning to escalate. How long do these cycles typically last? If the Fed and Congress go ahead with their initiatives, is this a short-term fix?
One solution for Apple is to bring some jobs back home where they belong to offset weaker dollar. Yes, it is easier said than done. On the other hand Apple is paid with euros in Europe so they get more dollars in exchange even if the price per unit will be competitive. There is a balance somewhere and we will probably never know where.