Microchip Technology Incorporated, a leading provider of microcontroller, mixed signal, analog and Flash-IP solutions, today reported results for the three months ended December 31, 2014.
GAAP net sales for the third quarter of fiscal 2015 were $528.7 million, down 3.2% sequentially from net sales of $546.2 million in the immediately preceding quarter, and up 9.6% from GAAP net sales of $482.4 million in the prior year's third fiscal quarter. GAAP net income for the third quarter of fiscal 2015 was $86.1 million, or 39 cents per diluted share, down 8.1% from GAAP net income of $93.6 million, or 42 cents per diluted share, in the immediately preceding quarter, and down 18.4% from GAAP net income of $105.4 million, or 48 cents per diluted share, in the prior year's third fiscal quarter.
Non-GAAP net sales for the third quarter of fiscal 2015 were $535.8 million, down 1.9% sequentially from non-GAAP net sales of $546.2 million in the immediately preceding quarter, and up 11.1% from non-GAAP net sales of $482.4 million in the prior year's third fiscal quarter. Non-GAAP net income for the third quarter of fiscal 2015 was $143.3 million, or 64 cents per diluted share, down 4.6% from non-GAAP net income of $150.2 million, or 67 cents per diluted share, in the immediately preceding quarter, and up 7.8% from non-GAAP net income of $132.9 million, or 61 cents per diluted share, in the prior year's third fiscal quarter. For the third 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), revenue recognition changes related to ISSC distributors, 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 35.70 cents per share. The quarterly dividend is payable on March 9, 2015 to stockholders of record on February 23, 2015.
"We are very pleased with our execution in the December quarter," said Steve Sanghi, President and CEO. "Our original revenue guidance was to be down 4.5% sequentially and in early December we improved our guidance for revenue to be down only 3.5% at the midpoint. Our actual non-GAAP revenue results were down only 1.9%, which was better than what is seasonally normal."
Mr. Sanghi added, "Calendar year 2014 was Microchip's first year above the $2 billion revenue mark and was up 12.8% from calendar year 2013 as a result of very strong performance from our microcontroller and analog product lines."
"For calendar year 2014 our microcontroller business was up 13.8%," said Ganesh Moorthy, Chief Operating Officer. "Our 16-bit and 32-bit microcontroller businesses were up 27.7% and 41.3% respectively, in calendar year 2014. All three microcontroller segments achieved new revenue records in calendar year 2014 and we believe these results clearly show that Microchip is continuing to gain significant microcontroller market share. In addition, our analog business also achieved a new revenue record in calendar year 2014."
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our cash generation in the December quarter excluding the purchase of additional shares of ISSC, our dividend payment, changes in marketable equity securities and changes in borrowing levels under our revolving line of credit was $145.7 million. As of December 31, 2014, our consolidated cash and total investment position was approximately $2.23 billion. The dividend that we announced today marks the 44th occasion that we have increased our dividend payment, and cumulative dividends paid will now be $2.44 billion."
Mr. Sanghi concluded, "We completed a small correction in the September 2014 quarter, and the December 2014 quarter turned out to be better than seasonal. The March quarter is historically a very strong quarter in Europe due to fewer holidays, but a weak quarter in Asia due to the Lunar New Year holidays. Considering these factors, along with the current economic backdrop, we expect our non-GAAP revenue to be up between 1% and 3% sequentially in the March quarter."
Microchip's Highlights for the Quarter Ended December 31, 2014:
- Microchip expanded its offering of 8-bit PIC® microcontrollers (MCUs) with integrated Core Independent Peripherals, which reduce interrupt latency, lower power consumption, and increase system efficiency and safety while minimizing design time and effort. The new PIC16(L)F161X family enables closed-loop digital control of motors, safety monitoring and a wide variety of other advanced functions.
- The new dsPIC33 "EV" family of 16-bit Digital Signal Controllers (DSCs) provides 5V operation for improved noise immunity and robustness, which is ideal for harsh environments such as appliances, automobiles and industrial applications. These DSCs also integrate advanced motor control, CAN and SENT communication, and touch-sensing peripherals.
- In the 32-bit MCU arena, Microchip continued to grow its portfolio with the low-cost PIC32MX1/2/5 series, with a feature-rich peripheral mix and large, scalable memory options. This latest series enables a wide range of applications, including digital audio, Bluetooth®, industrial connectivity, USB communication and general-purpose embedded control, all at lower prices.
- Microchip added three new families to its vast Analog & Interface portfolio. The latest Digitally Enhanced Power Analog (DEPA) MCP19118/9 controllers offer digital power-supply flexibility with easy analog control loops, via the combination of simple analog PWM control and a configurable MCU in a compact circuit solution. Additionally, our first high-speed MCP37DX1-200 and MCP372X1-200 analog-to-digital converters feature the industry's lowest power consumption with16-bit, 200 Msps performance. Our two new energy-measurement analog front ends completed Microchip's MCP391X family, which spans one to eight channels with high accuracy and a large amount of integration for smart meters and power monitoring.
- The Company continued to grow its automotive-infotainment solutions and business, with two new products and the announcement that the FAW Group became the first Chinese car maker to adopt our MOST® network controllers. Microchip's new USB84604 USB2.0 four-port controller hub with FlexConnect technology connects smart phones to automotive infotainment systems. Microchip also joined The Linux Foundation and Automotive Grade Linux, and began providing a beta version of its Linux driver to early-adopter customers, thus enabling designers to use the Linux operating system with its portfolio of MOST network interface controllers.
- Microchip also grew its touch and gesture sensing portfolio with two new chips and a strategic partnership with Xymox Technologies for printed multi-touch sensor solutions that, in combination with Microchip's low-power touch electronics, lower the cost and speed the design of human interfaces. The second member of its award-winning and patented GestIC® family-the MGC3030 3D gesture controller-features simplified user-interface options focused on gesture detection, enabling true one-step gesture designs for high-volume, cost-sensitive consumer and embedded applications, such as toys, audio and lighting. Additionally, our MTCH65X high-voltage, projected-capacitive touchscreen line driver provides advanced touch performance and increases the signal-to-noise ratio for robustness.
- In the memory arena, Microchip added two new families to its SuperFlash® portfolio, which features the world's fastest erase times and superior reliability among embedded Flash memory chips. The SST26WF080B/040B expands Microchip's family of Serial Quad I/O™, SuperFlash memory devices with 1.8V, low-power 4-Mbit and 8-Mbit members that are ideal for applications such as mobile handsets, Bluetooth headsets, GPS, camera modules, hearing aids and any battery-powered product. The SST26WF016B, announced earlier in the quarter, offers 16-Mbit of memory.
- The Company released its fourth-generation JukeBlox® streaming audio entertainment platform, which enables audio brands to develop high-quality, low-latency products at competitive consumer price points, such as standalone or multi-room wireless speakers, AV receivers, mini and micro systems, and sound bars. Additionally, Microchip announced the support of Qobuz Connect in its JukeBlox platform, which enables HD and true CD quality audio streaming directly to wireless speakers and AV receivers.
- Finally, four Microchip products were named to EDN Magazine's Hot 100 Products of 2014, including: the SST38VF640xB (MEMORY AND STORAGE), the PIC16(L)F170X/1X (MICROCONTROLLERS AND PROCESSORS), the MCP39F501 (POWER), and the RN4020 (WIRELESS & NETWORKING).