[January 16, 2014] |
 |
Skyworks Exceeds Q1 FY14 Revenue and EPS Guidance
WOBURN, Mass. --(Business Wire)--
Skyworks Solutions (News - Alert), Inc. (NASDAQ: SWKS) an innovator of high performance
analog semiconductors enabling a broad range of end markets, today
reported first fiscal quarter results for the period ending December 27,
2013. Revenue for the quarter was $505.2 million, up 11 percent
year-over-year and 6 percent sequentially.
On a non-GAAP basis, operating income for the first fiscal quarter of
2014 was $141.8 million, up 24 percent from $114.8 million in the first
fiscal quarter of 2013. Non-GAAP diluted earnings per share for the
first fiscal quarter was $0.67 compared to $0.55 for the prior year
first fiscal quarter. On a GAAP basis, operating income for the first
fiscal quarter of 2014 was $116.0 million and diluted earnings per share
was $0.49.
"Skyworks is off to a great start in fiscal 2014 as we exceeded guidance
and delivered strong performance across all key financial and
operational metrics," said David J. Aldrich, president and chief
executive officer of Skyworks. "We are capitalizing on unprecedented
demand for wireless ubiquity and the Internet of Things. Specifically,
Skyworks is empowering connectivity across a number of strategic
applications including medical devices, wearable technologies, home
automation and hybrid vehicles as well as smartphones and tablets,
linking people, places and things to improve the way the world
communicates."
Q1 Business Highlights
-
Captured navigational-assist content with Volkswagen across next year
models
-
Supported Nest's energy-efficient, intelligent thermostats and smoke
detectors
-
Commenced volume production of wireless home lighting platforms at
Belkin
-
Enabled wearable technologies at Philips (News - Alert) for emerging medical
applications
-
Secured key sockets within FitBit's smart scale and connected
wristband systems
-
Leveraged 802.11ac solutions in gaming consoles, set-top boxes,
BluRay® players and LED/4K TVs for enhanced video streaming
applications
-
Introduced 4G-LTE (News - Alert) base station RF subsystems at Ericsson
-
Shipped LED backlight drivers to a leading smartphone and tablet OEM
-
Ramped SkyOne™ at HTC and Samsung (News - Alert)
-
Launched envelope tracking solutions within multiple 4G platforms
-
Unveiled a suite of antenna switch modules with dual-mode MIPI
capability
-
Repurchased approximately 670,000 shares of common stock
Second Quarter 2014 Outlook
"Skyworks is substantially outpacing the analog semiconductor industry
driven by our broadening market footprint and new product launches,"
said Donald W. Palette, vice president and chief financial officer of
Skyworks. "Specifically, for the second fiscal quarter of 2014, we
anticipate revenue to be up 11 percent year-over-year to approximately
$470 million with non-GAAP diluted earnings per share up 23 percent
year-over-year to $0.59."
For further information regarding use of non-GAAP measures in this press
release, please refer to the Discussion Regarding the Use of Non-GAAP
Financial Measures set forth below.
Skyworks' First Fiscal Quarter 2014 Conference Call
Skyworks will host a conference call with analysts to discuss its first
fiscal quarter 2014 results and business outlook today at 5:00 p.m.
Eastern time. To listen to the conference call via the Internet, please
visit the investor relations section of Skyworks' Web site. To listen to
the conference call via telephone, please call 800-288-8961 (domestic)
or 612-332-0634 (international), confirmation code: 313554.
Playback of the conference call will begin at 9:00 p.m. Eastern time on
January 16, and end at 9:00 p.m. Eastern time on January 23. The replay
will be available on Skyworks' Web site or by calling 800-475-6701
(domestic) or 320-365-3844 (international), access code: 313554.
About Skyworks
Skyworks Solutions, Inc. is an innovator of high performance analog
semiconductors. Leveraging core technologies, Skyworks supports
automotive, broadband, cellular infrastructure, energy management, GPS,
industrial, medical, military, wireless networking, smartphone and
tablet applications. The Company's portfolio includes amplifiers,
attenuators, battery chargers, circulators, DC/DC converters,
demodulators, detectors, diodes, directional couplers, front-end
modules, hybrids, infrastructure RF subsystems, isolators, LED drivers,
mixers, modulators, optocouplers, optoisolators, phase shifters,
PLLs/synthesizers/VCOs, power dividers/combiners, power management
devices, receivers, switches, technical ceramics and voltage regulators.
Headquartered in Woburn, Mass., Skyworks is worldwide with engineering,
manufacturing, sales and service facilities throughout Asia, Europe and
North America. For more information, please visit Skyworks' Web site at: www.skyworksinc.com.
Safe Harbor Statement
This news release includes "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include without limitation information relating to future
results and expectations of Skyworks (e.g., certain projections and
business trends). Forward-looking statements can often be identified by
words such as "anticipates," "expects," "forecasts," "intends,"
"believes," "plans," "may," "will," or "continue," and similar
expressions and variations or negatives of these words. All such
statements are subject to certain risks, uncertainties and other
important factors that could cause actual results to differ materially
and adversely from those projected, and may affect our future operating
results, financial position and cash flows.
These risks, uncertainties and other important factors include, but are
not limited to: uncertainty regarding global economic and financial
market conditions; the susceptibility of the semiconductor industry and
the markets addressed by our, and our customers', products to economic
downturns; the timing, rescheduling or cancellation of significant
customer orders and our ability, as well as the ability of our
customers, to manage inventory; losses or curtailments of purchases or
payments from key customers, or the timing of customer inventory
adjustments; the availability and pricing of third party semiconductor
foundry, assembly and test capacity, raw materials and supplier
components; changes in laws, regulations and/or policies that could
adversely affect either (i) the economy and our customers' demand for
our products or (ii) the financial markets and our ability to raise
capital; our ability to develop, manufacture and market innovative
products in a highly price competitive and rapidly changing
technological environment; economic, social, military and geo-political
conditions in the countries in which we, our customers or our suppliers
operate, including security and health risks, possible disruptions in
transportation networks and fluctuations in foreign currency exchange
rates; fluctuations in our manufacturing yields due to our complex and
specialized manufacturing processes; delays or disruptions in production
due to equipment maintenance, repairs and/or upgrades; our reliance on
several key customers for a large percentage of our sales; fluctuations
in the manufacturing yields of our third party semiconductor foundries
and other problems or delays in the fabrication, assembly, testing or
delivery of our products; our ability to timely and accurately predict
market requirements and evolving industry standards, and to identify
opportunities in new markets; uncertainties of litigation, including
potential disputes over intellectual property infringement and rights,
as well as payments related to the licensing and/or sale of such rights;
our ability to rapidly develop new products and avoid product
obsolescence; our ability to retain, recruit and hire key executives,
technical personnel and other employees in the positions and numbers,
with the experience and capabilities, and at the compensation levels
needed to implement our business and product plans; lengthy product
development cycles that impact the timing of new product introductions;
unfavorable changes in product mix; the quality of our products and any
remediation costs; shorter than expected product life cycles; problems
or delays that we may face in shifting our products to smaller geometry
process technologies and in achieving higher levels of design
integration; and our ability to continue to grow and maintain an
intellectual property portfolio and obtain needed licenses from third
parties, as well as other risks and uncertainties, including, but not
limited to, those detailed from time to time in our filings with the
Securities and Exchange Commission.
The forward-looking statements contained in this news release are made
only as of the date hereof, and we undertake no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
Note to Editors: Skyworks and Skyworks Solutions are trademarks or
registered trademarks of Skyworks Solutions, Inc. or its subsidiaries in
the United States and in other countries. All other brands and names
listed are trademarks of their respective companies.
# # #
|
SKYWORKS SOLUTIONS, INC.
|
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 27,
|
|
Dec. 28,
|
(in millions, except per share amounts)
|
|
2013
|
|
2012
|
|
|
|
|
|
Net revenue
|
|
$
|
505.2
|
|
$
|
453.7
|
Cost of goods sold
|
|
|
283.2
|
|
|
261.1
|
Gross profit
|
|
|
222.0
|
|
|
192.6
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Research and development
|
|
|
58.4
|
|
|
58.1
|
Selling, general and administrative
|
|
|
41.1
|
|
|
38.1
|
Amortization of intangibles
|
|
|
6.5
|
|
|
8.2
|
Restructuring and other charges
|
|
|
-
|
|
|
1.6
|
Total operating expenses
|
|
|
106.0
|
|
|
106.0
|
|
|
|
|
|
Operating income
|
|
|
116.0
|
|
|
86.6
|
|
|
|
|
|
Other income, net
|
|
|
-
|
|
|
0.2
|
Income before income taxes
|
|
|
116.0
|
|
|
86.8
|
Provision for income taxes
|
|
|
21.5
|
|
|
20.3
|
Net income
|
|
$
|
94.5
|
|
$
|
66.5
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
Basic
|
|
$
|
0.51
|
|
$
|
0.35
|
Diluted
|
|
$
|
0.49
|
|
$
|
0.34
|
Weighted average shares:
|
|
|
|
|
Basic
|
|
|
186.2
|
|
|
189.4
|
Diluted
|
|
|
191.2
|
|
|
194.0
|
|
|
SKYWORKS SOLUTIONS, INC.
|
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 27,
|
|
Dec. 28,
|
(in millions)
|
|
2013
|
|
2012
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
222.0
|
|
|
$
|
192.6
|
|
Share-based compensation expense [a]
|
|
|
2.7
|
|
|
|
2.4
|
|
Non-GAAP gross profit
|
|
$
|
224.7
|
|
|
$
|
195.0
|
|
|
|
|
|
|
Non-GAAP gross margin %
|
|
|
44.5
|
%
|
|
|
43.0
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 27,
|
|
Dec. 28,
|
(in millions)
|
|
2013
|
|
2012
|
|
|
|
|
|
GAAP operating income
|
|
$
|
116.0
|
|
|
$
|
86.6
|
|
Share-based compensation expense [a]
|
|
|
18.8
|
|
|
|
17.7
|
|
Acquisition-related expense [b]
|
|
|
-
|
|
|
|
0.6
|
|
Amortization of intangibles
|
|
|
6.5
|
|
|
|
8.2
|
|
Restructuring and other charges [c]
|
|
|
-
|
|
|
|
1.6
|
|
Litigation settlement gains, losses and expenses [d]
|
|
|
0.5
|
|
|
|
-
|
|
Deferred executive compensation
|
|
|
-
|
|
|
|
0.1
|
|
Non-GAAP operating income
|
|
$
|
141.8
|
|
|
$
|
114.8
|
|
|
|
|
|
|
Non-GAAP operating margin %
|
|
|
28.1
|
%
|
|
|
25.3
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 27,
|
|
Dec. 28,
|
(in millions)
|
|
2013
|
|
2012
|
|
|
|
|
|
GAAP net income
|
|
$
|
94.5
|
|
|
$
|
66.5
|
|
Share-based compensation expense [a]
|
|
|
18.8
|
|
|
|
17.7
|
|
Acquisition-related expense [b]
|
|
|
-
|
|
|
|
0.6
|
|
Amortization of intangibles
|
|
|
6.5
|
|
|
|
8.2
|
|
Restructuring and other charges [c]
|
|
|
-
|
|
|
|
1.6
|
|
Litigation settlement gains, losses and expenses [d]
|
|
|
0.5
|
|
|
|
-
|
|
Deferred executive compensation
|
|
|
-
|
|
|
|
0.1
|
|
Tax adjustments [e]
|
|
|
7.4
|
|
|
|
11.9
|
|
Non-GAAP net income
|
|
$
|
127.7
|
|
|
$
|
106.6
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 27,
|
|
Dec. 28,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
GAAP net income per share, diluted
|
|
$
|
0.49
|
|
|
$
|
0.34
|
|
Share-based compensation expense [a]
|
|
|
0.10
|
|
|
|
0.09
|
|
Amortization of intangibles
|
|
|
0.03
|
|
|
|
0.05
|
|
Restructuring and other charges [c]
|
|
|
-
|
|
|
|
0.01
|
|
Litigation settlement gains, losses and expenses [d]
|
|
|
0.01
|
|
|
|
-
|
|
Tax adjustments [e]
|
|
|
0.04
|
|
|
|
0.06
|
|
Non-GAAP net income per share, diluted
|
|
$
|
0.67
|
|
|
$
|
0.55
|
|
|
SKYWORKS SOLUTIONS, INC. DISCUSSION REGARDING THE USE OF
NON-GAAP FINANCIAL MEASURES
Our earnings release contains some or all of the following financial
measures that have not been calculated in accordance with United States
Generally Accepted Accounting Principles ("GAAP"): (i) non-GAAP gross
profit and gross margin, (ii) non-GAAP operating income and operating
margin, (iii) non-GAAP net income, and (iv) non-GAAP diluted earnings
per share. As set forth in the "Unaudited Reconciliation of Non-GAAP
Financial Measures" table found above, we derive such non-GAAP financial
measures by excluding certain expenses and other items from the
respective GAAP financial measure that is most directly comparable to
each non-GAAP financial measure. Management uses these non-GAAP
financial measures to evaluate our operating performance and compare it
against past periods, make operating decisions, forecast for future
periods, compare our operating performance against peer companies and
determine payments under certain compensation programs. These non-GAAP
financial measures provide management with additional means to
understand and evaluate the operating results and trends in our
ongoing business by eliminating certain non-recurring expenses (which
may not occur in each period presented) and other items that management
believes might otherwise make comparisons of our ongoing business with
prior periods and competitors more difficult, obscure trends in ongoing
operations or reduce management's ability to make useful forecasts.
We provide investors with non-GAAP gross profit and gross margin,
non-GAAP operating income and operating margin and non-GAAP net income
because we believe it is important for investors to be able to closely
monitor and understand changes in our ability to generate income from
ongoing business operations. We believe these non-GAAP financial
measures give investors an additional method to evaluate historical
operating performance and identify trends, an additional means of
evaluating period-over-period operating performance and a method to
facilitate certain comparisons of our operating results to those of our
peer companies. We also believe that providing non-GAAP operating income
and operating margin allows investors to assess the extent to which our
ongoing operations impact our overall financial performance. We further
believe that providing non-GAAP net income and non-GAAP diluted earnings
per share allows investors to assess the overall financial performance
of our ongoing operations by eliminating the impact of share-based
compensation expense, acquisition-related expenses,
restructuring-related charges, litigation settlement gains, losses and
expenses, certain deferred executive compensation and certain tax items
which may not occur in each period presented and which may represent
non-cash items unrelated to our ongoing operations. We believe that
disclosing these non-GAAP financial measures contributes to enhanced
financial reporting transparency and provides investors with added
clarity about complex financial performance measures.
We calculate non-GAAP gross profit by excluding from GAAP gross profit,
share-based compensation expense and acquisition-related expenses. We
calculate non-GAAP operating income by excluding from GAAP operating
income, share-based compensation expense, acquisition-related expenses,
restructuring-related charges, litigation settlement gains, losses and
expenses and certain deferred executive compensation. We calculate
non-GAAP net income and diluted earnings per share by excluding from
GAAP net income and diluted earnings per share, share-based compensation
expense, acquisition-related expenses, restructuring-related charges,
litigation settlement gains, losses and expenses, certain deferred
executive compensation and certain tax items which may not occur in all
periods for which financial information is presented. We exclude the
items identified above from the respective non-GAAP financial measure
referenced above for the reasons set forth with respect to each such
excluded item below:
Share-Based Compensation - because (1) the total amount of
expense is partially outside of our control because it is based on
factors such as stock price volatility and interest rates, which may be
unrelated to our performance during the period in which the expense is
incurred, (2) it is an expense based upon a valuation methodology
premised on assumptions that vary over time, and (3) the amount of the
expense can vary significantly between companies due to factors that can
be outside of the control of such companies.
Acquisition-Related Expenses - including such items as, when
applicable, amortization of acquired intangible assets, fair value
adjustments to contingent consideration, fair value charges incurred
upon the sale of acquired inventory, acquisition-related professional
fees and deemed compensation expenses, because they are not considered
by management in making operating decisions and we believe that such
expenses do not have a direct correlation to our future business
operations and thereby including such charges does not accurately
reflect the performance of our ongoing operations for the period in
which such charges are incurred.
Restructuring-Related Charges - because, to the extent such
charges impact a period presented, we believe that they have no direct
correlation to our future business operations and including such charges
does not necessarily reflect the performance of our ongoing operations
for the period in which such charges are incurred.
Litigation Settlement Gains, Losses and Expenses- including
gains, losses and expenses related to the resolution of
other-than-ordinary-course threatened and actually filed lawsuits and
other-than-ordinary-course contractual disputes, because (1) they are
not considered by management in making operating decisions, (2) such
gains, losses and expenses tend to be infrequent in nature, (3) such
gains, losses and expenses are generally not directly controlled by
management, (4) we believe such gains, losses and expenses do not
necessarily reflect the performance of our ongoing operations for the
period in which such charges are recognized and (5) the amount of such
gains or losses and expenses can vary significantly between companies
and make comparisons less reliable.
Deferred Executive Compensation - including charges related to
any contingent obligation pursuant to an executive severance agreement,
because we believe the period over which the obligation is amortized may
not reflect the period of benefit and that such expense has no direct
correlation with our recurring business operations and including such
expenses does not accurately reflect the compensation expense for the
period in which incurred.
Certain Income Tax Items - including certain deferred tax charges
and benefits that do not result in a current tax payment or tax refund
and other adjustments, including but not limited to, items unrelated to
the current fiscal year or that are not indicative of our ongoing
business operations.
The non-GAAP financial measures presented in the table above should not
be considered in isolation, and are not an alternative for, the
respective GAAP financial measure that is most directly comparable to
each such non-GAAP financial measure. Investors are cautioned against
placing undue reliance on these non-GAAP financial measures and are
urged to review and consider carefully the adjustments made by
management to the most directly comparable GAAP financial measures to
arrive at these non-GAAP financial measures. Non-GAAP financial measures
may have limited value as analytical tools because they may exclude
certain expenses that some investors consider important in evaluating
our operating performance or ongoing business performance. Further,
non-GAAP financial measures are likely to have limited value for
purposes of drawing comparisons between companies because different
companies may calculate similarly titled non-GAAP financial measures in
different ways because non-GAAP measures are not based on any
comprehensive set of accounting rules or principles.
Our earnings release contains forward-looking estimates of non-GAAP
diluted earnings per share for the second quarter of our 2014 fiscal
year ("Q2 2014"). We provide these non-GAAP measures to investors on a
prospective basis for the same reasons (set forth above) that we provide
them to investors on a historical basis. We are unable to provide a
reconciliation of our forward-looking estimate of Q2 2014 non-GAAP
diluted earnings per share to a forward-looking estimate of Q2 2014 GAAP
diluted earnings per share because certain information needed to make a
reasonable forward-looking estimate of GAAP diluted earnings per share
for Q2 2014 (other than estimated share-based compensation expense of
$0.09 per diluted share, certain tax items of $0.07 per diluted share
and estimated amortization of intangibles of $0.03 per diluted share) is
difficult to predict and estimate and is often dependent on future
events that may be uncertain or outside of our control. Such events may
include unanticipated changes in our GAAP effective tax rate,
unanticipated one-time charges related to asset impairments (fixed
assets, inventory, intangibles or goodwill), unanticipated
acquisition-related expenses, unanticipated litigation settlement gains,
losses and expenses and other unanticipated non-recurring items not
reflective of ongoing operations. We believe the probable significance
of these unknown items, in aggregate, to be in the range of $0.00 to
$0.05 in quarterly earnings per diluted share on a GAAP basis. Our
forward-looking estimates of both GAAP and non-GAAP measures of our
financial performance may differ materially from our actual results and
should not be relied upon as statements of fact.
|
[a]
|
|
These charges represent expense recognized in accordance with ASC (News - Alert)
718 - Compensation, Stock Compensation.
|
|
|
Approximately $2.7 million, $7.5 million and $8.6 million were
included in cost of goods sold, research and development expense
and selling, general and administrative expense, respectively, for
the three months ended December 27, 2013.
|
|
|
|
|
|
For the three months ended December 28, 2012, approximately $2.4
million, $7.4 million and $7.9 million were included in cost of
goods sold, research and development expense and selling, general
and administrative expense, respectively.
|
|
|
|
[b]
|
|
The acquisition-related expense of $0.6 million recognized during
the three months ended December 28, 2012 primarily relates to
general and administrative expenses associated with past
acquisitions.
|
|
|
|
[c]
|
|
During the three months ended December 28, 2012, the Company
recorded a $1.6 million charge related to a restructuring plan to
reduce headcount primarily associated with its front end-solutions
team.
|
|
|
|
[d]
|
|
During the three months ended December 27, 2013, the Company
recognized a $0.5 million charge primarily related to general and
administrative expense associated with ongoing litigations.
|
|
|
|
[e]
|
|
During the three months ended December 27, 2013, these amounts
primarily represent the use of net operating loss and research and
development tax credit carryforwards, deferred tax expense not
affecting taxes payable, and non-cash expense related to uncertain
tax positions.
|
|
|
|
|
|
During the three months ended December 28, 2012, these amounts
primarily represent the use of net operating loss and research and
development tax credit carryforwards and non-cash expense related
to uncertain tax positions.
|
|
|
SKYWORKS SOLUTIONS, INC.
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
|
Dec. 27,
|
|
Sept. 27,
|
(in millions)
|
|
2013
|
|
2013
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
648.6
|
|
$
|
511.1
|
Accounts receivable, net
|
|
|
267.1
|
|
|
292.7
|
Inventory
|
|
|
224.7
|
|
|
229.5
|
Other current assets
|
|
|
39.7
|
|
|
40.0
|
Property, plant and equipment, net
|
|
|
323.7
|
|
|
328.6
|
Goodwill and intangible assets, net
|
|
|
858.8
|
|
|
865.3
|
Other assets
|
|
|
72.8
|
|
|
65.9
|
Total assets
|
|
$
|
2,435.4
|
|
$
|
2,333.1
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
107.3
|
|
$
|
126.5
|
Accrued and other current liabilities
|
|
|
58.5
|
|
|
53.2
|
Other long-term liabilities
|
|
|
57.4
|
|
|
52.3
|
Stockholders' equity
|
|
|
2,212.2
|
|
|
2,101.1
|
Total liabilities and equity
|
|
$
|
2,435.4
|
|
$
|
2,333.1
|
|

[ Back To TMCnet.com's Homepage ]
|