- Delivers $505 Million in Revenue, Up
11% Y-o-Y and 6% Sequentially
- Expands Non-GAAP Gross Margin to 44.5%
(43.9% GAAP) and Improves Operating Margin to 28.1% (23.0%
GAAP)
- Posts $0.67 of Diluted Non-GAAP EPS
($0.49 GAAP)
- Generates $159 Million in Cash Flow
from Operations
- Guides to Better-than-Seasonal
Performance in Q2
Skyworks Solutions, 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 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 base station RF
subsystems at Ericsson
- Shipped LED backlight drivers to a
leading smartphone and tablet OEM
- Ramped SkyOne™ at HTC and Samsung
- 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 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
Skyworks Media Relations:Pilar Barrigas(949)
231-3061orSkyworks Investor Relations:Stephen Ferranti(781)
376-3056
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