Semtech Announces Fiscal Year 2008 First Quarter Results

Semtech Corp. reported unaudited financial results for its first quarter of fiscal year 2008 that ended April 29, 2007. Net sales for the first quarter of fiscal year 2008 were $60.6 million, down 8% from the first quarter of fiscal year 2007 and up 4.5% when compared to the fourth quarter of fiscal year 2007.

Net income for the first quarter of fiscal year 2008, computed in accordance with U.S. generally accepted accounting principles (GAAP), was $7.9 million or 11 cents per diluted share. GAAP net income was $11.8 million or 16 cents per diluted share in the first quarter of fiscal year 2007 and was $4.6 million or 6 cents per diluted share in the fourth quarter of fiscal year 2007. Gross profit margin for the first quarter of fiscal year 2008 was 54.9% compared to 57.5% in the first quarter of fiscal year 2007 and 50.3% in the fourth quarter of fiscal year 2007.

Non-GAAP net income for the first quarter of fiscal year 2008 was $10.6 million or 14 cents per diluted share. Non-GAAP net income was $14.8 million or 20 cents per diluted share in the first quarter of fiscal year 2007 and was $9.3 million or 12 cents per diluted share in the fourth quarter of fiscal year 2007. Non-GAAP gross profit margin for the first quarter of fiscal year 2008 was 55.4%. Non-GAAP gross profit margin for the first quarter of fiscal year 2007 was 57.7% and 51.4% in the fourth quarter of fiscal year 2007. Non-GAAP results exclude the impact of stock based compensation, the amortization of acquisition-related intangibles, expenses associated with Semtech’s ongoing litigation against an insurer, the gain on sale of an unused parcel of land, and expenses related to the company’s now completed investigation into its historical stock option practices, now completed restatement of past financial statements to correct errors in stock option accounting and ongoing stock option related matters including an inquiry by the SEC, a federal grand jury subpoena, and previously announced derivative litigation.

New orders were up 7% in the first quarter of fiscal year 2008 compared to the fourth quarter of fiscal year 2007. New orders exceeded shipments, resulting in a book-to-bill ratio above one. Demand was strongest in the areas of industrial, handsets and communications equipment.

Operating expenses for the first quarter of fiscal year 2008 included approximately $2.1 million related to the stock options investigation, SEC inquiry, the grand jury subpoena, the previously announced derivative litigation, the restatement, and related matters. Operating expenses for the first quarter of fiscal year 2007 did not include any expenses for these matters, as they arose after the end of that quarter. In the fourth quarter of fiscal year 2007 these expenses were $2.5 million. Semtech had $364 million of cash, cash equivalents and marketable securities as of April 29, 2007, which was up from $341 million at the end of the fourth quarter of fiscal year 2007.