News

Atmel Reports Second Quarter 2010 Financial Results

August 09, 2010 by Jeff Shepard

Atmel Corp. announced financial results for its second quarter ended June 30, 2010. Revenues in the second quarter of 2010 were $393.4 million, up 13% from $348.5 million in the first quarter of 2010 and up 38% from $284.5 million in the second quarter of 2009.

Net loss, on a GAAP basis, was $36.4 million or $(0.08) per diluted share in the second quarter of 2010. Included in net loss for the quarter were charges related to the sale of the company’s manufacturing operations in Rousset, France of $107.6 million. The second quarter net loss compares with a GAAP net income of $16.6 million or $0.04 per diluted share in the first quarter of 2010 and a net loss of $12.4 million or $(0.03) per diluted share in the second quarter of 2009.

Non-GAAP net income in the second quarter of 2010 totaled $50.8 million or $0.11 per diluted share, compared with non-GAAP net income of $25.5 million or $0.05 per diluted share in the first quarter of 2010 and non-GAAP net loss of $(0.6) million or $(0.00) per diluted share in the second quarter of 2009.

Gross margin increased to 41% in the second quarter of 2010, the highest level achieved since the fourth quarter of 2000, compared to 38% in the first quarter of 2010 and 32% in the second quarter of 2009. The sequential gross margin improvement was the result of higher business volumes, increased factory utilization levels, and an improved mix, as greater than half of all product shipments during the quarter were higher margin microcontroller products.

"Our transformation to a higher growth and higher margin company is reflected in our increased revenues, improved gross margin, and strong cash flow from operations. We continue to build momentum in the microcontroller and touch businesses with increased design wins, particularly for our maXTouch™ solutions," said Steve Laub, President and Chief Executive Officer of Atmel. "We are also pleased to have achieved two major strategic milestones during the second quarter with the closing of the sale of our wafer manufacturing operations in Rousset, France, and the execution of a definitive agreement for the sale of our Smart Card business."

Second quarter 2010 loss from operations of $(78.9) million compared with first quarter income from operations of $14.9 million and a loss from operations of $(17.6) million in the second quarter of 2009. The sale of the manufacturing operations in Rousset resulted in a loss on the sale of assets as well as related restructuring and impairment charges totaling $107.6 million.

Stock-based compensation expense was $21.7 million in the second quarter of 2010, compared with $10.0 million in the first quarter of 2010 and $6.4 million in the second quarter of 2009.

Income tax benefit totaled $39.7 million in the second quarter of 2010, compared to an income tax provision of $2.6 million in the first quarter of 2010 and an income tax benefit of $9.7 million in the second quarter of 2009. The income tax benefit for the second quarter of 2010 was the result of discrete tax benefits related to the taxable losses from the Rousset fab transaction and related changes to deferred tax liabilities.

Cash provided from operations totaled approximately $49.2 million in the second quarter of 2010, compared with $70.4 million in the first quarter of 2010 and $1.6 million in the second quarter of 2009. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $552.2 million at the end of the second quarter of 2010, an increase of $31.0 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 $468.6 million at the end of second quarter 2010.

The company’s effective average exchange rate in the second quarter of 2010 was approximately $1.31 to the Euro, compared with $1.42 to the Euro in the first quarter of 2010 and $1.33 to the Euro in the year-ago period. During the second quarter 2010 a $0.01 decrease in the Euro/dollar exchange rate increased operating income by $0.2 million.