Exar Corporation announced financial results for the Company's fiscal year 2017 third quarter, which ended on January 1, 2017. Unless otherwise indicated, all non-GAAP financial results exclude the financial results of the iML Display business, which the Company has divested, and are presented in the GAAP results as discontinued operations.
Fiscal 2017 third quarter highlights included: Net sales of $27.2 million, down 1% sequentially; GAAP gross margin of 49.4%; GAAP operating loss of $0.6 million; GAAP EPS from continuing operations of $(0.01); GAAP EPS from discontinued operations of $0.89; iML divestiture completed; and Cash and equivalents, and short-term marketable securities of $228 million.
Ryan Benton, Exar's Chief Executive Officer, commented, "Exar again delivered solid results for the third fiscal quarter of 2017. Sales grew 7.6% compared to the third quarter of fiscal 2016. Our financial results include reaching a non-GAAP gross margin of 53.4%, up 730 basis points from the same period a year ago, and at a level not seen at Exar in almost a decade."
Mr. Benton added, "Our financial results reflect the success we are having in executing on our strategy. We are seeing the benefits of partnering with tier-one technology leaders to deliver high-value advanced power management and interface technology solutions. At the same time we have made tremendous improvements in our competitiveness by increasing the efficiency of our Company's supply chain. Both of these efforts offer additional efficiencies going forward, and I am pleased with our continued progress."
Fiscal 2017 Third Quarter Highlights (Continuing Operations Only): Third quarter net sales of $27.2 million decreased $0.4 million, or 1.4%, from the previous quarter's $27.6 million, and increased 7.6% from the $25.3 million from the same period a year ago. GAAP gross margin of 49.4% increased from 47.8% reported in the previous quarter and the 43.4% reported in the third quarter last year.
GAAP operating expenses of $14.1 million increased $1.0 million and decreased $0.1 million from the previous quarter's expenses of $13.1 million and the same period a year ago expenses of $14.2 million, respectively. Fiscal 2017 third quarter operating expenses included a charge of $3.2 million stock-based compensation expense.
GAAP net loss was $0.3 million, compared to net income of $0.1 million reported in the previous quarter, and compared to a net loss of $2.0 million reported in the third quarter of fiscal 2016. Note that the continuing operations do not include a gain of $45.4 million related to the divestiture of our iML subsidiary, which is classified as part of discontinued operations. GAAP loss per share was $0.01, compared to $0.00 reported in the previous quarter and a loss per share of $0.04 reported in the same period a year ago.
Keith Tainsky, Exar's Chief Financial Officer, stated, "We remain committed to our goal of delivering predictable operating results and increasing shareholder value. Our continued efforts to drive efficiency and increased competitiveness through the supply chain are paying enormous dividends." Mr. Tainsky continued, "Even as the funnel of advanced product design wins grows, we will keep the pressure and focus on continual improvement in our supply chain."
Fiscal 2017 Fourth Quarter Guidance: For the fiscal 2017 fourth quarter ending April 2, 2017, the Company expects results to be as follows: Net sales of $27.7 million, plus or minus $0.5 million; GAAP gross margin between 50.0% and 52.0%; GAAP operating expenses between $13.0 million to $14.0 million; and GAAP EPS between $0.00 to $0.03.
