Micrel Announces 2nd Quarter 2011 Financial Results
Micrel, Inc. announced financial results for the second quarter ended June 30, 2011. Second quarter revenues of $68.5 million increased by $1.0 million, or 1.5%, from $67.5 million in the first quarter of 2011 due to increased demand in the communications end market as well as a resumption of more typical shipment levels to a Korean wireless handset and consumer electronic device manufacturer which had moderated product deliveries during the previous quarter.
The sequential increase in revenues was less than expected, primarily due to lower than expected demand in the industrial end market. Compared to the same period last year, second quarter 2011 revenues were lower by $5.4 million, or 7.3%. The year-over-year decrease in revenues was primarily due to a reduction in demand from customers in the computer and communications end markets.
Second quarter 2011 GAAP net income was $10.7 million, or $0.17 per diluted share, compared to first quarter 2011 GAAP net income of $9.1 million, or $0.14 per diluted share, and GAAP net income of $12.4 million, or $0.20 per diluted share in the same period in 2010. Second quarter 2011 non-GAAP net income was $11.6 million, or $0.18 per diluted share, compared to first quarter 2011 non-GAAP net income of $9.9 million, or $0.16 per diluted share, and non-GAAP net income of $13.1 million, or $0.21 per diluted share in the same period in 2010. A reconciliation of the GAAP net income to non-GAAP net income is provided in the financial tables of this press release. Non-GAAP results exclude the impact of stock-based compensation expense and the related tax effects.
Commenting on the second quarter performance, Micrel’s President and CEO Ray Zinn said, "Second quarter revenues of $68.5 million increased by 1.5 percent on a sequential quarter basis but fell short of our sequential revenue growth expectations as softer demand within the industrial end market more than offset the strength of the wireless handset and communications end markets. Our book-to-bill for the second quarter of 2011 exceeded one for the first time since the second quarter of last year. We did see a moderation of orders near the end of the quarter, and we continue to monitor this situation closely. From an operational standpoint, our second quarter performance was excellent. Gross margin increased to 58.3%, the second highest quarterly level in the Company’s history. The second quarter gross margin benefitted from a richer product mix coupled with lower charges for excess inventory than in the previous quarter. In addition, we remain focused on controlling operating expenses and generating profitable growth which is reflected in our operating margin that expanded to 23.4% of revenues, or an improvement of 380 basis points over the previous quarter."
"Our strong balance sheet provides Micrel with significant financial flexibility to return capital to shareholders and enhance overall shareholder value. At the end of the second quarter, our cash, cash equivalents and short-term investments balance grew to $132.3 million, or nearly $2.10 per diluted share. During the quarter, the Micrel Board of Directors authorized an increase in the quarterly cash dividend to $0.04 per share from the previous quarterly dividend of $0.035 per share. In addition, we continued to maintain an active share re-purchase program. Through the first half of 2011, we repurchased approximately 554,000 shares of Micrel common stock for a total of $7.2 million."