News

Micrel Reports 2010 Second Quarter Financial Results

July 25, 2010 by Jeff Shepard

Micrel, Inc. announced financial results for the second quarter ended June 30, 2010. Second quarter revenues of $73.9 million increased by $6.7 million, or 10.0%, up from $67.2 million in the first quarter of 2010. The sequential increase in revenues was primarily due to improved demand in the communications, computer and industrial end markets. Compared to the same period last year, revenues were higher by $22.1 million, or 42.7%, due to higher overall demand from customers in all geographies and end markets. This is reflective of a global recovery from the worldwide economic downturn that significantly impacted most consumer-related markets during the prior year.

Second quarter 2010 GAAP net income of $12.4 million, or $0.20 per diluted share compares to first quarter 2010 GAAP net income of $9.7 million, or $0.16 per diluted share, and GAAP net income of $3.9 million or $0.06 per diluted share in the same period in 2009. Second quarter 2010 non-GAAP net income of $13.1 million, or $0.21 per diluted share compares to first quarter 2010 non-GAAP net income of $10.4 million, or $0.17 per diluted share, and non-GAAP net income of $4.6 million, or $0.07 per diluted share in the same period in 2009.

"Second quarter revenues of $73.9 million increased by 10% on a sequential quarter basis but fell slightly short of our expected sequential growth range of 12% to 15%. This was primarily due to supply chain delinquencies that delayed some of our scheduled product shipments in the quarter. However, we currently expect the supply chain constraints will be resolved during the third quarter and will not impact our results in the second half of 2010," commented Ray Zinn, President and CEO of Micrel. "Despite this short-term challenge, our second quarter results were solid and I was pleased with our operational execution. Demand from customers serving the communications, computer and industrial end markets was strong, resulting in a book-to-bill ratio well above one along with a robust ending backlog. During the previous several quarters, channel inventories were low, but an increase in the second quarter now has channel inventories approaching normal levels. In addition, our second quarter gross margin of 57.8% improved significantly, largely due to improved factory utilization and a richer product mix. This is a fifth consecutive quarter that gross margins have increased, reflecting the leverage in our business model as factory utilization improves. Overall, I believe we are doing a good job controlling operating expenses while managing the significant growth we have achieved during the past several quarters. As a result, our second quarter operating margin expanded to 25.8% – the highest level in recent memory."