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Microchip Technology Announces Record Fourth Quarter 2010 Financial Results

May 10, 2010 by Jeff Shepard

Microchip Technology Inc. reported results for the three months and fiscal year ended March 31, 2010. Net sales for the fourth quarter of fiscal year 2010 were $278.0 million, up 11.2% sequentially from net sales of $250.1 million in the immediately preceding quarter, and up 60.5% from net sales of $173.3 million in the prior year’s fourth quarter. GAAP net income for the fourth quarter of fiscal year 2010 was $75.7 million, or 40 cents per diluted share, up 9.1% from GAAP net income of $69.4 million, or 37 cents per diluted share, in the immediately preceding quarter, and up 244.9% from GAAP net income of $22.0 million, or 12 cents per diluted share, in the prior year’s fourth quarter.

Non-GAAP net income for the fourth quarter of fiscal year 2010 was $86.7 million, or 46 cents per diluted share, up 23.6% from non-GAAP net income of $70.1 million, or 38 cents per diluted share, in the immediately preceding quarter, and up 211.2% from non-GAAP net income of $27.9 million, or 15 cents per diluted share, in the prior year’s fourth quarter.

Net sales for the fiscal year ended March 31, 2010 were $947.7 million, an increase of 4.9% from net sales of $903.3 million in the prior fiscal year. On a GAAP basis, net income for the fiscal year ended March 31, 2010 was $217.0 million, or $1.16 per diluted share, a decrease of 11.6% from net income of $245.6 million, or $1.31 per diluted share in the prior fiscal year.

On a non-GAAP basis, net income for the fiscal year ended March 31, 2010 was $245.0 million, or $1.32 per diluted share, an increase of 4.2% from net income of $235.1 million, or $1.27 per diluted share, in the prior fiscal year. For fiscal years 2009 and 2010, our non-GAAP results exclude the items mentioned above and nonrecurring tax events.

Microchip also announced that its Board of Directors has declared a quarterly cash dividend on its common stock of 34.2 cents per share. The quarterly dividend is payable on June 2, 2010 to stockholders of record on May 19, 2010.

"The March quarter was another exceptional growth quarter for Microchip across all geographies and product lines, which resulted in us achieving 11.2% sequential revenue growth and exceeding our gross margin, operating profit and earnings per share guidance that we revised positively on March 15, 2010," said Steve Sanghi, Microchip’s President and CEO. "Non-GAAP gross margins were a record 61.63%, up over 260 basis points from the December quarter. Our achievement of this level of gross margin percentage is a full year ahead of our previous expectation. Microchip’s factories are running at higher levels of production output than they have ever produced in the history of the company."