Microchip Technology Incorporated reported results for the three months ended June 30, 2016. GAAP net sales for the first quarter of fiscal 2017 were $799.4 million, up 49.7% from GAAP net sales of $534.0 million in the prior year's first fiscal quarter. GAAP net loss from continuing operations for the first quarter of fiscal 2017 was $(109.2) million, or (51) cents per diluted share, down from GAAP net income of $130.7 million, or 60 cents per diluted share, in the prior year's first fiscal quarter.
Microchip also announced that its Board of Directors has declared a quarterly cash dividend on its common stock of 36.0 cents per share. The quarterly dividend is payable on September 6, 2016 to stockholders of record on August 22, 2016.
"Our June quarter financial results were outstanding. Non-GAAP net sales, gross margin percentage, operating profit percentage, and earnings per share were all above the high end of our guidance from May 4, 2016," said Steve Sanghi, Chairman and CEO. "Our non-GAAP earnings per share were 9.5 cents per share better than the mid-point of our guidance, and up 19.6% sequentially from the March quarter, due to improving sales, gross margin, operating expense leverage, and accretion from both Micrel and Atmel. We achieved excellent results both from our core business at Microchip as well as from the Atmel business."
Mr. Sanghi added, "We achieved all-time record net sales and non-GAAP earnings per share in the June 2016 quarter. We are tracking well ahead of our guidance for non-GAAP earnings per share for fiscal 2017 which we commented on in our May 4, 2016 earnings conference call."
"We achieved strong revenue growth in the microcontroller businesses of both core Microchip and Atmel in the June quarter," said Ganesh Moorthy, President and Chief Operating Officer. "All microcontroller business units for Microchip, as well as for Atmel, outperformed our expectations in the June quarter. Atmel's customers felt reassured about Microchip's plans to continue to support Atmel's microcontroller products going forward and launched their new products with confidence."
Mr. Moorthy added, "Our analog business revenue excluding Atmel, as well as including Atmel were both up nicely in the June quarter as compared to the March quarter. Microchip's vast portfolio of analog products is one of our greatest growth opportunities, as our sales teams and channel partners attach them to Atmel microcontrollers at customers and applications that we otherwise did not have visibility into."
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our inventory days were well managed during the quarter, and excluding purchase accounting adjustments were 107 days, well within our target model. Additionally, the strength in our business in the June 2016 quarter has our net leverage tracking ahead of schedule to the targets we had previously outlined to our stockholders."
Mr. Sanghi added, "We expect total net sales in the September 2016 quarter including Atmel to be flat to up 4% sequentially. We expect gross margin to be between 55.6% and 56.2%. We expect overall operating expenses from continuing operations to be between 27.2% and 27.9% of net sales, marking another significant reduction in Atmel's operating expenses. We expect operating income from continuing operations to be between 27.7% and 29% of net sales."
Mr. Sanghi concluded, "Based on the rapid integration progress we made in the June quarter, we are increasing the accretion target from Atmel from 25 cents to 40 cents for fiscal 2017."
Microchip Technology Incorporated reported results for the three months ended June 30, 2016. GAAP net sales for the first quarter of fiscal 2017 were $799.4 million, up 49.7% from GAAP net sales of $534.0 million in the prior year's first fiscal quarter. GAAP net loss from continuing operations for the first quarter of fiscal 2017 was $(109.2) million, or (51) cents per diluted share, down from GAAP net income of $130.7 million, or 60 cents per diluted share, in the prior year's first fiscal quarter.
Microchip also announced that its Board of Directors has declared a quarterly cash dividend on its common stock of 36.0 cents per share. The quarterly dividend is payable on September 6, 2016 to stockholders of record on August 22, 2016.
"Our June quarter financial results were outstanding. Non-GAAP net sales, gross margin percentage, operating profit percentage, and earnings per share were all above the high end of our guidance from May 4, 2016," said Steve Sanghi, Chairman and CEO. "Our non-GAAP earnings per share were 9.5 cents per share better than the mid-point of our guidance, and up 19.6% sequentially from the March quarter, due to improving sales, gross margin, operating expense leverage, and accretion from both Micrel and Atmel. We achieved excellent results both from our core business at Microchip as well as from the Atmel business."
Mr. Sanghi added, "We achieved all-time record net sales and non-GAAP earnings per share in the June 2016 quarter. We are tracking well ahead of our guidance for non-GAAP earnings per share for fiscal 2017 which we commented on in our May 4, 2016 earnings conference call."
"We achieved strong revenue growth in the microcontroller businesses of both core Microchip and Atmel in the June quarter," said Ganesh Moorthy, President and Chief Operating Officer. "All microcontroller business units for Microchip, as well as for Atmel, outperformed our expectations in the June quarter. Atmel's customers felt reassured about Microchip's plans to continue to support Atmel's microcontroller products going forward and launched their new products with confidence."
Mr. Moorthy added, "Our analog business revenue excluding Atmel, as well as including Atmel were both up nicely in the June quarter as compared to the March quarter. Microchip's vast portfolio of analog products is one of our greatest growth opportunities, as our sales teams and channel partners attach them to Atmel microcontrollers at customers and applications that we otherwise did not have visibility into."
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our inventory days were well managed during the quarter, and excluding purchase accounting adjustments were 107 days, well within our target model. Additionally, the strength in our business in the June 2016 quarter has our net leverage tracking ahead of schedule to the targets we had previously outlined to our stockholders."
Mr. Sanghi added, "We expect total net sales in the September 2016 quarter including Atmel to be flat to up 4% sequentially. We expect gross margin to be between 55.6% and 56.2%. We expect overall operating expenses from continuing operations to be between 27.2% and 27.9% of net sales, marking another significant reduction in Atmel's operating expenses. We expect operating income from continuing operations to be between 27.7% and 29% of net sales."
Mr. Sanghi concluded, "Based on the rapid integration progress we made in the June quarter, we are increasing the accretion target from Atmel from 25 cents to 40 cents for fiscal 2017."
