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Semtech Announces Fiscal Results; Agreement to Acquire Sierra Monolithics

November 18, 2009 by Jeff Shepard

Semtech Corp. reported un-audited financial results for its third quarter of fiscal year 2010 that ended October 25, 2009. Net revenues for the third quarter of fiscal year 2010 were $75.1 million, down 6% from the third quarter of fiscal year 2009 and up 13% compared to the second quarter of fiscal year 2010.

For the third quarter of fiscal year 2010 the company reported a net loss of $20.9 million or 34 cents per share computed in accordance with U.S. generally accepted accounting principles (GAAP). Third quarter of fiscal year 2010 results reflect a one-time tax expense of $32.8 million related to the decision to repatriate foreign-domiciled cash for purposes of funding the Sierra Monolithics transaction as referenced in the press release and 8-K filed earlier this afternoon. Excluding this one-time tax expense, our GAAP net income would have been $11.9 million or 19 cents per share. GAAP net income was $11.5 million or 19 cents per diluted share in the third quarter of fiscal year 2009 and $7.4 million or 12 cents per diluted share in the second quarter of fiscal year 2010.

GAAP gross profit margin for the third quarter of fiscal year 2010 was 55.1% compared to 53.5% in the third quarter of fiscal year 2009 and 54.5% in the second quarter of fiscal year 2010.

Semtech had $316.3 million of cash, cash equivalents and investments as of October 25, 2009, which was up from $291.1 million at the end of the second quarter of fiscal year 2010.

The company also announced that it has entered into a definitive agreement to acquire Sierra Monolithics, Inc. for $180 million in cash. Sierra Monolithics provides high performance analog ICs and solutions for a wide array of communications systems and applications. The transaction is expected to be accretive to Semtech’s GAAP earnings per share within twelve months of the transaction closing and is expected to be immediately accretive to Semtech’s Non-GAAP gross margins and Non-GAAP earnings per share.

"We are extremely excited to have Sierra Monolithics become a part of Semtech," said Mohan Maheswaran, President and Chief Executive Officer of Semtech. "Sierra Monolithics has the benefit of over 20 years of innovation, design and commercialization of high performance Analog ICs and solutions and brings to Semtech a world-class engineering team. Together, we will create a portfolio of wireless capability from ultra low power, sub 1Ghz platforms targeted at industrial applications, through Microwave RF and Millimeter wave technology platforms targeted at the highest performance communication challenges in the industry. In addition, SMI’s leadership position in 40Gbps and 100Gbps communications will elevate Semtech’s importance to the communications infrastructure customers who already purchase our leading Protection, Power Management and Timing Synchronization products. Together we are well positioned to capitalize on some of the fastest growing market segments in the communications and industrial segments."