Semtech has 19th Consecutive Year of Positive Operating Cash Flow
Semtech Corp. today announced net sales for the fourth quarter of fiscal year 2006 ended January 29, 2006 were $64.4 million, up 6 percent from $60.9 million in the third quarter of fiscal year 2006 and up 10 percent from $58.4 million in the fourth quarter of fiscal year 2005. Operating cash flow was approximately $20.0 million for the fourth quarter and $66.0 million for all of fiscal year 2006. This was Semtech's 19th consecutive year of positive operating cash flow.
Net income for the fourth quarter of fiscal year 2006 was $13.3 million or 18 cents per diluted share. Net income was $12.1 million or 16 cents per diluted share in the fourth quarter of fiscal year 2005. Operating income in the fourth quarter of fiscal year 2006 was up 22 percent compared to the third quarter.
Net income for all of fiscal year 2006 was $43.0 million or 57 cents per diluted share, which is net of 6 cents per share of after-tax expense for the amortization of acquisition-related intangibles. Net income for fiscal year 2005 was $58.9 million or 75 cents per diluted share.
The Company repurchased 724,000 shares of its common stock at a cost of $13.9 million in the fourth quarter. For all of fiscal year 2006, the Company repurchased approximately 2.7 million shares, or approximately 4 percent of the outstanding shares. Semtech ended fiscal year 2006 with $278.2 million of cash and investments and no long-term debt.
New orders in the fourth quarter of fiscal year 2006 were down 2 percent compared to the third quarter, but increased 26 percent compared to the prior year fourth quarter. New orders exceeded shipments in the fourth quarter of fiscal year 2006, resulting in a book-to-bill ratio above one.
The growth in sales in the fourth quarter of fiscal year 2006 was led by the fourth consecutive quarter of record shipments of protection products that are used in a variety of portable, video and networking applications. Sales of test and measurement products used in automated test equipment increased 45 percent sequentially, and represented 6 percent of total sales in the quarter. Power management product line sales declined 6 percent compared to the third quarter, primarily as a result of lower shipments of power products used in cellular phone handsets. Protection products used in cellular phone handsets and other portable devices continued to grow.
John D. "Jack" Poe, Semtech's Chairman and acting Chief Executive Officer, commented on the fourth quarter, "Semtech improved its operating performance in the fourth quarter. Sales grew 6 percent, gross margin increased to 56.5 percent and cash generation remained strong. Over the last quarter, the Company's research and development efforts were prioritized around projects that will deliver proprietary solutions with competitive advantages. Sales and marketing objectives were also reviewed. We expect these steps to lead to improvements in new product introductions and design wins in the second half of fiscal year 2007 and beyond."