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SMTC > SEC Filings for SMTC > Form 8-K on 7-Mar-2014All Recent SEC Filings

Show all filings for SEMTECH CORP

Form 8-K for SEMTECH CORP


7-Mar-2014

Results of Operations and Financial Condition, Financial Statements and Exhibits


Item 2.02. Results of Operations and Financial Condition

Semtech Corporation (the "Company"), issued a press release and held a conference call on March 5, 2014. The press release announced its consolidated financial results for the three and twelve months ended January 26, 2014. During the conference call, the Company discussed these financial results. The transcript of the conference call is filed as Exhibit 99.1 and is hereby incorporated by reference in its entirety. The information in this Form 8-K and the exhibit attached hereto is being furnished (not filed) under Item 2.02 of Form 8-K. The transcript has been selectively edited to facilitate the understanding of the information communicated during the conference call.

During the conference call, the Company discussed non-GAAP measures of gross profit, net income, earnings per diluted share and free cash flow. To provide additional insight into the Company's first quarter outlook for fiscal year 2015, the conference call included a discussion of forward-looking non-GAAP earnings per diluted share. The non-GAAP gross profit, net income and earnings per diluted share measures exclude the following items:

Stock-based compensation expense

Acquisition related fair value adjustments

Transaction and integration related expenses

Intangible amortization and impairments

Release of prior accrued taxes on foreign earnings

Option related expenses

Effect of enacted tax rate changes

Charges directly related to the strategic realignment, including:

- Impairment of goodwill

- Impairment of fixed assets

- Write-down of inventory

- Write-down of net U.S. deferred tax assets

The non-GAAP discussion of free cash flow excludes capital expenditures. These non-GAAP measures are provided to enhance the user's overall understanding of the Company's comparable financial performance between periods. In addition, the Company's management generally excludes the items noted above when managing and evaluating the performance of the business. Below are reconciliations of these non-GAAP measures to their most comparable GAAP results for the fourth quarter of fiscal years 2014 and 2013 and the third quarter of fiscal year 2014, and a reconciliation of forward-looking non-GAAP earnings per diluted share to its most comparable GAAP measure for the first quarter of fiscal year 2015. These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may be inconsistent with similar measures presented by other companies.

                   RECONCILIATION OF NON-GAAP MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES
                                (Tables in thousands - except per share amounts)

                                            Three Months Ended                        Twelve Months Ended
                                January 26,     October 27,     January 27,       January 26,     January 27,
                                   2014            2013            2013               2014           2013
Stock-based Compensation
Expense                           Q4 2014         Q3 2014         Q4 2013           Q4 2014         Q4 2013
                                (Unaudited)     (Unaudited)     (Unaudited)       (Unaudited)     (Unaudited)
Cost of sales                   $        519    $        413    $        377        $    1,665    $      1,218
Selling, general and
administrative                           193           3,449           5,113            12,071          14,965
Product development and
engineering                            2,268           2,967           2,311            10,854           8,345
Total stock-based
compensation expense            $      2,980    $      6,829    $      7,801        $   24,590    $     24,528

                                            Three Months Ended                        Twelve Months Ended
                                January 26,     October 27,     January 27,       January 26,     January 27,
                                   2014            2013            2013               2014           2012
Gross Profit -
Reconciliation GAAP to
Non-GAAP                          Q4 2014         Q3 2014         Q4 2013           Q4 2014         Q4 2013
                                (Unaudited)     (Unaudited)     (Unaudited)       (Unaudited)     (Unaudited)

GAAP gross profit               $     53,805    $     83,411    $     87,957        $  335,211         314,612
Adjustments to GAAP gross
profit:
Stock-based compensation
expense                                  519             413             377             1,665           1,218
Expiration of acquired
return rights                              -               -               -                 -           (676)
Acquisition related fair
value adjustments                          -               -           4,382             2,408          39,406
Restructuring charges                 16,776               -               -            16,776               -
Impairment Charges                     4,342               -               -             4,342               -
Non-GAAP gross profit           $     75,442    $     83,824    $     92,716        $  360,401    $    354,560


                                                              Three Months Ended                          Twelve Months Ended
                                                January 26,      October 27,      January 27,        January 26,      January 27,
                                                    2014            2013             2013                2014            2012
Net Income - Reconciliation GAAP to Non-GAAP      Q4 2014          Q3 2014          Q4 2013            Q4 2014          Q4 2013
                                                (Unaudited)      (Unaudited)      (Unaudited)        (Unaudited)      (Unaudited)

GAAP net income                                  $ (210,808)     $     12,453     $     13,118        $ (164,466)     $     41,939

Adjustments to GAAP net income:
Stock-based compensation expense                 $     2,980     $      6,829     $      7,801        $    24,590     $     24,528
Acquisition related fair value adjustments               339              338            4,721              3,762           40,638
Transaction and integration related expenses         (1,873)              607            2,377                168           24,110
Environmental monitoring and remediation
reserves                                                   -                -            1,500                  -            4,040
Intangible amortization and impairments                6,587            7,349            8,177             31,602           29,944
Restructuring charges                                  3,086                -                -              3,086                -
Impairment charges                                    59,075                -                -             59,075                -
Goodwill impairment                                  116,686                                              116,686
Writeoff of deferred financing costs and
refinancing fees                                           -                -                -              8,773                -

Total before taxes                                   186,880           15,123           24,576            247,742          123,260
Associated tax effect                                 39,400          (3,477)          (4,632)             23,318         (50,667)
Total of supplemental information net of
taxes                                                226,280           11,646           19,944            271,060           72,593
Non-GAAP net income                              $    15,472     $     24,099     $     33,062        $   106,594     $    114,532

Diluted GAAP earnings per share                  $    (3.12)     $       0.18     $       0.19        $    (2.44)     $       0.62
Adjustments per above                                   3.35             0.17             0.30               3.99             1.08
Diluted non-GAAP earnings per share              $      0.23     $       0.35     $       0.49        $      1.55     $       1.70




                                                            Three Months Ended                        Twelve Months Ended
                                                January 26,     October 27,     January 27,       January 26,     January 27,
                                                   2014            2013            2013               2014           2013
Tax Impact Associated With Supplemental
Information                                       Q4 2014         Q3 2014         Q4 2013           Q4 2014         Q4 2013
                                                (Unaudited)     (Unaudited)     (Unaudited)       (Unaudited)     (Unaudited)

Adjustments to GAAP net income:
Stock-based compensation expense                $        893    $      1,293    $        235             5,985    $      5,120
Acquisition related fair value adjustments              (13)             111           1,221               734           7,794
Transaction and integration related expenses             208             202             545               887           4,746
Environmental monitoring and remediation
reserves                                                   -               -             596                 -           1,303
Intangible amortization and impairments                1,405           1,871           2,035             7,768           5,217
Release of prior accrued taxes on foreign
earnings                                                   -               -               -                 -          23,443
Restructuring charges                                  1,865               -               -             1,865               -
Impairment charges                                     9,432               -               -             9,432               -
Goodwill impairment                                        -               -               -                 -               -
Valuation allowance                                 (53,191)               -               -          (53,191)               -
Write off of deferred financing costs and
refinancing fees                                           -               -               -             3,202               -
Effect of enacted tax rate changes                         -               -               -                 -           3,044
Total of associated tax effect                      (39,400)    $      3,477    $      4,632       $  (23,318)    $     50,667



                                                            Three Months Ended
                                                January 26,     October 27,     January 27,
                                                   2014            2013            2013
                                                  Q4 2014         Q3 2014         Q4 2013
                                                (Unaudited)     (Unaudited)     (Unaudited)
Free Cash Flow:
Cash Flow from Operations                       $     30,598    $     28,939          35,189
Net Capital Expenditure                              (6,411)         (7,185)         (5,151)
Free Cash Flow:                                 $     24,187    $     21,754    $     30,038


Q1 FY15 Earnings Per Share Guidance
GAAP to Non-GAAP Reconciliation (net of tax)
                                                    Low            High
GAAP EPS                                        $       0.10    $       0.14

Stock based compensation expense                        0.08            0.08
Transaction and integration related expenses            0.01            0.01
Amortization of acquired intangibles                    0.09            0.09

Non-GAAP EPS                                    $       0.28    $       0.32



Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No.                                 Description
99.1           Transcript of conference call on March 5, 2014 discussing financial
               results for the three months and year ended January 26, 2014. (This
               Exhibit 99.1 is being furnished and shall not be deemed "filed" as set
               forth in Item 2.02 hereof.)


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