SMTC
$78.11
Semtech
($.78)
(.99%)
Earnings Details
2nd Quarter July 2021
Wednesday, September 01, 2021 4:20:00 PM
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Summary

Semtech Beats

Semtech (SMTC) reported 2nd Quarter July 2021 earnings of $0.68 per share on revenue of $185.0 million. The consensus earnings estimate was $0.62 per share on revenue of $182.6 million. The Earnings Whisper number was $0.65 per share. Revenue grew 28.8% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.68 to $0.76 per share on revenue of $188.0 million to $198.0 million. The current consensus earnings estimate is $0.66 per share on revenue of $189.17 million for the quarter ending October 31, 2021.

Semtech Corp designs, develops and markets products for commercial applications, the majority of which are sold into the enterprise computing, communications, high-end consumer and industrial end-markets.

Results
Reported Earnings
$0.68
Earnings Whisper
$0.65
Consensus Estimate
$0.62
Reported Revenue
$185.0 Mil
Revenue Estimate
$182.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Semtech Announces Second Quarter of Fiscal Year 2022 Results

CAMARILLO, Calif.--(BUSINESS WIRE)--Semtech Corporation (Nasdaq: SMTC), a leading supplier of high performance analog and mixed-signal semiconductors and advanced algorithms, today reported unaudited financial results for its second quarter of fiscal year 2022, which ended August 1, 2021.

Highlights for the Second Fiscal Quarter 2022

  • Record net sales of $185.0 million, an increase of 9% sequentially and 29% year-over-year
  • GAAP and non-GAAP gross margin grew sequentially 90bps and 70bps to 62.4% and 62.7%, respectively
  • Record GAAP diluted earnings per share of $0.50 and record non-GAAP diluted earnings per share of $0.65
  • Record Wireless and Sensing products group net sales driven by record LoRa® and record proximity sensing net sales
  • Record Signal Integrity products group net sales driven by record Tri-Edge™ and record 10G PON net sales
  • Record operating cash flow of $53.0 million or 29% of Q2 FY2022 net sales
  • Repurchased 639,519 shares for $42.0 million during Q2 FY2022

Results on a GAAP basis for the Second Fiscal Quarter 2022

  • Net sales were $185.0 million
  • GAAP Gross margin was 62.4%
  • GAAP SG&A expense was $42.0 million
  • GAAP R&D expense was $35.5 million
  • GAAP Operating margin was 19.8%
  • GAAP Net income attributable to common stockholders was $32.9 million or $0.50 diluted earnings per share

To facilitate a complete understanding of comparable financial performance between periods, the Company also presents performance results that exclude certain non-cash items and items that are not considered reflective of the Company’s core results over time. These non-GAAP financial measures exclude certain items and are described below under “Non-GAAP Financial Measures.”

Results on a Non-GAAP basis for the Second Fiscal Quarter 2022 (see the list of non-GAAP financial measures and the reconciliation of these to the most comparable GAAP measures set forth in the tables below under "Supplemental Information: Reconciliation of GAAP to Non-GAAP Results")

  • Non-GAAP Gross margin was 62.7%
  • Non-GAAP SG&A expense was $34.2 million
  • Non-GAAP R&D expense was $31.7 million
  • Non-GAAP Operating margin was 27.1%
  • Non-GAAP Net income attributable to common stockholders was $42.4 million or $0.65 diluted earnings per share

Mohan Maheswaran, Semtech’s President and Chief Executive Officer, stated, “Fiscal Q2 was a strong quarter with the Company achieving record net sales and record diluted earnings per share. The strong global demand for our core growth engines in the IoT and Infrastructure segments, led by our LoRa and Tri-Edge platforms is very exciting. In addition, the increase in gross margins driven by the ramp of our new products is evidence of the healthy innovation culture in the Company. We are confident that we should be able to continue to execute across all our product groups and deliver a record performance in FY2022.”

Third Fiscal Quarter 2022 Outlook

Both the GAAP and non-GAAP third fiscal quarter 2022 outlook below take into account, based on the Company's current estimates, the uncertain, but potential negative impact to the Company of the ongoing COVID-19 pandemic on global economic conditions and on the Company's business operations, net sales and operating results, as well as export restrictions pertaining to Huawei and certain of its affiliates and other entities identified by the U.S. government. The Company is unable to predict the full impact such challenges may have on its future results of operations.

GAAP Third Fiscal Quarter 2022 Outlook

  • Net sales are expected to be in the range of $188.0 million to $198.0 million
  • GAAP Gross margin is expected to be in the range of 62.4% to 63.4%
  • GAAP SG&A expense is expected to be in the range of $44.0 million to $45.0 million
  • GAAP R&D expense is expected to be in the range of $36.7 million to $37.7 million
  • GAAP Intangible amortization expense is expected to be approximately $1.3 million
  • GAAP Interest and other expense, net is expected to be approximately $1.4 million
  • GAAP Effective tax rate is expected to be in the range of 9% to 11%
  • GAAP Diluted earnings per share are expected to be in the range of $0.47 to $0.55
  • Fully-diluted share count is expected to be approximately 65.2 million shares
  • Share-based compensation is expected to be approximately $15.0 million, categorized as follows: $0.8 million cost of sales, $10.0 million SG&A, and $4.2 million R&D
  • Capital expenditures are expected to be approximately $8.9 million
  • Depreciation expense is expected to be approximately $6.8 million

Non-GAAP Third Fiscal Quarter 2022 Outlook (see the list of non-GAAP financial measures and the reconciliation of these to the most comparable GAAP measures set forth in the tables below under "Reconciliation of GAAP to Non-GAAP Outlook")

  • Non-GAAP Gross margin is expected to be in the range of 62.8% to 63.8%
  • Non-GAAP SG&A expense is expected to be in the range of $33.5 million to $34.5 million
  • Non-GAAP R&D expense is expected to be in the range of $32.5 million to $33.5 million
  • Non-GAAP normalized tax rate for FY2022 is expected to be approximately 13%
  • Non-GAAP Diluted earnings per share are expected to be in the range of $0.68 to $0.76

Webcast and Conference Call

Semtech will be hosting a conference call today to discuss its second fiscal quarter 2022 results at 2:00 p.m. Pacific time. An audio webcast will be available on Semtech’s website at www.semtech.com in the “Investor Relations” section under “Investor News.” A replay of the call will be available through September 29, 2021 at the same website or by calling (877) 660-6853 and entering conference ID 13716892.

Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements prepared in accordance with GAAP, this release includes a presentation of select non-GAAP financial measures. The Company’s non-GAAP measures of gross margin, SG&A expense, R&D expense, operating margin, net income attributable to common stockholders, diluted earnings per share and normalized tax rate exclude the following items, if any:

  • Share-based compensation
  • Amortization of purchased intangibles, impairments and credit loss reserves
  • Restructuring, transaction and other acquisition or disposition-related gains or losses
  • Litigation expenses or dispute settlement charges or gains
  • Cumulative other reserves associated with historical activity including environmental and pension
  • Equity in net gains or losses of equity method investments
  • Loss on early extinguishment of debt
  • Interest income from debt investments
  • Changes in the fair value of contingent earn-out obligations

To provide additional insight into the Company's third quarter outlook, this release also includes a presentation of forward-looking non-GAAP financial measures. Management believes that the presentation of these non-GAAP measures provide useful information to investors regarding the Company’s financial condition and results of operations because these non-GAAP financial measures are adjusted to exclude the items identified above because such items are either operating expenses which would not otherwise have been incurred by the Company in the normal course of the Company’s business operations, or are not reflective of the Company’s core results over time. These excluded items may include recurring as well as non-recurring items, and no inference should be made that all of these adjustments, charges, costs or expenses are unusual, infrequent or non-recurring. For example: certain restructuring and integration-related expenses (which consist of employee termination costs, facility closure or lease termination costs, and contract termination costs) may be considered recurring given the Company’s ongoing efforts to be more cost effective and efficient; certain acquisition and disposition-related adjustments or expenses may be deemed recurring given the Company's regular evaluation of potential transactions and investments; and certain litigation expenses or dispute settlement charges or gains (which may include estimated losses for which the Company may have established a reserve, as well as any actual settlements, judgments, or other resolutions against, or in favor of, the Company related to litigation, arbitration, disputes or similar matters, and insurance recoveries received by the Company related to such matters) may be viewed as recurring given that the Company may from time to time be involved in, and may resolve, litigation, arbitration, disputes, and similar matters.

Notwithstanding that certain adjustments, charges, costs or expenses may be considered recurring, in order to provide meaningful comparisons, the Company believes that it is appropriate to exclude such items because they are not reflective of the Company's core results and tend to vary based on timing, frequency and magnitude.

These non-GAAP financial 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. The financial statements provided with this release include reconciliations of these non-GAAP financial measures to their most comparable GAAP measures for the first and second quarters of fiscal year 2022 and the second quarter of fiscal year 2021, along with a reconciliation of forward-looking non-GAAP measures (other than the non-GAAP normalized tax rate) to their most comparable GAAP measures for the third quarter of fiscal year 2022. Beginning with fiscal year 2022, the Company adopted a full-year, normalized tax rate for the computation of the non-GAAP income tax provision in order to provide better comparability across the interim reporting periods by reducing the quarterly variability in non-GAAP tax rates that can occur throughout the year. In estimating the full-year non-GAAP normalized tax rate, the Company utilized a full-year financial projection that considers multiple factors such as changes to the Company’s current operating structure, existing positions in various tax jurisdictions, the effect of key tax law changes, and other significant tax matters to the extent they are applicable to the full fiscal year financial projection. In addition to the adjustments described above, this normalized tax rate excludes the impact of share-based awards and the amortization of acquisition-related intangible assets. For fiscal year 2022, the Company’s projected non-GAAP normalized tax rate is 13% and will be applied to each quarter of fiscal year 2022. The Company’s non-GAAP normalized tax rate on non-GAAP net income may be adjusted during the year to account for events or trends that the Company believes materially impact the original annual non-GAAP normalized tax rate including, but not limited to, significant changes resulting from tax legislation, acquisitions, entity structures or operational changes and other significant events. The Company is unable to include a reconciliation of the forward-looking measure of the non-GAAP normalized tax rate to the corresponding GAAP measure as this is not available without unreasonable efforts due to the high variability and low visibility with respect to the impact of share-based awards and the amortization of acquisition-related intangible assets that are excluded from this non-GAAP measure. The Company expects the variability of the above charges to have a potentially significant impact on its GAAP financial results. 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.

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on the Company’s current expectations, estimates and projections about its operations, industry, financial condition, performance, results of operations, and liquidity. Forward-looking statements are statements other than historical information or statements of current condition and relate to matters such as future financial performance including the third quarter of fiscal year 2022 outlook and our expectations for growth momentum and record financial results for our fiscal year 2022; the potential for a negative impact associated with the current supply chain tightness and any associated disruptions; the potential for a negative impact of the COVID-19 pandemic on global economic conditions and on the Company's business operations, net sales and operating results; the Company’s expectations concerning the negative impact on the Company’s results of operations from its inability to ship certain products and provide certain support services due to the export restrictions including export restrictions with respect to Huawei and certain of its affiliates and other entities identified by the U.S. government; future operational performance; the anticipated impact of specific items on future earnings; and the Company’s plans, objectives and expectations. Statements containing words such as “may,” “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “should,” “will,” “designed to,” “projections,” or “business outlook,” or other similar expressions constitute forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected. Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the uncertainty surrounding the impact and duration of the COVID-19 pandemic on global economic conditions and on the Company's business and results of operations; export restrictions and laws affecting the Company's trade and investments including with respect to Huawei and certain of its affiliates and other entities identified by the U.S. government, and tariffs or the occurrence of trade wars; competitive changes in the marketplace including, but not limited to, the pace of growth or adoption rates of applicable products or technologies; downturns in the business cycle; decreased average selling prices of the Company’s products; the Company’s reliance on a limited number of suppliers and subcontractors for components and materials; changes in projected or anticipated end-user markets; the Company’s ability to forecast its annual non-GAAP normalized tax rate due to material changes that could occur during the fiscal year, which could include, but are not limited to, significant changes resulting from tax legislation, acquisitions, entity structures or operational changes and other significant events; and the Company's ability to forecast and achieve anticipated net sales and earnings estimates in light of periodic economic uncertainty, including impacts arising from Asian, European and global economic dynamics. Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021, subsequent Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission, and in material incorporated therein, including, without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” In light of the significant risks and uncertainties inherent in the forward-looking information included herein that may cause actual performance and results to differ materially from those predicted, any such forward-looking information should not be regarded as representations or guarantees by the Company of future performance or results, or that its objectives or plans will be achieved or that any of its operating expectations or financial forecasts will be realized. Reported results should not be considered an indication of future performance. Investors are cautioned not to place undue reliance on any forward-looking information contained herein, which reflect management’s analysis only as of the date hereof. Except as required by law, the Company assumes no obligation to publicly release the results of any update or revision to any forward-looking statements that may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated or future events, or otherwise.

About Semtech

Semtech Corporation is a leading supplier of high performance analog, mixed-signal semiconductors and advanced algorithms for infrastructure, high-end consumer, and industrial end markets. Products are designed to benefit the engineering community as well as the global community. The Company is dedicated to reducing the impact it, and its products, have on the environment. Internal green programs seek to reduce waste through material and manufacturing control, use of green technology and designing for resource reduction. Publicly traded since 1967, Semtech is listed on the NASDAQ Global Select Market under the symbol SMTC. For more information, visit http://www.semtech.com.

______________________________

Semtech, the Semtech logo and LoRa are registered trademarks or service marks, and Tri-Edge is a trademark or service mark, of Semtech Corporation or its subsidiaries.

SMTC-F

SEMTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

Net sales

$

185,004

 

 

 

$

170,372

 

 

 

$

143,660

 

 

 

$

355,376

 

 

 

$

276,362

 

 

Cost of sales

69,572

 

 

 

65,511

 

 

 

55,409

 

 

 

135,083

 

 

 

107,350

 

 

Gross profit

115,432

 

 

 

104,861

 

 

 

88,251

 

 

 

220,293

 

 

 

169,012

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

41,977

 

 

 

38,804

 

 

 

38,255

 

 

 

80,781

 

 

 

72,855

 

 

Product development and engineering

35,497

 

 

 

36,790

 

 

 

29,220

 

 

 

72,287

 

 

 

56,806

 

 

Intangible amortization

1,298

 

 

 

1,298

 

 

 

2,020

 

 

 

2,596

 

 

 

4,860

 

 

Changes in the fair value of contingent earn-out obligations

 

 

 

 

 

 

 

 

 

 

 

 

(33

)

 

Total operating costs and expenses

78,772

 

 

 

76,892

 

 

 

69,495

 

 

 

155,664

 

 

 

134,488

 

 

Operating income

36,660

 

 

 

27,969

 

 

 

18,756

 

 

 

64,629

 

 

 

34,524

 

 

Interest expense

(1,185

)

 

 

(1,199

)

 

 

(1,252

)

 

 

(2,384

)

 

 

(2,811

)

 

Non-operating income (expense), net

213

 

 

 

94

 

 

 

(176

)

 

 

307

 

 

 

247

 

 

Investment impairments and credit loss reserves

(468

)

 

 

(246

)

 

 

(1,485

)

 

 

(714

)

 

 

(5,115

)

 

Income before taxes and equity in net gains (losses) of equity method investments

35,220

 

 

 

26,618

 

 

 

15,843

 

 

 

61,838

 

 

 

26,845

 

 

Provision (benefit) for taxes

2,963

 

 

 

3,198

 

 

 

(416

)

 

 

6,161

 

 

 

943

 

 

Net income before equity in net gains (losses) of equity method investments

32,257

 

 

 

23,420

 

 

 

16,259

 

 

 

55,677

 

 

 

25,902

 

 

Equity in net gains (losses) of equity method investments

674

 

 

 

78

 

 

 

(137

)

 

 

752

 

 

 

(148

)

 

Net income

32,931

 

 

 

23,498

 

 

 

16,122

 

 

 

56,429

 

 

 

25,754

 

 

Net loss attributable to noncontrolling interest

(2

)

 

 

(2

)

 

 

(3

)

 

 

(4

)

 

 

(6

)

 

Net income attributable to common stockholders

$

32,933

 

 

 

$

23,500

 

 

 

$

16,125

 

 

 

$

56,433

 

 

 

$

25,760

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.51

 

 

 

$

0.36

 

 

 

$

0.25

 

 

 

$

0.87

 

 

 

$

0.39

 

 

Diluted

$

0.50

 

 

 

$

0.36

 

 

 

$

0.24

 

 

 

$

0.86

 

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

Basic

64,721

 

 

 

65,089

 

 

 

65,084

 

 

 

64,905

 

 

 

65,337

 

 

Diluted

65,584

 

 

 

66,110

 

 

 

66,004

 

 

 

65,849

 

 

 

66,099

 

 

 
SEMTECH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

August 1, 2021

 

January 31, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

262,657

 

 

$

268,891

 

Accounts receivable, net

73,062

 

 

70,433

 

Inventories

103,031

 

 

87,494

 

Prepaid taxes

14,179

 

 

22,083

 

Other current assets

31,920

 

 

25,827

 

Total current assets

484,849

 

 

474,728

 

Non-current assets:

 

 

 

Property, plant and equipment, net

132,140

 

 

130,934

 

Deferred tax assets

24,816

 

 

25,483

 

Goodwill

351,141

 

 

351,141

 

Other intangible assets, net

9,150

 

 

11,746

 

Other assets

97,908

 

 

88,070

 

Total assets

$

1,100,004

 

 

$

1,082,102

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

52,473

 

 

$

50,189

 

Accrued liabilities

63,893

 

 

59,384

 

Total current liabilities

116,366

 

 

109,573

 

Non-current liabilities:

 

 

 

Deferred tax liabilities

1,127

 

 

976

 

Long term debt

175,436

 

 

179,195

 

Other long-term liabilities

98,452

 

 

93,405

 

Stockholders’ equity

708,417

 

 

698,743

 

Noncontrolling interest

206

 

 

210

 

Total liabilities & equity

$

1,100,004

 

 

$

1,082,102

 

 
SEMTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL INFORMATION

(in thousands)

(unaudited)

 

Six Months Ended

 

 

 

August 1,
2021

 

July 26,
2020

 

 

Net income

$

56,429

 

 

 

$

25,754

 

 

 

 

 

 

 

 

 

 

Net cash provided by operations

85,599

 

 

 

63,299

 

 

 

 

Net cash used in investing activities

(15,867

)

 

 

(20,981

)

 

 

 

Net cash used in financing activities

(75,966

)

 

 

(54,186

)

 

 

 

Net decrease in cash and cash equivalents

(6,234

)

 

 

(11,868

)

 

 

 

Cash and cash equivalents at beginning of period

268,891

 

 

 

293,324

 

 

 

 

Cash and cash equivalents at end of period

$

262,657

 

 

 

$

281,456

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

Free Cash Flow:

 

 

 

 

 

Cash Flow from Operations

$

53,014

 

 

 

$

32,585

 

 

 

$

37,216

 

 

Net Capital Expenditures

(6,972

)

 

 

(5,760

)

 

 

(6,968

)

 

Free Cash Flow

$

46,042

 

 

 

$

26,825

 

 

 

$

30,248

 

 

 
SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(in thousands, except per share data)

(unaudited)

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

Gross Margin–GAAP

62.4

%

 

61.5

%

 

61.4

%

 

62.0

%

 

61.2

%

Share-based compensation

0.3

%

 

0.5

%

 

0.4

%

 

0.4

%

 

0.3

%

Adjusted Gross Margin (Non-GAAP)

62.7

%

 

62.0

%

 

61.8

%

 

62.4

%

 

61.5

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

Selling, general and administrative–GAAP

$

41,977

 

 

$

38,804

 

 

$

38,255

 

 

$

80,781

 

 

$

72,855

 

Share-based compensation

(7,098

)

 

(7,359

)

 

(9,501

)

 

(14,457

)

 

(15,460

)

Transaction and integration related

(101

)

 

177

 

 

(249

)

 

76

 

 

(334

)

Restructuring and other reserves

(16

)

 

 

 

(502

)

 

(16

)

 

(502

)

Litigation cost, net of recoveries

(560

)

 

(540

)

 

(105

)

 

(1,100

)

 

(251

)

Adjusted selling, general and administrative (Non-GAAP)

$

34,202

 

 

$

31,082

 

 

$

27,898

 

 

$

65,284

 

 

$

56,308

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

Product development and engineering–GAAP

$

35,497

 

 

$

36,790

 

 

$

29,220

 

 

$

72,287

 

 

$

56,806

 

Share-based compensation

(3,768

)

 

(3,762

)

 

(3,135

)

 

(7,530

)

 

(6,025

)

Transaction and integration related

 

 

 

 

 

 

 

 

87

 

Adjusted product development and engineering (Non-GAAP)

$

31,729

 

 

$

33,028

 

 

$

26,085

 

 

$

64,757

 

 

$

50,868

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

Operating Margin–GAAP

19.8

%

 

16.4

%

 

13.1

%

 

18.2

%

 

12.5

%

Share-based compensation

6.2

%

 

6.9

%

 

9.2

%

 

6.6

%

 

8.2

%

Intangible amortization

0.7

%

 

0.8

%

 

1.4

%

 

0.7

%

 

1.7

%

Transaction and integration related

0.1

%

 

(0.1

)%

 

0.1

%

 

%

 

0.1

%

Restructuring and other reserves

%

 

%

 

0.3

%

 

%

 

0.2

%

Litigation cost, net of recoveries

0.3

%

 

0.3

%

 

0.1

%

 

0.3

%

 

0.1

%

Adjusted Operating Margin (Non-GAAP)

27.1

%

 

24.3

%

 

24.2

%

 

25.8

%

 

22.8

%

 
SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

August 1,
2021

 

May 2,
2021

 

July 26,
2020

 

August 1,
2021

 

July 26,
2020

 

Q222

 

Q122

 

Q221

 

Q222

 

Q221

GAAP net income attributable to common stockholders

$

32,933

 

 

 

$

23,500

 

 

 

$

16,125

 

 

 

$

56,433

 

 

 

$

25,760

 

 

Adjustments to GAAP net income attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Share-based compensation

11,517

 

 

 

11,839

 

 

 

13,186

 

 

 

23,356

 

 

 

22,565

 

 

Intangible amortization

1,298

 

 

 

1,298

 

 

 

2,020

 

 

 

2,596

 

 

 

4,860

 

 

Transaction and integration related

101

 

 

 

(177

)

 

 

249

 

 

 

(76

)

 

 

247

 

 

Restructuring and other reserves

16

 

 

 

 

 

 

502

 

 

 

16

 

 

 

502

 

 

Litigation cost, net of recoveries

560

 

 

 

540

 

 

 

105

 

 

 

1,100

 

 

 

251

 

 

Changes in the fair value of contingent earn-out obligations

 

 

 

 

 

 

 

 

 

 

 

 

(33

)

 

Investment losses (gains), reserves and impairments, net

44

 

 

 

(84

)

 

 

729

 

 

 

(40

)

 

 

4,359

 

 

Total Non-GAAP adjustments before taxes

13,536

 

 

 

13,416

 

 

 

16,791

 

 

 

26,952

 

 

 

32,751

 

 

Associated tax effect

(3,375

)

 

 

(2,006

)

 

 

(4,848

)

 

 

(5,381

)

 

 

(7,420

)

 

Equity in net (gains) losses of equity method investments

(674

)

 

 

(78

)

 

 

137

 

 

 

(752

)

 

 

148

 

 

Total of supplemental information, net of taxes

9,487

 

 

 

11,332

 

 

 

12,080

 

 

 

20,819

 

 

 

25,479

 

 

Non-GAAP net income attributable to common stockholders

$

42,420

 

 

 

$

34,832

 

 

 

$

28,205

 

 

 

$

77,252

 

 

 

$

51,239

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.50

 

 

 

$

0.36

 

 

 

$

0.24

 

 

 

$

0.86

 

 

 

$

0.39

 

 

Adjustments per above

0.15

 

 

 

0.17

 

 

 

0.19

 

 

 

0.31

 

 

 

0.39

 

 

Non-GAAP diluted earnings per share

$

0.65

 

 

 

$

0.53

 

 

 

$

0.43

 

 

 

$

1.17

 

 

 

$

0.78

 

 

 
SEMTECH CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

Third Quarter of Fiscal Year 2022 Outlook

(in millions, except per share data)

 

 

 

Q3 FY22 Outlook

 

 

October 31, 2021

 

 

Low

 

High

Gross Margin–GAAP

 

62.4

%

 

63.4

%

Share-based compensation

 

0.4

%

 

0.4

%

Adjusted Gross Margin (Non-GAAP)

 

62.8

%

 

63.8

%

 

 

 

 

 

 

 

Low

 

High

Selling, general and administrative–GAAP

 

$

44.0

 

 

$

45.0

 

Share-based compensation

 

(10.0

)

 

(10.0

)

Transaction and integration related

 

(0.5

)

 

(0.5

)

Adjusted selling, general and administrative (Non-GAAP)

 

$

33.5

 

 

$

34.5

 

 

 

 

 

 

 

 

Low

 

High

Product development and engineering–GAAP

 

$

36.7

 

 

$

37.7

 

Share-based compensation

 

(4.2

)

 

(4.2

)

Adjusted product development and engineering (Non-GAAP)

 

$

32.5

 

 

$

33.5

 

 

 

 

 

 

 

 

Low

 

High

Diluted earnings per share–GAAP

 

$

0.47

 

 

$

0.55

 

Share-based compensation

 

0.23

 

 

0.23

 

Transaction, restructuring, and acquisition related expenses

 

0.01

 

 

0.01

 

Amortization of acquired intangibles

 

0.02

 

 

0.02

 

Associated tax effect

 

(0.05

)

 

(0.05

)

Adjusted diluted earnings per share (Non-GAAP)

 

$

0.68

 

 

$

0.76

 

 

Sandy Harrison
Semtech Corporation
(805) 480-2004
webir@semtech.com

Source: Semtech Corporation