Summary
Microchip Technology Inc. reported its financial results for the quarterly period ended December 31, 2012. The company saw a significant increase in net sales for both the three and nine-month periods compared to the prior year, largely driven by the acquisition of Standard Microsystems Corporation (SMSC) in August 2012. While net sales grew, net income saw a substantial decrease year-over-year for the same periods, primarily impacted by higher operating expenses, including amortization of acquired intangible assets and special charges related to the SMSC acquisition. Despite the lower net income, the company maintained a strong liquidity position with a considerable amount of cash and short-term investments. The acquisition of SMSC has significantly altered the company's asset and liability structure, increasing goodwill and intangible assets. Investors should note the strategic rationale behind the SMSC acquisition, which was to expand Microchip's product offerings and market reach in automotive, industrial, computing, consumer, and wireless audio sectors.
Financial Highlights
53 data points| Revenue | $416.05M |
| Cost of Revenue | $215.62M |
| Gross Profit | $200.43M |
| R&D Expenses | $71.38M |
| SG&A Expenses | $69.37M |
| Operating Expenses | $183.01M |
| Operating Income | $17.41M |
| Interest Expense | $11.08M |
| Net Income | $10.17M |
| EPS (Basic) | $0.03 |
| EPS (Diluted) | $0.03 |
| Shares Outstanding (Basic) | 389.92M |
| Shares Outstanding (Diluted) | 408.81M |
Key Highlights
- 1Net sales increased by 26.4% for the three months and 10.3% for the nine months ended December 31, 2012, compared to the same periods in the prior year, largely due to the acquisition of SMSC.
- 2Net income decreased significantly to $10.2 million for the three months and $67.7 million for the nine months ended December 31, 2012, compared to $77.5 million and $256.1 million in the prior year, respectively.
- 3The company completed the acquisition of Standard Microsystems Corporation (SMSC) on August 2, 2012, for approximately $919.6 million, which significantly increased goodwill and intangible assets.
- 4Operating income saw a substantial decrease, falling to $17.4 million for the three months and $121.8 million for the nine months ended December 31, 2012, from $88.1 million and $302.6 million in the prior year.
- 5Total assets grew to $3.84 billion from $3.08 billion, primarily due to the SMSC acquisition, with notable increases in goodwill and intangible assets.
- 6The company maintained a strong liquidity position, with cash and cash equivalents and short-term investments totaling $1.62 billion at December 31, 2012.
- 7Dividends declared per common share remained consistent, with a quarterly dividend of $0.352 paid in December 2012 and a declaration for March 2013.