10-QPeriod: Q1 FY2015

MICROCHIP TECHNOLOGY INC Quarterly Report for Q1 Ended Jun 30, 2014

Filed August 11, 2014For Securities:MCHPMCHPP

Summary

Microchip Technology Inc. (MCHP) reported strong growth in its fiscal second quarter ended June 30, 2014, with net sales increasing by 14.3% year-over-year to $528.9 million. This growth was primarily driven by the acquisition of Supertex, as well as market share gains and favorable semiconductor industry conditions. The company's core microcontroller segment continued to perform well, representing 65% of total net sales, with sales up 14.5% year-over-year. The analog, interface, and mixed-signal product segment also showed robust growth, increasing 21.5% year-over-year, boosted by the Supertex acquisition. Gross profit margin improved slightly to 58.0% from 57.6% in the prior year's comparable quarter. While there were some acquisition-related inventory fair value adjustments impacting gross margin, these were offset by lower excess capacity charges compared to the previous year. The company maintains a strong liquidity position with $2.29 billion in cash, cash equivalents, and investments. Management anticipates continued investment in new product development and process technologies to maintain its competitive edge in the embedded control market.

Financial Highlights

56 data points
Beta

Revenue

$528.88M

0.6% Gross Margin

Net Income

$89.91M

0.2% Net Margin

EPS (Diluted)

$0.20

Total Assets

$4.50B

Cash & Equivalents

$617.77M

Free Cash Flow

$165.79M

Financial Statements
Beta
Revenue$528.88M
Cost of Revenue$222.36M
Gross Profit$306.52M
R&D Expenses$84.37M
SG&A Expenses$69.25M
Operating Expenses$190.57M
Operating Income$115.95M
Interest Expense$13.68M
Net Income$89.91M
EPS (Basic)$0.23
EPS (Diluted)$0.20
Shares Outstanding (Basic)400.37M
Shares Outstanding (Diluted)449.05M

Key Highlights

  • 1Net sales increased by 14.3% year-over-year to $528.9 million, driven by acquisitions and market share gains.
  • 2Microcontroller sales, the largest segment, grew 14.5% year-over-year.
  • 3Analog, Interface, and Mixed Signal product sales saw a significant increase of 21.5% year-over-year, aided by the Supertex acquisition.
  • 4Gross profit margin improved slightly to 58.0%, with lower excess capacity charges compared to the prior year.
  • 5The company ended the quarter with a strong liquidity position, holding $2.29 billion in cash, cash equivalents, and investments.
  • 6Continued investment in Research & Development (R&D) is a strategic priority, with R&D expenses increasing 15.4% year-over-year.
  • 7The acquisition of Supertex, completed on April 1, 2014, contributed positively to revenue and product line expansion.

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