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Skyworks Solutions Annual Report, Year Ended Oct 1, 2004

Filing Date
Filed December 13, 2004
Period End
October 1, 2004
Security
SWKS
In the record · 2016–202610-K2110-Q338-K121

SWKS filed 21 annual reports (10-K), 33 quarterly reports (10-Q) and 121 current reports (8-K) between 2016 and 2026.

  1. FY2019 annual report10-K · Nov ’19Nov ’19
  2. Leadership change8-K · Feb ’22Feb ’22
  3. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed December 13, 2004. Cited figures are marked; the original filing is the authoritative source.

Skyworks Solutions, Inc. reported fiscal 2004 (year ended October 1, 2004) net revenues of $784.0 milliona, up from $617.8 million in fiscal 2003, and net income of $22.4 million, or $0.15 per share, compared with a net loss of $451.4 million in fiscal 2003.

The filing attributes the revenue increase primarily to stronger demand for the company's wireless product portfolio, with unit sales up approximately 53% while average selling prices fell approximately 17%. Gross margin was 39.9% versus 40.0% a year earlier, and operating income turned positive at $42.7 millionb, compared with an operating loss of $33.5 million in fiscal 2003. Special charges fell to $17.4 million from $34.5 million, and interest expense declined to $17.9 million from $21.4 million after the $45 million of 15 percent senior notes were converted into common stock in May 2004.

Cash generation improved markedly, with operating cash flow of $91.9 millionc versus a $72.1 million outflow in fiscal 2003, and cash and equivalents rose to $203.5 million at year-end. Total indebtedness was approximately $280 million, or about 28% of total capitalization, consisting of $230 million of 4.75 percent convertible subordinated notes due 2007 and $50 million drawn under a receivables-backed facility with Wachovia Bank. Management stated that existing liquidity should be sufficient for at least the next twelve months, and it expects fiscal 2005 capital expenditures to return to levels more comparable to fiscal 2003 after $60.0 million was invested in fiscal 2004.

Key risks flagged in the filing include the cyclical nature of the wireless semiconductor industry, customer concentration (Motorola at 14% and Samsung at 12% of fiscal 2004 revenue), intense competition with declining average selling prices, and ongoing patent litigation with Qualcomm, which the company says it considers without merit. The company also disclosed a $397.1 milliond goodwill impairment recorded in fiscal 2003 and has not paid cash dividends since fiscal 1986.

02—Key points

Key Highlights

  1. Net revenues rose 26.9% to $784.0 million in fiscal 2004, driven by greater demand for the wireless product portfolio.
  2. Net income of $22.4 million, or $0.15 per share, versus a net loss of $451.4 million in fiscal 2003, which included a $397.1 million goodwill impairment charge.
  3. Operating income of $42.7 million compared with an operating loss of $33.5 million in fiscal 2003.
  4. Operating cash flow of $91.9 million, up from a $72.1 million outflow in fiscal 2003; year-end cash and equivalents were $203.5 million.
  5. Days sales outstanding in the fourth quarter fell to 65.8 from 87.5 a year earlier.
  6. Total indebtedness of approximately $280 million (about 28% of total capitalization), including $230 million of 4.75% convertible subordinated notes due 2007.
  7. Customer concentration: Motorola accounted for 14% and Samsung Electronics for 12% of fiscal 2004 net revenues; ongoing patent litigation with Qualcomm.

03—Questions

Frequently Asked Questions

  1. How did Skyworks perform financially in fiscal 2004?

    Net revenues increased to $784.0 million from $617.8 million, and the company returned to profitability with net income of $22.4 million, or $0.15 per share, after a $451.4 million net loss in fiscal 2003. Gross margin was 39.9%, and operating income reached $42.7 million.

  2. What drove the revenue growth, and what pressures offset it?

    Growth came from stronger demand for the wireless product portfolio, including new highly integrated products. Unit volume rose approximately 53%, but average selling prices across products declined approximately 17%, and assembly and test service revenue fell about $15 million.

  3. How is Skyworks' balance sheet and liquidity position?

    Cash and cash equivalents were $203.5 million at year-end. Total indebtedness was about $280 million, including $230 million of 4.75% convertible notes due 2007 and $50 million under a Wachovia receivables facility. Management expects existing liquidity to fund operations for at least the next twelve months.

  4. What are the main risks investors should consider?

    The filing highlights industry cyclicality, intense competition with declining average selling prices, reliance on a few large customers (Motorola 14%, Samsung 12% of fiscal 2004 revenue), dependence on third-party foundries and a sole-source epitaxial wafer supplier, and litigation with Qualcomm, which the company believes is without merit.

  5. Does Skyworks pay dividends?

    No. The company has not paid cash dividends on its common stock since an Alpha Industries dividend in fiscal 1986 and does not anticipate paying cash dividends in the foreseeable future, intending to retain earnings to finance growth.

04—Continue

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