01—Abstract
Summary
Summary of the 10-K filed November 29, 2010. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported fiscal 2010 (year ended October 1, 2010) net revenues of $1,071,849 thousanda, up 33.6% from $802,577 thousand in fiscal 2009, driven by market share gains and higher demand for products used in mobile internet, wireless infrastructure, energy management and diversified analog applications.
Gross profit rose to $456,833 thousandb, or 42.6% of net revenues versus 39.6% a year earlier, and operating income increased to $199,744 thousand, or 18.6% of revenue. Net income was $137,294 thousand, or $0.75 per diluted share, compared with $94,983 thousand, or $0.56 per diluted share, in fiscal 2009. Cash flow and balance sheet strengthened.
Cash from operations was $223.0 millionc, and cash, cash equivalents and restricted cash totaled $459.4 million at year end. After convertible note retirements, the company reported a net cash position of $384.6 million. The company retired $53.0 million of its 2007 Convertible Notes during the year, and the $50.0 million Wells Fargo credit facility was substantially repaid as of November 29, 2010.
Capital expenditures rose to $88,929 thousandd from $39,172 thousand. Investors should note concentration and cyclicality risks. Three customers, Samsung, Nokia and Foxconn, each accounted for more than ten percent of fiscal 2010 net revenues.
The company describes the wireless semiconductor industry as highly cyclical and competitive, and it relies on third-party foundries and a sole-source supplier for epitaxial wafers. The board authorized a $200 million stock repurchase program on August 3, 2010, but no shares were repurchased under it during fiscal 2010.
02—Key points
Key Highlights
- Net revenues of $1,071,849 thousand, up 33.6% (or $269.3 million) year over year
- Gross margin expanded to 42.6% from 39.6%; gross profit of $456,833 thousand
- Operating income of $199,744 thousand, or 18.6% of revenue, versus 8.9% in fiscal 2009
- Net income of $137,294 thousand; diluted EPS of $0.75 versus $0.56
- Operating cash flow of $223.0 million; cash and restricted cash of $459.4 million; net cash position of $384.6 million
- Three customers (Samsung, Nokia, Foxconn) each exceeded 10% of net revenues in fiscal 2010
- $200 million stock repurchase program approved August 3, 2010; no shares repurchased in fiscal 2010
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Skyworks Solutions kept $0.13.
- Revenue$1.07B100.0%
- Cost of revenue−$615.0M57.4%
- Gross profit$456.8M42.6%
- Operating costs−$257.1M24.0%
- Operating income$199.7M18.6%
- Interest, other & tax−$62.5M5.8%
- Net income$137.3M12.8%
Where FY2010 revenue went
$1.07B- Cost of revenue: $615.0M, 57% of revenue
- Net income: $137.3M, 13% of revenue
- R&D: $134.1M, 13% of revenue
- SG&A: $117.9M, 11% of revenue
- Interest, other & tax: $62.5M, 5.8% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed November 29, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $1.07B$802.58M | +33.6% |
| Cost of Revenue | $615.02M$484.36M | +27.0% |
| Gross Profit | $456.83M$318.22M | +43.6% |
| R&D Expenses | $134.14M$124.00M | +8.2% |
| SG&A Expenses | $117.85M$100.42M | +17.4% |
| Operating Expenses | $257.09M$246.52M | +4.3% |
| Operating Income | $199.74M$71.70M | +178.6% |
| Interest Expense | $4.25M$8.29M | −48.8% |
| Net Income | $137.29M$94.98M | +44.5% |
| EPS (Basic) | $0.78$0.57 | +36.8% |
| EPS (Diluted) | $0.75$0.56 | +33.9% |
| Shares Outstanding (Basic) | 175.02M167.05M | +4.8% |
| Shares Outstanding (Diluted) | 182.74M169.66M | +7.7% |
05—Questions
Frequently Asked Questions
What drove Skyworks' revenue growth in fiscal 2010?
The filing attributes the $269.3 million, or 33.6%, revenue increase principally to market share gains and higher overall demand for products used in mobile internet, wireless infrastructure, energy management and diversified analog applications.
How did profitability change in fiscal 2010?
Gross margin rose to 42.6% from 39.6%, reflecting factory process and productivity enhancements, yield improvements, material cost reductions and higher revenue. Operating income increased $128.0 million, or 178.6%, to $199,744 thousand, and net income rose to $137,294 thousand from $94,983 thousand.
How concentrated is Skyworks' customer base?
In fiscal 2010, three customers, Samsung, Nokia and Foxconn, each accounted for greater than ten percent of net revenues. The filing states that loss of or a significant reduction in orders from these customers could materially and adversely affect the business.
What is the status of the company's debt and credit facility?
Short-term debt of $50.0 million under the Wells Fargo Credit Facility was outstanding at October 1, 2010, and the facility's borrowing ability expired in October 2010. The filing states it was substantially repaid as of November 29, 2010. Long-term convertible notes of $26.7 million in principal are due March 2012.
Has the company begun repurchasing shares under its buyback authorization?
The board approved a program on August 3, 2010 to repurchase up to $200 million of common stock. No shares were repurchased under the program during fiscal 2010, and as of November 29, 2010, the company had repurchased 786,400 shares for approximately $18.2 million, which are held in treasury stock.
06—Continue