01—Abstract
Summary
Summary of the 10-K filed November 28, 2011. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported fiscal 2011 (year ended September 30, 2011) net revenue of $1,418,922 thousanda, up 32.4% from $1,071,849 thousand in fiscal 2010, driven by growing addressable market, higher market share and acquisitions, with SiGe Semiconductor contributing approximately $39.7 million of revenue.
Gross profit rose to $620,304 thousandb, or 43.7% of net revenue, and operating income increased to $295,324 thousand, or 20.8% of revenue. Net income was $226,585 thousand, or $1.19 diluted EPS, compared with $137,294 thousand, or $0.75 diluted, in fiscal 2010. The company generated $365.8 million in operating cash flow and ended the year with $410.1 million in cash and cash equivalents.
It spent $249.3 millionc on acquisitions, primarily SiGe (acquired June 2011 for $278.9 million in total consideration), $100.7 million on capital expenditures, and $70.0 million on share repurchases. Total assets were $1,890,389 thousand and stockholders' equity was $1,609,095 thousand at September 30, 2011.
Key risks flagged include a pending acquisition of Advanced Analogic Technologies Inc. (AATI) at $6.13d per share, which is the subject of an arbitration proceeding in which Skyworks seeks release from its obligations, plus shareholder class actions challenging the merger. Customer concentration is also significant: Company A accounted for 27% of net revenue in fiscal 2011, and the filing identifies Foxconn, Nokia and Samsung Electronics as customers above ten percent.
02—Key points
Key Highlights
- Net revenue rose 32.4% to $1,418,922 thousand in fiscal 2011, versus $1,071,849 thousand in fiscal 2010.
- Gross margin expanded to 43.7% of net revenue, up from 42.6%, and operating income reached $295,324 thousand (20.8% of revenue) versus $199,744 thousand (18.6%).
- Net income was $226,585 thousand, with diluted EPS of $1.19 compared with $0.75 in fiscal 2010.
- Operating cash flow was $365,818 thousand, and year-end cash and cash equivalents were $410,087 thousand.
- The SiGe Semiconductor acquisition (June 2011, $278.9 million total consideration) contributed approximately $39.7 million of net revenue in fiscal 2011.
- A pending AATI merger at $6.13 per share is in arbitration, and the filing states that Skyworks is unable to predict the outcome.
- Customer concentration is high: Company A represented 27% of fiscal 2011 net revenue, and Foxconn, Nokia and Samsung Electronics each exceeded ten percent.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Skyworks Solutions kept $0.16.
- Revenue$1.42B100.0%
- Cost of revenue−$798.6M56.3%
- Gross profit$620.3M43.7%
- Operating costs−$325.0M22.9%
- Operating income$295.3M20.8%
- Interest, other & tax−$68.7M4.8%
- Net income$226.6M16.0%
Where FY2011 revenue went
$1.42B- Cost of revenue: $798.6M, 56% of revenue
- Net income: $226.6M, 16% of revenue
- R&D: $168.6M, 12% of revenue
- SG&A: $137.3M, 9.7% of revenue
- Other operating costs: $19.1M, 1.3% of revenue
- Interest, other & tax: $68.7M, 4.8% of revenue
Kept 16% as net incomeOther operating costs $19.1M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed November 28, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $1.42B$1.07B | +32.4% |
| Cost of Revenue | $798.60M$615.02M | +29.9% |
| Gross Profit | $620.30M$456.83M | +35.8% |
| R&D Expenses | $168.60M$134.14M | +25.7% |
| SG&A Expenses | $137.30M$117.85M | +16.5% |
| Operating Expenses | $325.00M$257.09M | +26.4% |
| Operating Income | $295.30M$199.74M | +47.8% |
| Interest Expense | $1.90M$4.25M | −55.3% |
| Net Income | $226.60M$137.29M | +65.0% |
| EPS (Basic) | $1.24$0.78 | +59.0% |
| EPS (Diluted) | $1.19$0.75 | +58.7% |
| Shares Outstanding (Basic) | 182.90M175.02M | +4.5% |
| Shares Outstanding (Diluted) | 190.70M182.74M | +4.4% |
05—Questions
Frequently Asked Questions
How did Skyworks perform financially in fiscal 2011?
Net revenue increased 32.4% to $1,418,922 thousand, gross profit rose to $620,304 thousand (43.7% of revenue), and net income reached $226,585 thousand, or $1.19 per diluted share, up from $0.75 in fiscal 2010.
What drove the revenue growth?
The filing attributes the increase principally to a growing addressable market, increasing market share and higher overall demand for products used in mobile internet, wireless infrastructure, energy management and diversified analog applications, along with incremental revenue from the SiGe acquisition.
What is the status of the pending AATI acquisition?
Skyworks and Advanced Analogic Technologies Inc. are in an arbitration proceeding in which Skyworks seeks release from the merger agreement and AATI seeks to compel closing. The hearing was scheduled for late November and early December 2011, and Skyworks states it is unable to predict the outcome. Separately, class action lawsuits challenge the merger, which the company says lack merit.
How did the company use its cash in fiscal 2011?
Operating activities provided $365.8 million. The company spent $249.3 million on acquisitions net of cash received, $100.7 million on capital expenditures, $70.0 million on share repurchases, and $50.0 million to repay and terminate its credit facility, ending the year with $410.1 million in cash and cash equivalents.
What customer concentration risks does Skyworks disclose?
In fiscal 2011, Company A accounted for 27% of net revenue, Company B for 13% and Company C for 11%. The filing identifies Foxconn, Nokia and Samsung Electronics as the customers each exceeding ten percent of net revenue, and it notes that losing major customers could materially affect the business.
06—Continue