01—Abstract
Summary
Summary of the 10-K filed November 18, 2013. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported fiscal 2013 (year ended September 27, 2013) net revenue of $1,792.0 milliona, up from $1,568.6 million in fiscal 2012, with operating income of $345.1 million (19.3% of net revenue) versus $255.6 million a year earlier.
Net income rose to $278.1 millionb from $202.0 million, and diluted earnings per share were $1.45 compared with $1.05. The company describes itself as an innovator of high performance analog semiconductors serving smartphone, tablet, cellular infrastructure, energy management, GPS, medical, military and other markets. Gross margin improved to 42.8% of net revenue from 42.5%, while research and development expense rose to $226.3 million.
Cash flow and liquidity were strong. Cash from operations was $499.7 millionc, up from $285.2 million, and ending cash and cash equivalents were $511.1 million. The company repurchased 8.1 million shares for $184.9 million and spent $123.8 million on capital expenditures.
Stockholders' equity increased to $2,101.1 milliond and the company reported no long-term debt at fiscal year-end. Customer concentration remains significant: one customer accounted for 36% of net revenue and another for 15% in fiscal 2013.
Investors should note the risk factors emphasized in the filing, including semiconductor industry cyclicality, pricing pressure with average selling prices expected to decline five to ten percent per year, reliance on a small number of customers and sole-source suppliers, dependence on gallium arsenide manufacturing facilities, and international and China-related exposures. The filing also disclosed a $250.0 million share repurchase program authorized July 16, 2013, with $229.6 million remaining at year end.
02—Key points
Key Highlights
- Net revenue rose 14.2% to $1,792.0 million in fiscal 2013 from $1,568.6 million, driven by demand for 3G, switching, wireless LAN and GPS solutions.
- Net income increased to $278.1 million from $202.0 million, and diluted EPS rose to $1.45 from $1.05.
- Gross profit was $766.6 million, or 42.8% of net revenue, compared with 42.5% in fiscal 2012.
- Operating cash flow was $499.7 million, up from $285.2 million, and year-end cash and equivalents reached $511.1 million.
- The company repurchased 8.1 million shares for $184.9 million and holds a $250.0 million repurchase authorization running through July 16, 2015, with $229.6 million remaining.
- Samsung and Foxconn-affiliated suppliers were the largest customers, at 36% and 15% of net revenue respectively in fiscal 2013 as reported in the customer concentration table.
- The company reported no long-term debt at September 27, 2013, and stockholders' equity grew to $2,101.1 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Skyworks Solutions kept $0.16.
- Revenue$1.79B100.0%
- Cost of revenue−$1.03B57.2%
- Gross profit$766.6M42.8%
- Operating costs−$421.5M23.5%
- Operating income$345.1M19.3%
- Interest, other & tax−$67.0M3.7%
- Net income$278.1M15.5%
Where FY2013 revenue went
$1.79B- Cost of revenue: $1.03B, 57% of revenue
- Net income: $278.1M, 16% of revenue
- R&D: $226.3M, 13% of revenue
- SG&A: $159.7M, 8.9% of revenue
- Other operating costs: $35.5M, 2.0% of revenue
- Interest, other & tax: $67.0M, 3.7% of revenue
Kept 16% as net incomeOther operating costs $35.5M · 2.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed November 18, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $1.79B$1.57B | +14.2% |
| Cost of Revenue | $1.03B$901.50M | +13.7% |
| Gross Profit | $766.60M$667.10M | +14.9% |
| R&D Expenses | $226.30M$212.50M | +6.5% |
| SG&A Expenses | $159.70M$158.40M | +0.8% |
| Operating Expenses | $421.50M$411.50M | +2.4% |
| Operating Income | $345.10M$255.60M | +35.0% |
| Interest Expense | $0$600K | −100.0% |
| Net Income | $278.10M$202.00M | +37.7% |
| EPS (Basic) | $1.48$1.09 | +35.8% |
| EPS (Diluted) | $1.45$1.05 | +38.1% |
| Shares Outstanding (Basic) | 187.50M185.80M | +0.9% |
| Shares Outstanding (Diluted) | 192.20M191.80M | +0.2% |
05—Questions
Frequently Asked Questions
How did Skyworks perform financially in fiscal 2013?
Net revenue grew to $1,792.0 million from $1,568.6 million, operating income rose to $345.1 million from $255.6 million, and net income increased to $278.1 million from $202.0 million. Diluted EPS was $1.45 versus $1.05 in fiscal 2012.
What drove the revenue growth?
The filing attributes the increase primarily to rising demand for the company's 3G, switching, wireless LAN and GPS solutions, partly offset by lower GSM/GPRS product revenue as the 2G market contracted.
How much cash did the company generate and how was it used?
Operating activities provided $499.7 million. The company used $184.9 million to repurchase common stock and $123.8 million for capital expenditures, and ended the year with $511.1 million in cash and cash equivalents.
What are the main risks identified in the filing?
Key risks include cyclicality of the semiconductor industry, ongoing average selling price erosion (expected at five to ten percent per year), dependence on a small number of customers, reliance on third-party foundries and sole-source suppliers, gallium arsenide manufacturing concentration, and international operations including China.
Does the company pay dividends?
No. The filing states that Skyworks has never paid cash dividends on its common stock and does not anticipate paying them in the foreseeable future.
06—Continue