Atmel Corporation (NasdaqGS:ATML - News) reported Non-GAAP net income of $67.5 million or 14 cents per diluted share in its fourth quarter financial results of fiscal 2011 compared to $119.2 million or 25 cents per diluted share in the previous year quarter and $124.0 million or 26 cents per diluted share in the third quarter of 2011, beating the Zacks Consensus Estimate of 10 cents per share.
In 2011, Non-GAAP net income came in at $438 million or 92 cents per diluted share versus $283 million or 59 cents per diluted share in 2010. The earnings results comprehensively beat the Zacks Consensus Estimate of 68 cents per share in 2011.
Revenues
The company reported net sales of $383.6 million in the final quarter of fiscal 2011, down 16.2% year over year and 20% sequentially, in line with management’s revised guidance. The softness in demand was brought about from enervated yields from the touch screen solutions segment and overall weakened performances from the industrial and consumer markets.
Microcontrollers business generated revenues of $216 million, falling 25% year over year and 28% sequentially, partially offset by the ASIC sales which were encouraging, coming in at $66 million, rising 12% year over year and 9% sequentially.
Geographically, Asia constituted majority share of revenues with 54% in the fourth quarter, EMEA was 29% and the Americas improved to 17% of total revenues.
Revenues in 2011 grew 10% annually to $1.8 billion. After adjusting for the Smart Card divestiture completed at the end of the third quarter of 2010, overall revenues in 2011 grew 15% year over year.
Margins
Non-GAAP gross margin in the fourth quarter of 2011 came in at 48.7% versus 50% in the previous year quarter and 50.4% in the third quarter of 2011. The decline was a result of factory under-utilization and weakened revenues.
Non-GAAP operating margin for the quarter was 17.9% compared to 24.5% in the last year quarter and 25.9% in the previous quarter.
In full year 2011, gross margin increased to 50.8% from 44.8% in 2010. Operating margin came in at 24.5% compared to 17.5% in 2010.
Share Repurchase and Acquisition
By the end of fiscal year 2011, Atmel repurchased 28.8 million shares of its own common stock in the open market at an average price of $10.57 per share.
Balance Sheet and Cash Flows
The company ended the year with cash and cash equivalents of $329.4 million, down from $478.1 million at the end of the previous quarter. As of December 31, 2011, trade accounts payable were $76.4 million, down from $106.9 million at the end of the previous quarter.
Atmel generated $43.4 million cash from operations during the fourth quarter of 2011 versus $84.6 million in the previous year quarter. Cash used for capital expenditures during the quarter was approximately $10 million, compared to $20 million in the previous quarter, falling just within management’s expectations of $10 million - $15 million in the quarter.
In 2011, capital expenditures came at $85 million, whereas cash flow from operations was $221 million.
Outlook
Management projects revenues to fall 6% - 11% sequentially in the first quarter of 2012 with non-GAAP gross margin to be slightly low, falling between 44.6% and 46.6%. Non-GAAP operating expenses are expected to be $117 million - $121 million.
Capital expenditures for the first quarter of 2012 are estimated at $5 million - $10 million. Cash tax rate is expected to lie between 2% - 3%.
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