UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of the
Securities Exchange
Act of 1934
Date of report (Date of earliest event reported) January 22, 2004
SKYWORKS SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 1-5560 | 04-2302115 | ||||||
|---|---|---|---|---|---|---|---|---|
| (State or Other Jurisdiction | (Commission | (IRS Employer | ||||||
| of Incorporation) | File Number) | Identification No.) | ||||||
| 20 Sylvan Road, Woburn, Massachusetts | 01801 | ||||
|---|---|---|---|---|---|
| (Address of Principal Executive Offices) | (Zip Code) | ||||
| Registrant's telephone number, including area code | (781) 376-3000 |
Page 1 of 4 pages
Exhibit Index on page 4
Item 12. Results of Operations and Financial Condition
The information contained herein and in the accompanying exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated
by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On
January 22, 2004, Skyworks Solutions, Inc. announced its financial results for the three months ended January 2, 2004. A copy of the press
release is attached hereto as Exhibit 99.1.
Use of Non-GAAP Financial Information
To supplement our consolidated financial statements presented in accordance with GAAP, Skyworks Solutions,
Inc. uses non-GAAP measures of operating results, net income and earnings per share, which are adjusted from
results based on GAAP to exclude certain expenses. These non-GAAP measures are provided to enhance the user’s
overall understanding of our current financial performance and our prospects for the future. Specifically, we
believe the non-GAAP results provide useful information to both management and investors by excluding certain
expenses that we believe are not indicative of our ongoing operations. Additionally, since we have historically
reported non-GAAP results to the investment community, the inclusion of non-GAAP measures provides
consistency in our financial reporting. Further, these non-GAAP results are one of the primary indicators
management uses for planning and forecasting in future periods. The presentation of this additional information
should not be considered in isolation or as a substitute for results prepared in accordance with accounting
principles generally accepted in the United States.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SKYWORKS SOLUTIONS, INC.
| Date: January 22, 2004 | By: /s/ Allan M. Kline Allan M. Kline Chief Financial Officer |
EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION | |
|---|---|---|
| 99.1 | Press Release dated January 22, 2004, announcing Skyworks Solutions, Inc.’s financial results for the three months ended January 2, 2004 |
| Skyworks Media Relations: | Skyworks Investor Relations: | |
|---|---|---|
| Pilar Barrigas (949) 231-3061 |
Thomas Schiller (949) 231-4700 |
Skyworks Grows First
Quarter Fiscal 2004 Revenues
17 Percent
Sequentially to a Record $175 Million
Delivers Pro Forma
EPS of $0.04 Versus Consensus Estimates of $0.01
and Generates
Positive Cash Flow
WOBURN, Mass., Jan. 22, 2004 – Skyworks Solutions, Inc. (Nasdaq: SWKS), the industry’s leading wireless semiconductor company focused on radio frequency (RF) and complete cellular system solutions for mobile communications applications, today announced record revenues of $175.1 million for the first fiscal quarter ended January 2, 2004 up 17 percent sequentially. This performance exceeded the company’s guidance of 10 percent growth from the $150.0 million achieved in the fourth fiscal quarter of 2003. Revenues were up 9 percent on a year-over-year basis from $160.2 million.
On a pro forma basis, excluding amortization of intangible assets and special items, operating income during the first quarter of fiscal 2004 was a record $11.1 million and compares to an operating loss of $4.8 million in the fourth quarter of 2003 and to $3.7 million of operating income in the same period last year, representing a 200 percent year-over-year improvement. First quarter fiscal 2004 pro forma earnings per share was $0.04 and better than consensus estimates of $0.01.
First quarter fiscal 2004 GAAP operating income was $10.4 million as compared to an operating loss of $37.9 million during the fourth quarter of 2003 and versus $6.4 million of operating income during the same period a year ago. GAAP earnings per share for the first quarter was $0.03.
“The Skyworks team delivered a strong first fiscal quarter of 2004 highlighted by record top and bottom line performances,” said David J. Aldrich, Skyworks’ president and chief executive officer. “Our revenue growth reflects the increasing traction of our portfolio of highly integrated wireless semiconductor solutions. At the same time, crisp execution enabled us to demonstrate operating leverage, generate free cash flow and strengthen our balance sheet. Looking forward, healthy backlog coupled with improving visibility are setting the stage for a strong current quarter and fiscal 2004 led by power amplifier, front-end module and direct conversion transceiver market share gains,” Aldrich concluded.
Financial Highlights
| o | Expanded wireless gross margins by 300 basis points sequentially to 41 percent, which excludes Mexicali assembly and test service activity of $11 million |
| o | Achieved inventory turns of 7.0 times and improved Days Sales Outstanding (DSO) by 10 days |
| o | Generated $25 million of cash flow from operations |
Product Highlights
Front-End Modules
| o | Increased power amplifier module unit volume by more than 25 percent sequentially to 400 million cumulative shipments |
| o | Surpassed 1 million unit milestone with the industry’s most highly integrated GSM/GPRS transmit front-end module (Tx FEM) at a leading OEM |
| o | Captured a key Tx FEM design win at another tier one handset supplier |
RF Subsystems
| o | Delivered more than 10 million direct conversion transceivers |
| o | Commenced initial shipments of the world's first Single Package RadioTM solution |
| o | Expanded engagements at leadership ODMs including BenQ, Chi Mei, Compal and Quanta |
Cellular Systems
| o | Scored a key system solution design win at NEC |
| o | Secured systems business at a 10th cellular licensee (of 18 total) authorized to sell and distribute handsets within China |
Cellular Infrastructure and Wireless Data
| o | Ramped the world's highest linearity direct conversion quadrature demodulator for base station applications |
| o | Doubled wireless LAN switch volume sequentially to almost 25 million units |
| o | Introduced the industry's broadest line of wireless LAN front-end modules |
Second Quarter Fiscal 2004 Outlook
“Despite traditional seasonality, we expect to maintain revenues at last quarter’s record level driven by new platform ramps and market share gains,” said Allan M. Kline, Skyworks’ chief financial officer. “Operationally, we plan to again deliver gross margins of approximately 41 percent within our wireless business and 38 percent on an aggregate basis. We are forecasting operating expenses to remain flat sequentially as well. Accordingly, we expect to achieve performance on par with our seasonally strong first fiscal quarter results,” Kline concluded.
Skyworks’ First Quarter Conference Call
Skyworks will host a conference call at 5:00 p.m. Eastern Time today to discuss first quarter FY04 results. To listen to the call, please visit the “Investor Relations” section of Skyworks’ web site at www.skyworksinc.com or www.companyboardroom.com. The webcast will be recorded and available for replay on Skyworks’ web site until 9:00 p.m. Eastern Time, Jan. 29 2004.
About Skyworks
Skyworks
Solutions, Inc. is the industry’s leading wireless semiconductor company focused on
RF and complete cellular system solutions for mobile communications applications. The
company is focused on providing front-end modules, RF subsystems and cellular systems to
handset, WLAN and infrastructure customers.
Skyworks
is headquartered in Woburn, Mass., with executive offices in Irvine, Calif. The company
has design, engineering, manufacturing, marketing, sales and service facilities throughout
North America, Europe, Japan and Asia Pacific. For more information please visit
www.skyworksinc.com.
Safe Harbor Statement
This
news release includes “forward-looking statements” intended to qualify for the
safe harbor from liability established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements include information relating to future results of
Skyworks (including certain projections and business trends). Forward-looking statements
can often be identified by words such as “anticipates,” “expects,”
“intends,” “believes,” “plans,” “may,”
“will,” “continue,” similar expressions, and variations or negatives
of these words. All such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially and adversely from those projected, and
may affect our future operating results, financial position and cash flows.
These
risks and uncertainties include, but are not limited to: global economic and market
conditions, such as the cyclical nature of the semiconductor industry and the markets
addressed by the company’s and its customers’ products; demand for and market
acceptance of new and existing products; the ability to develop, manufacture and market
innovative products in a rapidly changing technological environment; the ability to
compete with products and prices in an intensely competitive industry; product
obsolescence; losses or curtailments of purchases from key customers or the timing of
customer inventory adjustments; the timing of new product introductions; the availability
and extent of utilization of raw materials, critical manufacturing equipment and
manufacturing capacity; pricing pressures and other competitive factors; changes in
product mix; fluctuations in manufacturing yields; the ability to continue to grow and
maintain an intellectual property portfolio and obtain needed licenses from third parties;
the ability to attract and retain qualified personnel; labor relations of the company, its
customers and suppliers; economic, social and political conditions in the countries in
which Skyworks, its customers or its suppliers operate, including security and health
risks, possible disruptions in transportation networks and fluctuations in foreign
currency exchange rates; and the uncertainties of litigation, as well as other risks and
uncertainties, including but not limited to those detailed from time to time in the
company’s filings with the Securities and Exchange Commission.
These
forward-looking statements are made only as of the date hereof, and the company undertakes
no obligation to update or revise the forward-looking statements, whether as a result of
new information, future events or otherwise.
Note
to editors: Skyworks and Skyworks Solutions are trademarks or registered trademarks of
Skyworks Solutions, Inc. or its subsidiaries in the U.S. and in other countries. All other
brands and names listed are trademarks of their respective companies.
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
| (unaudited) | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) |
Pro Forma January 2, 2004 |
Pro Forma Adjustments |
GAAP January 2, 2004 |
GAAP December 27, 2002 | ||||||||||
| Net sales | $ | 175,108 | $ | -- | $ | 175,108 | $ | 160,194 | ||||||
| Cost of sales | 108,368 | -- | 108,368 | 95,074 | ||||||||||
| Research and development expenses | 36,694 | -- | 36,694 | 37,301 | ||||||||||
| Selling and administrative expenses | 18,904 | -- | 18,904 | 20,252 | ||||||||||
| Amortization of intangible assets | -- | 769 | 769 | 1,127 | ||||||||||
| Operating income | 11,142 | (769 | ) | 10,373 | 6,440 | |||||||||
| Interest expense | (5,374 | ) | -- | (5,374 | ) | (5,734 | ) | |||||||
| Other income, net | 453 | -- | 453 | 823 | ||||||||||
| Income before income taxes | 6,221 | (769 | ) | 5,452 | 1,529 | |||||||||
| Provision for income taxes | 800 | 480 | (a) | 1,280 | 738 | |||||||||
| Net income | $ | 5,421 | $ | (1,249 | ) | $ | 4,172 | $ | 791 | |||||
| Net income per share, basic | $ | 0.04 | $ | 0.03 | $ | 0.01 | ||||||||
| Net income per share, diluted | $ | 0.04 | $ | 0.03 | $ | 0.01 | ||||||||
| Weighted average shares, basic | 148,784 | 148,784 | 137,896 | |||||||||||
| Weighted average shares, diluted | 150,997 | 150,997 | 140,109 | |||||||||||
[a]
Represents a non-cash tax charge related to utilization of pre-merger deferred tax assets.
Although the pro forma presentation is not intended to present results of operations in accordance with GAAP, the Company believes this information is useful in understanding the results of operations. Therefore, Skyworks provides this supplemental information to enable investors to perform additional comparisons of operating results and as a means to provide additional insight into the Company’s ongoing operations.
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED
BALANCE SHEETS
| (unaudited) (in thousands) |
Jan 2, 2004 |
Oct 3, 2003 | ||||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 181,563 | $ | 170,806 | ||||
| Accounts receivable, net | 150,842 | 144,267 | ||||||
| Inventories, net | 61,844 | 58,168 | ||||||
| Prepaid expenses and other current assets | 12,587 | 12,854 | ||||||
| Property, plant and equipment, net | 132,934 | 127,765 | ||||||
| Goodwill and intangible assets, net | 526,635 | 527,695 | ||||||
| Other assets | 49,317 | 49,113 | ||||||
| Total assets | $ | 1,115,722 | $ | 1,090,668 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term debt | $ | 39,005 | $ | 41,681 | ||||
| Accounts payable | 64,393 | 50,369 | ||||||
| Accrued liabilities and other current liabilities | 52,203 | 44,766 | ||||||
| Long-term debt | 275,000 | 275,000 | ||||||
| Other long-term liabilities | 5,891 | 5,677 | ||||||
| Stockholders' equity | 679,230 | 673,175 | ||||||
| Total liabilities and equity | $ | 1,115,722 | $ | 1,090,668 | ||||