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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) April 28, 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
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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 April 28, 2004, Skyworks Solutions, Inc. announced its financial results
for the three and six months ended April 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: April 28, 2004 By: /s/ Allan M. Kline
-----------------------
Allan M. Kline
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Press Release dated April 28, 2004, announcing Skyworks Solutions,
Inc.'s financial results for the three and six months ended April
2, 2004
Exhibit 99.1
Skyworks Delivers Record Revenues and
Operating Income in Second Fiscal Quarter of 2004
Exceeds Top and Bottom Line Expectations
WOBURN, Mass.--(BUSINESS WIRE)--April 28, 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 $183.5 million
for the second fiscal quarter ended April 2, 2004, up 5 percent sequentially
from $175.1 million. This performance exceeded the company's guidance of flat
sequential revenue. Year-over-year, revenues for the quarter were up 17 percent
from $157.4 million.
On a pro forma basis, excluding amortization of intangible assets and
special items, operating income for the second fiscal quarter was $13.1 million,
up 18 percent sequentially and up 226 percent year-over-year. Second fiscal
quarter pro forma earnings per share was $0.05, and $0.01 better than First Call
consensus estimates.
Second fiscal quarter GAAP operating loss was $4.4 million, including $17.5
million in charges primarily related to the write-down of legacy baseband
technology licenses that were established prior to the merger between Alpha
Industries and Conexant's wireless business, and the consolidation of software
development design centers. These charges result from the company's intensified
focus in its Cellular Systems business on the advanced multimedia applications
required by a growing roster of customers, thus invalidating older technology
licenses. Including these items, GAAP loss per share for the second fiscal
quarter was $0.06.
"Despite seasonality in the wireless handset market, Skyworks delivered
record results, solidly growing both our top and bottom lines. We gained market
share in key product areas, highlighted by the ramp of our portfolio of next
generation power amplifiers, front-end modules, RF solutions and cellular
systems," said David J. Aldrich, Skyworks' president and chief executive
officer. "Our ability to outpace the growth of the overall wireless industry
demonstrates the tremendous efforts of product development, marketing and
operations teams as customers increasingly turn to our highly integrated
wireless semiconductor solutions. The product pipeline has never looked better
and we believe last quarter's performance is a precursor to an exceptional
year."
Corporate Achievements
-- Received LG Electronics' 2003 Best Quality Award for outstanding
product quality and customer service
-- Generated approximately $19 million of cash flow from operations
-- Ended the quarter with $197 million in cash
Product Highlights
Front-End Modules
-- Delivered more than four million of the industry's most highly
integrated front-end module solution, integrating switch and power
amplifier (PA) functionality
-- Commenced shipments of GSM/GPRS PA modules at Samsung Electronics,
supporting more than a dozen new feature-rich handsets
-- Gained PA module market share, with unit shipments up by more than 40
percent on a year-over-year basis
RF Subsystems
-- Unveiled the world's smallest single chip GSM/GPRS quad-band direct
conversion transceiver
-- Scored Ningbo Bird, China's largest domestic handset supplier, as a
new front-end module plus direct conversion transceiver customer
-- Captured initial EDGE RF subsystem design wins at leading OEMs and
ODMs
-- Ramped high volume CDMA 1X transmit and receive chain solutions at LG
Electronics
Cellular Systems
-- Supported NEC's ramp of their N910 family of handsets
-- Added Arima, one of Taiwan's leading ODMs, to the growing list of
system customers
-- Introduced GSM/GPRS system solution at China-based CEC Telecom
-- Provided enabling platform to Mio Technology for new 8390 smartphones
Cellular Infrastructure and Wireless Data
-- Shipped more than 30 million wireless LAN (WLAN) switches
-- Received initial high volume WLAN front-end module production orders
in support of a tier-one supplier
-- Increased GPRS, EDGE and 3G linear base station component shipments
driven by service provider deployments throughout China, India and
South America
Third Fiscal Quarter 2004 Outlook
"Based on record backlog and order trends across the business, we expect to
grow revenues another 5 percent sequentially in the June quarter," said Allan M.
Kline, Skyworks' vice president and chief financial officer. "Operationally, we
anticipate that gross margins will expand with operating expenses declining as a
percentage of sales. In turn, we expect to further demonstrate our business
model's leverage by improving operating profitability by roughly 15 percent
sequentially and delivering EPS of $0.07.
"Additionally, we have notified the holder of our $45 million, 15 percent
note, that on May 12, 2004 we intend to call this debt which has a conversion
price of $7.87 per share. This transaction will eliminate $45 million of
long-term debt, reduce our quarterly interest expense by $1.8 million and be
accretive to EPS going forward," concluded Kline.
Skyworks' Second Quarter Conference Call
Skyworks will host a conference call at 5:00 p.m. Eastern Time today to
discuss second 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, May 5, 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 provides 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, Korea,
Taiwan and India. 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 health and security 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
Securities and Exchange Commission filings.
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 is a trademark or registered trademark 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 Pro Forma GAAP GAAP
April 2, Adjustments April 2, March 28,
2004 2004 2003
Net sales $183,471 $- $183,471 $157,364
Cost of sales 113,193 974 (a) 114,167 93,845
Research and development
expenses 35,992 - 35,992 40,109
Selling and administrative
expenses 21,154 - 21,154 19,386
Amortization of intangible
assets - 769 769 1,108
Impairment and
restructuring (a) - 15,759 15,759 3,849
Operating income (loss) 13,132 17,502 (4,370) (933)
Interest expense (5,403) - (5,403) (5,047)
Other income, net 303 - 303 626
Income (loss) before income
taxes 8,032 17,502 (9,470) (5,354)
Provision (credit) for income
taxes 431 (480) (b) (49) 601
Net income (loss) $7,601 $17,022 $(9,421) $(5,955)
Net income (loss) per share,
basic $0.05 $(0.06) $(0.04)
Net income (loss) per share,
diluted $0.05 $(0.06)
Weighted average shares, basic 149,396 149,396 138,141
Weighted average shares,
diluted 152,709 149,396 138,141
(a) Impairment and restructuring charges consist primarily of a write-
down of legacy technology licenses related to the Company's cellular
systems business and certain costs incurred to implement facility
consolidations.
(b) Represents the reversal of the non-cash tax charge related to the
utilization of pre-merger deferred tax assets recorded in the first
quarter of fiscal 2004.
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.
(unaudited) Six Months Ended
(in thousands, except Pro Forma Pro Forma GAAP GAAP
per share data) April 2, Adjustments April 2, March 28,
2004 2004 2003
Net sales $358,579 $- $358,579 $317,558
Cost of sales 221,561 974 (a) 222,535 188,919
Research and
development expenses 72,686 - 72,686 77,410
Selling and
administrative
expenses 40,058 - 40,058 38,681
Amortization of
intangible assets - 1,538 1,538 2,235
Impairment and
restructuring (a) - 15,759 15,759 4,806
Operating income 24,274 18,271 6,003 5,507
Interest expense (10,777) - (10,777) (10,781)
Other income, net 756 - 756 1,449
Income (loss) before
income taxes 14,253 18,271 (4,018) (3,825)
Provision for income
taxes 1,231 - 1,231 1,339
Income (loss) before
cumulative effect of
change in accounting
principle $13,022 $18,271 $(5,249) $(5,164)
Cumulative effect of
change in accounting
principle (b) $- $- $- $(397,139)
Net income (loss) $13,022 $18,271 $(5,249)$(402,303)
Loss per share before cumulative effect of change in
accounting principle, basic and diluted $(0.04)
Cumulative effect of change in accounting
principle per share, basic and diluted $(2.88)
Net income (loss) per
share, basic $0.09 $(0.04) $(2.91)
Net income (loss) per
share, diluted $0.09 $(0.04) $(2.91)
Weighted average shares,
basic 149,090 149,090 138,019
Weighted average shares,
diluted 151,737 149,090 138,019
(a) Impairment and restructuring charges consist primarily of a write-
down of legacy technology licenses related to the Company's cellular
systems business and certain costs incurred to implement facility
consolidations.
(b) The Company adopted SFAS No. 142, "Goodwill and Other Intangible
Assets" during fiscal 2003. As a result of the adoption of SFAS No.
142, the Company was required to evaluate for impairment goodwill and
intangible assets that have indefinite lives. Based on this
evaluation, the Company determined that its goodwill was impaired.
The amount of this impairment charge was $397.1 million.
SKYWORKS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) April 2, Oct. 3,
(in thousands) 2004 2003
Assets
Current assets:
Cash, cash
equivalents and
short-term
investments $197,085 $170,806
Accounts
receivable, net 142,708 144,267
Inventories 72,334 58,168
Prepaid expenses
and other current
assets 11,868 12,854
Property, plant and
equipment, net 133,204 127,765
Goodwill and
intangible assets,
net 526,056 527,695
Other assets 34,940 49,113
Total assets $1,118,195 $1,090,668
Liabilities and Equity
Current liabilities:
Short-term debt $45,054 $41,681
Accounts payable 70,032 50,369
Accrued liabilities
and other current
liabilities 47,709 44,766
Long-term debt 275,000 275,000
Other long-term
liabilities 5,756 5,677
Stockholders' equity 674,644 673,175
Total liabilities
and equity $1,118,195 $1,090,668
CONTACT: Skyworks Solutions, Inc.
Pilar Barrigas (Media), 949-231-3061
or
Thomas Schiller (Investors), 949-231-4700