e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 25, 2006
SKYWORKS SOLUTIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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1-5560
(Commission File Number)
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04-2302115
(IRS Employer Identification No.) |
20 Sylvan Road, Woburn,
Massachusetts 01801
(Address of principal executive offices) (Zip Code)
(781) 376-3000
(Registrants telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
ITEM 2.02 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 25, 2006, Skyworks Solutions, Inc. announced its financial results for the three months ended
December 30, 2005. A copy of the press release is attached hereto as Exhibit 99.1.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in accordance with GAAP, Skyworks Solutions, Inc. uses
non-GAAP financial measures of operating results, net income and earnings per share, which are adjusted from results based on
GAAP to exclude certain charges and non-recurring items. These non-GAAP financial measures are provided to enhance the users
overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP
financial measures provide useful information to both management and investors by excluding certain charges and non-recurring
items that we believe are not indicative of our ongoing operations and economic performance. Additionally, since we have historically
reported non-GAAP results to the investment community, the inclusion of non-GAAP financial measures provides consistency in our
financial reporting. Further, these non-GAAP financial measures 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. A reconciliation of these
non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated January 25, 2006, announcing Skyworks Solutions, Inc.s financial results for the three months
ended December 30, 2005.
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.
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SKYWORKS SOLUTIONS, INC.
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By: |
/s/ Allan M. Kline
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Date: January 25, 2006 |
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Allan M. Kline |
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Chief Financial Officer |
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EXHIBIT
INDEX
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Exhibit |
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Number |
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Description |
99.1
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Press Release dated January 25, 2006, announcing
Skyworks Solutions, Inc.s financial results for the three months
ended December 30, 2005. |
exv99w1
EXHIBIT 99.1
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Skyworks Media Relations:
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Skyworks Investor Relations: |
Pilar Barrigas
(949) 231-3061
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Thomas Schiller
(949) 231-4700 |
Skyworks Reports First Fiscal Quarter 2006 Results
Grows Core Business Ten Percent Sequentially;
Generates $22 Million in Cash Flow from Operations
WOBURN, Mass., Jan. 25, 2006 Skyworks Solutions, Inc. (NASDAQ: SWKS), an industry leader in
radio solutions and precision analog semiconductors, today announced revenue of $198.3 million for
the first fiscal quarter ended December 30, 2005, compared to $190.2 million in the previous
quarter and $220.2 million in the same period a year ago. Revenue from the companys RF solutions
and linear products portfolio was $180.5 million, up 10 percent when compared to $163.7 million
last quarter. As anticipated, revenue within the cellular baseband product area was $17.8 million,
a decline from $26.5 million in the fourth fiscal quarter, reflecting a shift from tier-three
suppliers to leading cellular handset OEMs.
Operating income computed in accordance with U.S. Generally Accepted Accounting Principles
(GAAP) for the first fiscal quarter was $8.5 million compared to $7.1 million in the fourth fiscal
quarter of 2005. GAAP operating income in the corresponding period a year ago was $22.9 million.
On a pro forma basis, operating income for the first fiscal quarter was $13.9 million, a 56 percent
sequential increase against guidance of a 50 percent improvement, and versus $23.7 million in the
same period a year ago. GAAP diluted earnings per share during the quarter was $0.03, while pro
forma diluted earnings per share was $0.07, in line with consensus estimates.
Pro forma results, which are a supplement to financial results based on GAAP, exclude certain
charges including share-based compensation, amortization of intangible assets and non-recurring
items. The company believes these non-GAAP financial measures provide useful information to both
management and investors by excluding
certain charges and non-recurring items that may not be indicative of Skyworks ongoing operations
and economic performance.
For the first time, GAAP operating income includes a $3.0 million charge related to the
expensing of equity-based incentives in accordance with FASB Statement No. 123(R), which requires
that the company account for all share-based compensation in its statement of operations.
Ten percent sequential revenue growth across our RF solutions and linear products portfolio
signals growing demand for our newest semiconductor solutions. At the same time, we strengthened
our balance sheet through the generation of $22 million in cash flow from operations, said David
J. Aldrich, Skyworks president and chief executive officer. Our Helios EDGE radios are now
supporting the majority of top tier OEMs, with aggressive ramps ongoing at LG, beginning at
Samsung, and to be followed later this year at Motorola. Our WCDMA front-end module and multimode
radio traction, coupled with the launch of our newest precision analog solutions, are setting the
stage for a strong second half of 2006, concluded Aldrich.
First Fiscal Quarter 2006 Product Highlights
Mobile Platforms
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Signed a strategic agreement with Motorola for the supply of Helios DigRF radios in
support of next generation EDGE platforms |
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Initiated volume production of Helios Mini radios at Samsung for integration within
nine forthcoming EDGE models |
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Powered LG Electronics EDGE handsets with Helios radios |
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Introduced the worlds smallest and lowest cost GPRS radio at LG Electronics as they
target emerging markets |
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Supported Sony Ericssons highly successful suite of GPRS/EDGE Walkman handsets with
highly customized power amplifier modules |
Linear Products
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Commenced volume production of our newly released innovative CMOS switch solutions for
satellite receivers |
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Ramped front-end modules as part of Broadcoms 54g WLAN reference design |
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Secured amplifier sockets at Alcatel in support of 3G base stations |
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Launched ultra-low power transmit chain solutions for cellular infrastructure
applications |
Business Outlook
Despite traditional handset market seasonality of a 10 to 15 percent sequential unit decline,
we are forecasting better performance with March quarterly revenue down only nine percent
sequentially to approximately $180 million, driven by our ability to capture increasing
semiconductor content per platform, said Allan M. Kline, Skyworks vice president and chief
financial officer.
Skyworks will discuss its business outlook in more detail on its conference call to be held
with investors and analysts today at 5:00 p.m.
Skyworks First Fiscal Quarter 2006 Conference Call
Skyworks will host a conference call at 5:00 p.m. Eastern time today to discuss results for
the first fiscal quarter of 2006. To listen to the conference call via the Internet, please visit
the Investor Relations section of Skyworks Web site at www.skyworksinc.com. To listen to the
conference call via telephone, please call 800-819-9193 (domestic) or 913-981-4911 (international),
security code: Skyworks.
Playback of the conference call will begin at 9 p.m. ET on Wednesday, Jan. 25, and end at 9
p.m. ET on Wednesday, Feb. 1, 2006. The replay will be available on Skyworks Web site or by
calling 888-203-1112 (domestic) or 719-457-0820 (international); access code: 5044277#.
About Skyworks
Skyworks Solutions, Inc. is an industry leader in radio solutions and precision analog
semiconductors servicing a diversified set of mobile communications applications. The companys
power amplifiers, front-end modules and direct conversion transceivers are at the heart of many of
todays leading-edge multimedia handsets, cellular base stations and wireless networking platforms.
Skyworks also offers a portfolio of highly innovative linear products, supporting a diverse set of
automotive, broadband, industrial and medical customers.
Headquartered in Woburn, Mass., Skyworks is worldwide with engineering, manufacturing, sales
and service facilities throughout Asia, Europe and North America. For more information, please
visit the Skyworks Web site at: 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 companys 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
companys 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 United States and in other countries. All
other brands and names listed are trademarks of their respective companies.
# # #
SKYWORKS SOLUTIONS, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENT OF OPERATIONS
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Quarter Ended |
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Dec. 30, |
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Dec. 31, |
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(in thousands) |
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2005 |
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2004 |
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Net revenues |
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$ |
198,325 |
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$ |
220,160 |
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Cost of goods sold |
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123,602 |
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132,141 |
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Gross profit |
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74,723 |
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88,019 |
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Operating expenses: |
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Research and development |
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42,430 |
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37,113 |
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Selling, general and administrative |
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23,253 |
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27,224 |
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Amortization of intangibles |
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536 |
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737 |
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Total operating expenses |
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66,219 |
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65,074 |
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Operating income |
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8,504 |
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22,945 |
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Interest expense |
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(3,812 |
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(3,533 |
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Other income, net |
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2,319 |
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1,121 |
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Income before income taxes |
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7,011 |
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20,533 |
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Provision for income taxes |
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2,724 |
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6,616 |
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Net income |
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$ |
4,287 |
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$ |
13,917 |
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Earnings per share: |
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Basic |
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$ |
0.03 |
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$ |
0.09 |
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Diluted |
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$ |
0.03 |
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$ |
0.09 |
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Weighted average shares: |
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Basic |
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158,573 |
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156,440 |
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Diluted |
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158,827 |
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158,905 |
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SKYWORKS SOLUTIONS, INC.
UNAUDITED RECONCILIATION OF PRO FORMA NON-GAAP MEASURES
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Quarter Ended |
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Dec. 30, |
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Dec. 31, |
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(in thousands) |
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2005 |
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2004 |
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GAAP operating income |
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$ |
8,504 |
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$ |
22,945 |
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Stock-based compensation expense [a] |
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3,031 |
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Restructuring charges [b] |
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1,796 |
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Amortization of intangible assets |
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536 |
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737 |
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Pro forma operating income |
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$ |
13,867 |
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$ |
23,682 |
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Quarter Ended |
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Dec. 30, |
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Dec. 31, |
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(in thousands) |
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2005 |
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2004 |
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GAAP net income |
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$ |
4,287 |
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$ |
13,917 |
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Stock-based compensation expense [a] |
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3,031 |
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Restructuring charges [b] |
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1,796 |
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Amortization of intangible assets |
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536 |
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737 |
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Tax adjustments [c] |
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1,167 |
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5,890 |
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Pro forma net income |
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$ |
10,817 |
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$ |
20,544 |
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Quarter Ended |
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Dec. 30, |
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Dec. 31, |
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2005 |
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2004 |
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GAAP net income per share, diluted |
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$ |
0.03 |
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$ |
0.09 |
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Stock-based compensation expense [a] |
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0.02 |
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Restructuring charges [b] |
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0.01 |
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Amortization of intangible assets |
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0.01 |
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Tax adjustments [c] |
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0.01 |
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0.03 |
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Pro forma net income per share, diluted |
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$ |
0.07 |
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$ |
0.13 |
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[a] |
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These charges represent expense recognized in accordance with FASB Statement No. 123R, Share-Based Payment.
Approximately $0.3 million, $1.4 million and $1.3 million were included in cost of goods sold, research and development
expense and selling, general and administrative expense, respectively. |
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[b] |
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The charges recorded during the first quarter of fiscal 2006 primarily related to a continued reduction in the level of activity
within the Companys cellular baseband product area. Approximately $0.4 million, $1.2 million and $0.2 million were included in
cost of goods sold, research and development expense and selling, general and administrative expense, respectively. |
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[c] |
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During the first quarter of fiscal 2006, these charges primarily represented a non-cash tax charge related to the utilization
of pre-merger deferred tax assets. During the first quarter of fiscal 2005, these charges primarily represented a non-cash tax charge
related to the utilization of pre-merger deferred tax assets and a reduction in the expected benefit of foreign deferred tax assets
resulting from a change in regulated foreign tax rates. |
The above pro forma non-GAAP measures are based upon our unaudited consolidated statements of operations for the periods shown.
These non-GAAP financial measures are provided to enhance the users overall understanding of our current financial performance and
our prospects for the future. Specifically, we believe the non-GAAP financial measures provide useful information to both management and
investors by excluding certain charges and non-recurring items that we believe are not indicative of our ongoing operations and economic
performance. Additionally, since we have historically reported non-GAAP results to the investment community, the inclusion of non-GAAP
financial measures provides consistency in our financial reporting. Further, these non-GAAP financial measures 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 generaly accepted in the United States.
SKYWORKS SOLUTIONS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
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Dec. 30, |
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Sept. 30, |
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(in thousands) |
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2005 |
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2005 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
129,505 |
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$ |
122,535 |
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Short-term investments |
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114,970 |
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113,325 |
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Accounts receivable, net |
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171,065 |
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171,454 |
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Inventories |
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79,031 |
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77,400 |
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Prepaid expenses and other current assets |
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10,482 |
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11,268 |
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Property, plant and equipment, net |
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155,331 |
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150,838 |
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Goodwill and intangible assets, net |
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509,166 |
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511,119 |
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Other assets |
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30,390 |
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29,904 |
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Total assets |
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$ |
1,199,940 |
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$ |
1,187,843 |
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Liabilities and Equity |
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Current liabilities: |
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Short-term debt |
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$ |
50,000 |
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$ |
50,000 |
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Accounts payable |
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72,296 |
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72,276 |
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Accrued liabilities and other current liabilities |
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39,416 |
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35,959 |
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Long-term debt |
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230,000 |
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230,000 |
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Other long-term liabilities |
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7,115 |
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|
7,044 |
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Stockholders equity |
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801,113 |
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|
792,564 |
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Total liabilities and equity |
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$ |
1,199,940 |
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$ |
1,187,843 |
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