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):		November 6, 2008

Skyworks Solutions, Inc.

(Exact name of registrant as specified in its charter)

Delaware		1-5560		04-2302115
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer 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

Not Applicable

 

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

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, 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 November 6, 2008, Skyworks Solutions, Inc. issued a press release in which it announced financial results for the three and twelve month periods ended October 3, 2008. 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 user’s 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 financial 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.

(d) Exhibits

99.1 Press Release dated November 6, 2008, announcing Skyworks Solutions, Inc.’s financial results for the three and twelve month periods ended October 3, 2008.

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.

EXHIBIT INDEX

Exhibit
Number		Description
99.1		Press Release dated November 6, 2008, announcing Skyworks Solutions, Inc.’s financial results for the three and twelve month periods ended October 3, 2008.

EXHIBIT 99.1

Skyworks Media Relations:		Skyworks Investor Relations:
Pilar Barrigas		Thomas Schiller
(949) 231-3061		(949) 231-4700

Skyworks Reports 22 Percent Revenue Growth and
59 Percent Operating Income Improvement in Q4 FY08

	•		Delivers Record Quarterly Revenue of $233 Million vs. Guidance of $225 Million
	•		Expands Non-GAAP Gross Margin to 40.8 Percent and Operating Margin to 15.5 Percent
	•		Posts Record Non-GAAP Diluted EPS of $0.21
	•		Generates $52 Million in Cash Flow from Operations and Retires $62 Million of 2010 and 2012 Convertible Debt
	•		Guides to Sequential Revenue and Earnings Growth in December Quarter

WOBURN, Mass., November 6, 2008 — Skyworks Solutions, Inc. (NASDAQ: SWKS), an innovator of high performance analog and mixed signal semiconductors enabling mobile connectivity today announced record fourth fiscal quarter and year-end 2008 results. Revenue for the quarter was $232.6 million, a 22 percent increase when compared to $190.5 million in the year-ago period.

     On a non-GAAP basis, operating income for the fourth fiscal quarter was $36.0 million, up 59 percent from $22.7 million in the prior year. Non-GAAP diluted earnings per share for the quarter was $0.21 and $0.01 better than company guidance. On a GAAP basis, operating income for the fourth fiscal quarter was $28.0 million compared to $18.2 million in the year-ago timeframe. GAAP diluted earnings per share was $0.33 for the period, which included a $34.4 million benefit primarily relating to a tax valuation allowance reversal for deferred tax assets.

     For fiscal 2008, revenue was $860.0 million up 16 percent year-over-year from $741.7 million. Non-GAAP operating income was $120.9 million, up 51 percent year-over-year from $80.2 million, while diluted earnings per share was $0.71, up 48 percent

Q4FY08 Earnings Press		Release 2-2-2

from $0.48 in fiscal 2007. GAAP operating income was $90.4 million as compared to $58.5 million in fiscal 2007, with diluted earnings per share of $0.68 versus $0.36, respectively.

     “Skyworks’ record performance and growth outlook despite the slowing global economy demonstrates solid progress in our strategic plans to diversify, gain market share and deliver continued operational improvements,” said David J. Aldrich, president and chief executive officer of Skyworks. “In fact, the weakening industry backdrop is accelerating vendor share consolidation as both our linear and cellular handset customers increasingly award programs based on highly integrated, low-cost architectures, innovative roadmaps, operational scale and balance sheet strength. As a result, we are making faster strides towards realizing our vision of becoming the leader in analog-intensive, mobile connectivity semiconductor solutions and creating shareholder value.”

Business Highlights

	•		Expanded quarterly gross margin to 40.8 percent on a non-GAAP basis (40.3 percent on a GAAP basis) — a 140 basis point year-over-year increase and the sixth consecutive quarter of improvement
	•		Increased operating margin to 15.5 percent on a non-GAAP basis (12.0 percent on a GAAP basis) — a 360 basis point year-over-year improvement
	•		Generated $174 million of cash flow from operations in fiscal 2008
	•		Retired $62 million of 2010 and 2012 convertible debt in the fourth quarter, reducing future potential dilution by approximately 7 million equity shares
	•		Doubled year-over-year smart phone front-end module shipments with over 40 million units in fiscal 2008
	•		Secured a multi-year defense contract with Lockheed Martin to supply high-precision microwave components for the Aegis weapon system
	•		Launched portfolio of voltage controlled oscillators, frequency synthesizers, mixers and amplifiers targeting home area networks and industrial automation applications
	•		Ramped smart meter reader solutions in support of Itron and Sensus

First Fiscal Quarter 2009 Outlook

     “Diversification and new program ramps coupled with strong execution are enabling Skyworks to continue to grow our top and bottom lines even in the face of the

Q4FY08 Earnings Press		Release 3-3-3

broader industry downturn,” said Donald W. Palette, vice president and chief financial officer of Skyworks. “Specifically, we are forecasting December quarterly revenue to be $240 million as growth in new customer platforms more than offsets broad market softness. Operationally, we plan to further expand both gross and operating margins and expect to deliver non-GAAP diluted earnings per share of $0.23 for the quarter. We believe our guidance incorporates current market uncertainty and, at the same time, reflects Skyworks’ ability to outperform our addressable markets.”

     Estimated non-GAAP diluted earnings per share for the first fiscal quarter excludes approximately $6.6 million of FASB Statement No. 123(R) — related expenses.

     Non-GAAP results, which are a supplement to financial results based on GAAP, exclude certain charges including but not limited to share-based compensation, baseband exit charges, amortization of intangible assets, tax valuation allowance reversals, 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 financial performance.

Skyworks’ Fourth Fiscal Quarter 2008 Conference Call

     Skyworks will host a conference call with analysts to discuss its fourth fiscal quarter 2008 results and business outlook today at 5:00 p.m. Eastern time (ET). To listen to the conference call via the Internet, please visit the investor relations section of Skyworks’ Web site. To listen to the conference call via telephone, please call 888-713-4486 (domestic) or 913-312-1415 (international), confirmation code: 1681714.

     Playback of the conference call will begin at 9 p.m. Eastern time on November 6, and end at 9 p.m. Eastern time on November 13. The replay will be available on Skyworks’ Web site or by calling 888-203-1112 (domestic) or 719-457-0820 (international), pass code: 1681714.

About Skyworks

     Skyworks Solutions, Inc. is an innovator of high performance analog and mixed signal semiconductors enabling mobile connectivity. The company’s power amplifiers, front-end modules and direct conversion radios are at the heart of many of today’s leading-edge multimedia handsets. Leveraging core technologies, Skyworks also offers a diverse portfolio of linear products that support automotive, broadband, cellular infrastructure, industrial and medical applications.

Q4FY08 Earnings Press		Release 4-4-4

     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 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 and expectations of Skyworks (including certain projections and business trends). Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “forecasts,” “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: unprecedented uncertainty regarding global economic and financial market conditions; the susceptibility of the wireless semiconductor industry and the markets addressed by our, and our customers’, products to economic downturns; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; losses or curtailments of purchases or payments from key customers, or the timing of customer inventory adjustments; changes in laws, regulations and/or policies in the United States that could adversely affect financial markets and our ability to raise capital; our ability to develop, manufacture and market innovative products in a highly price competitive and rapidly changing technological environment; economic, social and political conditions in the countries in which we, our customers or our suppliers operate, including security and health risks, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; fluctuations in our manufacturing yields due to our complex and specialized manufacturing processes; delays or disruptions in production due to equipment maintenance, repairs and/or upgrades; our reliance on several key customers for a large percentage of our sales; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; the availability and pricing of third party semiconductor foundry, assembly and test capacity and raw materials; our ability to timely and accurately predict market requirements and evolving industry standards, and to identify opportunities in new markets; uncertainties of litigation, including potential disputes over intellectual property infringement and rights, as well as payments related to the licensing and/or sale of such rights; our ability to rapidly develop new products and avoid product obsolescence; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; lengthy product development cycles that impact the timing of new product introductions; unfavorable changes in product mix; the quality of our products and any remediation costs; shorter than expected product life cycles; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; and our ability to continue to grow and maintain an intellectual property portfolio and obtain needed licenses from third parties, as well as other risks and uncertainties, including but not limited to those detailed from time to time in our filings with the Securities and Exchange Commission.

     These forward-looking statements are made only as of the date hereof, and we undertake 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, 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 CONSOLIDATED STATEMENT OF OPERATIONS

		Three Months Ended								Year Ended
		Oct. 3,				Sept. 28,				Oct. 3,				Sept. 28,
(in thousands, except per share amounts)		2008				2007				2008				2007
Net revenues		$	232,566			$	190,454			$	860,017			$	741,744
Cost of goods sold			138,742				115,719				517,054				454,359
Gross profit			93,824				74,735				342,963				287,385
Operating expenses:
Research and development			38,777				33,731				146,013				126,075
Selling, general and administrative			25,399				22,298				100,007				94,950
Restructuring & other charges			567				—				567				5,730
Amortization of intangibles			1,101				536				6,005				2,144
Total operating expenses			65,844				56,565				252,592				228,899
Operating income			27,980				18,170				90,371				58,486
Interest expense			(1,695	)			(2,662	)			(7,330	)			(12,026	)
Other income, net			986				3,050				5,983				10,874
Early retirement of convertible debt			(6,836	)			—				(6,836	)			(564	)
Income before income taxes			20,435				18,558				82,188				56,770
Benefit from income taxes			(34,354	)			(3,435	)			(28,818	)			(880	)
Net income		$	54,789			$	21,993			$	111,006			$	57,650
Earnings per share:
Basic		$	0.33			$	0.14			$	0.69			$	0.36
Diluted		$	0.33			$	0.14			$	0.68			$	0.36
Weighted average shares: *
Basic			163,948				159,496				161,878				159,993
Diluted			166,527				167,006				164,755				161,064

SKYWORKS SOLUTIONS, INC.
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES

		Three Months Ended								Year Ended
		Oct. 3,				Sept. 28,				Oct. 3,				Sept. 28,
(in thousands)		2008				2007				2008				2007
GAAP gross profit		$	93,824			$	74,735			$	342,963			$	287,385
Share-based compensation expense [a]			812				398				2,974				1,274
Revenue adjustments [b]			—				—				—				105
Cost of goods sold adjustments [b]			—				—				—				(1,249	)
Acquisition related expense [c]			308				—				1,589				—
Non-GAAP gross profit		$	94,944			$	75,133			$	347,526			$	287,515
Non-GAAP gross margin %			40.8	%			39.4	%			40.4	%			38.8	%

		Three Months Ended								Year Ended
		Oct. 3,				Sept. 28,				Oct. 3,				Sept. 28,
(in thousands)		2008				2007				2008				2007
GAAP operating income		$	27,980			$	18,170			$	90,371			$	58,486
Share-based compensation expense [a]			6,450				4,021				23,212				13,737
Revenue adjustments [b]			—				—				—				105
Cost of goods sold adjustments [b]			—				—				—				(1,249	)
Acquisition related expense [c]			308				—				1,589				—
Selling, general and administrative adjustments [b]			(823	)			—				(1,325	)			1,287
Restructuring & other charges [b]			567				—				567				5,730
Deferred executive compensation			449				—				449				—
Amortization of intangible assets [c]			1,101				536				6,005				2,144
Non-GAAP operating income		$	36,032			$	22,727			$	120,868			$	80,240
Non-GAAP operating margin %			15.5	%			11.9	%			14.1	%			10.8	%

		Three Months Ended								Year Ended
		Oct. 3,				Sept. 28,				Oct. 3,				Sept. 28,
(in thousands)		2008				2007				2008				2007
GAAP net income		$	54,789			$	21,993			$	111,006			$	57,650
Share-based compensation expense [a]			6,450				4,021				23,212				13,737
Revenue adjustments [b]			—				—				—				105
Cost of goods sold adjustments [b]			—				—				—				(1,249	)
Acquisition related expense [c]			308				—				1,589				—
Selling, general and administrative adjustments [b]			(823	)			—				(1,325	)			1,287
Restructuring & other charges [b]			567				—				567				5,730
Deferred executive compensation			449				—				449				—
Amortization of intangible assets [c]			1,101				536				6,005				2,144
Early retirement of convertible debt [d]			6,836				—				6,836				564
Tax adjustments [e]			(34,414	)			(3,563	)			(30,959	)			(2,048	)
Non-GAAP net income		$	35,263			$	22,987			$	117,380			$	77,920

		Three Months Ended								Year Ended
		Oct. 3,				Sept. 28,				Oct. 3,				Sept. 28,
		2008				2007				2008				2007
GAAP net income per share, diluted		$	0.33			$	0.14			$	0.68			$	0.36
Share-based compensation expense [a]			0.04				0.02				0.14				0.09
Cost of goods sold adjustments [b]			—				—				—				(0.01	)
Acquisition related expense [c]			—				—				—				—
Selling, general and administrative adjustments [b]			—				—				—				0.01
Restructuring & other charges [b]			—				—				—				0.04
Amortization of intangible assets [c]			0.01				—				0.04				—
Early retirement of convertible debt [d]			0.04				—				0.04				—
Tax adjustments [e]			(0.21	)			(0.02	)			(0.19	)			(0.01	)
Non-GAAP net income per share, diluted		$	0.21			$	0.14			$	0.71			$	0.48

The above 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 user’s 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 financial 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.

SKYWORKS SOLUTIONS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

		Oct. 3,				Sept. 28,
(in thousands)		2008				2007
Assets
Current assets:
Cash and cash equivalents		$	231,066			$	248,079
Short-term investments			—				5,700
Accounts receivable, net			146,710				167,319
Inventories			103,791				82,109
Prepaid expenses and other current assets			13,089				10,511
Property, plant and equipment, net			173,360				153,516
Goodwill and intangible assets, net			503,417				494,332
Other assets			64,048				28,342
Total assets		$	1,235,481			$	1,189,908
Liabilities and Equity
Current liabilities:
Credit facility		$	50,000			$	50,000
Convertible notes			—				49,335
Accounts payable			58,527				56,417
Accrued liabilities and other current liabilities			40,213				41,471
Long-term debt			137,616				200,000
Other long-term liabilities			4,909				6,338
Stockholders’ equity			944,216				786,347
Total liabilities and equity		$	1,235,481			$	1,189,908