e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended January 2, 2009
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-5560
SKYWORKS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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04-2302115 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification No.) |
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20 Sylvan Road, Woburn, Massachusetts
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01801 |
(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (781) 376-3000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer þ |
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Accelerated filer o |
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Non-accelerated filer o
(Do not check if a smaller reporting company) |
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
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Class
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Outstanding at January 30, 2009 |
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Common Stock, par value $.25 per share
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165,478,996 |
SKYWORKS SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JANUARY 2, 2009
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
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Three-months Ended |
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January 2, |
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December 28, |
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2009 |
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2007 |
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Net revenues |
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$ |
210,228 |
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$ |
210,533 |
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Cost of goods sold |
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126,361 |
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128,195 |
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Gross profit |
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83,867 |
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82,338 |
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Operating expenses: |
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Research and development |
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34,644 |
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34,094 |
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Selling, general and administrative |
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27,101 |
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25,287 |
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Amortization of intangible assets |
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1,149 |
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1,932 |
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Total operating expenses |
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62,894 |
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61,313 |
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Operating income |
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20,973 |
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21,025 |
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Interest expense |
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(1,139 |
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(2,208 |
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Gain on early retirement of convertible debt |
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2,035 |
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Other income, net |
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1,402 |
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2,050 |
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Income before income taxes |
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23,271 |
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20,867 |
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Provision for income taxes |
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1,247 |
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1,789 |
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Net income |
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$ |
22,024 |
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$ |
19,078 |
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Per share information: |
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Net income, basic |
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$ |
0.13 |
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$ |
0.12 |
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Net income, diluted |
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$ |
0.13 |
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$ |
0.12 |
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Number of weighted-average shares used in
per share computations, basic |
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164,855 |
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160,319 |
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Number of weighted-average shares used in
per share computations, diluted |
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165,188 |
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162,836 |
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The following table summarizes share-based compensation expense for the three-month periods ended
January 2, 2009 and December 28, 2007 which is included in the financial statement line items above
as follows:
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Three-months Ended |
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January 2, |
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December 28, |
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(In thousands) |
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2009 |
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2007 |
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Cost of sales |
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$ |
909 |
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$ |
834 |
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Research and development |
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1,657 |
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1,146 |
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Selling, general and administrative |
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4,023 |
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3,027 |
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Total share-based compensation expense included in expenses |
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$ |
6,589 |
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$ |
5,007 |
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The accompanying notes are an integral part of these consolidated financial statements
3
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share amounts)
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As of |
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January 2, |
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October 3, |
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2009 |
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2008 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
243,695 |
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$ |
225,104 |
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Restricted cash |
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5,962 |
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5,962 |
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Receivables, net of allowance for doubtful
accounts of $1,072 and $1,048, respectively |
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108,871 |
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146,710 |
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Inventories |
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98,551 |
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103,791 |
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Other current assets |
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12,366 |
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13,089 |
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Total current assets |
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469,445 |
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494,656 |
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Property, plant and equipment, net |
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175,127 |
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173,360 |
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Goodwill |
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483,671 |
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483,671 |
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Intangible assets, net |
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19,817 |
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19,746 |
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Deferred tax assets |
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53,185 |
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53,192 |
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Other assets |
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10,444 |
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11,474 |
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Total assets |
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$ |
1,211,689 |
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$ |
1,236,099 |
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LIABILITIES AND STOCKHOLDERS 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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52,578 |
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58,527 |
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Accrued compensation and benefits |
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23,261 |
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32,110 |
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Other current liabilities |
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9,470 |
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8,103 |
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Total current liabilities |
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135,309 |
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148,740 |
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Long-term debt, less current maturities |
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97,116 |
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137,616 |
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Other long-term liabilities |
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4,994 |
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5,527 |
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Total liabilities |
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237,419 |
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291,883 |
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Commitments and contingencies (Note 10) |
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Stockholders equity: |
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Preferred stock, no par value: 25,000 shares
authorized, no shares issued |
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Common stock, $0.25 par value: 525,000 shares
authorized; 170,828 shares issued and 165,825
shares outstanding at January 2, 2009 and
170,323 shares issued and 165,592 shares
outstanding at October 3, 2008 |
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41,456 |
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41,398 |
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Additional paid-in capital |
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1,440,764 |
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1,430,999 |
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Treasury stock |
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(35,711 |
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(33,918 |
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Accumulated deficit |
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(471,059 |
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(493,083 |
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Accumulated other comprehensive loss |
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(1,180 |
) |
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(1,180 |
) |
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Total stockholders equity |
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974,270 |
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944,216 |
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Total liabilities and stockholders equity |
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$ |
1,211,689 |
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$ |
1,236,099 |
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The accompanying notes are an integral part of these consolidated financial statements
4
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
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Three-months Ended |
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January 2, |
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December 28, |
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2009 |
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2007 |
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Cash flows from operating activities: |
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Net income |
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$ |
22,024 |
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$ |
19,078 |
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Adjustments to reconcile net income to net cash provided by
operating activities: |
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Share-based compensation expense |
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6,589 |
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5,007 |
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Depreciation |
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11,211 |
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10,916 |
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Charge in lieu of income tax expense |
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1,465 |
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Amortization of intangible assets |
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1,149 |
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1,932 |
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Amortization of deferred financing costs |
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237 |
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481 |
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Contribution of common shares to savings and retirement plans |
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1,232 |
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828 |
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Deferred income taxes |
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44 |
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(257 |
) |
Loss on sales of assets |
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1 |
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6 |
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Provision for (losses) recoveries on accounts receivable |
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24 |
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(58 |
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Changes in assets and liabilities: |
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Receivables |
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37,815 |
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730 |
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Inventories |
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5,363 |
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1,580 |
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Other current and long-term assets |
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1,479 |
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1,331 |
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Accounts payable |
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(5,949 |
) |
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12,810 |
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Other current and long-term liabilities |
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(6,285 |
) |
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(355 |
) |
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Net cash provided by operating activities |
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74,934 |
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55,494 |
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Cash flows from investing activities: |
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Capital expenditures |
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(12,980 |
) |
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(19,903 |
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Payments for acquisitions |
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(1,220 |
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(32,617 |
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Sale of investments |
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10,000 |
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Purchase of investments |
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(7,500 |
) |
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Net cash used in investing activities |
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(14,200 |
) |
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(50,020 |
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Cash flows from financing activities: |
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Retirement of Junior Notes |
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(49,335 |
) |
Retirement of 2007 Convertible Notes |
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(40,500 |
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Change in restricted cash |
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|
200 |
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Repurchase of common stock |
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(1,792 |
) |
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(1,329 |
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Net proceeds from exercise of stock options |
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149 |
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2,127 |
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Net cash used in financing activities |
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(42,143 |
) |
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(48,337 |
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Net increase (decrease) in cash and cash equivalents |
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18,591 |
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(42,863 |
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Cash and cash equivalents at beginning of period |
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225,104 |
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241,577 |
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Cash and cash equivalents at end of period |
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$ |
243,695 |
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$ |
198,714 |
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Supplemental cash flow disclosures: |
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Taxes paid |
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$ |
225 |
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$ |
171 |
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Interest paid |
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$ |
425 |
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$ |
1,834 |
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The accompanying notes are an integral part of these consolidated financial statements.
5
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Skyworks Solutions, Inc. (Skyworks or the Company) designs, manufactures and markets a broad
range of high reliability analog and mixed signal semiconductors enabling a broad range of end markets.
Our power amplifiers (PAs) and front-end modules (FEMs) can be found in many of the cellular handsets sold by the worlds leading manufacturers. Leveraging
our core analog technologies, we also offer a diverse portfolio of linear integrated circuits (ICs)
that support automotive, broadband, cellular infrastructure, industrial and medical applications.
The accompanying unaudited consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the SEC). Certain information
and footnote disclosures, normally included in annual consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States of America, have been
condensed or omitted pursuant to those rules and regulations. However, in the opinion of
management, the financial information reflects all adjustments, consisting of adjustments of a
normal recurring nature necessary to present fairly the financial position, results of operations,
and cash flows of the Company. The results of operations for the three-month period ended January
2, 2009 are not necessarily indicative of the results to be expected for the full year. This
information should be read in conjunction with the Companys financial statements and notes thereto
contained in the Companys Form 10-K for the fiscal year ended October 3, 2008 as filed with the
SEC.
The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. The current volatility in the capital markets and the economy has increased the uncertainty in our estimates, including our estimates impacting marketable securities and long-lived assets. Significant judgment is required in determining the fair value of marketable securities in inactive markets as well as determining when
declines in fair value constitute an other-than-temporary impairment. In addition, significant judgment is required in determining whether a potential indicator of impairment of our long-lived assets exists and in estimating future cash flows for any necessary impairment tests. As future events unfold and their effects cannot be determined with precision, actual results could differ significantly from managements estimates.
The Companys fiscal year ends on the Friday closest to September 30. Fiscal 2009 consists of 52
weeks and ends on October 2, 2009. Fiscal 2008 consisted of 53 weeks and ended on October 3, 2008,
with the first three quarters of fiscal 2008 consisting of 13 weeks, and the fourth quarter of
fiscal 2008 consisting of 14 weeks. The first quarters of fiscal 2009 and fiscal 2008 each
consisted of 13 weeks and ended on January 2, 2009 and December 28, 2007, respectively.
2. BUSINESS COMBINATIONS
In October 2007, the Company paid $32.6 million in cash to acquire certain assets from two separate
companies. The Company acquired raw materials, die bank, finished goods, proprietary GaAs PA/FEM
designs and related intellectual property in a business combination from Freescale Semiconductor.
We also acquired sixteen fundamental HBT and RF MEMs patents in an asset acquisition from another
company. The purchase accounting on these acquisitions was finalized in March 2008 based upon the fair value of the tangible
and intangible assets acquired in accordance with Statement of Financial Accounting Standards
(SFAS) 141, Business Combinations. (SFAS 141). The Companys primary reasons for the above acquisitions were to expand its market share in power
amplifiers and front end modules at certain existing customers, and increase the probability of
future design wins with these customers. The significant factors that resulted in recognition of
goodwill in one of the transactions were: (a) the purchase price was based on cash flow projections
assuming the sale of the acquired inventory and the sale of the Companys next generation product
(a derivative of the acquired inventory); and (b) there were very few tangible and identifiable
intangible assets that qualified for recognition.
6
3. MARKETABLE SECURITIES
The Company accounts for its investment in debt and equity securities in accordance with SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities and classifies
them as available for sale. At January 2, 2009, these securities consist of $3.2 million in
amortized cost of auction rate securities (ARS), which are long-term debt instruments which
provide liquidity through a Dutch auction process that resets interest rates each month. The
recent uncertainties in the credit markets have disrupted the liquidity of this process resulting
in failed auctions.
During the fiscal year ended October 3, 2008, the Company performed a comprehensive valuation and
discounted cash flow analysis on the ARS. The Company concluded the value of the ARS was $2.3
million thus the carrying value of these securities was reduced by $0.9 million, reflecting this
change in fair value. The Company assessed the decline in fair value to be temporary and recorded
this reduction in stockholders equity in accumulated other comprehensive loss. As of January 2,
2009, the Company re-evaluated the ARS and determined that no further adjustment was required. The
Company will continue to closely monitor the ARS and evaluate the appropriate accounting treatment
in each reporting period. The Company holds no other auction rate securities.
4. FINANCIAL INSTRUMENTS
On October 4, 2008, the Company adopted SFAS 157, Fair Value Measurements (SFAS 157). In
accordance with FASB Staff Position (FSP) 157-2, Effective Date of FASB Statement 157, the
Company has deferred the adoption of SFAS 157 for non-financial assets and liabilities including
intangible assets and reporting units measured at fair value in the first step of a goodwill
impairment test. The Company will adopt the remainder of SFAS 157 on the first day of fiscal year
2010. In accordance with SFAS 157, the Company groups its financial assets and liabilities measured
at fair value on a recurring basis in three levels, based on the markets in which the assets and
liabilities are traded and the reliability of the assumptions used to determine fair value. These
levels are:
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Level 1 Valuation is based upon quoted market price for identical
instruments traded in active markets. |
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Level 2 Valuation is based on quoted market prices for similar
instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active, and model-based valuation
techniques for which all significant assumptions are observable in the
market. |
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Level 3 Valuation is generated from model-based techniques that use
significant assumptions not observable in the market. Valuation
techniques include use of discounted cash flow models and similar
techniques. |
Under SFAS 157, the Company groups marketable securities measured at fair value on a recurring
basis in three levels, based on the markets in which the assets are traded and the reliability of
the assumptions used to determine fair value.
The Company has cash equivalents classified as Level 1 and no Level 2 securities. The marketable
securities classified as Level 3 are auction rate securities.
The following table presents the balances of cash equivalents and marketable securities measured at
fair value on a recurring basis as of January 2, 2009 (in thousands):
7
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Fair Value Measurements |
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Quoted Prices in |
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Significant |
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Significant |
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Active Markets for |
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Other |
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Unobservable |
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Identical Assets |
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Observable Inputs |
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Inputs |
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Total |
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(Level 1) |
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(Level 2) |
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(Level 3) |
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Cash equivalents: |
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Money market |
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$ |
235,628 |
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$ |
235,628 |
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|
|
|
|
Auction rate securities |
|
|
2,288 |
|
|
|
|
|
|
|
|
|
|
|
2,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
237,916 |
|
|
$ |
235,628 |
|
|
$ |
|
|
|
$ |
2,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. INVENTORIES
Inventories consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
January 2, |
|
|
October 3, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
Raw materials |
|
$ |
5,582 |
|
|
$ |
8,005 |
|
Work-in-process |
|
|
58,402 |
|
|
|
64,305 |
|
Finished goods |
|
|
34,567 |
|
|
|
31,481 |
|
|
|
|
|
|
|
|
Total inventories |
|
$ |
98,551 |
|
|
$ |
103,791 |
|
|
|
|
|
|
|
|
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
January 2, |
|
|
October 3, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
Land |
|
$ |
9,423 |
|
|
$ |
9,423 |
|
Land and leasehold improvements |
|
|
5,075 |
|
|
|
4,989 |
|
Buildings |
|
|
39,708 |
|
|
|
39,708 |
|
Furniture and fixtures |
|
|
25,282 |
|
|
|
24,889 |
|
Machinery and equipment |
|
|
392,621 |
|
|
|
382,582 |
|
Construction in progress |
|
|
31,383 |
|
|
|
29,845 |
|
|
|
|
|
|
|
|
Total property, plant and equipment, gross |
|
|
503,492 |
|
|
|
491,436 |
|
Accumulated depreciation and amortization |
|
|
(328,365 |
) |
|
|
(318,076 |
) |
|
|
|
|
|
|
|
Total property, plant and equipment, net |
|
$ |
175,127 |
|
|
$ |
173,360 |
|
|
|
|
|
|
|
|
7. GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
Average |
|
|
January 2, 2009 |
|
|
October 3, 2008 |
|
|
|
Amortization |
|
|
Gross |
|
|
|
|
|
|
Net |
|
|
Gross |
|
|
|
|
|
|
Net |
|
|
|
Period |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
|
(Years) |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
Goodwill |
|
|
|
|
|
$ |
483,671 |
|
|
$ |
|
|
|
$ |
483,671 |
|
|
$ |
483,671 |
|
|
$ |
|
|
|
$ |
483,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology |
|
|
5-10 |
|
|
$ |
11,850 |
|
|
$ |
(7,816 |
) |
|
$ |
4,034 |
|
|
$ |
11,850 |
|
|
$ |
(7,533 |
) |
|
$ |
4,317 |
|
Customer relationships |
|
|
5-10 |
|
|
|
21,210 |
|
|
|
(10,393 |
) |
|
|
10,817 |
|
|
|
21,210 |
|
|
|
(9,650 |
) |
|
|
11,560 |
|
Patents |
|
|
2-3 |
|
|
|
2,120 |
|
|
|
(423 |
) |
|
|
1,697 |
|
|
|
900 |
|
|
|
(300 |
) |
|
|
600 |
|
Other |
|
|
.5-3 |
|
|
|
2,649 |
|
|
|
(2,649 |
) |
|
|
|
|
|
|
2,649 |
|
|
|
(2,649 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets |
|
|
|
|
|
|
37,829 |
|
|
|
(21,281 |
) |
|
|
16,548 |
|
|
|
36,609 |
|
|
|
(20,132 |
) |
|
|
16,477 |
|
Unamortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks |
|
|
|
|
|
|
3,269 |
|
|
|
|
|
|
|
3,269 |
|
|
|
3,269 |
|
|
|
|
|
|
|
3,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets |
|
|
|
|
|
$ |
41,098 |
|
|
$ |
(21,281 |
) |
|
$ |
19,817 |
|
|
$ |
39,878 |
|
|
$ |
(20,132 |
) |
|
$ |
19,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
Amortization expense related to intangible assets are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
December 28, |
|
|
2009 |
|
2007 |
|
|
|
Amortization expense |
|
$ |
1,149 |
|
|
$ |
1,932 |
|
The changes in the gross carrying amount of goodwill and intangible assets are as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and Intangible Assets |
|
|
|
|
|
|
|
Developed |
|
|
Customer |
|
|
Patents |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
Technology |
|
|
Relationships |
|
|
and Other |
|
|
Trademarks |
|
|
Total |
|
Balance as of October 3, 2008 |
|
$ |
483,671 |
|
|
$ |
11,850 |
|
|
$ |
21,210 |
|
|
$ |
3,549 |
|
|
$ |
3,269 |
|
|
$ |
523,549 |
|
Additions during period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,220 |
|
|
|
|
|
|
|
1,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 2, 2009 |
|
$ |
483,671 |
|
|
$ |
11,850 |
|
|
$ |
21,210 |
|
|
$ |
4,769 |
|
|
$ |
3,269 |
|
|
$ |
524,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill is adjusted as required as a result of the realization of deferred tax assets. The benefit
from the recognition of a portion of these deferred items reduces the carrying value of goodwill
instead of reducing income tax expense. Accordingly, future realization of certain deferred tax
assets will reduce the carrying value of goodwill. The remaining deferred tax assets that could
reduce goodwill in future periods are $7.6 million as of January 2, 2009. There was no adjustment
to reduce goodwill during the fiscal quarter ended January 2, 2009.
The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal
quarter and in interim periods if certain events occur indicating that the carrying value of
goodwill may be impaired. In accordance with SFAS 142, Goodwill and Other Intangible Assets, the
Company performed a goodwill impairment test for the three-month period ended January 2, 2009, and
determined that as of January 2, 2009, its goodwill was not impaired.
Annual amortization expense related to intangible assets for the next five years is expected to be
as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
2013 |
Amortization expense |
|
$ |
4,887 |
|
|
$ |
4,983 |
|
|
$ |
4,258 |
|
|
$ |
3,569 |
|
|
$ |
|
|
8. BORROWING ARRANGEMENTS
Long-Term Debt
Long-term debt consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
January 2, |
|
|
October 3, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
2007 Convertible Notes |
|
$ |
97,116 |
|
|
$ |
137,616 |
|
|
|
|
|
|
|
|
Long-term debt |
|
$ |
97,116 |
|
|
$ |
137,616 |
|
Less-current maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt |
|
$ |
97,116 |
|
|
$ |
137,616 |
|
|
|
|
|
|
|
|
On March 2, 2007, the Company issued $200.0 million aggregate principal amount of convertible
subordinated notes (2007 Convertible Notes). The offering contained two tranches. The first
tranche consisted of $100.0 million of 1.25% convertible subordinated notes due March 2010. The
second tranche consisted of $100.0 million of 1.50% convertible subordinated notes due March 2012.
The conversion price of the 2007 Convertible Notes is 105.0696 shares per $1,000 principal amount
of notes to be redeemed, which is the equivalent of a conversion price of approximately $9.52 per
share, plus accrued and unpaid interest, if any, at the conversion date. Holders may
9
require the
Company to repurchase the 2007 Convertible Notes upon a change in control of the Company. The
Company pays interest in cash semi-annually in arrears on March 1 and September 1 of each year. It
has been the Companys
historical practice to cash settle the principal and interest components of convertible debt
instruments, and it is our intention to continue to do so in the future, including settlement of
the 2007 Convertible Notes. During the three-month period ended January 2, 2009, the Company
redeemed $40.5 million of the 1.50% convertible subordinated notes at an average price of 92.6. A
discount of approximately $2.9 million offset by approximately $0.9 million in deferred financing
costs was recorded as a gain during the period.
On December 21, 2006, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
Emerging Issues Task Force 00-19-2 (FSP EITF 00-19-2). FSP EITF 00-19-2 specifies that the
contingent obligation to make future payments, or otherwise transfer consideration under a
registration payment arrangement, should be separately recognized and measured in accordance with
FASB Statement No. 5, Accounting for Contingencies (FASB 5). The Company adopted FSP EITF 00-19-2
on September 29, 2007. The Company agreed to file a shelf registration statement under the
Securities Act of 1933 (the Securities Act) not later than 120 days after the first date of
original issuance of the 2007 Convertible Notes. The Company agreed to utilize commercially
reasonable efforts to have this shelf registration statement declared effective not later than 180
days after the first date of original issuance of the notes, and to keep it effective until the
earliest of: 1) two years from the effective date of the shelf registration statement; 2) the date
when all registrable securities have been registered under the Securities Act and disposed of; and
3) the date on which all registrable securities held by non-affiliates are eligible to be sold to
the public pursuant to Rule 144(k) under the Securities Act. The Company filed the shelf
registration statement within 120 days of the original issuance of the 2007 Convertible Notes and
the shelf registration statement was declared effective within 180 days after the first date of
original issuance of the notes. If the shelf registration statement ceases to be effective within
two years from the effective date of the shelf registration statement the Company will be obligated
to pay an additional 0.25% interest per annum for the first 90 days after the occurrence of the
registration default and at the rate of 0.50% per annum thereafter. The Company has concluded that
it is not probable that a contingent liability has been incurred at January 2, 2009 pursuant to the
application of FASB 5 and thus has not recorded a liability.
Short-Term Debt
Short-term debt consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
January 2, |
|
|
October 3, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
Current maturities of long-term debt |
|
$ |
|
|
|
$ |
|
|
Facility Agreement |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
Total short-term debt |
|
$ |
50,000 |
|
|
$ |
50,000 |
|
|
|
|
|
|
|
|
On July 15, 2003, the Company entered into a receivables purchase agreement under which it has
agreed to sell from time to time certain of its accounts receivable to Skyworks USA, Inc.
(Skyworks USA), a wholly-owned special purpose entity that is consolidated for accounting
purposes. Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, N.A. providing
for a $50.0 million credit facility (Facility Agreement) secured by the purchased accounts
receivable. As a part of the consolidation, any interest incurred by Skyworks USA related to monies
it borrows under the Facility Agreement is recorded as interest expense in the Companys results of
operations. The Company performs collections and administrative functions on behalf of Skyworks
USA. The Company renewed the Facility Agreement on July 11, 2008 for a one year term. Interest
related to the Facility Agreement is at LIBOR plus 0.75%. As of January 2, 2009, Skyworks USA had
borrowed $50.0 million under this agreement.
9. INCOME TAXES
We recorded tax provisions of $1.2 million and $1.8 million for the three-month periods ended
January 2, 2009 and December 28, 2007, respectively. Our effective tax rates were 5.4% and 8.6%
for the three-month periods ended January 2, 2009 and December 28, 2007, respectively. The
difference between our effective tax rates and the 35% federal statutory rate resulted primarily
from a tax benefit related to a reduction in the federal and state deferred tax asset valuation
allowance and foreign earnings taxed at rates lower than the federal statutory rate.
10
As noted in our most recent Annual Report on Form 10-K, no benefit has been recognized for certain
acquisition related deferred tax assets. The benefit from the recognition of these deferred items
reduces the carrying value of goodwill instead of reducing income tax expense. We will evaluate
the realization of the acquisition related deferred tax assets on a quarterly basis and adjust the
provision for income taxes accordingly. As a result, the effective tax rate may vary in subsequent
quarters.
We utilize the asset and liability method of accounting for income taxes as set forth in SFAS No.
109, Accounting for Income Taxes (SFAS 109). Under the asset and liability method, deferred
taxes are determined based on the temporary differences between the financial statement and tax
bases of assets and liabilities using tax rates expected to be in effect during the years in which
the basis differences reverse. A valuation allowance is recorded when it is more likely than not
that some of the deferred tax assets will not be realized.
In accordance with SFAS 109, management has determined that it is more likely than not that a
portion of our historic and current year income tax benefits will not be realized. Accordingly, as
of January 2, 2009, we have established a valuation allowance of $75.4 million related to our
United States deferred tax assets. Deferred tax assets have been recognized for foreign operations
when management believes that it is more likely than not that they will be recovered during the
carryforward period. There is a valuation allowance of $1.3 million related to our foreign
deferred tax assets.
The Company will continue to evaluate its valuation allowance in future periods and depending upon
the outcome of that assessment, additional amounts could be reversed or recorded and recognized as
a reduction to goodwill or an adjustment to income tax benefit or expense. Such adjustments could
cause our effective income tax rate to vary in future periods. We will need to generate $300.3
million of future United States federal taxable income to utilize all of our net operating loss
carryforwards, research and experimentation tax credit carryforwards, and deferred income tax
temporary differences as of January 2, 2009.
In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes-an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in an enterprises financial statements in accordance with
SFAS 109. FIN 48 prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. This statement also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. The Company adopted FIN 48 on
September 29, 2007, and the provisions of FIN 48 are applied to all income tax provisions
commencing from that date.
During the quarter ended January 2, 2009, there were no significant changes in the Companys gross
unrecognized tax benefits. Of the total unrecognized tax benefits at January 2, 2009, $0.6 million
would impact the effective tax rate, if recognized. There are no positions which we anticipate
could change within the next twelve months. Total year to date accrued interest related to the
Companys unrecognized tax benefits is $0.0. The Companys policy is to recognize accrued
interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax
expense.
The Companys major tax jurisdictions as of the adoption of FIN 48 are the United States,
California, and Iowa. For United States federal income tax, the statute of limitations is closed
on years before fiscal 2005, but because of carryforwards, certain items are open back to fiscal
1998. For California, the statue of limitations is closed on years before fiscal 2004, but because
of carryforwards, certain items are open back to fiscal 2002. For Iowa, the statue of limitations
is closed on years before fiscal 2005, but because of carryforwards, certain items are open back to
fiscal year 2002.
11
10. COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, various lawsuits, claims and proceedings have been, and may in the future be,
instituted or asserted against the Company, including those pertaining to patent infringement,
intellectual property, environmental, product liability, safety and health, employment and
contractual matters.
Additionally, the semiconductor industry is characterized by vigorous protection and pursuit of
intellectual property rights. From time to time, third parties have asserted and may in the future
assert patent, copyright, trademark and other intellectual property rights to technologies that are
important to our business and have demanded and may in the future demand that we license their
technology. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims
or proceedings may be disposed of unfavorably to the Company. Intellectual property disputes often
have a risk of injunctive relief, which, if imposed against the Company, could materially and
adversely affect the Companys financial condition, or results of operations.
From time to time we are involved in legal proceedings in the ordinary course of business. We
believe that there is no such ordinary course litigation pending that will have, individually or in
the aggregate, a material adverse effect on our business.
Guarantees and Indemnifications
The Company has no guarantees. The Company generally indemnifies its customers from third-party
intellectual property infringement litigation claims related to its products, and, on occasion,
also provides other indemnities related to product sales. In connection with certain facility
leases, the Company has indemnified its lessors for certain claims arising from the facility or the
lease.
The Company indemnifies its directors and officers to the maximum extent permitted under the laws
of the state of Delaware. The duration of the indemnities varies, and in many cases is indefinite.
The indemnities to customers in connection with product sales generally are subject to limits based
upon the amount of the related product sales and in many cases are subject to geographic and other
restrictions. In certain instances, the Companys indemnities do not provide for any limitation of
the maximum potential future payments the Company could be obligated to make. The Company has not
recorded any liability for these indemnities in the accompanying consolidated balance sheets.
11. RESTRUCTURING
Restructuring and special charges consists of the following:
2006 RESTRUCTURING CHARGES AND OTHER
On September 29, 2006, the Company exited its baseband product area in order to focus on its core
business encompassing linear products, power amplifiers, front-end modules and radio solutions. The
Company recorded various charges associated with this action. In total, the Company recorded
charges of $90.4 million which included the following:
The Company recorded $13.1 million related to severance and benefits, $7.4 million related to the
write-down of technology licenses and design software, $4.2 million related to the impairment of
certain long-lived assets and $2.3 million related to other charges. These charges total $27.0
million and are recorded in restructuring and special charges.
The Company also recorded charges of $35.1 million in bad debt expense principally for two baseband
product area customers, $23.3 million of excess and obsolete baseband and other inventory charges
and reserves and $5.0 million related to baseband product area revenue adjustments. These charges
were recorded against selling, general and administrative expenses, cost of goods sold and
revenues, respectively.
12
The Company recorded additional restructuring charges of $4.9 million related to the exit of the
baseband product area during the fiscal year ended September 28, 2007. These charges consist of
$4.5 million relating to the exit of certain operating leases, $0.5 million relating to additional
severance, $1.4 million related to the write-off of technology licenses and design software, offset
by a $1.5 million benefit related to the reversal of a reserve originally recorded to account for
an engineering vendor charge.
During the fiscal year ended October 3, 2008, the Company recorded additional restructuring charges
of $0.6 million relating to lease obligations due to the closure of certain locations associated
with the baseband product area.
Activity and liability balances related to the fiscal 2006 restructuring actions are as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License and |
|
|
|
|
|
|
|
|
|
|
|
|
Facility |
|
|
Software |
|
|
Workforce |
|
|
Asset |
|
|
|
|
|
|
Closings |
|
|
Write-offs |
|
|
Reductions |
|
|
Impairments |
|
|
Total |
|
|
|
|
Charged to costs and expenses |
|
$ |
105 |
|
|
$ |
9,583 |
|
|
$ |
13,070 |
|
|
$ |
4,197 |
|
|
$ |
26,955 |
|
Non-cash items |
|
|
|
|
|
|
(6,426 |
) |
|
|
|
|
|
|
(4,197 |
) |
|
|
(10,623 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, September 29, 2006 |
|
$ |
105 |
|
|
$ |
3,157 |
|
|
$ |
13,070 |
|
|
$ |
|
|
|
$ |
16,332 |
|
Charged to costs and expenses |
|
|
4,483 |
|
|
|
(83 |
) |
|
|
530 |
|
|
|
|
|
|
|
4,930 |
|
Reclassification of reserves |
|
|
(128 |
) |
|
|
(508 |
) |
|
|
636 |
|
|
|
|
|
|
|
|
|
Non-cash items |
|
|
|
|
|
|
(419 |
) |
|
|
|
|
|
|
|
|
|
|
(419 |
) |
Cash payments |
|
|
(1,690 |
) |
|
|
(1,847 |
) |
|
|
(13,242 |
) |
|
|
|
|
|
|
(16,779 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, September 28, 2007 |
|
$ |
2,770 |
|
|
$ |
300 |
|
|
$ |
994 |
|
|
$ |
|
|
|
$ |
4,064 |
|
Charged to costs and expenses |
|
|
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
567 |
|
Reclassification of reserves |
|
|
547 |
|
|
|
(75 |
) |
|
|
48 |
|
|
|
|
|
|
|
520 |
|
Cash payments |
|
|
(1,667 |
) |
|
|
(225 |
) |
|
|
(806 |
) |
|
|
|
|
|
|
(2,698 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, October 3, 2008 |
|
$ |
2,217 |
|
|
$ |
|
|
|
$ |
236 |
|
|
$ |
|
|
|
$ |
2,453 |
|
Cash payments |
|
|
(1,053 |
) |
|
|
|
|
|
|
(76 |
) |
|
|
|
|
|
|
(1,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, January 2, 2009 |
|
$ |
1,164 |
|
|
$ |
|
|
|
$ |
160 |
|
|
$ |
|
|
|
$ |
1,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company anticipates that most of the remaining payments associated with the exit of the
baseband product area will be remitted during fiscal year 2009.
12. SEGMENT INFORMATION
In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information (SFAS 131), the Company has one reportable operating segment which designs, develops,
manufactures and markets proprietary semiconductor products, including intellectual property, for
manufacturers of wireless communication products. SFAS 131 establishes standards for the way public
business enterprises report information about operating segments in annual financial statements and
in interim reports to shareholders. The method for determining what information to report is based
on managements organization of segments within the Company for making operating decisions and
assessing financial performance. In evaluating financial performance, management uses sales and
operating profit as the measure of the segments profit or loss. All of the Companys operating
segments share similar economic characteristics as they have a similar long term business model,
and have similar research and development expenses and similar selling, general and administrative
expenses, thus, the Company had concluded at October 3, 2008 that it has only one reportable
operating segment. The Company will re-assess its conclusions at least annually.
13
13. EMPLOYEE STOCK BENEFIT PLANS
Net income for the three-month periods ended January 2, 2009 and December 28, 2007 included
share-based compensation expense under SFAS No. 123(R), Share-Based Payment (SFAS 123(R)) of $6.6
million and $5.0 million, respectively.
The following table summarizes share-based compensation expense related to employee stock options,
restricted stock grants, performance stock grants, and employee stock purchases under SFAS 123(R)
for the three-month periods ended January 2, 2009 and December 28, 2007, which were allocated as
follows:
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
|
January 2, |
|
|
December 28, |
|
(In thousands) |
|
2009 |
|
|
2007 |
|
|
|
|
Stock Options |
|
$ |
2,866 |
|
|
$ |
2,304 |
|
Non-vested restricted stock with service and
market conditions |
|
|
2,352 |
|
|
|
1,602 |
|
Non-vested restricted stock with service conditions |
|
|
293 |
|
|
|
284 |
|
Performance shares |
|
|
650 |
|
|
|
401 |
|
Employee Stock Purchase Plan |
|
|
428 |
|
|
|
416 |
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
6,589 |
|
|
$ |
5,007 |
|
|
|
|
|
|
|
|
The following table summarizes share-based compensation expense related to employee stock options,
employee stock purchases, performance stock grants, and restricted stock grants under SFAS 123(R)
for the three-month periods ended January 2, 2009 and December 28, 2007, which were allocated as
follows:
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
|
January 2, |
|
|
December 28, |
|
(In thousands) |
|
2009 |
|
|
2007 |
|
|
|
|
Cost of sales |
|
$ |
909 |
|
|
$ |
834 |
|
Research and development |
|
|
1,657 |
|
|
|
1,146 |
|
Selling, general and administrative |
|
|
4,023 |
|
|
|
3,027 |
|
|
|
|
|
|
|
|
Total share-based compensation expense
included in operating expenses |
|
$ |
6,589 |
|
|
$ |
5,007 |
|
|
|
|
|
|
|
|
The Company utilized the following weighted average assumptions in calculating its share-based
compensation expense using the Black Scholes model at January 2, 2009 and December 28, 2007:
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
December 28, |
|
|
2009 |
|
2007 |
|
|
|
Expected volatility |
|
|
60.90 |
% |
|
|
51.56 |
% |
Risk free interest rate (7 year contractual life options) |
|
|
2.28 |
% |
|
|
3.91 |
% |
Risk free interest rate (10 year contractual life options) |
|
|
2.76 |
% |
|
|
4.07 |
% |
Dividend yield |
|
|
0.00 |
|
|
|
0.00 |
|
Expected option life (7 year contractual life options) |
|
|
4.42 |
|
|
|
4.42 |
|
Expected option life (10 year contractual life options) |
|
|
5.79 |
|
|
|
5.80 |
|
14. EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
|
January 2, |
|
|
December 28, |
|
(In thousands, except per share amounts) |
|
2009 |
|
|
2007 |
|
|
|
|
Net income |
|
$ |
22,024 |
|
|
$ |
19,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding basic |
|
|
164,855 |
|
|
|
160,319 |
|
Effect of dilutive stock options |
|
|
333 |
|
|
|
2,517 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding diluted |
|
|
165,188 |
|
|
|
162,836 |
|
|
|
|
|
|
|
|
Net income per share basic |
|
$ |
0.13 |
|
|
$ |
0.12 |
|
Effect of dilutive stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share diluted |
|
$ |
0.13 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
14
Basic earnings per share is calculated by dividing net income by the weighted average number of
common shares outstanding. Diluted earnings per share includes the dilutive effect of equity based
awards using the treasury stock method, the Junior Notes on an if-converted basis and the 2007
Convertible Notes using the treasury stock method, if their effect is dilutive.
Equity based awards exercisable for approximately 25.3 million shares were outstanding but not
included in the computation of earnings per share for the three-month period ended January 2, 2009
as their effect would have been anti-dilutive.
Junior Notes convertible into approximately 2.9 million shares and equity based awards exercisable
for approximately 21.1 million shares were outstanding but not included in the computation of
earnings per share for the three-month period ended December 28, 2007 as their effect would have
been anti-dilutive. If the Company had earned in excess of $19.7 million in net income for the
three-month period ended December 28, 2007, the Junior Notes would have been dilutive to earnings
per share.
In addition, the Company issued $200.0 million aggregate principal amount of convertible
subordinated notes in March 2007. These 2007 Convertible Notes contain
cash settlement provisions, which permit the application of the treasury stock method in
determining potential share dilution of the conversion spread should the share price of the
Companys common stock exceed $9.52. It has been the Companys historical practice to cash settle
the principal and interest components of convertible debt instruments, and it is our intention to
continue to do so in the future, including settlement of the 2007 Convertible Notes issued in March
2007. These shares have not been included in the computation of earnings per share for the
three-month periods ended January 2, 2009 or December 28, 2007 as their effect would have been
anti-dilutive. The maximum potential dilution from the settlement of the 2007 Convertible Notes
would be approximately 11.7 million shares and 21.0 million shares, respectively.
15. COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income are as follows:
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
|
January 2, |
|
|
December 28, |
|
(In thousands) |
|
2009 |
|
|
2007 |
|
|
|
|
Net Income |
|
$ |
22,024 |
|
|
$ |
19,078 |
|
Other
comprehensive income (loss): |
|
|
|
|
|
|
|
|
Unrealized loss on auction rate securities |
|
|
|
|
|
|
(736 |
) |
|
|
|
|
|
|
|
Total comprehensive income |
|
$ |
22,024 |
|
|
$ |
18,342 |
|
|
|
|
|
|
|
|
16. SUBSEQUENT EVENT
On January 22, 2009, the Company committed to a restructuring plan to realign its costs given
current business conditions. The plan reduces global headcount by approximately 4%, or 150
employees, primarily affecting RF transceiver development. The plan will be implemented, in most
part, by the end of the second fiscal quarter of 2009, and the Company anticipates pre-tax charges
of approximately $18.0 million. These charges will include severance costs and asset impairments
for inventory and equipment. Total cash charges will approximate $6.0 million, of which half are
expected to be paid in the second fiscal quarter of 2009.
15
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This report and other documents we have filed with the Securities and Exchange Commission (SEC)
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject
to the safe harbor created by those sections. Words such as believes, expects, may, will,
would, should, could, seek, intends, plans, potential, continue, estimates,
anticipates, predicts, and similar expressions or variations or negatives of such words are
intended to identify forward-looking statements, but are not the exclusive means of identifying
forward-looking statements in this report. Additionally, statements concerning future matters such
as the development of new products, enhancements or technologies, sales levels, expense levels and
other statements regarding matters that are not historical are forward-looking statements. Although
forward-looking statements in this report reflect the good faith judgment of our management, such
statements can only be based on facts and factors currently known by us. Consequently,
forward-looking statements involve inherent risks and uncertainties and actual results and outcomes
may differ materially and adversely from the results and outcomes discussed in or anticipated by
the forward-looking statements. A number of important factors could cause actual results to differ
materially and adversely from those in the forward-looking statements. We urge you to consider the
risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended
October 3, 2008, under the heading Certain Business Risks and in the other documents filed with
the SEC in evaluating our forward-looking statements. We have no plans, and undertake no
obligation, to revise or update our forward-looking statements to reflect any event or circumstance
that may arise after the date of this report. We caution readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the date made.
In this document, the words we, our, ours and us refer only to Skyworks Solutions, Inc. and
not any other person or entity.
RESULTS OF OPERATIONS
THREE-MONTHS ENDED JANUARY 2, 2009 AND DECEMBER 28, 2007
The following table sets forth the results of our operations expressed as a percentage of net
revenues for the three-month periods ended January 2, 2009 and December 28, 2007:
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
December 28, |
|
|
2009 |
|
2007 |
|
|
|
Net revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
60.1 |
|
|
|
60.9 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
39.9 |
|
|
|
39.1 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
16.5 |
|
|
|
16.2 |
|
Selling, general and administrative |
|
|
12.9 |
|
|
|
12.0 |
|
Amortization of intangible assets |
|
|
0.5 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
29.9 |
|
|
|
29.1 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
10.0 |
|
|
|
10.0 |
|
Interest expense |
|
|
(0.5 |
) |
|
|
(1.0 |
) |
Gain on early retirement of
convertible debt |
|
|
1.0 |
|
|
|
0.0 |
|
Other income, net |
|
|
0.6 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
11.1 |
|
|
|
9.9 |
|
Provision for income taxes |
|
|
0.6 |
|
|
|
0.8 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
10.5 |
% |
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
16
GENERAL
During the three-month period ended January 2, 2009, our financial performance resulted in the
following:
|
§ |
|
We generated $74.9 million in cash from operations in the three-month period ended
January 2, 2009, an increase of $19.4 million from the comparable three-month period ended
December 28, 2007. At January 2, 2009, we had $249.7 million in cash, cash equivalents and
restricted cash. |
|
|
§ |
|
In the three-month period ended January 2, 2009, we retired $40.5 million of our 2007
Convertible Notes (due in 2012) at an average price of 92.6 percent of par value. These retirements
reduced the remaining principal balance on our 2007 Convertible Notes to $97.1 million and
reduced related potential dilution of stockholder ownership by approximately 4.2 million
shares. |
|
|
§ |
|
We increased gross profit by $1.5 million in the three-month period ended January 2,
2009, as compared to the first fiscal quarter of 2008, reflecting a gross profit margin of
39.9%, principally the result of a more favorable revenue mix, higher equipment
efficiencies at our factories, progress on yield improvement initiatives, and material cost
reductions, despite of relatively unchanged net revenues. |
NET REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Net revenues |
|
$ |
210,228 |
|
|
|
(0.1 |
)% |
|
$ |
210,533 |
|
We market and sell our mobile platforms and linear products to top tier Original Equipment
Manufacturers (OEMs) of communication electronic products, third-party Original Design
Manufacturers (ODMs) and contract manufacturers, and indirectly through electronic components
distributors. We periodically enter into strategic arrangements that
leverage our broad intellectual
property portfolio by licensing or selling our patents or other intellectual property. We
anticipate continuing this intellectual property strategy in future periods.
Net
revenues remained relatively unchanged for the first fiscal quarter of 2009, as compared to the
first fiscal quarter of 2008. Net revenues from our top three customers decreased to 41.5% in the
first quarter of fiscal 2009 from 47.2% in the first quarter of fiscal 2008, reflecting continued
expansion of our customer base and the successful execution of our diversification strategy.
GROSS PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Gross profit |
|
$ |
83,867 |
|
|
|
1.9 |
% |
|
$ |
82,338 |
|
% of net revenues |
|
|
39.9 |
% |
|
|
|
|
|
|
39.1 |
% |
Gross profit represents net revenues less cost of goods sold. Cost of goods sold consists primarily
of purchased materials, labor and overhead (including depreciation and equity based compensation
expense) associated with product manufacturing.
17
The increase in gross profit as a percentage of revenue and in aggregate dollars for the
three-month period ended January 2, 2009, as compared to the corresponding period in the previous
fiscal year, was principally attributable to increased labor and benefit costs as we continued to invest in what we believe might be growth areas.
RESEARCH AND DEVELOPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Research and development |
|
$ |
34,644 |
|
|
|
1.6 |
% |
|
$ |
34,094 |
|
% of net revenues |
|
|
16.5 |
% |
|
|
|
|
|
|
16.2 |
% |
Research and development expenses consist principally of direct personnel costs, costs for
pre-production evaluation and testing of new devices, masks and elots, equity based compensation
expense and design and test tool costs.
The increase in research and development expenses in aggregate dollars and as a percentage of net
revenues for the three-month period ended January 2, 2009 as compared to the corresponding period
in the previous fiscal year was principally attributable to increased labor and benefit costs as we
continued to invest in what we believe to be growth areas.
SELLING, GENERAL AND ADMINISTRATIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Selling, general and administrative |
|
$ |
27,101 |
|
|
|
7.2 |
% |
|
$ |
25,287 |
|
% of net revenues |
|
|
12.9 |
% |
|
|
|
|
|
|
12.0 |
% |
Selling, general and administrative expenses include legal, accounting, treasury, human resources,
information systems, customer service, bad debt expense, sales representative commissions,
advertising, marketing and other costs.
Selling, general and administrative expenses increased in aggregate dollars and as a percentage of
revenue for the three-month period ended January 2, 2009, as compared to the corresponding period in
fiscal year 2008, primarily due to higher share-based compensation expense and sales commissions.
AMORTIZATION OF INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Amortization |
|
$ |
1,149 |
|
|
|
(40.5 |
)% |
|
$ |
1,932 |
|
% of net revenues |
|
|
0.5 |
% |
|
|
|
|
|
|
0.9 |
% |
The decrease in amortization expense during the three-month period ended January 2, 2009, as
compared to the corresponding period of fiscal 2008, was due to a reduction in amortization of
intangible assets associated with an acquisition completed in October 2007. See Note 2 of Notes to
Unaudited Interim Consolidated Financial Statements for additional information
INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Interest expense |
|
$ |
1,139 |
|
|
|
(48.4 |
)% |
|
$ |
2,208 |
|
% of net revenues |
|
|
0.5 |
% |
|
|
|
|
|
|
1.0 |
% |
18
Interest expense is comprised principally of payments in connection with the $50.0 million credit
facility between Skyworks USA, Inc., our wholly owned subsidiary, and Wachovia Bank, N.A.
(Facility Agreement), the
Companys 4.75% convertible subordinated notes (the Junior Notes), and the Companys 1.25% and
1.50% convertible subordinated notes (the 2007 Convertible Notes).
The
decrease in interest expense, both in aggregate dollars and as a percentage of net revenues for
the three-month period ended January 2, 2009, when compared to the corresponding periods in fiscal
2008, was due to the retirement of our higher interest rate Junior Notes, and the early retirement
of $62.4 million and $40.5 million of the 2007 Convertible Notes in the fourth quarter of
fiscal 2008 and the first quarter of fiscal 2009, respectively. See Note 8 of Notes to Unaudited
Interim Consolidated Financial Statements for information related to our borrowing arrangements.
GAIN ON EARLY RETIREMENT OF CONVERTIBLE DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Gain on early retirement of convertible debt |
|
$ |
2,035 |
|
|
|
100.0 |
% |
|
$ |
0.0 |
|
% of net revenues |
|
|
1.0 |
% |
|
|
|
|
|
|
0.0 |
% |
In the three-month period ended January 2, 2009, we retired $40.5 million of our 2007 Convertible
Notes due in 2012. We recorded income of $2.0 million in the first quarter of fiscal 2009 related
to the early retirement of these notes, reflecting a $2.9 million discount received on
the early retirement of the debt offset by a $0.9 million write-off of deferred financing costs.
OTHER INCOME, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Other income, net |
|
$ |
1,402 |
|
|
|
(31.6 |
)% |
|
$ |
2,050 |
|
% of net revenues |
|
|
0.6 |
% |
|
|
|
|
|
|
0.9 |
% |
Other income, net is comprised primarily of interest income on invested cash balances, other
non-operating income and expense items and foreign exchange gains/losses.
The decreases in other income in both aggregate dollars and as a percentage of net revenues for the
three-month period ended January 2, 2009, as compared to the
corresponding period in fiscal 2008, is
due to an overall decline in interest income on invested cash balances due to lower interest rates
in fiscal 2009.
PROVISION FOR INCOME TAXES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
January 2, |
|
|
|
|
|
December 28, |
(dollars in thousands) |
|
2009 |
|
Change |
|
2007 |
|
|
|
Provision for income taxes |
|
$ |
1,247 |
|
|
|
(30.3 |
)% |
|
$ |
1,789 |
|
% of net revenues |
|
|
0.6 |
% |
|
|
|
|
|
|
0.8 |
% |
The
provision for income taxes for the three-month periods ended January 2, 2009 and December 28,
2007 consists of approximately $0.9 million and $1.9 million, respectively, of United States income
taxes. Of the total United States income tax provision, $0.0 million and $1.5 million were
recorded as a charge reducing the carrying value of goodwill for the three-month periods ended
January 2, 2009 and December 28, 2007, respectively.
The provision for the three-month periods ended January 2, 2009 and December 28, 2007 consists of
approximately $0.3 million and $(0.1) million, respectively, of foreign income taxes incurred by
foreign operations.
19
In
accordance with SFAS 109, Accounting for Income Taxes, management has determined that it is
more likely than not that a portion of our historic and current year income tax benefits will not
be realized. Accordingly, as of January 2, 2009, we have established a valuation allowance of
$75.4 million related to our United States deferred tax
assets. Deferred tax assets have been recognized for foreign operations when management believes
that it is more likely than not that they will be recovered during the carryforward period. There
is a valuation allowance of $1.3 million related to our foreign deferred tax assets.
Realization of benefits from our deferred tax asset (principally research and experimentation
credits) is dependent upon generating United States source taxable income in the future, which may
result in the existing valuation reserve being reversed in the near term to the extent that the
related deferred tax assets no longer require a valuation allowance under the provisions of SFAS
109.
The Company will continue to evaluate its valuation allowance in future periods and depending upon
the outcome of that assessment, additional amounts could be reversed or recorded and recognized as
a reduction to goodwill or an adjustment to income tax benefit or expense. Such adjustments could
cause our effective income tax rate to vary in future periods. We will need to generate $300.3
million of future United States federal taxable income to utilize all of our net operating loss
carryforwards, research and experimentation tax credit carryforwards, and deferred income tax
temporary differences as of January 2, 2009.
As noted in our Annual Report on Form 10-K, no benefit has been recognized for certain acquisition
related deferred tax assets. The benefit from the recognition of these deferred items reduces the
carrying value of goodwill instead of reducing income tax expense. We will evaluate the
realization of the acquisition related deferred tax assets on a quarterly basis and adjust the
provision for income taxes accordingly. As a result, the effective tax rate may vary in subsequent
quarters.
The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109, as of the beginning of fiscal year 2008. During the
quarter ended January 2, 2009, there were no significant changes in the Companys gross
unrecognized tax benefits. Of the total unrecognized tax benefits at January 2, 2009, $0.6 million
would impact the effective tax rate, if recognized. There are no positions which we anticipate
could change within the next twelve months. Total year to date accrued interest related to the
Companys unrecognized tax benefits is $0.0 million. The Companys policy is to recognize accrued
interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax
expense.
The Companys major tax jurisdictions as of the adoption of FIN 48 are the United States,
California, and Iowa. For United States federal income tax, the statute of limitations is closed
on years before fiscal 2005, but because of carryforwards, certain items are open back to fiscal
1998. For California, the statue of limitations is closed on years before fiscal 2004, but because
of carryforwards, certain items are open back to fiscal 2002. For Iowa, the statue of limitations
is closed on years before fiscal 2005, but because of carryforwards, certain items are open back to
fiscal year 2002.
LIQUIDITY AND CAPITAL RESOURCES
Cash Provided and Used
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
|
January 2, |
|
|
December 28, |
|
(dollars in thousands) |
|
2009 |
|
|
2007 |
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$ |
225,104 |
|
|
$ |
241,577 |
|
Net cash provided by operating activities |
|
|
74,934 |
|
|
|
55,494 |
|
Net cash used in investing activities |
|
|
(14,200 |
) |
|
|
(50,020 |
) |
Net cash used in financing activities |
|
|
(42,143 |
) |
|
|
(48,337 |
) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
243,695 |
|
|
$ |
198,714 |
|
|
|
|
|
|
|
|
20
Based on our results of operations for fiscal 2008 and the first three months of fiscal 2009, along
with current trends, we expect our existing sources of liquidity, together with cash expected to be
generated from operations, will be sufficient to fund our research and development, capital
expenditures, debt obligations, working capital and other cash requirements for at least the next
12 months. However, we cannot be certain that the capital required to fund these expenses will be
available in the future. In addition, any strategic investments and acquisitions that we may make
to help us grow our business may require additional capital resources. If we are unable to obtain
sufficient capital to meet our capital needs on a timely basis and on favorable terms (if at all),
our business and operations could be materially adversely affected.
Cash and cash equivalent balances increased $18.6 million to $243.7 million at January 2, 2009 from
$225.1 million at October 3, 2008. We generated $74.9 million in cash from operations during the
three-month period ended January 2, 2009, which was offset by the retirement of $40.5 million of
the 2007 Convertible Notes and capital expenditures of $13.0 million. The number of days sales
outstanding for the three-month period ended January 2, 2009 decreased to 47 from 72 for the
corresponding period in fiscal 2008.
During the three-month period ended January 2, 2009, we generated net income of $22.0 million. We
experienced a decrease in receivables, inventories, and other assets of $37.8 million, $5.4
million, and $1.5 million, respectively. We also incurred multiple non-cash charges (e.g.,
depreciation, amortization, contribution of common shares to savings and retirement plans, and
share-based compensation expense) totaling $20.4 million. This was offset by a decrease in
accounts payable and other accrued liabilities of $5.9 million and $6.3 million, respectively.
Cash used in investing activities for the three-month period ended January 2, 2009 consisted of
investments in capital equipment of $13.0 million primarily to expand fabrication and assembly and
test capacity. We believe a focused program of capital expenditures will be required to sustain our
current manufacturing capabilities. We expect that future capital expenditures will be funded by
the generation of positive cash flows from operations. We may also consider future acquisition
opportunities to extend our technology portfolio and design expertise and to expand our product
offerings.
Cash used in financing activities for the three-month period ended January 2, 2009 consisted of the
retirement of $40.5 million of our 2007 Convertible Notes, and the repurchase of treasury stock of
$1.8 million, offset by cash provided by stock option exercises of $0.2 million.
Our invested cash balances primarily consist of United States treasury obligations, United States
agency obligations, overnight repurchase agreements backed by United States treasuries or United
States agency obligations, highly rated commercial paper and certificates of deposit. At January
2, 2009, we also held a $3.2 million auction rate security which historically has provided
liquidity through a Dutch auction process. The recent disruptions in the credit markets have
substantially eliminated the liquidity of this process resulting in failed auctions. During the
fiscal year ended October 3, 2008, we performed a comprehensive valuation and discounted cash flow
analysis on the auction rate security. We concluded the value of the auction rate security was $2.3
million, and the carrying value of these securities was reduced by $0.9 million, reflecting this
change in fair value. Accordingly, in the fiscal year ended October 3, 2008, we recorded
unrealized losses on this auction rate security of approximately $0.9 million. We assessed these
declines in fair market value to be temporary and consider the security to be illiquid until there
is a successful auction. Accordingly, the remaining auction rate security balance has been
reclassified to non-current other assets and the loss was recorded in Other Comprehensive Income.
As of January 2, 2009, we re-evaluated our auction rate
securities and determined that no adjustment was
required. We will continue to monitor the liquidity and accounting classification of this security
in future periods. If in a future period, if we determine that the impairment is other than
temporary, we will impair the security to its fair value and charge the loss to earnings.
21
On July 15, 2003, we entered into a receivables purchase agreement under which we have agreed to
sell from time to time certain of our accounts receivable to Skyworks USA, Inc. (Skyworks USA), a
wholly-owned special purpose entity that is fully consolidated for accounting purposes.
Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, N.A. providing for a $50.0
million credit facility (Facility Agreement) secured by the purchased accounts receivable. As a
part of the consolidation, any interest incurred by Skyworks USA related to monies it borrows under
the Facility Agreement is recorded as interest expense in the Companys results of operations. We
perform collections and administrative functions on behalf of Skyworks USA. Interest related to the
Facility Agreement is at LIBOR plus 0.75%. We renewed the Facility Agreement for another year in
July 2008, and as of January 2, 2009, Skyworks USA had borrowed $50.0 million under this agreement.
CONTRACTUAL OBLIGATIONS
Our contractual obligations disclosure in our annual report on Form 10-K for the year ended October
3, 2008 has not materially changed since we filed that report, with the exception that we retired
$40.5 million of our 2007 Convertible Notes (due in 2012) at an average price of 92.6 of par value.
These retirements reduced the remaining principal balance on our 2007 Convertible Notes to $97.1
million as of November 12, 2008. Our short-term and long-term debt are more fully described in Note
8 of this Form 10-Q.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS 141(R)
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS 141(R)). SFAS
141(R) applies to any transaction or other event that meets the definition of a business
combination. Where applicable, SFAS 141(R) establishes principles and requirements for how the
acquirer recognizes and measures identifiable assets acquired, liabilities assumed, noncontrolling
interest in the acquiree and goodwill or gain from a bargain purchase. In addition, SFAS 141(R)
determines what information to disclose to enable users of the financial statements to evaluate the
nature and financial effects of the business combination. This statement is to be applied
prospectively for fiscal years beginning after December 15, 2008. The Company will evaluate the
impact of SFAS 141(R) on its Consolidated Financial Statements in the event future business
combinations are contemplated.
SFAS 160
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, an Amendment of ARB No. 51 (SFAS 160). SFAS 160 amends ARB 51 to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation
of a subsidiary. It also amends certain of ARB 51s consolidation procedures for consistency with
the requirements of SFAS 141(R). This statement is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. The statement shall be applied
prospectively as of the beginning of the fiscal year in which the statement is initially adopted.
The Company does not expect the adoption of SFAS 160 to impact its results of operations or
financial position because the Company does not have any minority interests.
SFAS 161
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 amends FASB Statement No.
133 to require enhanced disclosures about an entitys derivative and hedging activities thereby
improving the transparency of financial reporting. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items affect an entitys
financial position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The Company does not currently hold any positions in derivative
instruments or participate in hedging activities and thus does not expect the adoption of SFAS 161
to have any impact on its results of operations or financial position.
22
SFAS 162
In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 162, The Hierarchy
of Generally Accepted Accounting Principles (SFAS 162). SFAS No. 162 sets forth the level of
authority to a given accounting pronouncement or document by category. Where there might be
conflicting guidance between two categories, the more authoritative category will prevail. SFAS No.
162 will become effective 60 days after the SEC approves the PCAOBs amendments to AU Section 411
of the AICPA Professional Standards. SFAS No. 162 has no effect on the Companys financial
position, statements of operations, or cash flows at this time.
FSP No. 142-3
In April 2008, the FASB issued FASB Staff Position (FSP) No. 142-3, Determination of the Useful
Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the factors an entity should consider in
developing renewal or extension assumptions used in determining the useful life of recognized
intangible assets under FASB Statement No. 142, Goodwill and Other Intangible Assets. This new
guidance applies prospectively to intangible assets that are acquired individually or with a group
of other assets in business combinations and asset acquisitions. FSP 142-3 is effective for
financial statements issued for fiscal years and interim periods beginning after December 15,
2008. Early adoption is prohibited. The Company does not expect the adoption of FSP 142-3 to have
any material impact on its results of operations or financial position.
FSP No. APB 14-1
In May 2008, the FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). FSP APB
14-1 alters the accounting treatment for convertible debt instruments that allow for either
mandatory or optional cash settlements. FSP APB 14-1 is expected to impact the Companys
accounting for its 2007 Convertible Notes and previously held Junior Notes. This FSP requires
registrants with specified convertible note features to recognize (non-cash) interest expense based
on the market rate for similar debt instruments without the conversion feature. Furthermore,
pursuant to its retrospective accounting treatment, the FSP requires prior period interest expense
recognition. FSP APB 14-1 is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. The Company is currently evaluating FSP APB 14-1 and
the impact that it will have on its Consolidated Financial Statements. The Company is not required
to adopt FSP APB 14-1 until the first quarter of fiscal 2010.
FSP No. 133-1 and FIN 45-4
In September 2008, the FASB issued FSP No. 133-1, Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 (FSP 133-1) and FASB Interpretation No. 45;
and Clarification of the Effective Date of FASB Statement No. 161. This FSP amends FASB Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by
sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. This
FSP also amends FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, to require an additional
disclosure about the current status of the payment/performance risk of a guarantee. Further, this
FSP clarifies the Boards intent about the effective date of FASB Statement No. 161, Disclosures
about Derivative Instruments and Hedging Activities. The provisions of this FSP that amend
Statement 133 and Interpretation 45 shall be effective for reporting periods (annual or interim)
ending after November 15, 2008. The Company does not currently hold any positions in derivative
instruments or participate in hedging activities and thus does not expect the adoption of FSP 133-1
and FIN 45-4 to have any impact on its results of operations or financial position.
23
FSP No. FAS 157-3
In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active (FSP 157-3) which clarifies the application of SFAS
157 in a market that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset. SFAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 for financial assets carried at fair
value, and years beginning after November 15, 2008 for non-financial assets not carried at fair
value. The Company has adopted FSP 157-3 for its financial assets carried at fair value and
determined that it does not have a material impact on its results of operations or financial
position. The Company will adopt FSP 157-3 for non-financial assets in the first fiscal quarter of
2010 and is currently evaluating the impact on it results of operations or financial position.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to foreign currency, market rate and interest risks as described below:
Investment and Interest Rate Risk
Our exposure to interest and market risk relates principally to our investment portfolio, which as
of January 2, 2009 consisted of the following (in millions):
|
|
|
|
|
Cash and cash equivalents (time deposits, overnight repurchase agreements and money market funds) |
|
$ |
243.7 |
|
Restricted cash (time deposits and certificates of deposit) |
|
|
6.0 |
|
Available for sale securities (auction rate securities) |
|
|
2.3 |
|
|
|
|
|
Total |
|
$ |
252.0 |
|
|
|
|
|
The main objective of our investment activities is the preservation of investment capital. Credit
risk associated with our investments is not significant as our investment policy prescribes high
credit quality standards and limits the amount of credit exposure to any one issuer. We do not use
derivative instruments for speculative or investment purposes.
In general, our cash and cash equivalent investments have short-term maturity periods which dampen
the impact of significant market or interest rate risk. We are, however, subject to overall
financial market risks, such as changes in market liquidity, credit quality and interest rates.
Available for sale securities carry a longer maturity period (contractual maturities exceed ten
years). In fiscal 2008 we experienced a temporary unrealized loss on our investment in auction
rate securities primarily caused by a disruption in the liquidity of the Dutch auction process
which resets interest rates each month. We classified auction rate securities in prior periods as
current assets under Short Term Investments. Given the failed auctions, the auction rate
securities are effectively illiquid until there is a successful auction. Accordingly, the remaining
auction rate securities balance has been reclassified to non-current other assets. However, we
have the ability and intent to hold these investments until there is a full recovery of its fair
value, which may be at maturity.
The U.S. sub-prime mortgage crisis and other recent credit-related issues have had widespread
negative effects on global financial markets. The credit concerns and lack of liquidity in the
short-term markets have reinforced our temporary investment bias toward government-backed
securities and other high credit quality commercial paper and time deposits. If global credit
markets continue to deteriorate, investments may be negatively impacted, particularly in the form
of declining yields, which may impact future interest income.
Exchange Rate Risk
Substantially all sales to customers and arrangements with third-party manufacturers provide for
pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate
fluctuations on our results. A small percentage of our international operational expenses are
denominated in foreign currencies. Exchange rate volatility could negatively or positively impact
those operating costs. The Company incurred unrealized foreign
24
exchange gains/ (losses) of $0.8
million and $0.0 million for the three-month periods ended January 2, 2009 and December 28,
2007, respectively. Increases in the value of the U.S. dollar relative to other currencies could
make our products more expensive, which could negatively impact our ability to compete.
Conversely, decreases in the value of the U.S. dollar relative to other currencies could result in
our suppliers raising their prices to continue doing business with us. Fluctuations in currency
exchange rates could have a greater effect on our business in the future.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Our management, with the participation of our chief executive officer and chief financial officer,
evaluated the effectiveness of our disclosure controls and procedures as of January 2, 2009. The
term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act, means controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in
the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the
companys management, including its principal executive and principal financial officers, as
appropriate to allow timely decisions regarding required disclosure. Management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving their objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. Based on the
evaluation of our disclosure controls and procedures as of January 2, 2009, our chief executive
officer and chief financial officer concluded that, as of such date, our disclosure controls and
procedures were effective at the reasonable assurance level.
(b) Changes in internal controls over financial reporting.
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) occurred during the fiscal quarter ended January 2, 2009 that has
materially affected, or is reasonably likely to materially affect, Skyworks internal control over
financial reporting.
PART
II. OTHER INFORMATION
Item 1A. Risk Factors
There have been no significant changes in the risk factors disclosed in Item 1A of our Annual
Report on Form 10-K for the year ended October 3, 2008.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) The following table provides information regarding repurchases of common stock made by us
during the fiscal quarter ended January 2, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Number (or |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximately |
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
Dollar Value) of |
|
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
Shares that May Yet |
|
|
|
|
|
|
|
|
|
|
Part of Publicly |
|
Be Purchased Under |
|
|
Total Number of |
|
Average Price Paid |
|
Announced Plans or |
|
the Plans or |
Period |
|
Shares Purchased |
|
per Share |
|
Programs |
|
Programs |
October 6, 2008 |
|
|
2,582 |
(1) |
|
$ |
7.51 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
October 11, 2008 |
|
|
853 |
(1) |
|
$ |
7.00 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
October 20, 2008 |
|
|
447 |
(1) |
|
$ |
6.67 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
October 21, 2008 |
|
|
3,759 |
(1) |
|
$ |
6.38 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
November 4, 2008 |
|
|
80,317 |
(1) |
|
$ |
7.18 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
November 6, 2008 |
|
|
48,585 |
(1) |
|
$ |
6.42 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
November 7, 2008 |
|
|
135,141 |
(1) |
|
$ |
6.30 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
|
|
|
(1) |
|
All shares of common stock reported in the table above were repurchased by Skyworks at the
fair market value of the common stock as of the period stated above, in connection with the
satisfaction of tax withholding obligations under restricted stock agreements between Skyworks
and certain of its key employees. |
|
(2) |
|
We have no publicly announced plans or programs. |
25
Item 5. Other Information
2009 Annual Meeting of Stockholders
We currently expect to hold our 2009 annual meeting of stockholders on May 12, 2009. The 2009
annual meeting date constitutes a change of more than 30 days from the anniversary of the 2008
annual meeting. As a result, stockholder proposals to be presented at the 2009 Annual Meeting must
be received by the Companys Secretary not later than February 21, 2009, and any proposal intended
to be included in the Companys proxy statement for the 2009 annual meeting must also be received
by the Companys Secretary not later than February 21, 2009.
Please refer to the proxy statement for the 2008 annual meeting of stockholders for the procedures
for submitting stockholder proposals to the Company.
Item 6. Exhibits
|
|
|
Number |
|
Description |
|
|
|
10.II*
|
|
Fiscal 2009 Executive Incentive
Compensation Plan |
|
|
|
31.1*
|
|
Certification of the Companys Chief Executive Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a- 14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
31.2*
|
|
Certification of the Companys Chief Financial Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
32.1*
|
|
Certification of the Companys Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
32.2*
|
|
Certification of the Companys Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
26
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 thereunto duly authorized.
|
|
|
|
|
|
SKYWORKS SOLUTIONS, INC.
|
|
Date: February 11, 2009 |
By: |
/s/ David J. Aldrich
|
|
|
David J. Aldrich, President and Chief |
|
|
|
Executive Officer (Principal Executive Officer) |
|
|
|
By: |
/s/ Donald W. Palette
|
|
|
Donald W. Palette, Chief Financial Officer |
|
|
Vice President (Principal Accounting and Financial Officer) |
|
27
EXHIBIT INDEX
|
|
|
Number |
|
Description |
|
|
|
10.II
|
|
Fiscal 2009 Executive Incentive
Compensation Plan |
|
|
|
31.1
|
|
Certification of the Companys Chief Executive Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a- 14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
31.2
|
|
Certification of the Companys Chief Financial Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
32.1
|
|
Certification of the Companys Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
32.2
|
|
Certification of the Companys Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
28
exv10wii
Exhibit 10.II
FY09 Executive Incentive Plan
1. |
|
Purpose: The FY09 Executive Incentive Plan (theFY09 Plan) is designed to reward key
management employees for achieving certain financial and business objectives. |
|
2. |
|
Plan Period: The FY09 Plan covers the period from October 4, 2008 through October 2, 2009. |
|
3. |
|
Eligibility: This program applies to the Chief Executive Officer and his direct reporting
senior executives. Other key employees may be added based upon the recommendation of the
Chief Executive Officer and subsequent approval of the Compensation Committee. Those
employees not covered by this plan may be eligible for other programs established by Skyworks. |
|
4. |
|
Incentive Targets: Participants are eligible to earn a percentage of their base salary for
attaining certain performance objectives. Nominal, target and stretch incentive awards have
been established as follows (shown as a percentage of the participants base salary): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Incentive |
|
Incentive |
Name |
|
At Nominal |
|
At Target |
|
At Stretch |
CEO |
|
|
50 |
% |
|
|
100 |
% |
|
|
200 |
% |
CFO, VP Sales, Business Unit
General Managers, VP Ops |
|
|
30 |
% |
|
|
60 |
% |
|
|
120 |
% |
Other VPs |
|
|
25 |
% |
|
|
50 |
% |
|
|
100 |
% |
Special Participants |
|
|
20 |
% |
|
|
40 |
% |
|
|
80 |
% |
5. |
|
FY09 Metrics: The performance metrics for FY09 are as follows: |
|
|
|
1st Half Financial (2nd Half TBD) |
|
|
|
|
|
|
|
Metric |
|
Nominal |
|
Target |
|
Stretch |
Revenue ($M)
|
|
Redacted
|
|
Redacted
|
|
Redacted |
Gross Margin %
|
|
Redacted
|
|
Redacted
|
|
Redacted |
Operating Income %
|
|
Redacted
|
|
Redacted
|
|
Redacted |
Inventory Turns
|
|
Redacted
|
|
Redacted
|
|
Redacted |
BU Revenue ($M)
|
|
Redacted
|
|
Redacted
|
|
Redacted |
BU Operating Income %
|
|
Redacted
|
|
Redacted
|
|
Redacted |
|
|
1st Half Customer Satisfaction (2nd Half TBD) |
|
|
|
|
|
|
|
|
|
|
|
Metric |
|
Weight |
|
Nominal |
|
Target |
|
Stretch |
On-Time Delivery1
|
|
|
50 |
% |
|
Redacted
|
|
Redacted
|
|
Redacted |
Returned Material $ Reduction2
|
|
|
50 |
% |
|
Redacted
|
|
Redacted
|
|
Redacted |
|
|
|
1 |
|
CRSD (customer request ship dates excluding Hubs). |
|
2 |
|
Reductions based on trend performance over 16 quarters and 1st half revenue of $REDACTED |
|
|
Performance periods are semi-annual. The individual metrics above are for normal operations
and any extraordinary events and/or charges will be brought to the Compensation Committee
for review and approval. Metrics will be weighted based on performance for the first and
second half of FY09 as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory |
|
Customer |
|
BU |
|
BU |
Executive |
|
Revenue |
|
GM% |
|
OI% |
|
Turns |
|
Satisfaction |
|
Revenue |
|
OI% |
Redacted |
|
|
n/a |
|
|
|
30 |
% |
|
|
n/a |
|
|
|
10 |
% |
|
|
10 |
% |
|
|
30 |
% |
|
|
20 |
% |
Redacted |
|
|
30 |
% |
|
|
n/a |
|
|
|
20 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
30 |
% |
|
|
n/a |
|
Redacted |
|
|
20 |
% |
|
|
40 |
% |
|
|
20 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
n/a |
|
|
|
n/a |
|
Redacted |
|
|
30 |
% |
|
|
20 |
% |
|
|
n/a |
|
|
|
10 |
% |
|
|
10 |
% |
|
|
n/a |
|
|
|
30 |
% |
Redacted |
|
|
20 |
% |
|
|
20 |
% |
|
|
40 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
n/a |
|
|
|
n/a |
|
FY09 EIP
2 of 3
6. |
|
How the Plan Works: Upon completion of the first six months of the Fiscal Year, the Chief
Executive Officer will provide the Compensation Committee with recommendations for incentive
award payments to the named participants of the plan. The Committee will review the
recommendations and approve the actual amount to be paid to each participant. The Committee
will rely upon the CEO for the appropriate distribution of the authorized incentive pool.
The same process will occur for the 2nd 6 months of the Fiscal Year. All incentive award
payments under the FY09 Plan, if earned, will be paid by March 15th of the calendar year
following the end of the fiscal year in which the performance occurs. |
|
7. |
|
Administration: Actual performance between the Nominal and Target metrics will be paid on a
linear sliding scale beginning at the Nominal percentage and moving up to the Target
percentage. The same linear scale will apply for performance between Target and Stretch
metrics. In order to fund the incentive plans and insure the overall Companys financial
performance, the following terms apply. |
|
|
|
No incentive award will be paid unless the Company meets its Nominal operating
income goal after accounting for any incentive award payments. |
|
|
|
|
Payout for the first six month performance period will be capped at 80% of earnings
with 20% being held back until the end of the fiscal year based on sustained
performance. |
|
|
|
|
Incentive payments will be processed in a timely manner at the completion of each
six month performance period. Skyworks CEO, subject to approval by the Compensation
Committee, retains discretion to award below nominal or above stretch and to modify all
individual incentive payments to ensure equitable distribution of incentives; such
modifications may include, but are not limited to, the delivery of equity or similar
instruments in lieu of cash payments. |
|
|
|
|
Any payout shall be conditioned upon the Participants employment by the Company on
the date of payment; provided, however, that the Compensation Committee may make
exceptions to this requirement, in its sole discretion, including, without limitation,
in the case of a participants termination of employment, retirement, death or
disability. |
8. |
|
Taxes: All awards are subject to federal, state, local and social security taxes. Payments
under this Plan will not affect the base salary, which is used as the basis for Skyworks
benefits program. |
|
9. |
|
Amendments: The Company reserves the right to amend or terminate the FY09 Plan at any time
in its sole discretion. |
FY09 EIP
3 of 3
exv31w1
EXHIBIT 31.1
CERTIFICATION OF THE CEO PURSUANT TO SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RULES
13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David J. Aldrich, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; |
|
|
2. |
|
Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statement made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
|
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
|
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared; |
|
|
b) |
|
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and, |
|
|
d) |
|
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrants internal control over
financial reporting. |
|
5. |
|
The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
|
|
b) |
|
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: February 11, 2009
/s/ David J. Aldrich
David J. Aldrich
Chief Executive Officer
President
exv31w2
EXHIBIT 31.2
CERTIFICATION OF THE CFO PURSUANT TO SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RULES
13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Donald W. Palette, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; |
|
|
2. |
|
Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statement made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report and |
|
|
4. |
|
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
|
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared; |
|
|
b) |
|
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and, |
|
|
d) |
|
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrants internal control over
financial reporting. |
|
5. |
|
The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
|
|
b) |
|
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: February 11, 2009
/s/ Donald W. Palette
Donald W. Palette
Chief Financial Officer
Vice President
exv32w1
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Skyworks Solutions, Inc. (the Company) on Form 10-Q
for the period ending January 2, 2009 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, David J. Aldrich, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
/s/ David J. Aldrich
David J. Aldrich
Chief Executive Officer
President
Date: February 11, 2009
exv32w2
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Skyworks Solutions, Inc. (the Company) on Form 10-Q
for the period ending January 2, 2009 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, Donald W. Palette, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
/s/ Donald W. Palette
Donald W. Palette
Chief Financial Officer
Vice President
Date: February 11, 2009