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SMSC Posts Q3

HAUPPAUGE, N.Y. — SMSC (NASDAQ: SMSC) today announced financial results for its third quarter of fiscal 2011, ended November 30, 2010.

Highlights for the third quarter of fiscal 2011:

• Record revenue of $107.0 million,
• Record Automotive market revenue of $19.1 million,
• Non-GAAP diluted earnings per share of $0.52.

Total revenue for the third quarter of fiscal 2011 was $107.0 million, an increase of three percent sequentially and an increase of 23 percent when compared to the same period in the prior year. This included approximately $2.7 million in sales from SMSC’s acquisition of Symwave, Inc. Non-GAAP gross margin was 55.4 percent and the GAAP gross margin was 52.1 percent. Non-GAAP net income for the third quarter of fiscal 2011 was $12.0 million, or $0.52 per diluted share, compared to non-GAAP net income of $7.7 million, or $0.34 per diluted share in the third quarter of fiscal 2010. GAAP net loss for the third quarter of fiscal 2011 was $4.6 million, or $0.20 per diluted share, compared to GAAP net income of $6.8 million, or $0.30 per diluted share for the same prior year period. Non-GAAP income from operations was $15.8 million compared to a GAAP loss from operations of $8.2 million for the third quarter of fiscal 2011. The difference between the GAAP and non-GAAP results was primarily driven by adjustments for stock-based compensation of $18.9 million (primarily fair market adjustments to stock appreciation rights based on the increase in SMSC’s share price in the three month period ended November 30, 2010) and other adjustments mostly related to merger and acquisition activities.

“Revenue for the third quarter of fiscal 2011 of $107.0 million set a new record for SMSC,” said Christine King, President & Chief Executive Officer. “All of the key markets we serve have remained relatively healthy. Our Automotive market sales achieved record revenue in the third quarter and grew by five percent sequentially. Consumer Electronics revenue, which includes sales from the Symwave acquisition, grew by four percent sequentially. PC revenue grew two percent and Industrial revenue grew slightly after five quarters of significant sequential growth. On a year-over-year basis, sales into all end markets produced robust double-digit growth. During the third quarter, we closed on the Symwave acquisition, which expanded our USB product portfolio into USB to SATA for SuperSpeed USB applications. We believe the addition of this highly experienced analog team will accelerate our broad connectivity road maps.”

Ms. King continued, “Though we are entering the seasonally slower period in our annual cycle, we expect to end fiscal 2011 with more than $400 million in revenue, which will be a record for SMSC, and we expect non-GAAP earnings per share to improve by more than three times from fiscal 2010 earnings per share of $0.46.” During the third quarter of fiscal 2011, the Company generated $9.2 million in cash from operations. Cash and investments increased by $9.1 million sequentially to $188.5 million.

{complink 12841|Standard Microsystems Corp. (SMSC)}

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