• Quarterly Net Sales of $131.1 Million, Up 11 Percent Sequentially     
• GAAP EPS of $0.11, Up $0.09 or 450 Percent Sequentially
• Non-GAAP EPS of $0.30, Up $0.13 or 76 Percent Sequentially    

          
CAMARILLO, Calif., June 01, 2016 (GLOBE NEWSWIRE) -- Semtech Corporation (Nasdaq:SMTC), a leading supplier of analog and mixed-signal semiconductors, today reported unaudited financial results for its first quarter of fiscal year 2017, which ended May 1, 2016.  

Net sales for the first quarter of fiscal year 2017 were $131.1 million, up 11 percent from the fourth quarter of fiscal year 2016 and up 1 percent from the first quarter of fiscal year 2016.

Gross margin, computed in accordance with U.S. generally accepted accounting principles (GAAP), for the first quarter of fiscal year 2017 was 59.9 percent compared to 58.6 percent in the fourth quarter of fiscal year 2016 and 60.3 percent in the first quarter of fiscal year 2016. 

GAAP net income for the first quarter of fiscal year 2017 was $6.9 million, or $0.11 per diluted share.  This compares to GAAP net income of $1.2 million or $0.02 per diluted share in the fourth quarter of fiscal year 2016, and GAAP net loss of $0.01 million or $0.00 per diluted share in the first quarter of fiscal year 2016. 

GAAP operating results for the fourth quarter of fiscal 2016 reflected an after-tax benefit of $1.8 million as a result of the fair value re-measurement of the Triune Systems earn-out liability.   

To facilitate the complete understanding of comparable financial performance between periods, the Company also presents performance results net of certain non-cash items and items that are not considered reflective of the Company’s core results over time.  The Company’s non-GAAP measures of gross margin, net income and earnings per diluted share exclude certain items as described below under “Non-GAAP Financial Measures.”

Excluding such items, non-GAAP net income for the first quarter of fiscal year 2017 was $19.5 million or $0.30 per diluted share.  Non-GAAP net income was $10.8 million or $0.17 per diluted share in the fourth quarter of fiscal year 2016, and was $17.9 million or $0.27 per diluted share in the first quarter of fiscal year 2016.

Non-GAAP gross margin for the first quarter of fiscal year 2017 was 60.2 percent.  Non-GAAP gross margin for the fourth quarter of fiscal year 2016 was 59.0 percent and 60.8 percent in the first quarter of fiscal year 2016.  

As of the end of the first quarter of fiscal year 2017, the Company had $216.0 million in cash, cash equivalents and marketable securities compared to $211.8 million in cash, cash equivalents and marketable securities at the end of fiscal year 2016.

Mohan Maheswaran, Semtech’s President and Chief Executive Officer, stated, “We were pleased to deliver Q1 fiscal 2017 results that were at the upper-end of our guidance for the second consecutive quarter.  We believe strong broad-based bookings during the quarter and the higher backlog entering Q2 ensure a strong start to fiscal year 2017.  Our focus on high growth markets while striving to achieve end-market balance should help the Company to outperform the industry this year, as we continue toward our goal to achieve $1 billion in revenue.”

Second Quarter of Fiscal Year 2017 Outlook

• Net sales are expected to be in the range of $130 million to $140 million
• GAAP gross margin is expected to be in the range of 59.6% to 60.2%
• Non-GAAP gross margin is expected to be in the range of 60.0% to 60.5%
• GAAP SG&A expense is expected to be in the range of $32.2 million to $33.2 million
• GAAP R&D expense is expected to be in the range of $25.6 million to $26.6 million
• Transaction and Integration related expense is expected to be approximately $1.6 million
• Stock-based compensation expense is expected to be approximately $6.1 million, categorized as follows: $0.5 million cost of sales, $4.1 million SG&A, and $1.6 million R&D
• Intangible amortization expense is expected to be approximately $6.4 million
• Interest and other expense is expected to be approximately $2.2 million
• GAAP tax rate is expected to be in the range of 29% to 31%
• Non-GAAP tax rate is expected to be in the range of 21% to 23%
• GAAP earnings per diluted share are expected to be in the range of $0.12 to $0.17
• Non-GAAP earnings per diluted share are expected to be in the range of $0.30 to $0.36
• Fully-diluted share count is expected to be approximately 66.0 million shares
• Capital expenditures are expected to be approximately $8.0 million
• Depreciation expense is expected to be approximately $5.9 million

Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements prepared in accordance with GAAP, this release includes a non-GAAP presentation of gross margin, net income and earnings per diluted share and free cash flow.  The Company's measure of free cash flow excludes capital expenditures.  The Company’s non-GAAP measures of gross margin, net income and earnings per diluted share may exclude the following items, if any:

• Stock-based compensation expense
• Intangible amortization and impairments
• Restructuring, integration, transaction and other acquisition related expenses
• Litigation expenses or dispute settlement charges or gains
• Environmental and other reserves

To provide additional insight into the Company's second quarter outlook, this release also includes a presentation of forward-looking non-GAAP measures including gross margin, effective tax rate and earnings per diluted share. 

These non-GAAP financial measures are adjusted to exclude the items identified above because such items are either operating expenses which would not otherwise have been incurred by the Company in the normal course of the Company’s business operations or are not reflective of the Company’s core results over time.  These items may include recurring as well as non-recurring items, and no inference should be made that all of these adjustments, charges, costs or expenses are unusual, infrequent or non-recurring.  For example: certain restructuring and integration related expenses (which consist of employee termination costs, facility closure or lease termination costs, and contract termination costs) may be considered recurring given the Company’s ongoing efforts to be more cost effective and efficient; certain litigation expenses or dispute settlement charges or gains (which may include estimated losses for which we have established a reserve, as well as any actual settlements, judgments, or other resolutions against, or in favor of, the Company related to litigation, arbitration, disputes or similar matters, and insurance recoveries received by the Company related to such matters) may be viewed as recurring given that the Company may from time to time be involved in, and may resolve, litigation, arbitration, disputes, and similar matters; and certain acquisition-related adjustments or expenses may be deemed recurring given the Company's regular evaluation of potential transactions and investments.

Notwithstanding that certain adjustments, charges, costs or expenses may be considered recurring, in order to provide meaningful comparisons, the Company believes that it is appropriate to exclude such items because they are not reflective of the Company's core results and tend to vary based on timing, frequency and magnitude.

These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company's comparable financial performance between periods.  In addition, the Company's management generally excludes the items noted above when managing and evaluating the performance of the business.  The financial statements provided with this release include reconciliations of these non-GAAP measures to their most comparable GAAP results for the first quarter of fiscal year 2017 and the fourth and first quarters of fiscal year 2016 along with a reconciliation of forward-looking earnings per diluted share to its most comparable GAAP measure for the second quarter of fiscal year 2017.  These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may be inconsistent with similar measures presented by other companies.

Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on the Company’s current expectations, estimates and projections about its operations, industry, financial condition, performance, results of operations, and liquidity. Forward-looking statements are statements other than historical information or statements of current condition and relate to matters such as future financial performance, future operational performance, including the second quarter of fiscal year 2017 outlook and future goal of $1 billion in revenue, the anticipated impact of specific items on future earnings, and the Company’s plans, objectives and expectations.  Statements containing words such as “may,” “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “should,” “will,” “designed to,” “projections,” or “business outlook,” or other similar expressions constitute forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected.  Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to:  the Company’s ability to forecast its effective tax rates due to changing income in higher or lower tax jurisdictions and other factors that contribute to the volatility of the Company’s effective tax rates and impact anticipated tax benefits; the Company's ability to manage expenses to achieve anticipated shifts in demand among target customers, and other comparable changes or protracted weakness in projected or anticipated markets; competitive changes in the marketplace including, but not limited to, the pace of growth or adoption rates of applicable products or technologies; shifts in focus among target customers, and other comparable changes in projected or anticipated end-user markets; the Company’s ability to integrate its acquisitions and realize expected synergies and benefits from its acquisitions and dispositions; the continuation and/or pace of key trends considered to be main contributors to the Company's growth, such as demand for increased network bandwidth, demand for increasing energy efficiency in the Company's products or end-use applications of the products, and demand for increasing miniaturization of electronic components; adequate supply of components and materials from the Company’s suppliers, to include disruptions due to natural causes or disasters, weather, or other extraordinary events; the Company's ability to forecast and achieve anticipated revenues and earnings estimates in light of periodic economic uncertainty, to include impacts arising from European, Asian and global economic dynamics; and the amount and timing of expenditures for capital equipment.  Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2016, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission, and in material incorporated therein, including, without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors”.  In light of the significant risks and uncertainties inherent in the forward-looking information included herein that may cause actual performance and results to differ materially from those predicted, any such forward-looking information should not be regarded as representations or guarantees by the Company of future performance or results, or that its objectives or plans will be achieved or that any of its operating expectations or financial forecasts will be realized.  Reported results should not be considered an indication of future performance.  Investors are cautioned not to place undue reliance on any forward-looking information contained herein, which reflect management’s analysis only as of the date hereof.  Except as required by law, the Company assumes no obligation to publicly release the results of any update or revision to any forward-looking statements that may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated or future events, or otherwise.

About Semtech
Semtech Corporation is a leading supplier of analog and mixed-signal semiconductors for high-end consumer, enterprise computing, communications and industrial equipment.  Products are designed to benefit the engineering community as well as the global community.  The Company is dedicated to reducing the impact it, and its products, have on the environment.  Internal green programs seek to reduce waste through material and manufacturing control, use of green technology and designing for resource reduction.  Publicly traded since 1967, Semtech is listed on the NASDAQ Global Select Market under the symbol SMTC.  For more information, visit http://www.semtech.com.

Semtech, and the Semtech logo are registered marks of Semtech Corporation or its subsidiaries.

Contact: 
Sandy Harrison
Semtech Corporation 
(805) 480-2004
webir@semtech.com