Previous Statements by ATML
» Atmel Corp. Q4 2009 Earnings Call Transcript
» Atmel Corp. Q4 2009 Earnings Call Transcript
» Atmel Corp. Q3 2009 Earnings Call Transcript
» Atmel Corporation Q1 2009 Earnings Call Transcript
Joining us for the call today are Steve Laub, Atmel's president and CEO, and Stephen Cumming, Vice President of Finance and Chief Financial Officer. Stephen will begin the call with a review of our fourth quarter financial results, and Steve will then provide additional information on the business.At the conclusion of Steve's remarks, Stephen will discuss our financial guidance for the first quarter of 2011 and then open the call for questions. During the course of this conference call, we may make forward-looking statements about Atmel's business outlook, including statements regarding our expectations for market growth, revenues, target gross and operating margins, product introductions and cost savings for the remainder of 2011 and beyond. Our forward-looking statements and all other statements that are not historical facts reflect our expectations and beliefs as of today and, therefore, are subject to risks and uncertainties as described in the Safe Harbor discussion found in today's press release. During the call, we will also discuss non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in today's press release. I would now like to turn the call over to Stephen Cumming for a discussion of our fourth quarter financial results. Stephen? Stephen Cumming Thank you, Peter. Let me provide some details of our statement of operations. Revenues for the fourth quarter increased 3% sequentially and 33% as compared to the same quarter in 2009 to $458 million. Excluding the Smart Card business, which we sold at the end of the third quarter, revenues of $458 million increased 10% sequentially from $470 million, ahead of our guidance of up to 6% sequentially. For the full year of 2010, sales were $1.64 billion compared to $1.22 billion for 2009, representing a 35% increase over the prior year. Excluding the Smart Card divestiture, full year revenues increased 42%.
Fourth quarter gross margin of 49.5% reached the highest level since the third quarter of 1996. The fourth quarter gross margin of 49.5% was a 270-basis point improvement from the 46.8% we reported last quarter and ahead of our guidance range of [up] 48% to 49%.The sequential gross margin improvement was a result of increased volumes and improved mix of higher-margin products on the divestiture of the lower margins Smart Card business. For the full year of 2010, gross margins of 44.3% vastly improved from the 2009 gross margin of 33.9%. Total operating expenses came in at $130 million in Q4 compared to $122 million in Q3 and $114 million in the fourth quarter of 2009. In Q4 2010, operating expenses increased sequentially as the third quarter benefitted from the seasonal impact of the European summer vacations and unfavorable fund exchange rate impact from our operations in Europe. Our operating expenses were higher than guidance of $125 million, plus or minus $2 million, due primarily to increases in R&D investment, lower vacation than planned and higher costs on variable and stock-based compensation plans. R&D expense of $60 million in the fourth quarter was approximately $4 million higher than in the prior quarter and $4 million higher than the $56 million reported in the year-ago period. The increase as compared to last quarter was primarily due to increasing investments in new products, primarily in our microcontroller business. SG&A expense was $70 million for the fourth quarter of 2010 compared with $66 million in the prior quarter and $59 million in the same period last year due to higher costs on variable and stock-based compensation, increased sales across [inaudible] [segments]. Stock compensation for Q4 was $16 million and is broken out in the following areas; $2 million was related to manufacturing, $6 million to R&D and $8 million to SG&A. Stock compensation was $2 million higher than the third quarter. For the full year, stock compensation of $61 million increased from $30 million in the prior year, [presumably] due to the performance stock-based compensation incentive program, which is based on our expectations of meeting certain long-term performance metrics sooner than was originally anticipated. Read the rest of this transcript for free on seekingalpha.com