Microchip Technology, Inc. MCHP
Q1 2012 Earnings Call Transcript
Operator: Good day, everyone, and welcome to this Microchip Technology First Quarter and Fiscal Year 2012 Earnings Results Conference Call. As a reminder, today's call is being recorded.
At this time, I would like to turn the call over to Microchip's Chief Financial Officer, Mr. Eric Bjornholt. Please go ahead, sir.
J. Eric Bjornholt - VP and CFO: Good afternoon, everyone. During the course of this conference call, we will be making projections and other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to our press release of today as well as our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations.
In attendance with me today are Steve Sanghi, Microchip's President and CEO; Ganesh Moorthy, Microchip's COO; and Gordon Parnell, Vice President, Business Development and Investor Relations.
I will comment on our first quarter of fiscal year 2012 financial performance, and Steve and Ganesh will then give their comments on the results, discuss the current business environment, and discuss our guidance. We will then be available to respond to specific investor and analyst questions.
We are including information in our press release and this conference call on various GAAP and non-GAAP measures. We have posted a full GAAP to non-GAAP reconciliation on the Investor Relations page of our website at www.microchip.com. We believe you will find this useful when comparing GAAP and non-GAAP results.
I will now go through some of the operating results. I will be referring to gross margin and operating expense information on a non-GAAP basis prior to the effects of share-based compensation and acquisition-related expenses.
Net sales in the June 2011 quarter were $374.5 million and were down sequentially 1.4% from net sales of $380 million in the immediately preceding quarter and were up 4.9% from net sales of $357.1 million in the June 2010 quarter.
On a non-GAAP basis, gross margins were 59.5% in the June quarter and non-GAAP operating expenses were 25% of sales, both in line with our preliminary results that we shared with the street on July 11. Operating income was 34.5% of sales and net income was $111.4 million or $0.55 per diluted share. On a full GAAP basis, gross margins including share-based compensation and acquisition-related intangible amortization, were 58.7% in the June quarter. Total operating expenses were $102.9 million or 27.5% of sales and include share-based compensation of $7.6 million and acquisition-related expenses of $1.6 million. GAAP net income was $99.3 million or $0.49 per diluted share.
In the June quarter, the non-GAAP tax rate was 12.9% and the GAAP tax rate was 12.8%. Our tax rate is impacted by the mix of geographical profits, withholding taxes associated with our licensing business, and the percentage of our cash that is invested in tax advantage securities. We expect our combined forward-looking effective tax rate on both a GAAP and non-GAAP basis to be about 12.75% to 13.25%.
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