Atmel Reports Second Quarter 2015 Financial Results

Jul 28, 2015, 16:05 ET from Atmel Corporation

SAN JOSE, Calif., July 28, 2015 /PRNewswire/ -- Atmel® Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced financial results for its second quarter ended June 30, 2015. 

GAAP

Non-GAAP

Q2 2015

Q1 2015

Q2 2014

Q2 2015

Q1 2015

Q2 2014

Net revenue

$         306.4

$    318.3

$    355.5

$        306.3

$     316.9

$     355.5

Gross margin

46.1%

46.3%

45.4%

47.0%

47.6%

45.3%

Operating margin

4.8%

6.5%

7.4%

11.6%

13.6%

11.5%

Net income

$             6.3

$       16.5

$       19.2

$          33.7

$       45.1

$       38.3

Diluted EPS

$           0.02

$       0.04

$       0.05

$          0.08

$       0.11

$       0.09

(In millions, except earnings per share data and percentages)

Revenue for the second quarter of 2015 was $306.4 million, a 4% decrease compared to $318.3 million for the first quarter of 2015, and 14% lower compared to $355.5 million for the second quarter of 2014.  Non-GAAP revenue for the second quarter of 2015 was $306.3 million.

GAAP gross margin was 46.1% in the second quarter of 2015 compared with 46.3% in the first quarter of 2015, and 45.4% in the second quarter of 2014.

Non-GAAP gross margin was 47.0% in the second quarter of 2015 compared to 47.6% in the immediately preceding quarter and 45.3% in the second quarter of 2014.  Refer to the non-GAAP reconciliation table included in this release for more details.

GAAP net income totaled $6.3 million or $0.02 per diluted share for the second quarter of 2015.  This compares to net income of $16.5 million or $0.04 per diluted share for the first quarter of 2015 and net income of $19.2 million or $0.05 per diluted share for the second quarter of 2014.  

Non-GAAP net income for the second quarter of 2015 totaled $33.7 million or $0.08 per diluted share, compared to non-GAAP net income of $45.1 million or $0.11 per diluted share in the first quarter of 2015, and $38.3 million or $0.09 per diluted share for the second quarter of 2014. Refer to the non-GAAP reconciliation table included in this release for more details.

"Last quarter we delivered solid operating margins and earnings despite a weaker global semiconductor industry environment and the adverse impact of foreign exchange rates," said Steve Laub, Atmel's President and Chief Executive Officer.  "Our attractive product portfolio and resilient operating model position us for meaningful margin expansion and increased cash generation once the industry resumes growth." 

Cash provided by operations totaled $25.9 million for the second quarter of 2015, compared to $40.1 million for the first quarter of 2015 and $52.5 million for the second quarter of 2014.  Combined cash balances (cash and cash equivalents plus short-term investments) totaled $196.4 million at the end of the second quarter of 2015, a decrease of $4.5 million from the immediately preceding quarter resulting principally from the acquisition of fixed assets of $10.9 million, the payment of $16.7 million for our common stock dividend, the repurchase of $2.9 million in common stock during the second quarter, and $10.1 million debt repayments, offset by our cash generated from operations, $8.9 million proceeds from the sale of the XSense division and $3.8 million proceeds from the sale of investments in a privately-held company.

Company Highlights

  • Released for production Atmel | SMART ARM® Cortex® M7 based microcontrollers, world's highest performing M-based MCU, for IoT, industrial and automotive applications
  • Launched new family of Atmel | SMART ARM® Cortex® M0+ based microcontrollers combining 5V functionality with integrated peripheral touch controller for the rapidly expanding smart appliance and industrial markets
  • Arduino began volume shipments of Zero board featuring Atmel | SMART ARM® Cortex® M0+ based microcontrollers for the IoT development Maker community
  • Arduino began volume shipments of Wi-Fi Shield enabling secure Wi-Fi connectivity for all Arduino platforms
  • Launched IoT cloud ecosystem partner program to accelerate IoT development
  • Showcased wearable turnkey solution at Computex 2015 featuring Atmel's ultra-low power embedded processing, wireless, touch, security and sensor technologies
  • Expanded maXTouch® U series touch controllers with six new devices enabling next-generation touchscreens from 1.2" to 10.1" for wearables, super phones and tablets
  • ASUS selected maXTouch® and maXStylus® to power world's first on-cell touchscreen with capacitive active stylus enabling 'pen-to-paper' writing experience

Stock Repurchase During the second quarter of 2015, Atmel repurchased 345 thousand shares of its common stock in the open market at an average price of $8.37 per share.

Outlook Q3 2015

  • Revenue between $283 and $303 million
  • Non-GAAP gross margin 47.5% plus or minus 100 basis points
  • Non-GAAP operating expenses $104 million, plus or minus $2 million

Non-GAAP Metrics Non-GAAP net income excludes share-based compensation expense, acquisition-related charges, restructuring charges (credits), operating results of the exited XSense business for 2015, loss from manufacturing facility damage and shutdown, French building underutilization and other (credits), loss (gain) related to foundry arrangements, gain on sale of assets and investments, non-GAAP tax adjustments, as well as net (loss) income attributable to noncontrolling interest.  A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

Conference Call Atmel will hold a teleconference at 2 p.m. PT today to discuss the second quarter 2015 financial results. The conference call will be webcast live and can also be monitored by dialing 1-706-758-4519.  The conference access code is 68295827 and participants are encouraged to initiate their calls 10 minutes prior to the 2 p.m. PT start time to ensure a timely connection. The webcast and earnings release will be accessible at http://ir.atmel.com/ and will be archived for 12 months.

A replay of the July 28, 2015 conference call will be available the same day at approximately 5 p.m. PT and will be archived for 48 hours. The replay access number is 1-404-537-3406. The access code is 68295827.

About Atmel Atmel is a worldwide leader in the design and manufacture of microcontrollers, capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics industry with intelligent and connected solutions focused on the industrial, automotive, consumer, communications, and computing markets.

©2015 Atmel Corporation. Atmel®, Atmel logo and combinations thereof, Enabling Unlimited Possibilities®, and others are registered trademarks or trademarks of Atmel Corporation in the U.S. and other countries. Other terms and product names may be trademarks of others.

Safe Harbor for Forward-Looking Statements Statements in this release, including those regarding Atmel's financial outlook for the third quarter of 2015, long-term forecasts, business outlook, expectations, new product launches, and beliefs, among others, are forward-looking statements that involve risks and uncertainties. These statements may include comments about our future operating and financial performance, including our outlook for 2015 and beyond, our expectations regarding market share and product revenue growth, and Atmel's strategies. All forward-looking statements included in this release are based upon information available to Atmel as of the date of this release, including our third quarter 2015 outlook, which may change. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, without limitation, general global macroeconomic and geo-political conditions; the cyclical nature of the semiconductor industry; the inability to realize the anticipated benefits of transactions related to acquisitions, restructuring activities or other initiatives in a timely manner or at all; consolidation occurring within the semiconductor industry through mergers and acquisitions; the impact of competitive products and pricing; disruption to our business caused by our increased dependence on outside foundries, financial instability or insolvency proceedings affecting some of those foundries, and associated litigation involving us in some cases; industry and/or company overcapacity or undercapacity, including capacity constraints of our independent assembly contractors; the success of our customers' end products and timely design acceptance by our customers; timely introduction of new products and technologies and implementation of new manufacturing technologies; our ability to ramp new products into volume production; our reliance on non-binding customer forecasts and the absence of long-term supply contracts with most of our customers; financial stability in foreign markets and the impact or volatility of foreign exchange rates and significant devaluation of the Euro against the U.S. dollar; unanticipated changes in environmental, health and safety regulations; our dependence on selling through independent distributors; the complexity of our revenue recognition policies; information technology system failures; business interruptions, natural disasters or terrorist acts; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; the market price or increased volatility of our common stock; disruptions in the availability of raw materials; compliance with U.S. and international laws and regulations by us and our distributors; our dependence on key personnel; our ability to protect our intellectual property rights; litigation (including intellectual property litigation in which we may be involved or in which our customers may be involved, especially in the mobile device sector), and the possible unfavorable results of legal proceedings; and other risks detailed from time to time in Atmel's SEC reports and filings, including our Form 10-K for the year ended December 31, 2014, filed on February 26, 2015. Atmel assumes no obligation and does not intend to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:    Peter Schuman Senior Director, Investor Relations (408) 437-2026 

                                            

ATMEL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2015

2015

2014

2015

2014

Net revenue

$          306,353

$          318,288

$          355,534

$          624,641

$          692,895

Operating expenses

Cost of revenue

165,039

170,991

194,296

336,030

391,667

Research and development

59,998

59,129

70,082

119,127

139,834

Selling, general and administrative

59,922

62,073

64,783

121,995

128,862

Acquisition-related charges 

3,807

4,403

1,497

8,210

3,125

Restructuring charges (credits)

4,882

1,147

(1,583)

6,029

(1,807)

Gain on sale of assets

(2,053)

-

-

(2,053)

-

Total operating expenses

$          291,595

$          297,743

$          329,075

$          589,338

$          661,681

Income from operations

14,758

20,545

26,459

35,303

31,214

Interest and other income (expense), net

1,162

3,700

(1,202)

4,862

(1,125)

Income before income taxes

15,920

24,245

25,257

40,165

30,089

Provision for income taxes

(9,693)

(7,699)

(6,021)

(17,392)

(8,687)

Net income 

6,227

16,546

19,236

22,773

21,402

Less: net loss (income) attributable to noncontrolling interest

85

(51)

-

34

-

Net income attributable to Atmel 

$               6,312

$             16,495

$             19,236

$             22,807

$             21,402

Basic net income per share attributable to Atmel:

Net income per share

$                 0.02

$                 0.04

$                 0.05

$                 0.05

$                 0.05

Weighted-average shares used in basic net income per share calculations

417,861

417,038

421,090

417,474

423,233

Diluted net income per share attributable to Atmel:

Net income per share

$                 0.02

$                 0.04

$                 0.05

$                 0.05

$                 0.05

Weighted-average shares used in diluted net income per share calculations

419,158

418,462

422,834

418,784

424,876

Cash dividends declared and paid per share

$                 0.04

$                 0.04

$                      -

$                 0.08

$                      -

 

ATMEL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

June 30,

December 31, 

2015

2014

Current assets

Cash and cash equivalents

$          196,359

$          206,937

Accounts receivable, net

206,070

222,021

Inventories

275,268

278,242

Prepaids and other current assets

78,225

89,101

Total current assets

755,922

796,301

Fixed assets, net

154,943

158,281

Goodwill

191,451

191,088

Intangible assets, net

44,019

50,286

Other assets

164,939

166,348

Total assets

$       1,311,274

$       1,362,304

Current liabilities

Trade accounts payable

$             76,928

$             97,467

Accrued and other liabilities

128,373

147,109

Deferred income on shipments to distributors

53,324

49,059

Total current liabilities

258,625

293,635

Other long-term liabilities

185,931

198,670

Total liabilities

444,556

492,305

Stockholders' equity

866,718

869,999

Total liabilities and stockholders' equity

$       1,311,274

$       1,362,304

 

ATMEL CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2015

2015

2014

2015

2014

GAAP net revenue

$          306,353

$          318,288

$          355,534

$          624,641

$          692,895

Revenue from the XSense business

(58)

(1,371)

-

(1,429)

-

Non-GAAP net revenue

$          306,295

$          316,917

$          355,534

$          623,212

$          692,895

GAAP gross margin

$          141,314

$          147,297

$          161,238

$          288,611

$          301,228

Loss from manufacturing facility damage and shutdown

-

-

-

-

7,056

Loss (gain) related to foundry arrangements

765

1,192

(2,071)

1,957

(2,129)

Share-based compensation expense

1,682

1,115

1,971

2,797

3,287

Gross margin from the XSense business

115

1,138

-

1,253

-

Non-GAAP gross margin

$          143,876

$          150,742

$          161,138

$          294,618

$          309,442

GAAP research and development expense

$             59,998

$             59,129

$             70,082

$          119,127

$          139,834

Share-based compensation expense

(3,573)

(3,578)

(4,383)

(7,151)

(9,112)

French building underutilization and other (credits)

(376)

296

(651)

(80)

(1,612)

Research and development expense from the XSense business

(156)

(1,457)

-

(1,613)

-

Non-GAAP research and development expense

$             55,893

$             54,390

$             65,048

$          110,283

$          129,110

GAAP selling, general and administrative expense

$             59,922

$             62,073

$             64,783

$          121,995

$          128,862

Share-based compensation expense

(7,282)

(8,994)

(8,924)

(16,276)

(18,496)

French building underutilization and other (credits)

(126)

(8)

(515)

(134)

(850)

Selling, general and administrative expense from the XSense business

37

64

-

101

-

Non-GAAP selling, general and administrative expense

$             52,551

$             53,135

$             55,344

$          105,686

$          109,516

GAAP income from operations

$             14,758

$             20,545

$             26,459

$             35,303

$             31,214

Share-based compensation expense

12,537

13,687

15,278

26,224

30,895

Loss from manufacturing facility damage and shutdown

-

-

-

-

7,056

Acquisition-related charges

3,807

4,403

1,497

8,210

3,125

French building underutilization and other (credits)

502

(288)

1,166

214

2,462

Restructuring charges (credits) 

4,882

1,147

(1,583)

6,029

(1,807)

Loss (gain) related to foundry arrangements

765

1,192

(2,071)

1,957

(2,129)

Gain on sale of assets

(2,053)

-

-

(2,053)

-

Operating loss from the XSense business

234

2,531

-

2,765

-

Non-GAAP income from operations

$             35,432

$             43,217

$             40,746

$             78,649

$             70,816

GAAP provision for income taxes

$             (9,693)

$             (7,699)

$             (6,021)

$          (17,392)

$             (8,687)

Non-GAAP tax adjustments

(8,144)

(5,867)

(4,788)

(14,011)

(6,439)

Non-GAAP provision for income taxes

$             (1,549)

$             (1,832)

$             (1,233)

$             (3,381)

$             (2,248)

GAAP net income attributable to Atmel 

$               6,312

$             16,495

$             19,236

$             22,807

$             21,402

Share-based compensation expense

12,537

13,687

15,278

26,224

30,895

Loss from manufacturing facility damage and shutdown

-

-

-

-

7,056

Acquisition-related charges

3,807

4,403

1,497

8,210

3,125

French building underutilization and other (credits)

502

(288)

1,166

214

2,462

Restructuring charges (credits) 

4,882

1,147

(1,583)

6,029

(1,807)

Loss (gain) related to foundry arrangements

765

1,192

(2,071)

1,957

(2,129)

Gain on sale of assets

(2,053)

-

-

(2,053)

-

Gain on sale of investments in privately-held companies

(1,317)

-

-

(1,317)

-

Operating loss from the XSense business

234

2,531

-

2,765

-

Non-GAAP tax adjustments

8,144

5,867

4,788

14,011

6,439

Net (loss) income attributable to noncontrolling interest

(85)

51

-

(34)

-

Consolidated non-GAAP net income

$             33,728

$             45,085

$             38,311

$             78,813

$             67,443

GAAP net income per share - diluted attributable to Atmel 

$                 0.02

$                 0.04

$                 0.05

$                 0.05

$                 0.05

Share-based compensation expense

0.03

0.03

0.03

0.06

0.07

Loss from manufacturing facility damage and shutdown

-

-

-

-

0.02

Acquisition-related charges

0.01

0.01

-

0.02

0.01

French building underutilization and other (credits)

-

-

-

-

-

Restructuring charges (credits) 

0.01

-

-

0.01

-

Loss (gain) related to foundry arrangements

-

-

-

-

-

Gain on sale of assets

(0.01)

-

-

-

-

Gain on sale of investments in privately-held companies

-

-

-

-

-

Operating loss from the XSense business

-

0.01

-

0.01

-

Non-GAAP tax adjustments

0.02

0.02

0.01

0.04

0.01

Net income per share attributable to noncontrolling interest

-

-

-

-

-

Consolidated non-GAAP net income per share  - diluted

$                 0.08

$                 0.11

$                 0.09

$                 0.19

$                 0.16

GAAP diluted shares

419,158

418,462

422,834

418,784

424,876

Adjusted dilutive stock awards - non-GAAP

6,486

7,070

7,212

6,414

7,288

Non-GAAP diluted shares

425,644

425,532

430,046

425,198

432,164

 

ATMEL CORPORATION

NET REVENUE - BY OPERATING SEGMENT

(In thousands)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2015

2015

2014

2015

2014

Microcontroller

$          205,003

$          218,786

$          254,775

$          423,789

$          489,915

Nonvolatile Memory

43,153

43,748

40,180

86,901

75,832

Automotive

37,216

35,745

35,994

72,961

76,965

Multi-Market and Other

20,981

20,009

24,585

40,990

50,183

 Total Company Revenue

$          306,353

$          318,288

$          355,534

$          624,641

$          692,895

 

Notes to Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, Atmel uses non-GAAP financial measures, including non-GAAP net income and non-GAAP net income per diluted share, which are adjusted from the most directly comparable GAAP financial measures to exclude certain items, as shown above and described below. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of Atmel's operations that, when viewed in conjunction with Atmel's GAAP results, provide a more comprehensive understanding of the various factors and trends affecting Atmel's business and operations.

Atmel uses each of these non-GAAP financial measures for internal purposes and believes that these non-GAAP measures provide meaningful supplemental information regarding operational and financial performance. Management uses these non-GAAP measures for strategic and business decision making, internal budgeting, forecasting and resource allocation processes. Atmel may, in the future, determine to present non-GAAP financial measures other than those presented in this release, which it believes may be useful to investors. Any such determinations will be made with the intention of providing the most useful information to investors and will reflect information used by the company's management in assessing its business, which may change from time to time.

Management believes that providing these non-GAAP financial measures, in addition to the GAAP financial results, is useful to investors because the non-GAAP financial measures allow investors to see Atmel's results "through the eyes" of management as these non-GAAP financial measures reflect Atmel's internal measurement processes. Management believes that these non-GAAP financial measures enable investors to better assess changes in each key element of Atmel's operating results across different reporting periods on a consistent basis. Thus, management believes that each of these non-GAAP financial measures provides investors with another method for assessing Atmel's operating results in a manner that is focused on the performance of its ongoing operations. In addition, these non-GAAP financial measures may facilitate comparisons to Atmel's historical operating results and to competitors' operating results.

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. In addition, non-GAAP financial measures may be limited in value because they exclude certain items that may have a material impact upon Atmel's reported financial results.  Management compensates for these limitations by providing investors with reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for or superior to the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided above.

As presented in the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" tables above, each of the non-GAAP financial measures excludes one or more of the following items:

  • Share-based compensation expense.

Share-based compensation expense relates primarily to equity awards such as stock options and restricted stock units.  This includes share-based compensation expense related to performance-based restricted stock units for which Atmel recognizes share-based compensation expense to the extent management believes it is probable that Atmel will achieve the performance criteria which occurs before these awards actually vest. If the performance goals are unlikely to be met, no compensation expense is recognized and any previously recognized compensation expense is reversed.  Share-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Atmel's control. As a result, management excludes this item from Atmel's internal operating forecasts and models. Management believes that non-GAAP measures adjusted for share-based compensation provide investors with a basis to measure Atmel's core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used. 

  • XSense related activities

Operating results of exited XSense business.

Assets related to the XSense business were sold on April 16. 2015.  Operating results of this business, including revenue, gross margin and operating expenses, have been excluded from non-GAAP results beginning in the first quarter of 2015 after management determined to discontinue its investment and exit this business. Management believes that excluding the XSense operating results from non-GAAP measures provides investors a basis to compare operating results from continuing operations. 

  • Gain on sale of assets.

Gain on sale of assets reflects the sale of the XSense assets. Management believes that it is appropriate to exclude these gains as they are not reflective of the ongoing operating performance and should be excluded from period-over-period comparisons.

  • Gain on sale of investments in privately-held companies.

Gain on sale of investments in privately-held companies. Management believes that it is appropriate to exclude these gains as they are not reflective of the ongoing operating performance and should be excluded from period-over-period comparisons.

  • Acquisition-related charges.

Acquisition-related charges include: (1) amortization of purchased intangibles, which include acquired intangibles such as customer relationships, backlog, core developed technology, trade names and non-compete agreements, (2) contingent compensation expense, which includes compensation resulting from the employment retention of certain key employees established in accordance with the terms of the acquisitions, (3) adjustments to previously recognized earn-out liability on contingent compensation expense related to acquisitions, and (4) direct costs related to acquisitions such as banker, legal and accounting fees. In most cases, these acquisition-related charges are not factored into management's evaluation of potential acquisitions or Atmel's performance after completion of acquisitions, because they are not related to Atmel's core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Management believes that excluding acquisition-related charges from non-GAAP measures provides investors with a basis to compare Atmel against the performance of other companies without the variability caused by purchase accounting.

  • Restructuring charges (credits).

Restructuring charges (credits) primarily relate to expenses necessary to make infrastructure-related changes to Atmel's operating costs.  Restructuring charges (credits) are excluded from non-GAAP financial measures because they are not considered core operating activities. Although Atmel has engaged in various restructuring activities in recent years, each has been a discrete event based on a unique set of business objectives. Management believes that it is appropriate to exclude restructuring charges (credits) from Atmel's non-GAAP financial measures as it enhances the ability of investors to compare Atmel's period-over-period operating results from continuing operations.

  • Loss from manufacturing facility damage and shutdown.

Atmel experienced an unplanned shutdown of its semiconductor manufacturing operations in Colorado Springs, Colorado in the fourth quarter of 2013 due to damage to the facility's nitrogen plant.  All repairs were completed in the first quarter of 2014 and the facility has resumed normal operations.  During the third quarter 2014 we received an insurance payment of $3.6 million related to our facility damage claim.  Management believes that the loss from the manufacturing facility damage and shutdown is an individually discrete event that is not generally reflective of ongoing operating performance and should be excluded from period-over-period comparisons.

  • Loss (gain) related to foundry arrangements.

Loss (gain) related to foundry arrangements relates to the reduction of estimated loss (gain)  previously recorded with respect to European foundry "take or pay" arrangements for wafers that were delivered during the term of the arrangement.   Management believes that it is appropriate to exclude loss (gain) related to foundry arrangements from Atmel's non-GAAP financial measures, as it enhances the ability of investors to compare Atmel's period-over-period operating results from continuing operations.

  • French building underutilization and other (credits).

French building underutilization and other (credits) relates to charges incurred as a result of the insolvency of our tenant in France in the first quarter of 2014, and prior year real estate taxes relating to an audit assessment of the same facilities in France.  Management believes that it is appropriate to exclude these charges as they are individually discrete events and generally not reflective of the ongoing operating performance and should be excluded from period-over-period comparisons.

  • Non-GAAP tax adjustments.

In conjunction with the implementation of Atmel's global structure changes which took effect January 1, 2011, the company changed its methodology for reporting non-GAAP taxes. Beginning in the first quarter of 2011, Atmel's non-GAAP tax amounts approximate operating cash tax expense, similar to the liability reported on Atmel's tax returns for the current period/year.  This approach is designed to enhance the ability of investors to understand the company's tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP adjustments which may not reflect actual cash tax expense. 

Atmel forecasts its annual cash tax liability and allocates the tax to each quarter in proportion to earnings for that period.

  • Net (loss) income attributable to noncontrolling interest.

Net (loss) income attributable to noncontrolling interest relates the share of profit and loss allocated to a noncontrolling interest in one of Atmel's subsidiaries.  Atmel excludes these items from its non-GAAP financial measures primarily because these (losses) gains are individually discrete events and generally not reflective of the ongoing operating performance of Atmel's business and can distort period-over-period comparisons.

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SOURCE Atmel Corporation



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