Micrel Reports First Quarter 2001 Results

Apr 19, 2001, 01:00 ET from Micrel, Incorporated

    SAN JOSE, Calif., April 19 /PRNewswire/ -- Micrel, Incorporated
 (Nasdaq:   MCRL) today reported its financial results for the first quarter
 ended March 31, 2001.
     The widespread inventory correction in the electronics supply chain,
 combined with a slowing global economy, resulted in cancellations of order
 backlog and a slowing of new orders during the first quarter.  The precipitous
 decline in short term demand resulted in total revenue for the first quarter
 of $64.9 million, 4% below first quarter 2000 revenue of $67.3 million and
 30% below the fourth quarter 2000 level of $92.8 million, but in line with
 revised guidance issued on March 12, 2001.
     Net income for the first quarter was $11.0 million, or 17% of revenue.
 First quarter net income per diluted share was $0.12 compared with $0.15 in
 the year ago period and $0.25 in the previous quarter.
     "The first quarter was a difficult period for both the semiconductor
 industry and Micrel," said president and CEO Ray Zinn.  "We are disappointed
 to report our first down quarter after nineteen consecutive quarters of
 revenue and earnings growth, before acquisition charges.  Micrel is
 positioning itself to deal with one of the most challenging market
 environments the industry has faced in over a decade.  We are actively
 reducing expenses, delaying capital purchases and cutting our manufacturing
 output to control inventory while maintaining a focus on new product
 development," continued Zinn.
     Micrel accelerated its new product momentum during the first quarter.
 Included in the nineteen new standard products released in the first quarter
 is a family of seven switching regulators that serve the full range of power
 switching needs in telecommunications power supplies, controlling voltages
 from 48 volts down to 1.5 volts.  The Company also released its first highly
 integrated RF transmitter that works in conjunction with Micrel's existing
 family of RF receivers targeted at the command and control wireless market.
 In addition, the Company introduced three new high performance hot-swap power
 controllers for the data communications and storage markets.
     "The breadth and quality of our new product offerings, combined with the
 record level of design wins reported in the first quarter, confirm our belief
 that Micrel is well positioned to resume its long term growth trend once the
 current industry slowdown runs its course," stated Ray Zinn.  "However, the
 rapid depletion of backlog in the first quarter coupled with the weakening
 global economy have greatly reduced visibility for end customer demand and
 increased the level of uncertainty regarding near term results."
     Given the current volatile market conditions and uncertainties regarding
 customer demand, Micrel's second quarter 2001 revenue could be 15% to
 25% below first quarter revenue.
     Zinn concluded, "Micrel's great growth track record and its longevity
 in the industry, sets Micrel apart as an enduring company.  Over the past
 twenty-three years Micrel has successfully managed itself through five
 industry downturns.  With its seasoned management, Micrel is confident that
 it will again manage itself through the current difficult business
 conditions."
 
     Telephone Conference Call
     The Company will host a conference call related to this announcement
 at 2:00 PM PST (5:00 PM EST) today, April 19, 2001.  Participants will be
 President and CEO, Raymond Zinn and Chief Financial Officer, Richard Crowley.
 The call is available to any interested party on a listen only basis by
 dialing (973) 633-6740 at least 5 minutes before the scheduled start time,
 and by asking to be connected to the Micrel, Incorporated conference call.
 A recorded replay will be available until April 30, 2001 by dialing
 (973) 341-3080 and entering code number 2506074.  The replay will also be
 available on the Company's website ( www.micrel.com ).
 
     SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
 OF 1995
     This release includes statements that qualify as forward-looking
 statements under the Private Securities Reform Act of 1995.  Those statements
 include statements about the following topics:  our expectations regarding
 future financial results, including revenues, factory utilization, gross
 margins, and earnings per share; our business plans, including our plans to
 continue investing in new product development and to provide further guidance
 in the future; and our expectations regarding future customer demand,
 cancellations, and new order rates.  Forward-looking statements are subject
 to certain risks and uncertainties that could cause actual results to differ
 materially.  Those risks and uncertainties include, but are not limited to,
 such factors as:  continued softness in demand for our products; a
 continuation of customer decisions to cancel, reschedule, or delay orders for
 our products; economic or financial difficulties experienced by our customers;
 the effect of business conditions in the computer, telecommunications and
 industrial markets, the impact of any current or future acquisitions, changes
 in demand for high bandwidth communications products, the impact of
 competitive products and pricing and alternative technological advances,
 the worldwide financial situation, and the timely and successful development
 and market acceptance of new products and upgrades to existing products.
 For further discussion of these risks and uncertainties, we refer you to the
 documents the Company files with the SEC from time to time, including the
 Company's Annual Report on Form 10-K for the year ended December 31, 2000.
 All forward-looking statements are made as of today, and the Company disclaims
 any duty to update such statements.
     For further information, contact Richard Crowley at Micrel, Incorporated,
 1849 Fortune Drive, San Jose, California 95131, (408) 944-0800 or visit our
 Website at http://www.micrel.com .
 
 
                              MICREL, INCORPORATED
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                  (Unaudited)
 
                                                    Three Months Ended
                                                         March 31,
                                                  2001              2000
 
     Net revenues                               $64,855           $67,313
 
     Cost of revenues                            28,877            29,145
 
     Gross profit                                35,978            38,168
 
     Operating expenses:
       Research and development                  10,797             8,230
       Selling, general and administrative       10,069             9,306
         Total operating expenses                20,866            17,536
 
     Income from operations                      15,112            20,632
     Other income, net                            1,648               612
 
     Income before income taxes                  16,760            21,244
     Provision for income taxes                   5,782             7,010
 
     Net income                                 $10,978           $14,234
 
     Diluted net income per share                 $0.12             $0.15
 
     Shares used in computing
       diluted net income per share              93,962            94,264
 
 
                              MICREL, INCORPORATED
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                    March 31,    December 31,
                                                      2001          2000 (a)
                                                  (Unaudited)
     ASSETS
     CURRENT ASSETS:
       Cash, cash equivalents and short-term
         investments                                 $130,272       $114,760
       Accounts receivable, net                        48,254         58,751
       Inventories                                     24,930         20,703
       Deferred income taxes                           20,962         20,485
       Other current assets                             2,298          1,494
 
         Total current assets                         226,716        216,193
 
     EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET        116,462        110,576
     INTANGIBLE ASSETS, NET                             5,233          5,775
     OTHER ASSETS                                         391            350
 
     TOTAL                                           $348,802       $332,894
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES                              $58,843        $57,901
     LONG-TERM OBLIGATIONS                              8,170          9,168
     SHAREHOLDERS' EQUITY:
       Common stock                                    95,833         90,854
       Accumulated other comprehensive loss              (25)           (32)
       Retained earnings                              185,981        175,003
 
     TOTAL SHAREHOLDERS' EQUITY                       281,789        265,825
 
     TOTAL                                           $348,802       $332,894
 
     (a) Derived from the December 31, 2000 audited balance sheet included in
         the 2000 Annual Report on Form 10-K of Micrel, Incorporated.
 
 

SOURCE Micrel, Incorporated
    SAN JOSE, Calif., April 19 /PRNewswire/ -- Micrel, Incorporated
 (Nasdaq:   MCRL) today reported its financial results for the first quarter
 ended March 31, 2001.
     The widespread inventory correction in the electronics supply chain,
 combined with a slowing global economy, resulted in cancellations of order
 backlog and a slowing of new orders during the first quarter.  The precipitous
 decline in short term demand resulted in total revenue for the first quarter
 of $64.9 million, 4% below first quarter 2000 revenue of $67.3 million and
 30% below the fourth quarter 2000 level of $92.8 million, but in line with
 revised guidance issued on March 12, 2001.
     Net income for the first quarter was $11.0 million, or 17% of revenue.
 First quarter net income per diluted share was $0.12 compared with $0.15 in
 the year ago period and $0.25 in the previous quarter.
     "The first quarter was a difficult period for both the semiconductor
 industry and Micrel," said president and CEO Ray Zinn.  "We are disappointed
 to report our first down quarter after nineteen consecutive quarters of
 revenue and earnings growth, before acquisition charges.  Micrel is
 positioning itself to deal with one of the most challenging market
 environments the industry has faced in over a decade.  We are actively
 reducing expenses, delaying capital purchases and cutting our manufacturing
 output to control inventory while maintaining a focus on new product
 development," continued Zinn.
     Micrel accelerated its new product momentum during the first quarter.
 Included in the nineteen new standard products released in the first quarter
 is a family of seven switching regulators that serve the full range of power
 switching needs in telecommunications power supplies, controlling voltages
 from 48 volts down to 1.5 volts.  The Company also released its first highly
 integrated RF transmitter that works in conjunction with Micrel's existing
 family of RF receivers targeted at the command and control wireless market.
 In addition, the Company introduced three new high performance hot-swap power
 controllers for the data communications and storage markets.
     "The breadth and quality of our new product offerings, combined with the
 record level of design wins reported in the first quarter, confirm our belief
 that Micrel is well positioned to resume its long term growth trend once the
 current industry slowdown runs its course," stated Ray Zinn.  "However, the
 rapid depletion of backlog in the first quarter coupled with the weakening
 global economy have greatly reduced visibility for end customer demand and
 increased the level of uncertainty regarding near term results."
     Given the current volatile market conditions and uncertainties regarding
 customer demand, Micrel's second quarter 2001 revenue could be 15% to
 25% below first quarter revenue.
     Zinn concluded, "Micrel's great growth track record and its longevity
 in the industry, sets Micrel apart as an enduring company.  Over the past
 twenty-three years Micrel has successfully managed itself through five
 industry downturns.  With its seasoned management, Micrel is confident that
 it will again manage itself through the current difficult business
 conditions."
 
     Telephone Conference Call
     The Company will host a conference call related to this announcement
 at 2:00 PM PST (5:00 PM EST) today, April 19, 2001.  Participants will be
 President and CEO, Raymond Zinn and Chief Financial Officer, Richard Crowley.
 The call is available to any interested party on a listen only basis by
 dialing (973) 633-6740 at least 5 minutes before the scheduled start time,
 and by asking to be connected to the Micrel, Incorporated conference call.
 A recorded replay will be available until April 30, 2001 by dialing
 (973) 341-3080 and entering code number 2506074.  The replay will also be
 available on the Company's website ( www.micrel.com ).
 
     SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
 OF 1995
     This release includes statements that qualify as forward-looking
 statements under the Private Securities Reform Act of 1995.  Those statements
 include statements about the following topics:  our expectations regarding
 future financial results, including revenues, factory utilization, gross
 margins, and earnings per share; our business plans, including our plans to
 continue investing in new product development and to provide further guidance
 in the future; and our expectations regarding future customer demand,
 cancellations, and new order rates.  Forward-looking statements are subject
 to certain risks and uncertainties that could cause actual results to differ
 materially.  Those risks and uncertainties include, but are not limited to,
 such factors as:  continued softness in demand for our products; a
 continuation of customer decisions to cancel, reschedule, or delay orders for
 our products; economic or financial difficulties experienced by our customers;
 the effect of business conditions in the computer, telecommunications and
 industrial markets, the impact of any current or future acquisitions, changes
 in demand for high bandwidth communications products, the impact of
 competitive products and pricing and alternative technological advances,
 the worldwide financial situation, and the timely and successful development
 and market acceptance of new products and upgrades to existing products.
 For further discussion of these risks and uncertainties, we refer you to the
 documents the Company files with the SEC from time to time, including the
 Company's Annual Report on Form 10-K for the year ended December 31, 2000.
 All forward-looking statements are made as of today, and the Company disclaims
 any duty to update such statements.
     For further information, contact Richard Crowley at Micrel, Incorporated,
 1849 Fortune Drive, San Jose, California 95131, (408) 944-0800 or visit our
 Website at http://www.micrel.com .
 
 
                              MICREL, INCORPORATED
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                  (Unaudited)
 
                                                    Three Months Ended
                                                         March 31,
                                                  2001              2000
 
     Net revenues                               $64,855           $67,313
 
     Cost of revenues                            28,877            29,145
 
     Gross profit                                35,978            38,168
 
     Operating expenses:
       Research and development                  10,797             8,230
       Selling, general and administrative       10,069             9,306
         Total operating expenses                20,866            17,536
 
     Income from operations                      15,112            20,632
     Other income, net                            1,648               612
 
     Income before income taxes                  16,760            21,244
     Provision for income taxes                   5,782             7,010
 
     Net income                                 $10,978           $14,234
 
     Diluted net income per share                 $0.12             $0.15
 
     Shares used in computing
       diluted net income per share              93,962            94,264
 
 
                              MICREL, INCORPORATED
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                    March 31,    December 31,
                                                      2001          2000 (a)
                                                  (Unaudited)
     ASSETS
     CURRENT ASSETS:
       Cash, cash equivalents and short-term
         investments                                 $130,272       $114,760
       Accounts receivable, net                        48,254         58,751
       Inventories                                     24,930         20,703
       Deferred income taxes                           20,962         20,485
       Other current assets                             2,298          1,494
 
         Total current assets                         226,716        216,193
 
     EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET        116,462        110,576
     INTANGIBLE ASSETS, NET                             5,233          5,775
     OTHER ASSETS                                         391            350
 
     TOTAL                                           $348,802       $332,894
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES                              $58,843        $57,901
     LONG-TERM OBLIGATIONS                              8,170          9,168
     SHAREHOLDERS' EQUITY:
       Common stock                                    95,833         90,854
       Accumulated other comprehensive loss              (25)           (32)
       Retained earnings                              185,981        175,003
 
     TOTAL SHAREHOLDERS' EQUITY                       281,789        265,825
 
     TOTAL                                           $348,802       $332,894
 
     (a) Derived from the December 31, 2000 audited balance sheet included in
         the 2000 Annual Report on Form 10-K of Micrel, Incorporated.
 
 SOURCE  Micrel, Incorporated