COMPANY PRESS RELEASE: Microchip Technology Incorporated has reported net sales for its third fiscal quarter ended December 31, 2001 of $141.9 million, essentially flat with sales of $141.7 million in the immediately preceding quarter.
Diluted earnings per share for the third fiscal quarter were 17 cents on 139.9 million average shares outstanding, flat with diluted earnings per share of 17 cents in the immediately preceding quarter. Net sales for the quarter ended December 31, 2001 were down 25.4% from sales of $190.1 million in the prior year’s December quarter.
Diluted earnings per share for the December quarter of fiscal 2002 decreased approximately 45% from diluted earnings per share of 31 cents in the prior year’s December quarter. Our December quarter performance was strong and consistent with our expectations. Microchip’s gross margins and operating profits remained solid at 50% and 21%, respectively. We remain debt-free, and have added $74 million in cash this quarter.
We also reduced inventories by approximately $2 million in the quarter. These financial indicators continue to demonstrate the strength of our business model, said Steve Sanghi, Microchip’s President and CEO. We saw stable inventory in all channels worldwide, confirming our belief that the inventory correction is complete. Design-in momentum for our proprietary products remains robust, and we are experiencing unit volume growth in our memory products, with a return to a normal pricing environment, Mr. Sanghi continued. Mr. Sanghi concluded, Based on our assessment of the principal factors of our business, we believe that Microchip is poised to return to a pattern of growth.
We believe that revenues will grow between 1 and 2% in the March 2002 quarter from the December 2001 quarter, which is our most seasonally challenged period, and will grow approximately 4 to 5% sequentially in the June 2002 quarter.
Microchip’s Third Quarter Highlights:
In December, Microchip introduced a low-cost Chinese language PICC ME16 C Compiler, a development tool that specifically supports designers in the Asian market who use Microchip’s mid-range family of PICmicro microcontrollers. The tool allows users to write code for the embedded controller in a familiar C language, rather than having to write it in an unfamiliar and unfriendly assembly language. The instructions and local technical support is provided in Chinese, eliminating any language, time or long-distance barrier issues that often occur with other products.
In October, Microchip announced its expansion into the low-end or thin client Controller Area Network (CAN) applications market with its family of Input/Output Expanders supporting the CAN protocol. Designed to enable system designers to implement simpler CAN nodes without microcontrollers, the MCP25050 and MCP25055 Mixed-Signal I/O Expanders and the MCP25020 and MCP25025 Digital CAN I/O Expanders are an alternative to microcontroller-based thin client solutions that help save overall system costs and board space. Microchip is currently the only semiconductor manufacturer to offer a small-packaged, full-featured, cost-effective alternative to microcontroller-based solutions with its family of MCP250XX I/O Expanders.
In October, Microchip launched Here to H.E.L.P. (Helping Engineers Launch Products), a program that offers free engineering resources and support for any embedded control designer and application. Here to H.E.L.P. gives customers direct access to Microchip’s internal product engineering experts so that design issues can be resolved quicker.
Microchip continued to extend its reach in the analog arena, by announcing the MCP602X family of op amps for low current, high-performance applications in November. The MCP602X rail-to-rail input and output op amps offer designers a cost-effective way to improve performance and increase the operational life of battery-powered systems for audio processing, communications, test and medical equipment applications. The devices offer rail-to-rail input and output that allows the full voltage supply range to be useful from 5.5-volt down to 2.5-volt voltage supply operation.
In November, Microchip announced the release of its new 80mA low dropout regulator (LDO) in a space-saving SC-70 package. Microchip’s latest LDO offers the highest performance-to-package ratio in the industry. Customers can now replace SOT-23 LDOs with a 50% smaller solution without compromising performance. Referred to as the TC1016, the device offers extremely low dropout voltage (150mV at 80mA) and low-supply current (50uA), therefore significantly extending battery life and improving system efficiency. The features of this new device improve system performance, reduce board space and minimize system cost, making the TC1016 the best SC-70 LDO in the industry for any battery-operated application.
Microchip was named one of the Top 20 Electronics Companies for 2001 by Electronic Buyers’ News in December. This achievement, according to the magazine, recognizes companies who have distinguished themselves in 2001 and who are expected to flourish as the economy improves.
In December, Microchip expanded its thermal management family by announcing an industry first with its TC670 predictive fan failure integrated circuit. The device is able to predict fan failure by sensing fan revolutions and asserting a logic-low alert signal whenever the fan speed falls below a user programmable trip point. The TC670 has a pin for clearing the alert signal, making it ideal for interfacing with microcontrollers. Excellent thermal protection is assured by giving users the opportunity to replace the fan before any electro-mechanical problem compromises the system’s performance and reliability.
Microchip announced the TCM809/810 and TCM811/812 cost-effective system supervisors in December. The TCM809/810 devices, housed in the tiny SC-70 package, occupy only two-thirds the space required by a standard SOT-23 package, an ideal solution for applications where space is limited, such as laptops, PDAs, cellular phones and pagers. While the TCM811/812 devices are housed in small, 4-pin SOT-143 packages, utilizing a low supply current of 6uA makes them ideal for battery-powered applications.