- Full year revenues of $247.6 million, compared to $237.1 million in 2013
- Full year revenues of $242.5 million without a one-time conversion of $5.1 million
- Revenues of $57.9 million, compared to $67.5 million for the third quarter of 2014
- Revenues of $62.4 million for the third quarter of 2014 without a one-time conversion of $5.1 million
- GAAP net income of $3.1 million, or $0.05 per diluted share for the fourth quarter of 2014
- Non-GAAP net income of $4.8 million, or $0.08 per diluted share for the fourth quarter of 2014
- GAAP net income of $13.5 million, or $0.24 per diluted share for 2014
- Net income of $0.19 per diluted share without the one-time revenue conversion
- Non-GAAP net income of $17.8 million, or $0.31 per diluted share for 2014
- Gross margin of 51.1% and 51.7% for the fourth quarter and full year 2014, respectively
- Repurchased 0.5 million shares of Micrel common stock for a total of $6.7 million for the fourth quarter of 2014
- Repurchased 1.7 million shares of Micrel common stock for a total of $20.2 million for 2014
- Declared quarterly dividend of $0.05 per share
Micrel, Incorporated (
Revenues for 2014 for the total year were $247.6 million, compared to $237.1 million in 2013. Revenues for the fourth quarter of 2014 were $57.9 million, a $9.6 million or 14.2% decrease, compared to $67.5 million for the third quarter of 2014. Compared to the fourth quarter of 2013, revenues were $2.1 million, or 3.5% lower. During the third quarter of 2014, the Company converted certain distributors to a sell-in revenue recognition model following changes to the terms of Micrel distribution agreements. Revenues for the third quarter of 2014 included a one-time increase of $5.1 million, which represented the amount of inventory at these distributors on June 30, 2014. This one-time increase in revenues and related income is excluded from non-GAAP results, as explained below, under "Non-GAAP Reporting."
GAAP net income was $3.1 million, or $0.05 per diluted share, for the fourth quarter of 2014, compared to net income of $4.7 million, or $0.08 per diluted share, for the third quarter of 2014, and net income of $3.4 million, or $0.06 per diluted share, for the fourth quarter of 2013. Net income was $0.04 per diluted share without the one-time revenue conversion for the third quarter of 2014. During the fourth quarter of 2014, the Company recorded restructuring charges of $0.5 million related to employee severances.
Non-GAAP net income was $4.8 million, or $0.08 per diluted share, for the fourth quarter of 2014, compared to non-GAAP net income of $4.2 million, or $0.07 per diluted share, for the third quarter of 2014, and non-GAAP net income of $4.8 million, or $0.08 per diluted share, for the fourth quarter of 2013.
GAAP net income was $13.5 million, or $0.24 per diluted share, for 2014, compared to net income of $17.6 million, or $0.30 per diluted share, for 2013. Non-GAAP net income was $17.8 million, or $0.31 per diluted share, for 2014, compared to $23.0 million, or $0.39 per diluted share, for 2013. GAAP gross margin was 51.7% for 2014, compared to 51.5% for 2013.
A reconciliation of the GAAP net income to non-GAAP net income is provided in the financial tables at the end of this press release. Non-GAAP net income and non-GAAP earnings per diluted share exclude the impact of revenues and the related cost of revenues from the conversion of distributors to a sell-in revenue recognition model as well as share-based compensation, restructuring charges, and amortization of acquisition-related intangible assets with the related income tax effects and R&D tax credit. Beginning in the first quarter of 2014, the Company changed the presentation of non-GAAP net income from that previously reported to exclude the impact of the amortization of acquisition-related intangible assets and the related tax effect. The non-GAAP net income for the fourth quarter of 2013 and for the twelve months of 2013 have been revised from previously reported amounts to exclude the impact of the amortization of acquisition-related intangible assets and the related tax effect to conform with the current period presentation.
Commenting on the fourth quarter and full-year 2014 results, Micrel's President and CEO Ray Zinn said, "Fourth quarter revenues of $57.9 million declined on a sequential quarter basis, primarily due to a slowdown in LTE build-out and the seasonal weakness from the wireline communications end market in Asia. This was partially offset by improving revenues from our timing and communications products where we saw particularly strong demand for our products in the fiber optic market. Operationally, fourth quarter gross margin was 51.1%, and efforts to improve efficiencies and reduce costs resulted in a $1.4 million per quarter reduction in total operating expenses. Although the semiconductor industry faced a difficult global macroeconomic environment throughout 2014, Micrel generated solid full-year financial and operational results with year-over-year growth in revenues, improving gross margins and strong cash flow from operations. In addition, I am very happy with the record design win momentum and we are quite pleased with the traction that our new products continue to receive in the marketplace."
Outlook
Mr. Zinn continued, "Quarter one is typically a flat to down quarter for Micrel and the industry overall. With that in mind, we believe Micrel's revenue for the quarter will be in the range of down 2% to up 4% from the fourth quarter of 2014. First quarter gross margin is expected to be in the range of 50% to 51% and GAAP net income is projected to be in the range of $0.02 to $0.04 per share, with non-GAAP income projected to be in the range of $0.04 to $0.07."
Dividend
The Company announced today that Micrel's Board of Directors has authorized a quarterly cash dividend of $0.05 per share of common stock. The payment of this dividend will be made on February 25, 2015 to shareholders of record as of February 11, 2015.
Share Repurchase Plan
In the fourth quarter of 2014, the Company repurchased 0.5 million shares for a total of $6.7 million at an average price of $12.33 per share. For the full year, the Company repurchased 1.7 million shares for a total of $20.2 million at an average price of $11.55 per share. On August 20, 2014, the Company announced that its Board of Directors had authorized the repurchase of an additional $25.0 million of the Company's common stock. This most recent authorization is in addition to the approximately $17.7 million of the Board of Directors' previous authorization remaining as of August 19, 2014. On December 31, 2014, Micrel had approximately $30.7 million remaining under its repurchase authorization. Stock repurchases may occur from time to time in the open market or in privately negotiated transactions; provided that the repurchases are made in accordance with the terms of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and amount of any repurchase of shares will be determined by the Company's management, based on its evaluation of market conditions, cash on hand and other factors. The authorization will stay in effect until the aggregate authorized amount is expended or the authorization is modified by the Board of Directors.
Conference Call
The Company will host a conference call today, January 29, 2015, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). President and Chief Executive Officer, Raymond Zinn, and Chief Financial Officer, Bob DeBarr, will present an overview of the 2014 fourth quarter and full-year financial results; discuss current business conditions and then respond to questions.
The call is available, live, to any interested party, on a listen-only basis, by dialing (877) 407-0789. For international callers, please dial (201) 689-8562. A live webcast will also be available on the 'Investors' section of Micrel's website at:
www.micrel.com . An audio replay of the conference call will be available for all interested parties through February 5, 2015, by dialing (877) 870-5176 and entering the participant code 13597696. For international callers, please dial (858) 384-5517 and enter participant code 13597696. The webcast replay will also be available on the Company's website.
