GAAP net income totaled $5.4 million or $0.01 per diluted share for the third quarter of 2013. This compares to $13.0 million or $0.03 per diluted share for the second quarter of 2013, and $21.6 million or $0.05 per diluted share for the third quarter of 2012.

GAAP gross margin was 40.3% in the third quarter of 2013 and included an $8.9 million loss related to a foundry arrangement.  This compares to 42.5% for the second quarter of 2013 and 43.1% for the third quarter of 2012.   

Non-GAAP net income for the third quarter of 2013 totaled $37.7 million or $0.09 per diluted share, compared to $25.3 million or $0.06 per diluted share in the second quarter of 2013, and $43.0 million or $0.10 per diluted share for the year-ago quarter. Refer to the non-GAAP reconciliation table included in this release for more details.

Non-GAAP gross margin was 43.1% in the third quarter of 2013 as compared to 42.6% in the preceding quarter and 43.7% in the third quarter of 2012.  Refer to the non-GAAP reconciliation table included in this release for more details.

"We delivered solid third quarter results highlighted by increased revenue from the industrial, consumer, and automotive end markets," said Steve Laub, Atmel's President and Chief Executive Officer. "We are well positioned in attractive markets with leadership products and despite a challenging industry environment we expect further margin expansion in the fourth quarter."

Cash provided by operations totaled approximately $82.1 million for the third quarter of 2013, compared to $8.6 million for the second quarter of 2013 and $53.6 million for the third quarter of 2012. Combined cash balances (cash and cash equivalents plus short-term investments) totaled $270.9 million at the end of the third quarter of 2013, an increase of $44.3 million from the immediately preceding quarter. This increase resulted principally from improved operating performance, a substantial reduction in inventory and lower receivables. The increase in cash balances is after repurchasing $34.4 million of common stock.

Company Highlights

• Introduced new ultra low-power ARM® Cortex®-M0+ based solution for sensor hub management
• First-to-market with flexible smart energy platform, built around a dual-core ARM® Cortex-M4 architecture, for smart grid communications, electricity, gas and water metering systems and energy measurement applications
• Launched new RF receiver family featuring the industry's lowest power consumption for the automotive and smart RF markets
• Sony selects Atmel's ultra-low power Wi-Fi solution for the BRAVIA Smart Stick next generation Google TV remote control
• Atmel's ultra-low-power AVR- and ARM-based microcontrollers powering TomTom's runner and multi-sport watches
• Expanded maXTouch T Series with next-generation touch controllers offering the most advanced  touch features for smartphones, phablets and tablets
• New Android product introductions featuring maXTouch include Xiaomi's Mi3 and Pantech's VEGA LTE smartphones, Samsung's Galaxy Note 10.1" 2014 Edition and LG Electronics G Pad 8.3 tablets
• Windows 8.1 designs featuring maXTouch include Microsoft's Surface Pro 2 and RT,  ASUS' T100, UX300, X450, X550, and VivoTab TF810, Dell's XPS12 Convertible and Latitude 7240, Lenovo's Miix2, Samsung's ATIV Tab 3
• Sony commenced shipments of new PlayStation Vita featuring maXTouch
• Commenced XSense shipments for revenue from Colorado manufacturing facility  

Stock Repurchase
During the third quarter of 2013, Atmel repurchased 4.6 million shares of its common stock in the open market at an average price of $7.52 per share.

Non-GAAP Metrics
Non-GAAP net income excludes (loss) gain on foundry arrangements, recovery of receivables from foundry suppliers, restructuring charges (credit), settlement charges, acquisition-related charges, gain on sale of assets, credit from reserved grant income, share-based compensation expense, as well as the non-GAAP income tax adjustment and other non-recurring income tax items. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

Conference Call
Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the third quarter 2013 financial results. The conference call will be webcast live and can also be monitored by dialing 1-706-758-4519. The conference ID number is 48007417 and participants are encouraged to initiate their calls 10 minutes prior to the 2:00 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 October 30, 2013 conference call will be available the same day at approximately 5:00 p.m. PT and will be archived for 48 hours. The replay access number is 1-404-537-3406. The access code is 48007417.

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 complete system solutions focused on industrial, consumer, communications, computing and automotive markets.

©2013 Atmel Corporation. Atmel®, Atmel logo and combinations thereof, and others are registered trademarks or trademarks of Atmel Corporation or its subsidiaries. Other terms and product names may be trademarks of others.

Safe Harbor for Forward-Looking Statements
Information in this release regarding Atmel's forecasts, business outlook, expectations, new product launches, and beliefs 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 2013 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, 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 conditions (especially in Europe and Asia) and fiscal budget uncertainties in the United States; 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; the impact of competitive products and pricing; disruption to our business caused by our increased dependence on outside foundries,  and the financial instability or insolvency proceedings 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 (including, for example, our XSense and new maXTouch products) 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; 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, 2012, filed on February 26, 2013. 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.