Revenues for the first quarter of 2009 were $271.5 million, an 18.9% decrease compared to $334.6 million for the fourth quarter of 2008 and a 34.0% decrease compared to $411.2 million for the first quarter ended March 31, 2008.
Net income, on a GAAP basis, for the first quarter of 2009 totaled $3.6 million or $0.01 per diluted share. This compares to a net loss of $(24.4) million or $(0.05) per diluted share for the fourth quarter of 2008 and net income of $6.8 million or $0.02 per diluted share for the year-ago quarter.
Non-GAAP net income for the first quarter of 2009 totaled $20.1 million or $0.04 per diluted share compared to net income of $4.8 million or $0.01 per diluted share for the fourth quarter of 2008 and $13.3 million or $0.03 per diluted share for the year-ago quarter.
Gross profit, as a percent of revenue, was 35.1% for the first quarter of 2009 and within the internal expectations announced by the Company in February 2009. This compares to gross profit of 39.7% for the fourth quarter of 2008 and 35.5% for the year-ago quarter.
"We are pleased with the substantial progress we achieved in reducing operating costs this quarter, especially in light of the revenue softness," said Steve Laub, Atmel's President and Chief Executive Officer. "Although visibility remains limited, we are seeing signs that order patterns have stabilized as bookings in March showed signs of improvement."
Operating loss was $(20.5) million for the first quarter of 2009, or (7.6)% of revenue. This compares to an operating loss of $(18.2) million for the fourth quarter of 2008 and an operating profit of $15.4 million for the first quarter of 2008. Included in the first quarter 2009 operating loss was $8.5 million of net charges related to acquisition, restructuring, grant repayments and gain on sale of assets.
Stock-based compensation expense was $5.4 million for the first quarter of 2009, compared to $9.1 million for the fourth quarter of 2008 and $6.3 million for the year-ago quarter.
Income tax benefit totaled $27.7 million for the first quarter of 2009. This compares to an income tax provision of $3.5 million for the fourth quarter of 2008 and $3.2 million for the first quarter of 2008. The income tax benefit for the first quarter of 2009 was the result of the release of reserves related to certain foreign R&D tax credits that the Company realized in the quarter.
Combined cash balances (cash and cash equivalents plus short-term investments) totaled $416.9 million at the end of the first quarter of 2009, a decrease of $23.7 million from the end of the prior quarter. Not included in this balance is $17.2M of restricted cash required as a result of the lower borrowing base from our revolving line of credit. Cash provided from operations totaled approximately $5.6 million for the first quarter of 2009. This compares to $33.7 million for the fourth quarter of 2008 and cash used in operations of $40.2 million for the first quarter of 2008.
The Company's effective average exchange rate in the first quarter of 2009 was approximately $1.32 to the euro, compared to $1.35 to the euro in the fourth quarter of 2008 and $1.47 to the euro in the year-ago period. A $0.01 decrease in the dollar/euro exchange rate increases operating income by approximately $0.3 million each quarter.
First Quarter 2009 and Recent Operational Highlights
-- Gartner Confirms Atmel as Fastest Growing Top Ten 8-bit Microcontroller Supplier for 2008 -- Announced the pursuit of strategic alternatives for the ASIC business and related manufacturing assets -- Completed the previously announced cost reduction actions in North America and Europe with an expected annual savings of $32 million -- Implemented additional cost and headcount reductions in North America with an expected annual savings of $13 million beginning in the second quarter of 2009
Recent Product Highlights
-- Awarded Product of the Year by Electronic Products China for Touchscreen Devices -- Low Cost 4-Channel QTouch Capacitive Touch Button Controller Targets Mobile Devices -- New picoPower(TM) AVR(R) ATtiny10 Takes Industry's Leading Position in 6-pin Microcontrollers -- Launched New AVR32 Microcontroller with High Speed Communication for Digital Audio Solutions -- Introduced New Family of 0.7V tinyAVR Microcontrollers -- Secure Microcontroller with SERMEPA's Advantis Crypto Smart Card Receives VISA Approval -- Introduced Highly Integrated System-in-Package Solution for Automotive LIN Networking Applications
Due to the current macroeconomic environment and limited visibility, the Company expects second quarter 2009 revenues will be up in the range of 1% to 4% on a sequential basis.
Non-GAAP net income excludes charges related to restructuring activities, acquisitions, grant repayments, gain on sale of assets, and stock-based compensation, as well as pension benefit related to fab sale, distributor bad debt expense (recovery), unsolicited M&A expense and the income tax effect of these excluded items. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.
Atmel will hold a teleconference at 2:00 p.m. PT today to discuss the first quarter 2009 financial results. The conference call will be webcast live and can also be monitored by dialing 1-800-374-0405 or 1-706-634-5185. The conference ID number is 97406411 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2:00 p.m. PT start time to ensure a timely connection. The webcast can be accessed at http://www.atmel.com/ir/ and will be archived for 12 months.
A replay of the May 5, 2009 conference call will be available today at approximately 5:00 p.m. PT and will run for 48 hours. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations. The access code is 97406411.
Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel provides the electronics industry with complete system solutions focused on consumer, industrial, security, communications, computing and automotive markets.
Safe Harbor for Forward-Looking Statements
Information in this release regarding Atmel's forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about order patterns for our products and future operating and financial performance including second quarter 2009 revenues. 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, and we assume no obligation to update any such forward-looking statements. 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 general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or Company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, the ability to realize the anticipated benefits of our recent strategic transactions, restructuring plans and other initiatives in a timely manner or at all, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, the market price of our common stock, compliance with U.S. and international trade and export laws and regulations by us and our distributors, 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, 2008, filed on March 2, 2009, and our subsequent Form 10-Q reports. Atmel assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.