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Microchip Technology Announces Record Net Sales

Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, today reported results for the three months ended December 31, 2012 as summarized in the following table:

(in millions, except earnings per diluted share and percentages)       Three Months Ended December 31, 2012
       

GAAP1

   

% of Net
Sales

   

Non-
GAAP

   

% of Net
Sales

Net Sales       $ 416.0             $ 416.0      
Gross Margin       $ 200.4       48.2 %     $ 233.1     56.0 %
Operating Income       $ 17.4       4.2 %     $ 105.6     25.4 %
Other Expense       $ 7.7             $ 5.6      
Income Tax Provision (Benefit)         ($0.5 )           $ 15.5      
Net Income       $ 10.2       2.4 %     $ 84.5     20.3 %
Earnings per Diluted Share         5 cents               41 cents      

1 See the “Use of Non-GAAP Financial Measures” section of this release.

Consolidated GAAP net sales for the third quarter of fiscal 2013 were a record $416 million, up 8.5% sequentially from net sales of $383.3 million in the immediately preceding quarter, and up 26.4% from net sales of $329.2 million in the prior year’s third fiscal quarter. Consolidated GAAP net income for the third quarter of fiscal 2013 was $10.2 million, or five cents per diluted share, up from a GAAP net loss of $21.2 million, or 11 cents per diluted share, in the immediately preceding quarter, and down from GAAP net income of $77.5 million, or 38 cents per diluted share, in the prior year’s third fiscal quarter. The GAAP results were negatively impacted by the expenses associated with our acquisition activities as more fully described later in this release.

Consolidated non-GAAP net sales for the third quarter of fiscal 2013 were a record $416 million, up 2.0% sequentially from non-GAAP net sales of $407.8 million in the immediately preceding quarter, and up 26.4% from non-GAAP net sales of $329.2 million in the prior year’s third fiscal quarter. Consolidated non-GAAP net income for the third quarter of fiscal 2013 was $84.5 million, or 41 cents per diluted share, down 13.5% from non-GAAP net income of $97.7 million, or 48 cents per diluted share, in the immediately preceding quarter, and down 1.1% from non-GAAP net income of $85.4 million, or 42 cents per diluted share, in the prior year’s third fiscal quarter. For the third quarters of fiscal 2013 and fiscal 2012, our non-GAAP results exclude the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, inventory valuation costs, restructuring costs, earn out adjustments and legal and other general and administrative expenses associated with acquisitions), and non-cash interest expense on our convertible debentures. A reconciliation of our non-GAAP and GAAP results is included in this press release.

Microchip also announced today that its Board of Directors declared a quarterly cash dividend on its common stock of 35.3 cents per share. The quarterly dividend is payable on March 7, 2013 to stockholders of record on February 21, 2013.

“We were pleased with our execution in the December quarter despite a very challenging macroeconomic environment,” said Steve Sanghi, President and CEO. “Our net sales, gross margin, operating expenses and earnings per share were all better than the mid-point of our guidance given on November 8, 2012.”

Mr. Sanghi added, “We achieved an all-time record in net sales of $416 million in the December quarter. Net sales of microcontroller products were up 1.8% sequentially at $266 million, while achieving record sales for 16-bit as well as 32-bit microcontrollers, thus exemplifying our continued strength in this market.”

“Our 16-bit microcontroller business was up 12.6% sequentially in the December quarter, achieving a new record for revenue,” said Ganesh Moorthy, Chief Operating Officer. “We continue to expand the breadth of the 16-bit solutions we are offering, and customers we are serving, as we continue to gain share in this market.”

Mr. Moorthy continued, “Our 32-bit microcontroller revenue was up 17.4% sequentially in the December quarter, also achieving a new record. We are continuing to win new designs and expanding into new applications to enable further growth in revenue and market share.”

Mr. Moorthy concluded, “Our analog revenue grew 7.7% sequentially in the December quarter to achieve a new record, and our analog business continues to perform exceptionally well. Analog revenue represented 22.4% of Microchip’s overall revenue in the December quarter, the highest proportion of our revenue ever.”

Eric Bjornholt, Microchip’s Chief Financial Officer, said, “We made good progress in reducing our inventory position in the December quarter. The actions that we implemented to reduce factory output in the December quarter are bringing inventory levels down and we expect to make further progress in the March quarter.”

Mr. Bjornholt added, “We had strong free cash flow generation in the December quarter at $123.2 million prior to our dividend payment of $68.7 million. We ended the quarter with $1.77 billion in cash and investments on the balance sheet.”

Mr. Sanghi concluded, “The March quarter has the seasonal effect of the Chinese New Year. However, we are starting to see exceptionally strong bookings and expedite activity in our business driven by solid demand and a robust design win pipeline. We believe the December quarter was the bottom of this cycle for Microchip, and we expect our total net sales in the March quarter to be up between one and four percent sequentially.”

Microchip’s Recent Highlights:

  • Microchip introduced the world’s first electrical-field-based 3D gesture controller, featuring its patented GestIC® technology, which enables the next dimension in intuitive, gesture-based, non-contact and mobile-friendly 3D user interfaces for a broad range of end products. The configurable MGC3130 3D gesture controller provides low-power, precise, fast and robust hand position tracking, along with free-space gesture recognition.
  • Continuing its string of recent innovations, Microchip launched the world’s first analog-based power management controller with an integrated MCU, for flexible, efficient power conversion. This followed announcements of a high-voltage analog buck PWM controller with integrated MOSFET drivers, and Microchip’s first family of high-speed, low figure-of-merit MOSFETs. Together, these new offerings represent a major expansion of Microchip’s mid-voltage controller and MOSFET portfolio, providing a host of industry-leading options to the designers of DC/DC power-conversion applications.
  • In the 32-bit microcontroller arena, Microchip boosted performance by 25%, on its low-cost, small-package PIC32 MX1/MX2 series. These feature-packed MCUs include I2S for audio applications, along with capacitive touch and USB OTG. To enable cost-effective multitouch displays, Microchip also introduced the PIC32 GUI Development Board with Projected-Capacitive Touch. This board demonstrates how the high-performance PIC32 eliminates the cost and complexity of an external graphics controller.
  • The Company also announced the expansion of its mTouch™ Sensing Solutions portfolio, with four turnkey controllers for multitouch projected-capacitive touchscreens and touchpads, proximity detection, and haptic touch feedback.
  • On the wireless front, Microchip launched the world’s first wireless-audio solution for iOS, Android™, Windows® 8 and Mac®—the new JukeBlox® 3.2 platform and software development kit. This platform expansion added seamless integration of cloud-based music services and simultaneous Wi-Fi® audio streaming to multiple home-audio products.
  • Microchip also introduced a Bluetooth® module for streaming audio. This pre-certified module builds on the portfolio’s data capabilities with added support for streaming music and voice, while maintaining low power consumption and a small form factor.
  • The Company’s industry-leading memory catalog continued its steady expansion, with three new SPI SuperFlash® memory devices that feature low power consumption and an extended operating-voltage range.
  • The industry continued to recognize Microchip’s technology leadership and innovation, in the form of prestigious annual awards from top publications. EDN Magazine named six of Microchip’s products to its 2012 Hot 100 list, across five categories. Included in that list was the brand-new GestIC® Technology, which was also selected by Electronic Design Magazine for their 2012 “Best of” awards, in the Digital category. The readers of ECN Magazine chose Microchip’s JukeBlox Wireless Audio Platform for a Readers Choice Tech Award, in the “Boards & Modules” category. Finally, Microchip’s 8-bit PIC® MCUs with Configurable Logic were named finalists by the editors of Design News Magazine, in their Golden Mousetrap Awards.

Fourth Quarter Fiscal Year 2013 Outlook:

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

      Microchip Consolidated Guidance
       
GAAP
   

Non-GAAP
Adjustments

   
Non-GAAP1
                     
Net Sales       $420.2 to $432.7 million           $420.2 to $432.7 million
Gross Margin2       55.0% to 55.5%     $3.1 to $3.3 million     55.75% to 56.25%
Operating Expenses2       42.25% to 43.25%     $54.6 to $56.3 million     29.25% to 30.25%
Other Expense       $6.7 million     $2.1 million     $4.6 million
Income Tax Expense       $4.9 to $6.1 million     $3.8 to $3.9 million     $8.7 to $10.0 million
Net Income       $37.7 to $44.5 million     $56.1 to $57.7 million     $93.8 to $102.2 million

Diluted Common Shares Outstanding3

     

Approximately 209
million shares

   

Approximately 0.3
million shares

   

Approximately 208.7
million shares

Earnings per Diluted Share       18 to 21 cents     27 to 28 cents     45 to 49 cents

1

  See the “Use of Non-GAAP Financial Measures” section of this release.

2

Earnings per share have been calculated based on the diluted shares outstanding of Microchip on a consolidated basis.

3

See Footnote 2 under the “Use of Non-GAAP Financial Measures” section of this release.
  • Microchip’s inventory days at March 31, 2013 are expected to be about 123 to 129 days. Our inventory position enables us to continue to service our customers with very short lead times while allowing us to control future capital expenditures. Our actual inventory level will depend on the inventory that our distributors decide to hold to support their customers, overall demand for our products and our production levels.
  • Capital expenditures for the quarter ending March 31, 2013 are expected to be approximately $24 million. Capital expenditures for all of fiscal year 2013 are anticipated to be approximately $60 million. We are continuing to take actions to selectively invest in the equipment needed to support the expected growth of our new products and technologies.
  • We expect net cash generation during the March quarter of approximately $110 million to $130 million prior to the dividend payment and our acquisition-related activities.
  • Included in the GAAP and non-GAAP income tax expense guidance for the quarter ended March 31, 2013 is a $5.6 million favorable impact from the retroactive reinstatement of the Research and Experimentation Tax Credit.

1

 

Use of Non-GAAP Financial Measures: Our Non-GAAP adjustments, where applicable, include the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, inventory valuation costs, restructuring costs, severance costs, earn-out adjustments and legal and other general and administrative expenses associated with acquisitions), losses on equity securities, legal settlements, and non-cash interest expense on our convertible debentures, the related income tax implications of these items and nonrecurring tax events.

 
We are required to estimate the cost of certain forms of share-based compensation, including employee stock options, restricted stock units and our employee stock purchase plan, and to record a commensurate expense in our income statement. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by the price of our stock at the date of grant. The price of our stock is affected by market forces that are difficult to predict and are not within the control of management. The value of our equity securities varies in amount from period to period and is affected by fluctuations in the market prices of such securities that we cannot predict and are not within the control of management. The non-GAAP adjustments related to the impact of our acquisitions, legal settlements, nonrecurring tax events and a portion of our interest expense related to our convertible debentures are either non-cash expenses or non-recurring expenses related to such transactions. Accordingly, management excludes all of these items from its internal operating forecasts and models.
 
We are using non-GAAP net sales, non-GAAP gross profit, non-GAAP gross profit percentage, non-GAAP operating expenses in dollars and as a percentage of sales including non-GAAP research and development expenses and non-GAAP selling, general and administrative expenses, non-GAAP operating income, non-GAAP other expense, net, non-GAAP income tax/tax rate, non-GAAP net income, and non-GAAP diluted earnings per share which exclude the items noted in the immediately preceding paragraph, as applicable, to permit additional analysis of our performance.
 
Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods. Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other charges that many investors feel may obscure our underlying operating results. Management uses these non-GAAP measures to manage and assess the profitability of its business. Specifically, we do not consider such items when developing and monitoring our budgets and spending. As described above, the economic substance behind our decision to exclude such items relates either to these charges being non-cash in nature, or to the one-time nature of the events, or in the case of distributor inventory acquired in an acquisition being recognized as net sales for non-GAAP purposes on sell-through to provide comparability between periods for the results of the acquired company, or in the case of our equity securities, because such item is difficult to predict and not within the control of management. Our determination of the above non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP. There are limitations associated with using non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results.
 

2

Diluted Common Shares Outstanding can vary for, among other things, the trading price of our common stock, the actual exercise of options or vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures (additional information regarding our share count is available in the investor relations section of our website under the heading “Supplemental Financial Information”), and the repurchase or the issuance of stock. The diluted common shares outstanding presented in the guidance table above assumes an average Microchip stock price in the March 2013 quarter of $35 per share (however, we make no prediction as to what our actual share price will be for such period or any other period and we cannot estimate what our stock option exercise activity will be during the quarter).

 

3

Generally, gross margin fluctuates over time, driven primarily by the mix of microcontrollers, analog products and memory products sold and licensing revenue; variances in manufacturing yields; fixed cost absorption; wafer fab loading levels; inventory reserves; pricing pressures in our non-proprietary product lines; and competitive and economic conditions. Operating expenses fluctuate over time, primarily due to net sales and profit levels.

 
                   
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share amounts)

(Unaudited)

 
Three Months Ended Nine Months Ended

December 31,

December 31,

2012 2011 2012 2011
Net sales $ 416,047 $ 329,156 $ 1,151,479 $ 1,044,265
Cost of sales   215,619     143,668     552,059     440,617  
Gross profit 200,428 185,488 599,420 603,648
 
Operating expenses:
Research and development 71,377 44,256 184,285 134,937
Selling, general and administrative 69,368 51,087 196,727 158,603
Amortization of acquired intangible assets 39,711 2,678 71,615 8,161
Special charges (income)   2,559     (660 )   24,953     (660 )
  183,015     97,361     477,580     301,041  
 
Operating income 17,413 88,127 121,840 302,607
(Losses) gains on equity method investments (229 ) 14 (382 ) (60 )
Other expense, net   (7,492 )   (4,464 )   (18,783 )   (14,774 )
 
Income before income taxes 9,692 83,677 102,675 287,773
Income tax (benefit) provision   (481 )   6,188     34,976     31,704  
 
Net income $ 10,173   $ 77,489   $ 67,699   $ 256,069  
 
Basic net income per common share $ 0.05   $ 0.40   $ 0.35   $ 1.34  
Diluted net income per common share $ 0.05   $ 0.38   $ 0.33   $ 1.26  
 
Basic common shares outstanding   194,958     191,640     194,157     190,854  
Diluted common shares outstanding   204,405     203,291     204,553     202,686  
 
 
 
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

           
 
ASSETS
 
December 31, March 31,
2012 2012
(Unaudited)
Cash and short-term investments $ 1,622,303 $ 1,459,009
Accounts receivable, net 177,502 170,201
Inventories 261,594 217,278
Other current assets   235,184   169,373
Total current assets 2,296,583 2,015,861
 
Property, plant & equipment, net 522,737 516,611
Long-term investments 149,662 328,586
Other assets   874,542   222,718
 
Total assets $ 3,843,524 $ 3,083,776
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Accounts payable and other current liabilities $ 173,668 $ 139,164
Deferred income on shipments to distributors   122,611   108,709
Total current liabilities 296,279 247,873
 
Long-term line of credit 610,000 -
Convertible debentures 361,409 355,050
Long-term income tax payable 181,418 70,490
Deferred tax liability 445,492 411,368
Other long-term liabilities 21,840 8,322
 
Stockholders’ equity   1,927,086   1,990,673
 
Total liabilities and stockholders’ equity $ 3,843,524 $ 3,083,776
 
 
 
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in thousands except per share amounts and percentages)
(Unaudited)
                   
 
RECONCILIATION OF GAAP NET SALES TO NON-GAAP NET SALES
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Net sales, as reported $ 416,047 $ 329,156 $ 1,151,479 $ 1,044,265
Distributor revenue recognition adjustment   -     -     24,748     -  
Non-GAAP net sales $ 416,047   $ 329,156   $ 1,176,227   $ 1,044,265  
 
 
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Gross profit, as reported $ 200,428 $ 185,488 $ 599,420 $ 603,648
Distributor revenue recognition adjustment - - 15,868 -
Share-based compensation expense 1,834 1,369 5,758 4,376

Acquisition-related acquired inventory valuation and other costs

  30,808     -     54,958     -  
Non-GAAP gross profit $ 233,070   $ 186,857   $ 676,004   $ 608,024  
Non-GAAP gross profit percentage

56.0

%

56.8

%

57.5

%

58.2

%

 
 
RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Research and development expenses, as reported $ 71,377 $ 44,256 $ 184,285 $ 134,937
Share-based compensation expense

(6,172

)

(3,851

)

(16,562

)

(10,820

)

Acquisition-related costs   -     -    

(17

)

  -  
Non-GAAP research and development expenses $ 65,205   $ 40,405   $ 167,706   $ 124,117  

Non-GAAP research and development expenses as a percentage of net sales

15.7

%

12.3

%

14.3

%

11.9

%

 
 
RECONCILIATION OF GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Selling, general and administrative expenses, as reported $ 69,368 $ 51,087 $ 196,727 $ 158,603
Share-based compensation expense

(6,114

)

(4,742

)

(22,339

)

(13,274

)

Acquisition-related costs  

(1,035

)

 

(241

)

 

(6,054

)

 

(863

)

Non-GAAP selling, general and administrative expenses $ 62,219   $ 46,104   $ 168,334   $ 144,466  

Non-GAAP selling, general and administrative expenses as a percentage of net sales

15.0

%

14.0

%

14.3

%

13.8

%

 
 
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Operating income, as reported $ 17,413 $ 88,127 $ 121,840 $ 302,607
Distributor revenue recognition adjustment - - 15,868 -
Share-based compensation expense 14,120 9,962 44,659 28,470

Acquisition-related acquired inventory valuation and other costs

31,843 241 61,029 863
Amortization of acquired intangible assets 39,711 2,678 71,615 8,161
Special charges (income)   2,559    

(660

)

  24,953    

(660

)

Non-GAAP operating income $ 105,646   $ 100,348   $ 339,964   $ 339,441  
Non-GAAP operating income as a percentage of net sales

25.4

%

30.5

%

28.9

%

32.5

%

 
 
RECONCILIATION OF GAAP OTHER EXPENSE, NET TO NON-GAAP OTHER EXPENSE, NET
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Other expense, net, as reported

$

(7,492

)

$

(4,464

)

$

(18,783

)

$

(14,774

)

Convertible debt non-cash interest expense 2,089 1,909 6,106 5,580
Losses on equity securities   -     -     -     1,878  
Non-GAAP other expense, net

$

(5,403

)

$

(2,555

)

$

(12,677

)

$

(7,316

)

Non-GAAP other expense, net, as a percentage of net sales

-1.3

%

-0.8

%

-1.1

%

-0.7

%

 
 

RECONCILIATION OF GAAP INCOME TAX (BENEFIT) PROVISION TO NON-GAAP INCOME TAX PROVISION

Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Income tax (benefit) provision, as reported

$

(481

)

$ 6,188 $ 34,976 $ 31,704
Income tax rate, as reported

-5.0

%

7.4

%

34.1

%

11.0

%

Distributor revenue recognition adjustment - - 3,404 -
Share-based compensation expense 2,755 1,261 7,496 3,655

Acquisition-related acquired inventory valuation costs, intangible asset amortization and other costs

7,416 143 12,803 464
Special charges 1,367 - 12,843 -
Convertible debt non-cash interest expense 784 716 2,291 2,093
Non-recurring tax event 3,645 4,075

(26,071

)

4,075
Losses on equity securities   -     -     -     704  
Non-GAAP income tax provision $ 15,486   $ 12,383   $ 47,742   $ 42,695  
Non-GAAP income tax rate

15.5

%

12.7

%

14.6

%

12.9

%

 
 
RECONCILIATION OF GAAP NET INCOME AND GAAP DILUTED NET INCOME PER SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER SHARE
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Net income, as reported $ 10,173 $ 77,489 $ 67,699 $ 256,069
Distributor revenue recognition adjustment, net of tax effect - - 12,464 -
Share-based compensation expense, net of tax effect 11,365 8,701 37,163 24,815

Acquisition-related acquired inventory valuation costs, intangible asset amortization and other costs, net of tax effect

64,138 2,776 119,841 8,560
Special charges (income), net of tax effect 1,192

(660

)

12,110

(660

)

Convertible debt non-cash interest expense, net of tax effect 1,305 1,193 3,815 3,487
Non-recurring tax events

(3,645

)

(4,075

)

26,071

(4,075

)

Losses on equity securities, net of tax effect   -     -     -     1,174  
Non-GAAP net income $ 84,528   $ 85,424   $ 279,163   $ 289,370  
Non-GAAP net income as a percentage of net sales

20.3

%

26.0

%

23.7

%

27.7

%

 
Diluted net income per share, as reported $ 0.05   $ 0.38   $ 0.33   $ 1.26  
Non-GAAP diluted net income per share $ 0.41   $ 0.42   $ 1.37   $ 1.43  
Diluted common shares outstanding, non-GAAP   204,123     202,749     204,231     202,090  
 

Microchip will host a conference call today, February 7, 2013 at 5:00 p.m. (Eastern Time) to discuss this release. This call will be simulcast over the Internet at www.microchip.com. The webcast will be available for replay until February 14, 2013.

A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) February 7, 2013 and will remain available until 8:00 p.m. (Eastern Time) on February 14, 2013. Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 4879987.

Cautionary Statement:

The statements in this release relating to continued strength in our 16- and 32-bit microcontroller market, continuing to expand the breadth of our 16-bit solutions and customers that we are serving, continuing to gain share in the 16-bit market, continuing to win new 32-bit designs, expanding into new applications and enabling further revenue and market share growth in our 32-bit business, our analog business continuing to perform exceptionally well, bringing inventory levels down and expecting to make further progress in the March quarter, exceptionally strong bookings and expedite activity in our business, solid demand and robust design win pipeline, our expectation that the December quarter marked the bottom of this cycle for Microchip, expecting total net sales in the March 2013 quarter to be up between one and four percent sequentially, our fourth quarter fiscal 2013 guidance (GAAP and Non-GAAP as applicable) including net sales, gross margin, operating expenses, other expense, income tax expense, net income, diluted common shares outstanding, earnings per diluted share, inventory days, capital expenditures for the March quarter and for fiscal 2013, inventory position enabling us to service our customers with very short lead times while allowing us to control future capital expenditures, expected growth of our new products and technologies, net cash generation and assumed average stock price in the March 2013 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: the continued economic uncertainty or any unexpected fluctuations or further weakness in the U.S. and global economies, changes in demand or market acceptance of our products and the products of our customers; the mix of inventory we hold and our ability to satisfy short-term orders from our inventory; changes in utilization of our manufacturing capacity and our ability to effectively manage our production levels; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; the level of sell-through of our products through distribution; changes or fluctuations in customer order patterns and seasonality; foreign currency effects on our business; our ability to continue to realize the expected benefits of our SMSC acquisition; the impact of any other significant acquisitions that we may make; costs and outcome of any current or future tax audit or any litigation involving intellectual property, customers or other issues; our actual average stock price in the March 2013 quarter and the impact such price will have on our share count; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.

For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip’s website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services.

Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this February 7, 2013 press release, or to reflect the occurrence of unanticipated events.

About Microchip:

Microchip Technology Incorporated is a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.

Note: The Microchip name and logo, GestIC, JukeBlox, SuperFlash, and PIC are registered trademarks of Microchip Technology Inc. in the USA and other countries. mTouch is a trademark of Microchip Technology Inc. in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies.

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Cloud Expo Breaking News
Over the last few years the healthcare ecosystem has revolved around innovations in Electronic Health Record (HER) based systems. This evolution has helped us achieve much desired interoperability. Now the focus is shifting to other equally important aspects – scalability and performance. While applying cloud computing environments to the EHR systems, a special consideration needs to be given to the cloud enablement of Veterans Health Information Systems and Technology Architecture (VistA), i.e., the largest single medical system in the United States.
It’s time to face reality: "Americans are from Mars, Europeans are from Venus," and in today’s increasingly connected world, understanding “inter-planetary” alignments and deviations is mission-critical for cloud. In her session at 15th Cloud Expo, Evelyn de Souza, Data Privacy and Compliance Strategy Leader at Cisco Systems, will discuss cultural expectations of privacy based on new research across these elements.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at Internet of @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, will discuss the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data and analysis are providing the pull to meet customer expectations of a widely connected, multi-dimensional universe of people, things, and information.
SYS-CON Events announced today that Esri has been named “Bronze Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Esri inspires and enables people to positively impact the future through a deeper, geographic understanding of the changing world around them. For more information, visit http://www.esri.com.
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, has been named “Bronze Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Cloudian is a Foster City, Calif.-based software company specializing in cloud storage. Cloudian HyperStore® is an S3-compatible cloud object storage platform that enables service providers and enterprises to build reliable, affordable and scalable hybrid cloud storage solutions. Cloudian actively partners with leading cloud computing environments including Amazon Web Services, Citrix Cloud Platform, Apache CloudStack, OpenStack and the vast ecosystem of S3 compatible tools and applications. Cloudian's customers include Vodafone, Nextel, NTT, Nifty, and LunaCloud. The company has additional offices in China and Japan.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how these devices generate enough data to learn our behaviors and simplify/improve our lives. What if we could connect everything to everything? I'm not only talking about connecting things to things but also systems, cloud services, and people. Add in a little machine learning and artificial intelligence and now we have something interesting...
After a couple of false starts, cloud-based desktop solutions are picking up steam, driven by trends such as BYOD and pervasive high-speed connectivity. In his session at 15th Cloud Expo, Seth Bostock, CEO of IndependenceIT, cuts through the hype and the acronyms, and discusses the emergence of full-featured cloud workspaces that do for the desktop what cloud infrastructure did for the server. He’ll discuss VDI vs DaaS, implementation strategies and evaluation criteria.
Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading innovators are adopting DevOps and cloud together! In his session at DevOps Summit, Andi Mann, Vice President of Strategic Solutions at CA Technologies, will explore the synergies in these two approaches, with practical tips, techniques, research data, war stories, case studies, and recommendations.
Cloud Computing is evolving into a Big Three of Amazon Web Services, Google Cloud, and Microsoft Azure. Cloud 360: Multi-Cloud Bootcamp, being held Nov 4–5, 2014, in conjunction with 15th Cloud Expo in Santa Clara, CA, delivers a real-world demonstration of how to deploy and configure a scalable and available web application on all three platforms. The Cloud 360 Bootcamp, led by Janakiram MSV, an analyst with Gigaom Research, is the first bootcamp that introduces the core concepts of Infrastructure as a Service (IaaS) based on the workings of the Big Three platforms – Amazon EC2, Google Compute Engine, and Azure VMs. Bootcamp attendees will get to see the big picture and also receive the knowledge needed to make the best cloud decisions for their business applications and entire enterprise IT organization.
“Distrix fits into the overall cloud and IoT model around software-defined networking. There’s a broad category around software-defined networking that’s focused on data center, and we focus on the WAN,” explained Jay Friedman, President of Distrix, in this SYS-CON.tv interview at the Internet of @ThingsExpo, held June 10-12, 2014, at the Javits Center in New York City. Internet of @ThingsExpo 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading IoT industry players in the world.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at 15th Internet of @ThingsExpo, Chad Jones, Vice President, Product Strategy of LogMeIn's Xively IoT Platform, will show you how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
“The Internet of Things is a wave that has arrived and it’s growing really fast. The concern at Aria Systems is making sure that people understand the ramifications of their attempts to monetize whatever it is they build on the Internet of Things," explained C Brendan O’Brien, Co-founder and Chief Architect at Aria Systems, in this SYS-CON.tv interview at the Internet of @ThingsExpo, held June 10-12, 2014, at the Javits Center in New York City. Internet of @ThingsExpo 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading IoT industry players in the world.
The Internet of Things is a natural complement to the cloud and related technologies such as Big Data, analytics, and mobility. In his session at Internet of @ThingsExpo, Joe Weinman will lay out four generic strategies – digital disciplines – to exploit emerging digital technologies for strategic advantage. Joe Weinman has held executive leadership positions at Bell Labs, AT&T, Hewlett-Packard, and Telx, in areas such as corporate strategy, business development, product management, operations, and R&D.
SYS-CON Events announced today that DevOps.com has been named “Media Sponsor” of SYS-CON's “DevOps Summit at Cloud Expo,” which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. DevOps.com is where the world meets DevOps. It is the largest collection of original content relating to DevOps on the web today Featuring up-to-the-minute news, feature stories, blogs, bylined articles and more, DevOps.com is where the thought leaders of the DevOps movement make their ideas known.