<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
____________
For Quarter Ended August 2, 1998 Commission File Number 1-6395
-------------- ------
SEMTECH CORPORATION
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2119684
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
652 Mitchell Road, Newbury Park, California 91320
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (805) 498-2111
-------------------
N/A
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant has required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days
Yes X No
----- -----
Number of shares of Common Stock, $0.01 par value, outstanding at August 2,
1998: 14,598,990.
----------
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
--------------------
The consolidated condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It
is suggested that these condensed financial statements be read in conjunction
with the consolidated financial statements and the notes thereto included in the
Company's latest Annual Report on Form 10-K.
In the opinion of the Company, these unaudited statements contain all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position of Semtech Corporation and subsidiaries as
of August 2, 1998, and the results of their operations and their cash flows for
the three months and six months then ended.
2
<PAGE>
SEMTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR SHARE FIGURES)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
AUGUST 2, August 3, AUGUST 2, August 3,
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $25,539 $24,558 $55,073 $47,733
Cost of Sales 13,710 12,988 28,770 25,466
------- ------- ------- -------
Gross Profit 11,829 11,570 26,303 22,267
------- ------- ------- -------
Operating costs and expenses:
Selling, general and administrative 4,948 4,073 9,581 8,047
Product development and engineering 3,320 2,165 6,265 4,071
Restructuring charge 2,502 - 2,502 -
Acquisition costs - - 255 -
------- ------- ------- -------
Total operating costs and expenses 10,770 6,238 18,603 12,118
------- ------- ------- -------
Operating Income 1,059 5,332 7,700 10,149
Interest and other income, net 199 87 370 128
------- ------- ------- -------
Income before taxes 1,258 5,419 8,070 10,277
Provision for taxes 420 1,816 2,695 3,444
------- ------- ------- -------
NET INCOME $ 838 $ 3,603 $ 5,375 $ 6,833
======= ======= ======= =======
Earnings per share:
Net income per share-
Basic $ 0.06 $ 0.26 $ 0.37 $ 0.49
Diluted $ 0.05 $ 0.24 $ 0.34 $ 0.48
Weighted average number of shares -
Basic 14,557 13,968 14,500 13,937
Diluted 15,499 15,063 15,592 14,357
</TABLE>
3
<PAGE>
SEMTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR PER SHARE FIGURE)
<TABLE>
<CAPTION>
AUGUST 2, February 1,
1998 1998
(Unaudited)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $22,652 $18,808
Temporary investments 1,395 1,852
Receivables, less allowances 14,861 13,722
Inventories 19,615 17,020
Other current assets 1,157 956
Deferred income taxes 1,535 1,395
------- -------
Total current assets 61,215 53,753
Property, plant and equipment, net 12,372 12,805
Other assets 164 157
Deferred income taxes 636 420
------- -------
TOTAL ASSETS $74,387 $67,135
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 4,805 5,241
Accrued liabilities 4,121 4,459
Income taxes payable 841 1,020
Other current liabilities 1,513 1,721
------- -------
Total current liabilities 11,280 12,441
Other long-term liabilities 83 33
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value, 40,000,000 shares authorized 147 142
Additional paid-in capital 21,120 18,406
Retained earnings 41,963 36,332
Accumulated other comprehensive income (206) (219)
------- -------
Total shareholders' equity 63,024 54,661
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $74,387 $67,135
======= =======
</TABLE>
4
<PAGE>
SEMTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
---------------------------------
AUGUST 2, AUGUST 3,
1998 1997
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES -
Net income $ 5,375 $ 6,833
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 1,827 1,275
Deferred income taxes (356) 166
Loss on disposition of assets 1,763 -
Changes in assets and liabilities :
Receivables (1,139) (1,364)
Income taxes refundable - 68
Inventories (2,595) (2,226)
Other assets (208) 442
Accounts payable and accrued liabilities (774) (91)
Income taxes payable 1,141 1,457
Other current liabilities (208) 1
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,826 6,561
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES -
Temporary investments 457 32
Additions to property, plant and equipment (3,157) (3,411)
------- -------
NET CASH USED BY INVESTING ACTIVITIES (2,700) (3,379)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES -
Repayment of debt (244) (540)
Exercise of stock options 1,082 1,336
Other long-term liabilities 50 64
Other 817 -
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,705 860
------- -------
Effect of exchange rate changes on cash 13 51
Net increase in cash and cash equivalents 3,844 4,093
Cash and cash equivalents at beginning of period 18,808 9,439
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $22,652 $13,532
======= =======
</TABLE>
5
<PAGE>
SEMTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BUSINESS COMBINATIONS
- ------------------------
On April 27, 1998, the Company signed a merger agreement with Acapella Limited
(Acapella), a company located in the United Kingdom, to be accounted for as a
pooling of interests. Under the terms of the agreement, Acapella shareholders
received approximately 176,000 shares of Semtech common stock for all
outstanding shares of Acapella stock. The Company acquired Acapella to
strengthen its ability to serve high-end communication applications.
The acquisition of Acapella was accounted for as a pooling of interests in
accordance with APB Opinion No. 16 and related Securities and Exchange
Commission pronouncements. Acapella's financial position and results of
operations prior to the six months ended August 2, 1998 were immaterial in
relation to Semtech's overall results. Therefore, the effect of the merger prior
to February 1, 1998 has been adjusted to retained earnings. The consolidated
balance sheet at August 2, 1998 as well as the consolidated statements of income
and cash flow for the three and six months ended August 2, 1998 include the
results of Acapella.
2. RESTRUCTURING CHARGE
- -----------------------
A restructuring charge in the amount of $2,502,000 was taken during the quarter
ended August 2, 1998 for the consolidation of certain manufacturing capacity and
the writedown of related inventory. Approximately $138,000 of the restructuring
charge resulted in cash outlays for severance payments. The remaining portion
resulted from writedown of production equipment and legacy product line
inventories. The Company estimates that all restructuring activites should be
complete by October 31, 1998.
The restructuring included the elimination of 60 manufacturing positions and the
transition of all commercial integrated circuit production to the Company's
Santa Clara, California wafer fabrication facility and to outside wafer
foundries. The Company's Corpus Christi, Texas facility is now solely dedicated
to producing wafers for the transient voltage suppressor (TVS) product line. As
a result of these steps, the Company's long-term operating model is expected to
be benefited through improved internal fab utilization, a reduction in capital
spending for wafer fabrication capacity, and the ability to take advantage of
advanced processes at outside foundries.
3. SEGMENT REPORTING
- --------------------
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information". This
Statement, which is effective for all reporting periods beginning in fiscal
1999, redefines the way publicly held companies report information about
segments. The Company is currently in the process of determining the
appropriate business unit structure for reporting in accordance with SFAS No.
131.
4. EARNINGS PER SHARE
- ---------------------
The consolidated condensed financial statements are presented in accordance with
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share."
Basic earnings per common share are computed using the weighted average number
of common shares outstanding during the period. Diluted
6
<PAGE>
earnings per common share include the incremental shares issuable upon the
assumed exercise of stock options.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- ------------------------------
August 2, August 3, August 2, August 3,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic 14,557,000 13,968,000 14,500,000 13,937,000
========== ========== ========== ==========
Diluted 15,499,000 15,063,000 15,592,000 14,357,000
========== ========== ========== ==========
</TABLE>
5. COMPREHENSIVE INCOME
- -------------------------
On February 2, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income". For year-end financial statements, SFAS No. 130 requires that net
income and all other non-owner changes in equity be displayed in a financial
statement with the same prominence as other consolidated financial statements.
In addition, the standard encourages companies to display the components of
other comprehensive income below the total for net income.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ -----------------------------
August 2, August 3, August 2, August 3,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income $ 838 $3,603 $5,375 $6,833
Change in foreign currency
translation (61) (12) 13 50
------ ------ ------ ------
Comprehensive Income $ 777 $3,591 $5,388 $6,883
===== ====== ====== ======
</TABLE>
6. TEMPORARY INVESTMENTS
- ------------------------
Temporary investments consist of commercial paper and government and corporate
obligations with original maturities in excess of three months and are carried
at cost, which approximates market. Also included in temporary investments is a
residential structure and related plot of land with an estimated value of
$365,000, which is expected to be sold within the next six months.
7. LONG-TERM DEBT
- -----------------
As of August 2, 1998, the Company had no long-term debt.
8. INVENTORIES
- --------------
The commercial semiconductor industry and the markets in which the Company's
products are used are characterized by rapid changes and short product life
cycles. Consistent with the industry, the Company has experienced declines in
average selling prices over the life of its product lines. The Company has
generally reserved inventory which is considered obsolete or estimated to be in
excess of 18 months demand, and has provided reserves for declines in selling
price below cost. Inventories consisted of the following:
7
<PAGE>
<TABLE>
<CAPTION>
Raw Work in Finished
(thousands) Materials Process Goods Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUGUST 2, 1998
Gross inventories $2,496 $11,373 $ 9,623 $23,492
Total reserves (441) (1,267) (2,169) (3,877)
------ ------- ------- -------
Net inventories $2,055 $10,106 $ 7,454 $19,615
====== ======= ======= =======
FEBRUARY 1, 1998
Gross inventories $2,639 $11,261 $ 6,894 $20,794
Total reserves (329) (1,069) (2,376) (3,774)
------ ------- ------- -------
Net inventories $2,310 $10,192 $ 4,518 $17,020
====== ======= ======= =======
</TABLE>
9. LINE OF CREDIT
- -----------------
The Company maintains a credit arrangement with a financial institution for a
line of credit for up to $7,500,000 at an interest rate of 30 day commercial
paper plus 2.5 percent that extends through September 1998. The line of credit
is made up of two parts, the first part being a $4,000,000 line for working
capital needs and the second part being a $3,500,000 line for equipment
acquisitions. The arrangement is collateralized by the Company's domestic
assets and contains provisions regarding current ratios, debt to worth, and net
worth. As of August 2, 1998, the Company had no borrowings outstanding under
this credit facility.
10. SIGNIFICANT CUSTOMERS
- -------------------------
For the three months and six months ended August 2, 1998 and August 3, 1997, no
one customer accounted for 10% or more of the Company's net sales.
11. LEGAL MATTERS
- -----------------
The Company is involved in certain legal matters, which are routine to the
nature of its business. In one specific case, the Company is a defendant in a
complaint filed by a competitor regarding the recruitment of personnel.
Management is of the opinion that the ultimate resolution of these matters will
not have a material adverse effect on its financial position or results of
operations.
12. NEW PRONOUNCEMENTS
- ----------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and for Hedging Activities." Under the
statement, every derivative is recorded on the balance sheet as either an asset
or liability measured at its fair value. Changes in the derivative's fair value
will be recognized in earnings unless specific hedge accounting criteria are
met. The Company will adopt this standard in January 2000 and has not yet
determined its impact on the Company's financial position. The Company
currently does not use derivative instruments for hedging activities.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Conditions and
----------------------------------------------------------------
Results of Operations
---------------------
(l) Material Changes in Financial Condition
---------------------------------------
On August 2, 1998, Semtech Corporation (the Company) had working capital of
$49,935,000, compared with $41,312,000 at February 1, 1998 - an increase of
$8,623,000. The ratio of current assets to current liabilities at August 2,
1998, was 5.4 to 1, compared to 4.3 to 1 at February 1, 1998. The increase was
primarily due to increases in cash and inventories.
In the first six months of fiscal year 1999, the Company generated $3,844,000 of
cash and cash equivalents. The increase in cash and cash equivalents was due to
the Company's profitability during the period and was only partially offset by
cash outlays for inventory, capital equipment, increased accounts receivable and
year-end supplemental compensation relating to the prior fiscal year. Operating
cash flow for the six months ended August 2, 1998 was a positive $4,826,000.
During the first six months of fiscal 1999, the Company used cash of $3,157,000
to pay for capital equipment purchases and $244,000 for the paydown of long-term
debt.
In order to develop, design and manufacture new products, the Company had to
make significant investments over the past several years. Such investments
aimed at developing additional new products, including the addition of design
and applications engineers and related equipment, will continue. Semtech fully
intends to continue to invest in those areas that have shown potential for
viable and profitable market opportunities. Certain of these investments,
particularly additional design engineers, will probably not generate significant
results in the short-term. The Company plans to finance these investments with
cash generated by operations and cash on-hand.
(2) Material Changes in Results of Operations
-----------------------------------------
The following information is provided to further explain certain financial
information shown in the Consolidated Condensed Statements of Income for the
three month and six month periods ended August 2, 1998 and August 3, 1997.
THREE MONTH AND SIX MONTH PERIODS ENDED AUGUST 2, 1998 COMPARED WITH THE THREE
- ------------------------------------------------------------------------------
MONTH AND SIX MONTH PERIODS ENDED AUGUST 3, 1997:
- -------------------------------------------------
INDUSTRY TRENDS AND OUTLOOK -
During the second quarter of fiscal year 1999, Semtech experienced weak market
conditions for certain of its main commercial product lines. This weakness was
due primarily to concerns over excess inventory by major computer manufacturers,
a significant drop in production rates of automated test equipment (ATE) and
general concerns over the Asian region's economic condition. These factors most
effected the Company's power management product line that is widely used in
computer applications and the Company's line of ATE circuits that are sold to
manufacturers of large test systems.
9
<PAGE>
Lower operating voltages in newer electronic systems, demand for increased
bandwidth in communicating, and the overall need for certain analog-based
functions have benefited the Company. In addition to technical factors, unit
demand increases for electronics in general have benefited the sales of all
products. Future growth by the Company will remain dependent on market
conditions, economic factors, the ability to introduce new products and
increased operating efficiencies.
The Company has historically experienced some seasonality in order rates from
manufacturers of personal computers. Demand from this market segment in prior
years has declined following the holiday season through first half of the year.
The seasonality for the first half of fiscal year 1999 was further impacted by
the Asian economic situation and excess end-system inventory at major computer
suppliers. Due to increased sales to other computer segments, such as servers,
laptops and peripheral devices, the effect of computer seasonality on quarterly
results has been reduced, but not eliminated. Ongoing efforts are being made to
further diversify revenue sources and likewise reduce the effects of
seasonality.
The semiconductor equipment market, which includes automated test equipment, is
very cyclical. The Company did witness a significant decline in demand during
the quarter from its ATE customers. Despite the slowdown in demand, the Company
believes that the test market still holds long-term growth potential. The
Company's ATE business unit has introduced many new products specially designed
for test applications, and in doing so has gained market share from competing
suppliers.
The Company has witnessed a continued move towards a "build-to-order" model at
many of its OEM customers. As a result, the Company increasingly relies on
turns-fill orders (orders received and shipped in the same quarter) in each
quarter in order to achieve revenue objectives. Semtech generally has only 60-
90 days visibility of future period shipments. Due to weaker demand, turns-fill
orders represented only 22% of net sales in the second quarter from
approximately 35% of net sales in the first quarter.
Typical of the semiconductor industry, the Company has experienced increased
competition and overall declines in average selling prices over the life of its
product lines. In addition to new competitors, existing competitors have become
more aggressive in protecting market share and customer relationships. Efforts
to offset price declines include increasing units shipped, finding new
applications for existing products and introduction of new products. Management
will continue to take steps to offset the impact of declines in average selling
prices, however, there is no assurance that these efforts will be successful.
NET SALES -
Net sales for the second quarter of fiscal 1999 were $25,539,000 compared to
$24,558,000 in the second quarter of fiscal 1998, an increase of 4%. Net sales
for the six months ended August 2, 1998 were $55,073,000 compared to $47,733,000
in the comparable period ended August 3, 1997. While net sales for the second
quarter of fiscal year 1998 were above prior year levels, they represented a
decline of nearly 14% from the first quarter of fiscal 1999. This decline was
due primarily to weak demand from the computer and test equipment markets.
10
<PAGE>
End-market applications for the Company's products sold during the second
quarter of fiscal 1999 are estimated to be 43% computer, 18% communications, 21%
industrial (which includes ATE), 13% military/aerospace and 5% foundry sales.
For the prior year's second quarter, end-market applications were estimated to
be 42% computer, 13% communications, 23% industrial, 12% military/aerospace and
10% foundry. On a year-over-year basis, the largest gains were in
communications and ATE (included in industrial) applications and the largest
decline was in foundry sales. On a sequential basis, second quarter end-market
applications had communications show the largest gain and ATE show the largest
decline.
Geographically, sales for the second quarter of fiscal 1999 were approximately
50% domestic, 38% to Asian-Pacific and 12% to European customers. For the
second quarter of last fiscal year, domestic sales were 57% of net sales, Asia
was 30% and Europe was 13%. Sales to Asian customers grew both on a
sequentially and year-over-year basis due to increased shipments to
subcontractors and foreign subsidiaries of major United States-based
manufacturers. The Company estimates that approximately two-thirds of all
shipments made into Asia are eventually exported out of the region in finished
products. Sales to customers based in Taiwan, Japan and Korea have been
adversely effected by declines in foreign currency exchange rates.
New orders during the second quarter of fiscal year 1999 were less than net
shipments, resulting in a book-to-bill ratio of less than 1 to 1. The book-to-
bill ratio for the comparable three month period last year exceeded 1 to 1. For
the first six months of fiscal year 1999, the Company had a book-to-bill ratio
just below 1 to 1, which compares to a book-to-bill ratio above 1 to 1 for the
same period last year.
New orders received in the second quarter of this year reflected the general
conditions of end-markets and the major manufacturers supplying these markets.
Only the Company's line of transient voltage suppressors (TVS) showed sequential
growth in terms of new orders during the three months ended August 2, 1998. The
most dramatic sequential decline in new orders was for the Company's line of ATE
circuits.
COSTS AND EXPENSES -
COST OF GOODS SOLD -
Gross profit margin as a percentage of net sales was 46% in the second quarter
of fiscal year 1999, compared to 47% in the second quarter of fiscal 1998. For
the first six months of fiscal year 1999 and 1998, profit margin as a percentage
of net sales was 48% and 47%, respectively.
The decline in gross margin was attributed to a sequential drop in overall net
sales and a large decline in sales of ATE components. ATE components generate
gross margins that are higher than the overall corporate average. Declines in
gross margin associated with lower revenue levels and ATE sales where only
partially offset by increased sales of higher margin TVS products and ongoing
cost-cutting measurers. Future gross margin performance will be affected by
product mix, productivity levels and price changes. Average selling prices,
capacity utilization and shipment rates for new products will continue to have
the most significant impact on margins.
11
<PAGE>
OPERATING EXPENSES -
Fiscal year 1999 operating costs and expenses were at 42% of net sales in the
second quarter and 34% of net sales in the first half of the year. Operating
expenses were 25% of net sales in both the second quarter and first six months
of fiscal year 1998.
Included in fiscal year 1999 operating costs and expenses is a one-time
restructuring charge of $2,502,000 taken during the second quarter and
acquisition costs of $255,000 taken in the first quarter. The restructuring
charge was for the consolidation of certain manufacturing capacity and the
acquisition costs related to the merger with Acapella Limited. Operating costs
and expenses as a percentage of net sales prior to these one-time charges were
at more moderate levels, but higher than prior year levels due to increased
spending in research, development, strategic marketing and administrative
functions.
The restructuring charge taken during the second quarter of fiscal year 1999
included the elimination of 60 manufacturing positions and the transition of all
commercial integrated circuit production to the Company's Santa Clara,
California wafer fabrication facility and to outside wafer foundries. The
Company's Corpus Christi, Texas facility is now solely dedicated to producing
wafers for the transient voltage suppressor (TVS) product line. As a result of
these steps, the Company's long-term operating model is expected to be benefited
through improved internal fab utilization, a reduction in capital spending for
wafer fabrication capacity, and the ability to take advantage of advanced
processes at outside foundries.
Semtech has invested heavily over the last twenty-four months in technical
talent and equipment needed to support ongoing research and development of new
products. The Company now has dedicated design centers in California, North
Carolina and Scotland. Cost associated with development efforts are expected to
continue to increase in terms of absolute dollars and as a percentage of sales.
Expenses related to sales, marketing, general and administrative are also
expected to increase, but at a less significant rate.
OTHER -
Net interest and other income for the second quarter of fiscal year 1999 was
$199,000. For the second quarter of fiscal 1998, net interest and other income
was $87,000. For the first half of fiscal year 1999 and 1998, the Company had
net interest and other income of $370,000 and $128,000, respectively. Other
income and expenses for all periods is primarily interest income.
PROVISION FOR TAXES -
The effective tax rate for the second quarters and first six months of fiscal
years 1999 and 1998 was approximately 33%.
FORWARD LOOKING STATEMENTS -
Some statements included in this filing which are not historical in nature are
forward-looking statements within the meaning of the Private Securities
Legislation Act of 1995. Forward looking statements regarding the Company's
12
<PAGE>
future performance and financial results are subject to certain risks and
uncertainties.
The Company cautions investors that there can be no assurance that actual
results or business conditions will not differ materially from those suggested
in such forward-looking statements as a result of various factors, including,
but not limited to, the Company's ability to introduce new products, support
existing and new customers, achieve manufacturing efficiencies, and penetrate
new markets and additional end-product applications. As a result, the Company's
future development efforts involve a high degree of risk. For further
information, refer to the more specific risks and uncertainties discussed
throughout this report and the Company's most recent Form 10-K filing with the
Securities and Exchange Commission.
13
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
The Company is involved in certain legal matters, which are routine to the
nature of its business. In one specific case, the Company is a defendant in a
complaint filed by a competitor regarding the recruitment of personnel.
Management is of the opinion that the ultimate resolution of all these matters
will not have a material adverse effect on its financial position or results of
operations.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The 1998 Annual Meeting of Shareholders of the Company was duly held on June
11, 1998.
(b) Inapplicable, as (i) proxies for the meeting were solicited pursuant to
Regulation 14 under the Act; (ii) there was no solicitation in opposition to
the management's nominees as listed in the Proxy Statement; and (iii) all of
such nominees were duly elected.
(c) One other matter voted upon at the meeting was for the adoption of a new
Long-Term Stock Incentive Plan in which there were 5,561,077 affirmative
votes, 4,143,637 negative votes, and 37,917 abstaining votes.
(d) Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
11.1 -Computation of per share earnings - See Note 4 of Notes to
Consolidated Condensed Financial Statements.
27 -Financial Data Schedule, Article 5
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on March 3, 1998 for the registration
of stock issued in connection with a stock split in the form of a 100% stock
dividend.
A report on Form 8-K was filed on July 8, 1998 in connection with a press
release that sighted weaker demand that was effecting second quarter
results.
A report on Form 8-K was filed on July 16, 1998 to register a stockholder
protection agreement that was adopted by Company's Board of Directors and
approved by stockholders.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SEMTECH CORPORATION
-------------------
Registrant
Date: September 15, 1998 /s/ John D. Poe
--------------------------------
John D. Poe
Chairman of the Board and
Chief Executive Officer
Date: September 15, 1998 /s/ David G. Franz, Jr.
--------------------------------
David G. Franz, Jr.
Vice President Finance, Chief
Financial Officer, and
Secretary
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains results of operations for the three months ended August
2, 1998, which are qualified in their entirety by reference to the Form 10-Q
filing and Form 10-K for the year ended February 1, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
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