e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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| þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended April 3, 2009
OR
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| o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-5560
SKYWORKS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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| Delaware
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04-2302115 |
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
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| 20 Sylvan Road, Woburn, Massachusetts
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01801 |
| (Address of principal executive offices)
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(Zip Code) |
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| Registrant’s telephone
number, including area code: (781) 376-3000 |
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 was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
o Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
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| Large accelerated filer þ |
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Accelerated filer o |
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Non-accelerated filer o
(Do not check if a smaller reporting company) |
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of
the latest practicable date.
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| Class
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Outstanding at May 6, 2009 |
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| Common Stock, par value $.25 per share
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167,438,102 |
SKYWORKS SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED APRIL 3, 2009
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
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Three-months Ended |
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Six-months Ended |
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April 3, |
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March 28, |
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April 3, |
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March 28, |
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2009 |
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2008 |
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2009 |
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2008 |
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Net revenues |
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$ |
172,990 |
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$ |
201,708 |
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$ |
383,218 |
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$ |
412,241 |
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Cost of goods sold |
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108,115 |
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121,341 |
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234,476 |
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249,536 |
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Gross profit |
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64,875 |
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80,367 |
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148,742 |
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162,705 |
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Operating expenses: |
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Research and development |
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28,596 |
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36,581 |
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63,240 |
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70,675 |
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Selling, general and administrative |
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22,794 |
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23,346 |
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49,895 |
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48,633 |
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Amortization of intangible assets |
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1,246 |
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1,871 |
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2,395 |
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3,803 |
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Restructuring and other charges |
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15,982 |
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— |
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15,982 |
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— |
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Total operating expenses |
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68,618 |
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|
61,798 |
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131,512 |
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123,111 |
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Operating (loss) income |
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|
(3,743 |
) |
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18,569 |
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17,230 |
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39,594 |
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Interest expense |
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(808 |
) |
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|
(1,769 |
) |
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(1,947 |
) |
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(3,977 |
) |
Gain on early retirement of convertible debt |
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— |
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— |
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2,035 |
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— |
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Other (expense) income, net |
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(13 |
) |
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1,883 |
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1,389 |
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3,933 |
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(Loss) Income before income taxes |
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(4,564 |
) |
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18,683 |
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18,707 |
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|
39,550 |
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Provision for income taxes |
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25 |
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2,010 |
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1,272 |
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3,799 |
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Net (loss) income |
|
$ |
(4,589 |
) |
|
$ |
16,673 |
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$ |
17,435 |
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$ |
35,751 |
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Per share information: |
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Net (loss) income, basic |
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$ |
(0.03 |
) |
|
$ |
0.10 |
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$ |
0.11 |
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$ |
0.22 |
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Net (loss) income, diluted |
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$ |
(0.03 |
) |
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$ |
0.10 |
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$ |
0.11 |
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$ |
0.22 |
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Number of weighted-average shares used in
per share computations, basic |
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165,997 |
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161,165 |
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165,426 |
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160,742 |
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Number of weighted-average shares used in
per share computations, diluted |
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165,997 |
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162,982 |
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165,981 |
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162,740 |
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The following table summarizes share-based compensation expense for the three and six-month periods
ended April 3, 2009 and March 28, 2008 which are included in the financial statement line items
above as follows:
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Three-months Ended |
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Six-months Ended |
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April 3, |
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March 28, |
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April 3, |
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March 28, |
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| (In thousands) |
|
2009 |
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2008 |
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|
2009 |
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2008 |
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Cost of sales |
|
$ |
828 |
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$ |
677 |
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$ |
1,737 |
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$ |
1,511 |
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Research and development |
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1,158 |
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2,620 |
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2,814 |
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3,765 |
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Selling, general and administrative |
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2,278 |
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2,346 |
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6,302 |
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5,374 |
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Total share-based compensation
expense included in expenses |
|
$ |
4,264 |
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$ |
5,643 |
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$ |
10,853 |
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$ |
10,650 |
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The accompanying notes are an integral part of these consolidated financial statements.
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share amounts)
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As of |
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April 3, |
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October 3, |
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2009 |
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2008 |
|
ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
261,951 |
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$ |
225,104 |
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Restricted cash |
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5,962 |
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5,962 |
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Receivables, net of allowance for doubtful accounts of $1,632 and $1,048,
respectively |
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112,130 |
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146,710 |
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Inventories |
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91,753 |
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|
103,791 |
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Other current assets |
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14,838 |
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|
13,089 |
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Total current assets |
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486,634 |
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|
494,656 |
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Property, plant and equipment, net |
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163,576 |
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|
173,360 |
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Goodwill |
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483,671 |
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483,671 |
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Intangible assets, net |
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18,571 |
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|
19,746 |
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Deferred tax assets |
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52,013 |
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53,192 |
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Other assets |
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|
9,839 |
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11,474 |
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Total assets |
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$ |
1,214,304 |
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$ |
1,236,099 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Short-term debt |
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$ |
100,000 |
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$ |
50,000 |
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Accounts payable |
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48,098 |
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58,527 |
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Accrued compensation and benefits |
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21,032 |
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32,110 |
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Other current liabilities |
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14,163 |
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8,103 |
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Total current liabilities |
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183,293 |
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148,740 |
|
Long-term debt, less current maturities |
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47,116 |
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|
137,616 |
|
Other long-term liabilities |
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4,965 |
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5,527 |
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Total liabilities |
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235,374 |
|
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|
291,883 |
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Commitments and contingencies (Note 10) |
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Stockholders’ equity: |
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Preferred stock, no par value: 25,000 shares authorized, no shares issued |
|
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— |
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— |
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Common stock, $0.25 par value: 525,000 shares authorized; 171,931 shares
issued and 166,919 shares outstanding at April 3, 2009 and 170,323
shares issued and 165,592 shares outstanding at October 3, 2008 |
|
|
41,730 |
|
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|
41,398 |
|
Additional paid-in capital |
|
|
1,449,798 |
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|
1,430,999 |
|
Treasury stock |
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|
(35,769 |
) |
|
|
(33,918 |
) |
Accumulated deficit |
|
|
(475,649 |
) |
|
|
(493,083 |
) |
Accumulated other comprehensive loss |
|
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(1,180 |
) |
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(1,180 |
) |
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Total stockholders’ equity |
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978,930 |
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|
944,216 |
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Total liabilities and stockholders’ equity |
|
$ |
1,214,304 |
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$ |
1,236,099 |
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The accompanying notes are an integral part of these consolidated financial statements.
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
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Six-months Ended |
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April 3, |
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March 28, |
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2009 |
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|
2008 |
|
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Cash flows from operating activities: |
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|
|
|
|
|
Net income |
|
$ |
17,435 |
|
|
$ |
35,751 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
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|
|
|
|
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|
Share-based compensation expense |
|
|
10,853 |
|
|
|
10,650 |
|
Depreciation |
|
|
22,815 |
|
|
|
21,993 |
|
Charge in lieu of income tax expense |
|
|
— |
|
|
|
2,720 |
|
Amortization of intangible assets |
|
|
2,395 |
|
|
|
4,112 |
|
Amortization of deferred financing costs |
|
|
446 |
|
|
|
892 |
|
Contribution of common shares to savings and retirement plans |
|
|
4,430 |
|
|
|
5,016 |
|
Non-cash restructuring expense |
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|
955 |
|
|
|
— |
|
Deferred income taxes |
|
|
1,239 |
|
|
|
(300 |
) |
Loss on sales of assets |
|
|
47 |
|
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|
58 |
|
Inventory write-downs |
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|
3,458 |
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|
— |
|
Asset impairments |
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|
5,616 |
|
|
|
— |
|
Provision for losses on accounts receivable |
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|
584 |
|
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|
241 |
|
Changes in assets and liabilities: |
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Receivables |
|
|
33,996 |
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|
2,474 |
|
Inventories |
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|
8,369 |
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|
(6,730 |
) |
Other current and long-term assets |
|
|
(1,577 |
) |
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|
2,376 |
|
Accounts payable |
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|
(10,429 |
) |
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|
20,274 |
|
Other current and long-term liabilities |
|
|
(3,836 |
) |
|
|
(3,654 |
) |
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|
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Net cash provided by operating activities |
|
|
96,796 |
|
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|
95,873 |
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Cash flows from investing activities: |
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Capital expenditures |
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(18,694 |
) |
|
|
(37,416 |
) |
Payments for acquisitions |
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(1,220 |
) |
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|
(32,627 |
) |
Sale of investments |
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|
— |
|
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|
10,000 |
|
Purchase of investments |
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|
— |
|
|
|
(7,500 |
) |
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|
|
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|
Net cash used in investing activities |
|
|
(19,914 |
) |
|
|
(67,543 |
) |
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Cash flows from financing activities: |
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Retirement of Junior Notes |
|
|
— |
|
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|
(49,335 |
) |
Retirement of 2007 Convertible Notes |
|
|
(40,500 |
) |
|
|
— |
|
Change in restricted cash |
|
|
— |
|
|
|
200 |
|
Repurchase of common stock |
|
|
(1,850 |
) |
|
|
(1,619 |
) |
Net proceeds from exercise of stock options |
|
|
2,315 |
|
|
|
3,004 |
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(40,035 |
) |
|
|
(47,750 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
36,847 |
|
|
|
(19,420 |
) |
Cash and cash equivalents at beginning of period |
|
|
225,104 |
|
|
|
241,577 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
261,951 |
|
|
$ |
222,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Taxes paid |
|
$ |
510 |
|
|
$ |
482 |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
1,225 |
|
|
$ |
3,747 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Skyworks Solutions, Inc. (“Skyworks” or the “Company”) designs, manufactures and markets a broad
range of high reliability analog and mixed signal semiconductors enabling a broad range of end
markets. Our power amplifiers (PAs) and front-end modules (FEMs) can be found in many of the
cellular handsets sold by the world’s leading manufacturers. Leveraging our core analog
technologies, we also offer a diverse portfolio of linear integrated circuits (ICs) that support
automotive, broadband, cellular infrastructure, industrial and medical applications.
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim
financial reporting. Certain information and footnote disclosures, normally included in annual
consolidated financial statements prepared in accordance with accounting principles generally
accepted in the United States of America, have been condensed or omitted pursuant to those rules
and regulations. However, in the opinion of management, the financial information reflects all
adjustments, consisting of adjustments of a normal recurring nature necessary to present fairly the
financial position, results of operations, and cash flows of the Company. The results of operations
for the three and six-month periods ended April 3, 2009 are not necessarily indicative of the
results to be expected for the full year. This information should be read in conjunction with the
Company’s financial statements and notes thereto contained in the Company’s Form 10-K for the
fiscal year ended October 3, 2008 as filed with the SEC.
The Company evaluates its estimates on an ongoing basis using historical experience and other
factors, including the current economic environment. The current volatility in the capital markets
and the economy has increased the uncertainty in our estimates, including our estimates impacting
marketable securities and long-lived assets. Significant judgment is required in determining the
fair value of marketable securities in inactive markets as well as determining when declines in
fair value constitute an other-than-temporary impairment. In addition, significant judgment is
required in determining whether a potential indicator of impairment of our long-lived assets exists
and in estimating future cash flows for any necessary impairment tests. As future events unfold and
their effects cannot be determined with precision, actual results could differ significantly from
management’s estimates.
The Company’s fiscal year ends on the Friday closest to September 30. Fiscal 2009 consists of 52
weeks and ends on October 2, 2009. Fiscal 2008 consisted of 53 weeks and ended on October 3, 2008,
with the first three quarters of fiscal 2008 consisting of 13 weeks, and the fourth quarter of
fiscal 2008 consisting of 14 weeks. The second quarters of fiscal 2009 and fiscal 2008 each
consisted of 13 weeks and ended on April 3, 2009 and March 28, 2008, respectively.
2. BUSINESS COMBINATIONS
In October 2007, the Company paid $32.6 million in cash to acquire certain assets from two separate
companies. The Company acquired raw materials, die bank, finished goods, proprietary designs and
related intellectual property in a business combination from Freescale Semiconductor. The Company
also acquired sixteen patents in a separate asset acquisition. The purchase accounting on these
acquisitions was finalized in March 2008 based upon the fair value of the tangible and intangible
assets acquired in accordance with Statement of Financial Accounting Standards (“SFAS”) 141,
Business Combinations (“SFAS 141”). The Company’s primary reasons for the above acquisitions were
to expand its market share in power amplifiers and front end modules at certain existing customers,
and increase the probability of future design wins with these customers. The significant factors
that resulted in recognition of goodwill in one of the transactions were: (a) the purchase price
was based on cash flow projections assuming the sale of the acquired inventory and the sale of the
Company’s next generation product (a derivative of the acquired inventory); and (b) there were very
few tangible and identifiable intangible assets that qualified for recognition.
3. MARKETABLE SECURITIES
The Company accounts for its investment in debt and equity securities in accordance with SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities, and classifies them as
“available for sale.” At April 3, 2009, these securities consisted of $3.2 million in auction rate
securities (“ARS”), which are long-term debt instruments which provide liquidity through a Dutch
auction process that resets interest rates each period. The uncertainties in the credit markets
have caused the ARS to become illiquid resulting in failed auctions.
During the fiscal year ended October 3, 2008, the Company performed a comprehensive valuation and
discounted cash flow analysis on the ARS. The Company concluded the value of the ARS was $2.3
million, thus the carrying value of these securities was reduced by $0.9 million, reflecting this
change in fair value. The Company assessed the decline in fair value to be temporary and recorded
this reduction in stockholders’ equity in accumulated other comprehensive loss. As of April 3,
2009, the Company re-evaluated the ARS and determined that no further adjustment was required. The
Company will continue to closely monitor the ARS and evaluate the appropriate accounting treatment
in each reporting period. The Company holds no other auction rate securities.
4. FINANCIAL INSTRUMENTS
On October 4, 2008, the Company adopted SFAS 157, Fair Value Measurements (“SFAS 157”). In
accordance with FASB Staff Position (“FSP”) 157-2, Effective Date of FASB Statement 157, the
Company has deferred the adoption of SFAS 157 for non-financial assets and liabilities including
intangible assets and reporting units measured at fair value in the first step of a goodwill
impairment test. The Company will adopt the remainder of SFAS 157 on the first day of fiscal year
2010. In accordance with SFAS 157, the Company groups its financial assets and liabilities measured
at fair value on a recurring basis in three levels, based on the markets in which the assets and
liabilities are traded and the reliability of the assumptions used to determine fair value. These
levels are:
| |
• |
|
Level 1 — Valuation is based upon quoted market price for identical
instruments traded in active markets. |
| |
| |
• |
|
Level 2 — Valuation is based on quoted market prices for similar
instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active, and model-based valuation
techniques for which all significant assumptions are observable in the
market. |
| |
| |
• |
|
Level 3 — Valuation is generated from model-based techniques that use
significant assumptions not observable in the market. Valuation
techniques include use of discounted cash flow models and similar
techniques. |
Under SFAS 157, the Company groups marketable securities measured at fair value on a recurring
basis in three levels, based on the markets in which the assets are traded and the reliability of
the assumptions used to determine fair value.
The Company has cash equivalents classified as Level 1 and has no Level 2 securities. The
marketable securities classified as Level 3 are auction rate securities.
The following table presents the balances of cash equivalents and marketable securities measured at
fair value on a recurring basis as of April 3, 2009 (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Fair Value Measurements |
|
| |
|
|
|
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
| |
|
|
|
|
|
Active Markets for |
|
|
Other |
|
|
Unobservable |
|
| |
|
|
|
|
|
Identical Assets |
|
|
Observable Inputs |
|
|
Inputs |
|
| |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market/repurchase agreements |
|
$ |
251,915 |
|
|
$ |
251,915 |
|
|
$ |
— |
|
|
$ |
— |
|
Auction rate securities |
|
|
2,288 |
|
|
|
— |
|
|
|
— |
|
|
|
2,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
254,203 |
|
|
$ |
251,915 |
|
|
$ |
— |
|
|
$ |
2,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. INVENTORIES
Inventories consist of the following (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
April 3, |
|
|
October 3, |
|
| |
|
2009 |
|
|
2008 |
|
| |
|
|
Raw materials |
|
$ |
5,684 |
|
|
$ |
8,005 |
|
Work-in-process |
|
|
56,484 |
|
|
|
64,305 |
|
Finished goods |
|
|
29,585 |
|
|
|
31,481 |
|
|
|
|
|
|
|
|
Total inventories |
|
$ |
91,753 |
|
|
$ |
103,791 |
|
|
|
|
|
|
|
|
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
April 3, |
|
|
October 3, |
|
| |
|
2009 |
|
|
2008 |
|
| |
|
|
Land |
|
$ |
9,423 |
|
|
$ |
9,423 |
|
Land and leasehold improvements |
|
|
5,079 |
|
|
|
4,989 |
|
Buildings |
|
|
38,913 |
|
|
|
39,708 |
|
Furniture and fixtures |
|
|
25,504 |
|
|
|
24,889 |
|
Machinery and equipment |
|
|
402,396 |
|
|
|
382,582 |
|
Construction in progress |
|
|
13,614 |
|
|
|
29,845 |
|
|
|
|
|
|
|
|
Total property, plant and equipment, gross |
|
|
494,929 |
|
|
|
491,436 |
|
Accumulated depreciation and amortization |
|
|
(331,353 |
) |
|
|
(318,076 |
) |
|
|
|
|
|
|
|
Total property, plant and equipment, net |
|
$ |
163,576 |
|
|
$ |
173,360 |
|
|
|
|
|
|
|
|
7. GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets consist of the following (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted |
|
|
April 3, 2009 |
|
|
October 3, 2008 |
|
| |
|
Average |
|
|
Gross |
|
|
|
|
|
|
Net |
|
|
Gross |
|
|
|
|
|
|
Net |
|
| |
|
Amortization |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
| |
|
Period (Years) |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
| |
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
$ |
483,671 |
|
|
$ |
— |
|
|
$ |
483,671 |
|
|
$ |
483,671 |
|
|
$ |
— |
|
|
$ |
483,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Amortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology |
|
|
5-10 |
|
|
$ |
11,850 |
|
|
$ |
(8,100 |
) |
|
$ |
3,750 |
|
|
$ |
11,850 |
|
|
$ |
(7,533 |
) |
|
$ |
4,317 |
|
Customer relationships |
|
|
5-10 |
|
|
|
21,210 |
|
|
|
(11,136 |
) |
|
|
10,074 |
|
|
|
21,210 |
|
|
|
(9,650 |
) |
|
|
11,560 |
|
Patents |
|
|
2-3 |
|
|
|
2,120 |
|
|
|
(642 |
) |
|
|
1,478 |
|
|
|
900 |
|
|
|
(300 |
) |
|
|
600 |
|
Other |
|
|
.5-3 |
|
|
|
2,649 |
|
|
|
(2,649 |
) |
|
|
— |
|
|
|
2,649 |
|
|
|
(2,649 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets |
|
|
|
|
|
|
37,829 |
|
|
|
(22,527 |
) |
|
|
15,302 |
|
|
|
36,609 |
|
|
|
(20,132 |
) |
|
|
16,477 |
|
Unamortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks |
|
|
|
|
|
|
3,269 |
|
|
|
— |
|
|
|
3,269 |
|
|
|
3,269 |
|
|
|
— |
|
|
|
3,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets |
|
|
|
|
|
$ |
41,098 |
|
|
$ |
(22,527 |
) |
|
$ |
18,571 |
|
|
$ |
39,878 |
|
|
$ |
(20,132 |
) |
|
$ |
19,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense related to intangible assets are as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
March 28, |
|
April 3, |
|
March 28, |
| |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
| |
|
|
|
|
Amortization expense |
|
$ |
1,246 |
|
|
$ |
2,180 |
|
|
$ |
2,395 |
|
|
$ |
4,112 |
|
The changes in the gross carrying amount of goodwill and intangible assets are as follows (in
thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Goodwill and Intangible Assets |
|
| |
|
|
|
|
|
Developed |
|
|
Customer |
|
|
Patents |
|
|
|
|
|
|
|
| |
|
Goodwill |
|
|
Technology |
|
|
Relationships |
|
|
and Other |
|
|
Trademarks |
|
|
Total |
|
| |
|
|
Balance as of October 3, 2008 |
|
$ |
483,671 |
|
|
$ |
11,850 |
|
|
$ |
21,210 |
|
|
$ |
3,549 |
|
|
$ |
3,269 |
|
|
$ |
523,549 |
|
Additions during period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,220 |
|
|
|
— |
|
|
|
1,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of April 3, 2009 |
|
$ |
483,671 |
|
|
$ |
11,850 |
|
|
$ |
21,210 |
|
|
$ |
4,769 |
|
|
$ |
3,269 |
|
|
$ |
524,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill is adjusted as required as a result of the realization of deferred tax assets. The benefit
from the recognition of a portion of these deferred items reduces the carrying value of goodwill
instead of reducing income tax expense. Accordingly, future realization of certain deferred tax
assets will reduce the carrying value of goodwill. During the six-month period ended March 28,
2008, goodwill was reduced by $2.7 million as a result of the realization of deferred tax assets.
There was no adjustment to reduce goodwill during the six-month period ended April 3, 2009. The
remaining deferred tax assets that could reduce goodwill in future periods are $7.6 million as of
April 3, 2009.
The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal
quarter and in interim periods if certain events occur indicating that the carrying value of
goodwill may be impaired. In accordance with SFAS 142, Goodwill and Other Intangible Assets, the
Company performed a goodwill impairment test for the three-month period ended April 3, 2009, and
determined that as of April 3, 2009, its goodwill was not impaired.
Annual amortization expense related to intangible assets for the next five years is expected to be
as follows (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
2013 |
Amortization expense |
|
$ |
4,887 |
|
|
$ |
4,983 |
|
|
$ |
4,258 |
|
|
$ |
3,569 |
|
|
$ |
|
— |
8. BORROWING ARRANGEMENTS
Long-Term Debt
Long-term debt consists of the following (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
April 3, |
|
|
October 3, |
|
| |
|
2009 |
|
|
2008 |
|
| |
|
|
2007 Convertible Notes |
|
$ |
97,116 |
|
|
$ |
137,616 |
|
Less-current maturities |
|
|
50,000 |
|
|
|
— |
|
|
|
|
|
|
|
|
Total long-term debt |
|
$ |
47,116 |
|
|
$ |
137,616 |
|
|
|
|
|
|
|
|
On March 2, 2007, the Company issued $200.0 million aggregate principal amount of convertible
subordinated notes (“2007 Convertible Notes”). The offering contained two tranches. The first
tranche consisted of $100.0 million of 1.25% convertible subordinated notes due March 2010. The
second tranche consisted of $100.0 million of 1.50% convertible subordinated notes due March 2012.
The conversion price of the 2007 Convertible Notes is 105.0696 shares per $1,000 principal amount
of notes to be redeemed, which is the equivalent of a conversion price of approximately $9.52 per
share, plus accrued and unpaid interest, if any, at the conversion date. Holders may require the
Company to repurchase the 2007 Convertible Notes upon a change in control of the Company. The
Company pays interest in cash semi-annually in arrears on March 1 and September 1 of each year. It
has been the Company’s historical practice to cash settle the principal and interest components of
convertible debt instruments, and it is our intention to continue to do so in the future, including
settlement of the 2007 Convertible Notes. During the three-month period ended January 2, 2009, the
Company redeemed $40.5 million of the 1.50% convertible subordinated notes at an average price of
92.6. A discount of approximately $2.9 million offset by approximately $0.9 million in deferred
financing costs was recorded as a gain during the period.
On December 21, 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position
Emerging Issues Task Force 00-19-2 (“FSP EITF 00-19-2”). FSP EITF 00-19-2 specifies that the
contingent obligation to make future payments, or otherwise transfer consideration under a
registration payment arrangement, should be separately recognized and measured in accordance with
FASB Statement No. 5,
Accounting
for Contingencies (“FASB 5”). The Company adopted FSP EITF 00-19-2 on September 29, 2007. The Company agreed to file
a shelf registration statement under the Securities Act of 1933 (the “Securities Act”) not later
than 120 days after the first date of original issuance of the 2007 Convertible Notes. The Company
agreed to utilize commercially reasonable efforts to have this shelf registration statement
declared effective not later than 180 days after the first date of original issuance of the notes,
and to keep it effective until the earliest of: 1) two years from the effective date of the shelf
registration statement; 2) the date when all registrable securities have been registered under the
Securities Act and disposed of; and 3) the date on which all registrable securities held by
non-affiliates are eligible to be sold to the public pursuant to Rule 144(k) under the Securities
Act. The Company filed the shelf registration statement within 120 days of the original issuance of
the 2007 Convertible Notes and the shelf registration statement was declared effective within 180
days after the first date of original issuance of the notes. If the shelf registration statement
ceases to be effective within two years from the effective date of the shelf registration statement
the Company will be obligated to pay an additional 0.25% interest per annum for the first 90 days
after the occurrence of the registration default and at the rate of 0.50% per annum thereafter as
the shelf registration remained in place as of April 3, 2009. The Company has concluded that it is
not probable that a contingent liability has been incurred pursuant to the application of FASB 5
and thus has not recorded a liability.
Short-Term Debt
Short-term debt consists of the following (in thousands):
| |
|
|
|
|
|
|
|
|
| |
|
April 3, |
|
|
October 3, |
|
| |
|
2009 |
|
|
2008 |
|
| |
|
|
Current maturities of long-term debt |
|
$ |
50,000 |
|
|
$ |
— |
|
Facility Agreement |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
Total short-term debt |
|
$ |
100,000 |
|
|
$ |
50,000 |
|
|
|
|
|
|
|
|
On July 15, 2003, the Company entered into a receivables purchase agreement under which it has
agreed to sell from time to time certain of its accounts receivable to Skyworks USA, Inc.
(“Skyworks USA”), a wholly-owned special purpose entity that is consolidated for accounting
purposes. Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, N.A. providing
for a $50.0 million credit facility (“Facility Agreement’’) secured by the purchased accounts
receivable. As a part of the consolidation, any interest incurred by Skyworks USA related to monies
it borrows under the Facility Agreement is recorded as interest expense in the Company’s results of
operations. The Company performs collections and administrative functions on behalf of Skyworks
USA. The Company renewed the Facility Agreement on July 11, 2008 for a one year term. Interest
related to the Facility Agreement is at LIBOR plus 0.75%. As of April 3, 2009, Skyworks USA had
borrowed $50.0 million under this agreement.
9. INCOME TAXES
We recorded tax provisions of $0.0 million and $1.3 million for the three and six-month periods
ended April 3, 2009, and $2.0 million and $3.8 million for the three and six-month periods ended
March 28, 2008, respectively. Our effective tax rates were 0.6% and 6.8% for the three and
six-month periods ended April 3, 2009, and 10.8% and 9.6% for the three and six-month periods ended
March 28, 2008, respectively. The difference between our effective tax rates and the 35% federal
statutory rate resulted primarily from a tax benefit related to a reduction in the federal and
state deferred tax asset valuation allowance and foreign earnings taxed at rates lower than the
federal statutory rate.
As noted in our most recent Annual Report on Form 10-K, no benefit has been recognized for certain
acquisition related deferred tax assets. The benefit from the recognition of these deferred items
reduces the carrying value of goodwill instead of reducing income tax expense. We will evaluate
the realization of the acquisition related deferred tax assets on a quarterly basis and adjust the
provision for income taxes accordingly. As a result, the effective tax rate may vary in subsequent
quarters.
We utilize the asset and liability method of accounting for income taxes as set forth in SFAS No.
109, Accounting for Income Taxes (“SFAS 109”). Under the asset and liability method, deferred
taxes are determined based on the temporary differences between the financial statement and tax
bases of assets and liabilities using tax rates expected
to be in effect during the years in which the basis differences reverse. A valuation allowance is
recorded when it is more likely than not that some of the deferred tax assets will not be realized.
In accordance with SFAS 109, management has determined that it is more likely than not that a
portion of our historic and current year income tax benefits will not be realized. Accordingly, as
of April 3, 2009, we have established a valuation allowance of $76.3 million related to our United
States federal deferred tax assets. Deferred tax assets have been recognized for foreign operations
when management believes that it is more likely than not that they will be recovered during the
carryforward period. There is a valuation allowance of $1.3 million related to our foreign
deferred tax assets.
The Company will continue to evaluate its valuation allowance in future periods and depending upon
the outcome of that assessment, additional amounts could be reversed or recorded and recognized as
a reduction to goodwill or an adjustment to income tax benefit or expense. Such adjustments could
cause our effective income tax rate to vary in future periods. We will need to generate $309.4
million of future United States federal taxable income to utilize all of our net operating loss
carryforwards, research and experimentation tax credit carryforwards, and deferred income tax
temporary differences as of April 3, 2009.
In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes-an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with
SFAS 109. FIN 48 prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. This statement also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. The Company adopted FIN 48 on
September 29, 2007, and the provisions of FIN 48 are applied to all income tax provisions
commencing from that date.
During the quarter ended April 3, 2009, there were no significant changes in the Company’s gross
unrecognized tax benefits. Of the total unrecognized tax benefits at April 3, 2009, $0.6 million
would impact the effective tax rate, if recognized. There are no positions which we anticipate
could change within the next twelve months. Total year to date accrued interest related to the
Company’s unrecognized tax benefits is $0.0 million. The Company’s policy is to recognize accrued
interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax
expense.
The Company’s major tax jurisdictions as of the adoption of FIN 48 are the United States federal
and the states of California and Iowa. For United States federal income tax, the statute of
limitations is closed on years before fiscal 2005, but because of carryforwards, certain items are
open back to fiscal 1998. For California, the statue of limitations is closed on years before
fiscal 2004, but because of carryforwards, certain items are open back to fiscal 2002. For Iowa,
the statue of limitations is closed on years before fiscal 2005, but because of carryforwards,
certain items are open back to fiscal year 2002.
10. COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, various lawsuits, claims and proceedings have been, and may in the future be,
instituted or asserted against the Company, including those pertaining to patent infringement,
intellectual property, environmental, product liability, safety and health, employment and
contractual matters.
Additionally, the semiconductor industry is characterized by vigorous protection and pursuit of
intellectual property rights. From time to time, third parties have asserted and may in the future
assert patent, copyright, trademark and other intellectual property rights to technologies that are
important to our business and have demanded and may in the future demand that we license their
technology. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims
or proceedings may be disposed of unfavorably to the Company. Intellectual property disputes often
have a risk of injunctive relief, which, if imposed against the Company, could materially and
adversely affect the Company’s financial condition, or results of operations.
From time to time we are also involved in legal proceedings in the ordinary course of business.
We believe that there is no litigation involving the Company pending that will have, individually
or in the aggregate, a material adverse effect on our business.
Guarantees and Indemnifications
The Company has made no contractual guarantees for the benefit of third parties. However, the
Company generally indemnifies its customers from third-party intellectual property infringement
litigation claims related to its products, and, on occasion, also provides other indemnities
related to product sales. In connection with certain facility leases, the Company has indemnified
its lessors for certain claims arising from the facility or the lease.
The Company indemnifies its directors and officers to the maximum extent permitted under the laws
of the state of Delaware. The duration of the indemnities varies, and in many cases is indefinite.
The indemnities to customers in connection with product sales generally are subject to limits based
upon the amount of the related product sales and in many cases are subject to geographic and other
restrictions. In certain instances, the Company’s indemnities do not provide for any limitation of
the maximum potential future payments the Company could be obligated to make. The Company has not
recorded any liability for these indemnities in the accompanying consolidated balance sheets and
does not expect that such obligations will have a material adverse impact on its financial
condition or results of operations.
11. RESTRUCTURING
Restructuring and other charges consists of the following (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
|
April 3, |
|
|
March 28, |
|
| |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Asset impairments |
|
$ |
5,616 |
|
|
$ |
— |
|
|
$ |
5,616 |
|
|
$ |
— |
|
Restructuring and other charges |
|
|
10,366 |
|
|
|
— |
|
|
|
10,366 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
15,982 |
|
|
$ |
— |
|
|
$ |
15,982 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 Restructuring and Other Charges
On January 22, 2009, the Company implemented a restructuring plan to realign its costs given
current business conditions. The Company exited its mobile transceiver product area and reduced
global headcount by approximately 4%, or 150 employees. The Company recorded various charges
associated with this action. In total, the Company recorded charges of $15.9 million of
restructuring and other charges and $3.5 million in inventory write-downs that were charged to cost
of goods sold.
The $15.9 million charge includes the following: $4.5 million related to severance and benefits,
$5.6 million related to the impairment of certain long-lived assets, $2.0 million related to the
exit of certain operating leases, $2.3 million related to the impairment of technology licenses and
design software, and $1.5 million related to other charges. These charges total $15.9 million and
are recorded in restructuring and other charges.
The Company made cash payments related to the restructuring plan of $3.4 million during the quarter
ended April 3, 2009.
Activity and liability balances related to the fiscal 2009 restructuring actions are as follows (in
thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
License and |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Software Write-offs |
|
|
Workforce |
|
|
Asset |
|
|
|
|
| |
|
Facility Closings |
|
|
and Other |
|
|
Reductions |
|
|
Impairments |
|
|
Total |
|
Charged to costs and expenses |
|
$ |
1,967 |
|
|
$ |
3,892 |
|
|
$ |
4,507 |
|
|
$ |
5,616 |
|
|
$ |
15,982 |
|
Reclassification of reserves |
|
|
(121 |
) |
|
|
(100 |
) |
|
|
— |
|
|
|
— |
|
|
|
(221 |
) |
Non-cash items |
|
|
— |
|
|
|
(955 |
) |
|
|
— |
|
|
|
(5,616 |
) |
|
|
(6,571 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
License and |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Software Write-offs |
|
|
Workforce |
|
|
Asset |
|
|
|
|
| |
|
Facility Closings |
|
|
and Other |
|
|
Reductions |
|
|
Impairments |
|
|
Total |
|
Cash payments |
|
|
(127 |
) |
|
|
(495 |
) |
|
|
(2,767 |
) |
|
|
— |
|
|
|
(3,389 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, April 3, 2009 |
|
$ |
1,719 |
|
|
$ |
2,342 |
|
|
$ |
1,740 |
|
|
$ |
— |
|
|
$ |
5,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The remaining restructuring reserve at April 3, 2009 of $5.8 million is classified as other current
liabilities. The Company anticipates completing the restructuring plan and remitting the remaining
payments within the next twelve months.
12. SEGMENT INFORMATION
The
Company follows SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information (“SFAS No. 131”). SFAS No. 131 establishes standards for the way public business
enterprises report information about operating segments in annual financial statements and in
interim reports to shareholders. The method for determining what information to report is based on
the way that management organizes the segments within the Company for making operating decisions
and assessing financial performance. In evaluating financial performance, management uses sales and
operating profit as the measure of the segments’ profit or loss. Based on the guidance in SFAS No.
131, the Company has one operating segment for financial reporting purposes, which designs,
develops, manufactures and markets proprietary semiconductor products, including intellectual
property, for manufacturers of wireless communication products.
13. EMPLOYEE STOCK BENEFIT PLANS
Net income for the three-month periods ended April 3, 2009 and March 28, 2008 included share-based
compensation expense under SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”) of $4.3 million and
$5.6 million, respectively. Net income for the six-month periods ended April 3, 2009 and March
28, 2008 included share-based compensation expense under SFAS 123(R) of $10.8 million and $10.6
million, respectively.
The following table summarizes share-based compensation expense related to employee stock options,
restricted stock grants, performance stock grants, and employee stock purchases under SFAS 123(R)
for the three and six-month periods ended April 3, 2009 and March 28, 2008 as follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
|
April 3, |
|
|
March 28, |
|
| (In thousands) |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Stock options |
|
$ |
2,544 |
|
|
$ |
2,841 |
|
|
$ |
5,410 |
|
|
$ |
5,145 |
|
Non-vested restricted stock with service and
market conditions |
|
|
293 |
|
|
|
766 |
|
|
|
2,645 |
|
|
|
2,367 |
|
Non-vested restricted stock with service conditions |
|
|
237 |
|
|
|
244 |
|
|
|
530 |
|
|
|
529 |
|
Performance shares |
|
|
801 |
|
|
|
1,413 |
|
|
|
1,451 |
|
|
|
1,814 |
|
Employee Stock Purchase Plan |
|
|
389 |
|
|
|
379 |
|
|
|
817 |
|
|
|
795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
4,264 |
|
|
$ |
5,643 |
|
|
$ |
10,853 |
|
|
$ |
10,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company utilized the following weighted average assumptions in calculating its share-based
compensation expense using the Black Scholes model at April 3, 2009 and March 28, 2008:
| |
|
|
|
|
|
|
|
|
| |
|
Three and Six-months Ended |
| |
|
April 3, |
|
March 28, |
| |
|
2009 |
|
2008 |
Expected volatility |
|
|
60.90 |
% |
|
|
51.56 |
% |
Risk free interest rate (7 year contractual life options) |
|
|
2.17 |
% |
|
|
2.93 |
% |
Risk free interest rate (10 year contractual life options) |
|
|
2.61 |
% |
|
|
3.49 |
% |
Dividend yield |
|
|
0.00 |
|
|
|
0.00 |
|
Expected option life (7 year contractual life options) |
|
|
4.42 |
|
|
|
4.42 |
|
Expected option life (10 year contractual life options) |
|
|
5.79 |
|
|
|
5.80 |
|
14. EARNINGS PER SHARE
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
|
April 3, |
|
|
March 28, |
|
| (In thousands, except per share amounts) |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Net (loss) income |
|
$ |
(4,589 |
) |
|
$ |
16,673 |
|
|
$ |
17,435 |
|
|
$ |
35,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted average shares outstanding – basic |
|
|
165,997 |
|
|
|
161,165 |
|
|
|
165,426 |
|
|
|
160,742 |
|
Effect of dilutive stock options |
|
|
— |
|
|
|
1,817 |
|
|
|
555 |
|
|
|
1,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – diluted |
|
|
165,997 |
|
|
|
162,982 |
|
|
|
165,981 |
|
|
|
162,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net (loss) income per share – basic |
|
$ |
(0.03 |
) |
|
$ |
0.10 |
|
|
$ |
0.11 |
|
|
$ |
0.22 |
|
Effect of dilutive stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share – diluted |
|
$ |
(0.03 |
) |
|
$ |
0.10 |
|
|
$ |
0.11 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share is calculated by dividing net (loss) income by the weighted average number
of common shares outstanding. Diluted earnings per share includes the dilutive effect of equity
based awards using the treasury stock method, the Junior Notes on an if-converted basis and the
2007 Convertible Notes using the treasury stock method, if their effect is dilutive.
Equity based awards exercisable for approximately 22.0 million shares were outstanding but not
included in the computation of earnings per share for the three-month period ended April 3, 2009 as
their effect would have been anti-dilutive. Equity based awards exercisable for approximately 23.3
million shares were outstanding but not included in the computation of earnings per share for the
six-month period ended April 3, 2009 as their effect would have been anti-dilutive.
Equity based awards exercisable for approximately 23.5 million shares were outstanding but not
included in the computation of earnings per share for the three-month period ended March 28, 2008
as their effect would have been anti-dilutive. Junior Notes convertible into approximately 1.4
million shares and equity based awards exercisable for approximately 22.8 million shares were
outstanding but not included in the computation of earnings per share for the six-month period
ended March 28, 2008 as their effect would have been anti-dilutive. If the Company had earned in
excess of $39.5 million in net income for the six-month period ended March 28, 2008, the Junior
Notes would have been dilutive to earnings per share.
In addition, the Company issued $200.0 million aggregate principal amount of convertible
subordinated notes in March 2007. These 2007 Convertible Notes contain cash settlement provisions,
which permit the application of the treasury stock method in determining potential share dilution
of the conversion spread should the share price of the Company’s common stock exceed $9.52. It has
been the Company’s historical practice to cash settle the principal and interest components of
convertible debt instruments, and it is the Company’s intention to continue to do so in the future,
including settlement of the 2007 Convertible Notes issued in March 2007. The Company retired $62.4
million and $40.5 million of the 2007 Convertible Notes in the fourth quarter of fiscal 2008 and
the first quarter of fiscal 2009, respectively. These shares have not been included in the
computation of earnings per share for the three or six-month periods ended April 3, 2009 as their
effect would have been anti-dilutive. The maximum potential dilution from the settlement of the
2007 Convertible Notes would be approximately 10.2 million shares and 10.9 million shares for the
three and six-month periods ended April 3, 2009, respectively. These shares have also not been
included in the three or six-month periods ended March 28, 2008, as their effect would have been
anti-dilutive. The maximum potential dilution from the settlement of the 2007 Convertible Notes at March 28, 2008
would have been approximately 21.0 million shares.
15. COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income are as follows:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
|
April 3, |
|
|
March 28, |
|
| (In thousands) |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Net (loss) income |
|
$ |
(4,589 |
) |
|
$ |
16,673 |
|
|
$ |
17,435 |
|
|
$ |
35,751 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on auction rate securities |
|
|
— |
|
|
|
(768 |
) |
|
|
— |
|
|
|
(1,504 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (loss) income |
|
$ |
(4,589 |
) |
|
$ |
15,905 |
|
|
$ |
17,435 |
|
|
$ |
34,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This report and other documents we have filed with the Securities and Exchange Commission (“SEC”)
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject
to the “safe harbor” created by those sections. Words such as “believes,” “expects,” “may,” “will,”
“would,” “should,” “could,” “seek,” “intends,” “plans,” “potential,” “continue,” “estimates,”
“anticipates,” “predicts,” and similar expressions or variations or negatives of such words are
intended to identify forward-looking statements, but are not the exclusive means of identifying
forward-looking statements in this report. Additionally, statements concerning future matters such
as the development of new products, enhancements or technologies, sales levels, expense levels and
other statements regarding matters that are not historical are forward-looking statements. Although
forward-looking statements in this report reflect the good faith judgment of our management, such
statements can only be based on facts and factors currently known by us. Consequently,
forward-looking statements involve inherent risks and uncertainties and actual results and outcomes
may differ materially and adversely from the results and outcomes discussed in or anticipated by
the forward-looking statements. A number of important factors could cause actual results to differ
materially and adversely from those in the forward-looking statements. We urge you to consider the
risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended
October 3, 2008, under the heading “Certain Business Risks” and in the other documents filed with
the SEC in evaluating our forward-looking statements. We have no plans, and undertake no
obligation, to revise or update our forward-looking statements to reflect any event or circumstance
that may arise after the date of this report. We caution readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the date made.
In this document, the words “we,” “our,” “ours” and “us” refer only to Skyworks Solutions, Inc. and
not any other person or entity.
RESULTS OF OPERATIONS
THREE AND SIX-MONTHS ENDED APRIL 3, 2009 AND MARCH 28, 2008
The following table sets forth the results of our operations expressed as a percentage of net
revenues for the three and six-month periods ended April 3, 2009 and March 28, 2008:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
|
April 3, |
|
|
March 28, |
|
| |
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Net revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
62.5 |
|
|
|
60.2 |
|
|
|
61.2 |
|
|
|
60.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
37.5 |
|
|
|
39.8 |
|
|
|
38.8 |
|
|
|
39.5 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
16.5 |
|
|
|
18.1 |
|
|
|
16.5 |
|
|
|
17.2 |
|
Selling, general and administrative |
|
|
13.2 |
|
|
|
11.6 |
|
|
|
13.0 |
|
|
|
11.8 |
|
Amortization of intangible assets |
|
|
0.7 |
|
|
|
0.9 |
|
|
|
0.6 |
|
|
|
0.9 |
|
Restructuring and other charges |
|
|
9.2 |
|
|
|
— |
|
|
|
4.2 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
39.6 |
|
|
|
30.6 |
|
|
|
34.3 |
|
|
|
29.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(2.1 |
) |
|
|
9.2 |
|
|
|
4.5 |
|
|
|
9.6 |
|
Interest expense |
|
|
(0.5 |
) |
|
|
(0.8 |
) |
|
|
(0.5 |
) |
|
|
(1.0 |
) |
Gain on early retirement of
convertible debt |
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
Other income, net |
|
|
— |
|
|
|
0.9 |
|
|
|
0.4 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes |
|
|
(2.6 |
) |
|
|
9.3 |
|
|
|
4.9 |
|
|
|
9.6 |
|
Provision for income taxes |
|
|
— |
|
|
|
1.0 |
|
|
|
0.3 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(2.6 |
)% |
|
|
8.3 |
% |
|
|
4.6 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL
During the six-month period ended April 3, 2009, our financial performance resulted in the
following:
| |
§ |
|
We generated $96.8 million in cash from operations in the six-month period ended April
3, 2009, an increase of $0.9 million from the comparable six-month period ended March 28,
2008. At April 3, 2009, we had $267.9 million in cash, cash equivalents and restricted cash
compared to $228.5 million at March 28, 2008. |
| |
| |
§ |
|
In the six-month period ended April 3, 2009, we retired $40.5 million of our 2007
Convertible Notes (due in 2012) at an average price of 92.6 percent of par value. These
retirements reduced the remaining principal balance on our 2007 Convertible Notes to $97.1
million and reduced related potential dilution of stockholder ownership by approximately
4.2 million shares. |
| |
| |
§ |
|
On January 22, 2009, we implemented a restructuring plan to realign our cost structure
given the currently challenging industry and overall economic conditions. We reduced global
headcount by approximately 4%, or 150 employees. We recorded total charges of $19.4 million
comprised of inventory write-downs, asset impairments and severance and benefit costs. The
non-cash component of this charge was $10.1 million. The restructuring plan was
substantially completed as of April 3, 2009. We expect to achieve annual operating expense
reductions of approximately $25.0 million due to this restructuring plan. |
NET REVENUES
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Net revenues |
|
$ |
172,990 |
|
|
|
(14.2 |
)% |
|
$ |
201,708 |
|
|
$ |
383,218 |
|
|
|
(7.0 |
)% |
|
$ |
412,241 |
|
We market and sell our mobile platforms and linear products to top tier Original Equipment
Manufacturers (“OEMs”) of communication electronic products, third-party Original Design
Manufacturers (“ODMs”) and contract manufacturers, and indirectly through electronic components
distributors. We periodically enter into
strategic arrangements that leverage our broad intellectual property portfolio by licensing or
selling our patents or other intellectual property. We anticipate continuing this intellectual
property strategy in future periods.
Net revenues decreased 14.2% for the three-month period ended April 3, 2009 as compared to the
corresponding period in the prior year. Net revenues decreased 7.0% for the six-month period ended
April 3, 2009 as compared to the same period in the prior year. The revenue decline for both the
three and six-month periods was due to a decline in mobile transceiver product revenues as we
exited this product area on January 22, 2009 and an overall slowing of demand for certain of our
products due to weak global economic conditions, partially offset by market share gains in our
handset business. Net revenues from our top three customers decreased to 40.3% in the second
quarter of fiscal 2009 from 41.0% in the second quarter of fiscal 2008, reflecting continued
expansion of our customer base and the successful execution of our diversification strategy. Our
top three customers in the second quarter of fiscal 2009 were OEMs.
GROSS PROFIT
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Gross profit |
|
$ |
64,875 |
|
|
|
(19.3 |
)% |
|
$ |
80,367 |
|
|
$ |
148,742 |
|
|
|
(8.6 |
)% |
|
$ |
162,705 |
|
% of net revenues |
|
|
37.5 |
% |
|
|
|
|
|
|
39.8 |
% |
|
|
38.8 |
% |
|
|
|
|
|
|
39.5 |
% |
Gross profit represents net revenues less cost of goods sold. Cost of goods sold consists primarily
of purchased materials, labor and overhead (including depreciation and equity based compensation
expense) associated with product manufacturing.
The decrease in gross profit as a percentage of revenue for the three and six-month periods ended
April 3, 2009, as compared to the corresponding periods in the previous fiscal year, was
substantially the result of the $3.5 million charge we incurred on inventory write-downs due to our
exit of the mobile transceiver product area. The decline in gross profit in aggregate dollars for
both periods was principally the result of the lower revenue base. Our ability to maintain
relatively consistent gross margin levels (not withstanding the one-time $3.5 million inventory
write-down) is principally the result of sustained cost control measures including capacity
management enhanced by the flexibility of our hybrid manufacturing model.
RESEARCH AND DEVELOPMENT
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Research and development |
|
$ |
28,596 |
|
|
|
(21.8 |
)% |
|
$ |
36,581 |
|
|
$ |
63,240 |
|
|
|
(10.5 |
)% |
|
$ |
70,675 |
|
% of net revenues |
|
|
16.5 |
% |
|
|
|
|
|
|
18.1 |
% |
|
|
16.5 |
% |
|
|
|
|
|
|
17.2 |
% |
Research and development expenses consist principally of direct personnel costs, costs for
pre-production evaluation and testing of new devices, masks and engineering prototypes, equity
based compensation expense and design and test tool costs.
The decrease in research and development expenses in aggregate dollars and as a percentage of net
revenues for the three and six-month periods ended April 3, 2009 as compared to the corresponding
periods in the previous fiscal year was principally attributable to due to the restructuring plan
implemented on January 22, 2009.
SELLING, GENERAL AND ADMINISTRATIVE
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Selling, general and administrative |
|
$ |
22,794 |
|
|
|
(2.4 |
)% |
|
$ |
23,346 |
|
|
$ |
49,895 |
|
|
|
2.6 |
% |
|
$ |
48,633 |
|
% of net revenues |
|
|
13.2 |
% |
|
|
|
|
|
|
11.6 |
% |
|
|
13.0 |
% |
|
|
|
|
|
|
11.8 |
% |
Selling, general and administrative expenses include legal, accounting, treasury, human resources,
information systems, customer service, bad debt expense, sales representative commissions,
advertising, marketing and other costs.
Selling, general and administrative expenses decreased in the aggregate for the three-month period
ended April 3, 2009, as compared to the corresponding period in fiscal year 2008, primarily due to
lower compensation and benefit costs including incentives. Selling, general and administrative expenses increased as a
percentage of revenues for the three-month period ended April 3, 2009, as compared to the
corresponding period in fiscal year 2008 due to the lower revenue base. Selling, general and
administrative expenses increased both in the aggregate and as a percentage of revenue for the
six-month period ended April 3, 2009 compared to the corresponding period in the prior year
primarily due to higher non-cash equity based compensation expense.
AMORTIZATION OF INTANGIBLE ASSETS
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Amortization |
|
$ |
1,246 |
|
|
|
(42.8 |
)% |
|
$ |
2,180 |
|
|
$ |
2,395 |
|
|
|
(41.8 |
)% |
|
$ |
4,112 |
|
% of net revenues |
|
|
0.7 |
% |
|
|
|
|
|
|
1.1 |
% |
|
|
0.6 |
% |
|
|
|
|
|
|
1.0 |
% |
The decrease in amortization expense during the three and six-month periods ended April 3, 2009, as
compared to the corresponding periods of fiscal 2008, was due to a reduction in amortization of
intangible assets associated with an acquisition completed in October 2007. See Note 2 of Notes to
Unaudited Interim Consolidated Financial Statements for additional information.
RESTRUCTURING AND OTHER CHARGES
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Restructuring and other charges |
|
$ |
15,982 |
|
|
|
100.0 |
% |
|
$ |
— |
|
|
$ |
15,982 |
|
|
|
100.0 |
% |
|
$ |
— |
|
% of net revenues |
|
|
9.2 |
% |
|
|
|
|
|
|
0.0 |
% |
|
|
4.2 |
% |
|
|
|
|
|
|
0.0 |
% |
Restructuring and other charges consist of charges for asset impairments and restructuring
activities, as follows:
2009 RESTRUCTURING AND OTHER CHARGES
On January 22, 2009, we implemented a restructuring plan to realign our costs given current
business conditions. We exited our mobile transceiver product area and reduced global headcount by
approximately 4%, or 150 employees. We recorded various charges associated with this action. In
total, we recorded $15.9 million of restructuring and other charges and $3.5 million in inventory
write-downs that were charged to cost of goods sold.
The $15.9 million charge includes the following: $4.5 million related to severance and benefits,
$5.6 million related to the impairment of certain long-lived assets, $2.0 million related to the
exit of certain operating leases, $2.3 million related to the impairment of technology licenses and
design software, and $1.5 million related to other charges. These charges total $15.9 million and
are recorded in restructuring and other charges.
For additional information regarding restructuring charges and liability balances, see Note 11 of
Notes to Unaudited Interim Consolidated Financial Statements.
INTEREST EXPENSE
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Interest expense |
|
$ |
808 |
|
|
|
(54.3 |
)% |
|
$ |
1,769 |
|
|
$ |
1,947 |
|
|
|
(51.0 |
)% |
|
$ |
3,977 |
|
% of net revenues |
|
|
0.5 |
% |
|
|
|
|
|
|
0.8 |
% |
|
|
0.5 |
% |
|
|
|
|
|
|
1.0 |
% |
Interest expense is comprised principally of payments in connection with the $50.0 million credit
facility between Skyworks USA, Inc., our wholly owned subsidiary, and Wachovia Bank, N.A.
(“Facility Agreement”), the Company’s 4.75% convertible subordinated notes (the “Junior Notes”),
and the Company’s 1.25% and 1.50% convertible subordinated notes (the “2007 Convertible Notes”).
The decrease in interest expense, both in aggregate dollars and as a percentage of net revenues for
the three and six-month periods ended April 3, 2009, when compared to the corresponding periods in
fiscal 2008, was due to the retirement of our higher interest rate Junior Notes, and the early
retirement of $62.4 million and $40.5 million of the 2007 Convertible Notes in the fourth quarter
of fiscal 2008 and the first quarter of fiscal 2009, respectively. See Note 8 of Notes to Unaudited
Interim Consolidated Financial Statements for information related to our borrowing arrangements.
GAIN ON EARLY RETIREMENT OF CONVERTIBLE DEBT
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Gain on early
retirement of
convertible debt |
|
$ |
0.0 |
|
|
|
0.0 |
% |
|
$ |
0.0 |
|
|
$ |
2,035 |
|
|
|
100.0 |
% |
|
$ |
0.0 |
|
% of net revenues |
|
|
0.0 |
% |
|
|
|
|
|
|
0.0 |
% |
|
|
0.5 |
% |
|
|
|
|
|
|
0.0 |
% |
In the six-month period ended April 3, 2009, we retired $40.5 million of our 2007 Convertible Notes
due in 2012. We recorded income of $2.0 million in the first quarter of fiscal 2009 related to the
early retirement of these notes, reflecting a $2.9 million discount received on the early
retirement of the debt offset by a $0.9 million write-off of deferred financing costs.
OTHER (EXPENSE) INCOME, NET
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
Six-months Ended |
| |
|
April 3, |
|
|
|
|
|
March 28, |
|
April 3, |
|
|
|
|
|
March 28, |
| (dollars in thousands) |
|
2009 |
|
Change |
|
2008 |
|
2009 |
|
Change |
|
2008 |
| |
|
|
|
|
Other (expense) income, net |
|
$ |
(13 |
) |
|
|
(100.7 |
)% |
|
$ |
1,883 |
|
|
$ |
1,389 |
|
|
|
(64.7 |
)% |
|
$ |
3,933 |
|
% of net revenues |
|
|
0.0 |
% |
|
|
|
|
|
|
0.9 |
% |
|
|
0.4 |
% |
|
|
|
|
|
|
1.0 |
% |
Other (expense) income, net is comprised primarily of interest income on invested cash balances,
other non-operating income and expense items and foreign exchange gains/losses.
The decreases in other (expense) income in both aggregate dollars and as a percentage of net
revenues for the three and six-month periods ended April 3, 2009, as compared to the corresponding
periods in fiscal 2008, is due to an overall decline in interest income on invested cash balances
due to lower interest rates in fiscal 2009.
PROVISION FOR INCOME TAXES
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three-months Ended |
|
|
Six-months Ended |
|
| |
|
April 3, |
|
|
|
|
|
|
March 28, |
|
|
April 3, |
|
|
|
|
|
|
March 28, |
|
| (dollars in thousands) |
|
2009 |
|
|
Change |
|
|
2008 |
|
|
2009 |
|
|
Change |
|
|
2008 |
|
Provision for income taxes |
|
$ |
25 |
|
|
|
(98.8 |
)% |
|
$ |
2,010 |
|
|
$ |
1,272 |
|
|
|
(66.5 |
)% |
|
$ |
3,799 |
|
% of net revenues |
|
|
0.0 |
% |
|
|
|
|
|
|
1.0 |
% |
|
|
0.3 |
% |
|
|
|
|
|
|
0.9 |
% |
The provision for income taxes for the three and six-month periods ended April 3, 2009
consists of approximately $(0.3) million and $0.6 million, respectively, of United States federal
and state income taxes. A charge to the United States federal income tax provision was not
required to reduce the carrying value of goodwill for the three and six-month periods ended April
3, 2009, respectively. The provision for income taxes for the three and six-month period ended
March 28, 2008 consists of approximately $1.7 million and $3.6 million, respectively, of United
States federal and state income taxes. Of the total U.S. income tax provision, $1.2 million and
$2.7 million were recorded as a charge reducing the carrying value of goodwill for the three and
six-month periods ended March 28, 2008, respectively.
The provision for the three and six-month periods ended April 3, 2009 consists of approximately
$0.3 million and $0.6 million, respectively, of foreign income taxes incurred by foreign
operations. The provision for the three and six-month periods ended March 28, 2008, consists of
approximately $0.3 million and $0.2 million, respectively, of foreign income taxes incurred by
foreign operations.
In accordance with SFAS 109, Accounting for Income Taxes (“SFAS 109”), management has determined
that it is more likely than not that a portion of our historic and current year income tax benefits
will not be realized. Accordingly, as of April 3, 2009, we have established a valuation allowance
of $76.3 million related to our United States federal deferred tax assets. Deferred tax assets have
been recognized for foreign operations when management believes that it is more likely than not
that they will be recovered during the carryforward period. There is a valuation allowance of $1.3
million related to our foreign deferred tax assets.
Realization of benefits from our deferred tax asset (principally research and experimentation
credits) is dependent upon generating United States source taxable income in the future, which may
result in the existing valuation reserve being reversed in the near term to the extent that the
related deferred tax assets no longer require a valuation allowance under the provisions of SFAS
109.
We will continue to evaluate its valuation allowance in future periods and depending upon
the outcome of that assessment, additional amounts could be reversed or recorded and recognized as
a reduction to goodwill or an adjustment to income tax benefit or expense. Such adjustments could
cause our effective income tax rate to vary in future periods. We will need to generate $309.4
million of future United States federal taxable income to utilize all of our net operating loss
carryforwards, research and experimentation tax credit carryforwards, and deferred income tax
temporary differences as of April 3, 2009.
As noted in our Annual Report on Form 10-K, no benefit has been recognized for certain acquisition
related deferred tax assets. The benefit from the recognition of these deferred items reduces the
carrying value of goodwill instead of reducing income tax expense. We will evaluate the
realization of the acquisition related deferred tax assets on a quarterly basis and adjust the
provision for income taxes accordingly. As a result, the effective tax rate may vary in subsequent
quarters.
We adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109 (“FIN 48”), as of the beginning of fiscal year 2008.
During the quarter ended April 3, 2009, there were no
significant changes in our gross
unrecognized tax benefits. Of the total unrecognized tax benefits at April 3, 2009, $0.6 million
would impact the effective tax rate, if recognized. There are no positions which we anticipate
could change within the next twelve months. Total year to date accrued interest related to our unrecognized tax benefits is $0.0 million. Our policy is to recognize accrued
interest and penalties, if incurred, on any unrecognized tax benefits as a component of income tax
expense.
Our major tax jurisdictions as of the adoption of FIN 48 are the United States federal
and the states of California and Iowa. For United States federal income tax, the statute of
limitations is closed on years before fiscal 2005, but because of carryforwards, certain items are
open back to fiscal 1998. For California, the statue of limitations is closed on years before
fiscal 2004, but because of carryforwards, certain items are open back to fiscal 2002. For Iowa,
the statue of limitations is closed on years before fiscal 2005, but because of carryforwards,
certain items are open back to fiscal year 2002.
LIQUIDITY AND CAPITAL RESOURCES
Cash Provided and Used
| |
|
|
|
|
|
|
|
|
| |
|
Six-months Ended |
|
| |
|
April 3, |
|
|
March 28, |
|
| (dollars in thousands) |
|
2009 |
|
|
2008 |
|
Cash and cash equivalents at beginning of period |
|
$ |
225,104 |
|
|
$ |
241,577 |
|
Net cash provided by operating activities |
|
|
96,796 |
|
|
|
95,873 |
|
Net cash used in investing activities |
|
|
(19,914 |
) |
|
|
(67,543 |
) |
Net cash used in financing activities |
|
|
(40,035 |
) |
|
|
(47,750 |
) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
261,951 |
|
|
$ |
222,157 |
|
|
|
|
|
|
|
|
Based on our results of operations for fiscal 2008 and the first six months of fiscal 2009, along
with current trends, we expect our existing sources of liquidity, together with cash expected to be
generated from operations, will be sufficient to fund our research and development, capital
expenditures, debt obligations, working capital and other cash requirements for at least the next
12 months. However, we cannot be certain that the capital required to fund these expenses will be
available in the future. In addition, any strategic investments and acquisitions that we may make
to help us grow our business may require additional capital resources. If we are unable to obtain
sufficient capital to meet our capital needs on a timely basis and on favorable terms (if at all),
our business and operations could be materially and adversely affected.
Cash and cash equivalent balances increased $36.8 million to $261.9 million at April 3, 2009 from
$225.1 million at October 3, 2008. We generated $96.8 million in cash from operations during the
six-month period ended April 3, 2009, which was offset by the retirement of $40.5 million of the
2007 Convertible Notes and capital expenditures of $18.7 million. The number of days sales
outstanding for the three-month period ended April 3, 2009 decreased to 59 from 74 for the
corresponding period in fiscal 2008.
During the six-month period ended April 3, 2009, we generated net income of $17.4 million. We
experienced a decrease in receivables, and inventories of $34.0 million and $8.4 million,
respectively. We also incurred multiple non-cash charges (e.g., depreciation, amortization,
contribution of common shares to savings and retirement plans, share-based compensation expense,
non-cash restructuring expense, asset impairments and inventory write-downs) totaling $51.0
million. This was offset by an increase in other assets of $1.6 million, and a decrease in
accounts payable and other accrued liabilities of $10.4 million and $3.8 million, respectively.
Cash used in investing activities for the six-month period ended April 3, 2009 consisted of
investments in capital equipment of $18.7 million primarily to expand fabrication and assembly and
test capacity. We believe a focused program of capital expenditures will be required to sustain our
current manufacturing capabilities. We expect that future capital expenditures will be funded by
the generation of positive cash flows from operations. We may also consider future acquisition
opportunities to extend our technology portfolio and design expertise and to expand our product
offerings.
Cash used in financing activities for the six-month period ended April 3, 2009 consisted of the
retirement of $40.5 million of our 2007 Convertible Notes, and the repurchase of treasury stock of
$1.8 million, offset by cash provided by stock option exercises of $2.3 million.
Our invested cash balances primarily consist of mutual funds invested in United States treasury
obligations, United States agency obligations, overnight repurchase agreements backed by United
States treasuries or United States
agency obligations, highly rated commercial paper, certificates of deposit and overnight repurchase
agreements. At April 3, 2009, we also held a $3.2 million auction rate security which historically
has provided liquidity through a Dutch auction process. The recent disruptions in the credit
markets have substantially eliminated the liquidity of this process resulting in failed auctions.
During the fiscal year ended October 3, 2008, we performed a comprehensive valuation and discounted
cash flow analysis on the auction rate security. We concluded the value of the auction rate
security was $2.3 million, and the carrying value of these securities was reduced by $0.9 million,
reflecting this change in fair value. Accordingly, in the fiscal year ended October 3, 2008, we
recorded unrealized losses on this auction rate security of approximately $0.9 million. We
assessed these declines in fair market value to be temporary and consider the security to be
illiquid until there is a successful auction or the investment matures. Accordingly, the remaining
auction rate security balance has been reclassified to non-current other assets and the loss was
recorded in other comprehensive income. As of April 3, 2009, we re-evaluated our auction rate
securities and determined that no adjustment was required. We will continue to monitor the
liquidity and accounting classification of this security in future periods. If in a future period,
if we determine that the impairment is other than temporary, we will impair the security to its
fair value and charge the loss to earnings.
On July 15, 2003, we entered into a receivables purchase agreement under which we have agreed to
sell from time to time certain of our accounts receivable to Skyworks USA, Inc. (“Skyworks USA”), a
wholly-owned special purpose entity that is fully consolidated for accounting purposes.
Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, N.A. providing for a $50.0
million credit facility (“Facility Agreement’’) secured by the purchased accounts receivable. As a
part of the consolidation, any interest incurred by Skyworks USA related to monies it borrows under
the Facility Agreement is recorded as interest expense in the Company’s results of operations. We
perform collections and administrative functions on behalf of Skyworks USA. Interest related to the
Facility Agreement is at LIBOR plus 0.75%. We renewed the Facility Agreement for another year in
July 2008, and as of April 3, 2009, Skyworks USA had borrowed $50.0 million under this agreement.
CONTRACTUAL OBLIGATIONS
Our contractual obligations disclosure in our annual report on Form 10-K for the year ended October
3, 2008 has not materially changed since we filed that report, with the exception that we retired
$40.5 million of our 2007 Convertible Notes (due in 2012) at an average price of 92.6 of par value.
These retirements reduced the remaining principal balance on our 2007 Convertible Notes to $97.1
million as of November 12, 2008. Our short-term and long-term debts are more fully described in
Note 8 of this Form 10-Q.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS 141(R)
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). SFAS
141(R) applies to any transaction or other event that meets the definition of a business
combination. Where applicable, SFAS 141(R) establishes principles and requirements for how the
acquirer recognizes and measures identifiable assets acquired, liabilities assumed, noncontrolling
interest in the acquiree and goodwill or gain from a bargain purchase. In addition, SFAS 141(R)
determines what information to disclose to enable users of the financial statements to evaluate the
nature and financial effects of the business combination. This statement is to be applied
prospectively for fiscal years beginning after December 15, 2008. The Company will evaluate the
impact of SFAS 141(R) on its Consolidated Financial Statements in the event future business
combinations are contemplated.
SFAS 160
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, an Amendment of ARB No. 51 (“SFAS 160”). SFAS 160 amends ARB 51 to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation
of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with
the requirements of SFAS 141(R). This statement is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. The statement shall be applied
prospectively as of the beginning of the fiscal year in which the statement
is initially adopted. The Company does not expect the adoption of SFAS 160 to impact its results of
operations or financial position because the Company does not have any minority interests.
SFAS 161
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 amends FASB Statement No.
133 to require enhanced disclosures about an entity’s derivative and hedging activities thereby
improving the transparency of financial reporting. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The Company does not currently hold any positions in derivative
instruments or participate in hedging activities and thus does not expect the adoption of SFAS 161
to have any impact on its results of operations or financial position.
SFAS 162
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy
of Generally Accepted Accounting Principles (“SFAS 162”). SFAS No. 162 sets forth the level of
authority to a given accounting pronouncement or document by category. Where there might be
conflicting guidance between two categories, the more authoritative category will prevail. SFAS No.
162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411
of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial
position, statements of operations, or cash flows at this time.
FSP No. 142-3
In April 2008, the FASB issued FASB Staff Position (“FSP”) No. 142-3, Determination of the Useful
Life of Intangible Assets (“FSP 142-3”). FSP 142-3 amends the factors an entity should consider in
developing renewal or extension assumptions used in determining the useful life of recognized
intangible assets under FASB Statement No. 142, Goodwill and Other Intangible Assets. This new
guidance applies prospectively to intangible assets that are acquired individually or with a group
of other assets in business combinations and asset acquisitions. FSP 142-3 is effective for
financial statements issued for fiscal years and interim periods beginning after December 15, 2008.
Early adoption is prohibited. The Company does not expect the adoption of FSP 142-3 to have any
material impact on its results of operations or financial position.
FSP No. APB 14-1
In May 2008, the FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB
14-1 alters the accounting treatment for convertible debt instruments that allow for either
mandatory or optional cash settlements. FSP APB 14-1 is expected to impact the Company’s
accounting for its 2007 Convertible Notes and previously held Junior Notes. This FSP requires
registrants with specified convertible note features to recognize (non-cash) interest expense based
on the market rate for similar debt instruments without the conversion feature. Furthermore,
pursuant to its retrospective accounting treatment, the FSP requires prior period interest expense
recognition. FSP APB 14-1 is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. The Company is currently evaluating FSP APB 14-1 and
the impact that it will have on its Consolidated Financial Statements. The Company is not required
to adopt FSP APB 14-1 until the first quarter of fiscal 2010.
FSP No. 133-1 and FIN 45-4
In September 2008, the FASB issued FSP No. 133-1, Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 (“FSP 133-1”) and FASB Interpretation No. 45;
and Clarification of the Effective Date of FASB Statement No. 161. This FSP amends FASB Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by
sellers of credit derivatives, including credit
derivatives embedded in a hybrid instrument. This
FSP also amends FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, to require an additional
disclosure about the current status of the payment/performance risk of a guarantee. Further, this
FSP clarifies the Board’s intent about the effective date of FASB Statement No. 161, Disclosures
about Derivative Instruments and Hedging Activities. The provisions of this FSP that amend
Statement 133 and Interpretation 45 shall be effective for reporting periods (annual or interim)
ending after November 15, 2008. The Company does not currently hold any positions in derivative
instruments or participate in hedging activities and thus does not expect the adoption of FSP 133-1
and FIN 45-4 to have any impact on its results of operations or financial position.
FSP No. FAS 157-3
In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active (“FSP 157-3”) which clarifies the application of SFAS
157 in a market that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset. SFAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 for financial assets carried at fair
value, and years beginning after November 15, 2008 for non-financial assets not carried at fair
value. The Company has adopted FSP 157-3 for its financial assets carried at fair value and
determined that it does not have a material impact on its results of operations or financial
position. The Company will adopt FSP 157-3 for non-financial assets in the first fiscal quarter of
2010 and is currently evaluating the impact on it results of operations or financial position.
FSP No. FAS 157-4
In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly (“FSP 157-4”) amends SFAS No. 157 and provides additional guidance for
estimating fair value in accordance with SFAS No. 157 when the volume and level of activity for the
asset and liability have significantly decreased, as well as provides guidance on identifying
circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for interim and
annual periods ending after June 15, 2009. The adoption of FSP 157-4 is not expected to have a
material impact on the Company’s consolidated results of operations, cash flows or financial
position.
FSP No. FAS 115-2 and FAS 124-2
In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments (“FSP 115-2 and FAS 124-2”) amending SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities and FSP No. FAS 115-1 and FAS 124-1, The Meaning
of Other-Than-Temporary Impairment and its Application to Certain Investments. FAS 115-2 and FAS
124-2 provide additional guidance to make other-than-temporary impairments more operational and to
improve the financial statement presentation of such impairments. FAS 115-2 and FAS 124-2 are
effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 115-2 and
FAS 124-2 is not expected to have a material impact on the Company’s consolidated results of
operations, cash flows or financial position.
FSP No. FAS 107-1 and APB 28-1
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments (“ FSP 107-1 and APB 28-1”) amending SFAS No. 107, Disclosures
about Fair Value of Financial Instruments and APB Opinion No. 28, Interim Financial Reporting, by
requiring disclosures about fair value of financial instruments in interim financial statements as well as in annual financial
statements. FSP 107-1 and APB 28-1 are effective for interim periods ending after June 15, 2009.
The adoption of FSP 107-1 and APB 28-1 are not expected to have a material impact on the Company’s
consolidated results of operations, cash flows or financial position.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to foreign currency, market rate and interest risks as described below:
Investment and Interest Rate Risk
Our exposure to interest and market risk relates principally to our investment portfolio, which as
of April 3, 2009 consisted of the following (in millions):
| |
|
|
|
|
Cash and cash equivalents (time deposits, overnight repurchase agreements and money market funds) |
|
$ |
261.9 |
|
Restricted cash (time deposits and certificates of deposit) |
|
|
6.0 |
|
Available for sale securities (auction rate securities) |
|
|
2.3 |
|
|
|
|
|
Total |
|
$ |
270.2 |
|
|
|
|
|
The main objective of our investment activities is the liquidity and preservation of investment
capital. Credit risk associated with our investments is not significant as our investment policy
prescribes high credit quality standards and limits the amount of credit exposure to any one
issuer. We do not use derivative instruments for speculative or investment purposes.
In general, our cash and cash equivalent investments have short-term maturity periods which dampen
the impact of significant market or interest rate risk. We are, however, subject to overall
financial market risks, such as changes in market liquidity, credit quality and interest rates.
Available for sale securities carry a longer maturity period (contractual maturities exceed ten
years). In fiscal 2008 we experienced a temporary unrealized loss on our investment in auction
rate securities primarily caused by a disruption in the liquidity of the Dutch auction process
which resets interest rates each period. We classified auction rate securities in prior periods as
current assets under “Short Term Investments”. Given the failed auctions, the auction rate
securities are effectively illiquid until there is a successful auction. Accordingly, the remaining
auction rate securities balance has been reclassified to non-current other assets. However, we
have the ability and intent to hold these investments until there is a full recovery of its fair
value, which may be at maturity.
Exchange Rate Risk
Substantially all sales to customers and arrangements with third-party manufacturers provide for
pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate
fluctuations on our results. A small percentage of our international operational expenses are
denominated in foreign currencies. Exchange rate volatility could negatively or positively impact
those operating costs. The Company incurred unrealized foreign exchange gains/(losses) of $(0.3)
million and $0.5 million for the three and six-month periods ended April 3, 2009, respectively, and
unrealized foreign exchange gains/(losses) of $0.1 million for both the three and six-month periods
ended March 28, 2008. Increases in the value of the U.S. dollar relative to other currencies could
make our products more expensive, which could negatively impact our ability to compete.
Conversely, decreases in the value of the U.S. dollar relative to other currencies could result in
our suppliers raising their prices to continue doing business with us. Fluctuations in currency
exchange rates could have a greater effect on our business in the future.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Our management, with the participation of our chief executive officer and chief financial officer,
evaluated the effectiveness of our disclosure controls and procedures as of April 3, 2009. The term
“disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and
other procedures of a company that are designed to ensure that information required to be disclosed
by a company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by a company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the company’s management,
including its principal executive and principal financial officers, as appropriate to allow timely decisions
regarding required disclosure. Management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of achieving their objectives
and management necessarily applies its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Based on the evaluation of our disclosure controls and procedures
as of April 3, 2009, our chief executive officer and chief financial officer concluded that, as of
such date, our disclosure controls and procedures were effective at the reasonable assurance level.
(b) Changes in internal controls over financial reporting.
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) occurred during the fiscal quarter ended April 3, 2009 that has
materially affected, or is reasonably likely to materially affect, Skyworks’ internal control over
financial reporting.
PART II. OTHER INFORMATION
Item 1A. Risk Factors
There have been no significant changes in the risk factors disclosed in Item 1A of our Annual
Report on Form 10-K for the year ended October 3, 2008.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) The following table provides information regarding repurchases of common stock made by us
during the fiscal quarter ended April 3, 2009:
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|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Maximum Number (or |
| |
|
|
|
|
|
|
|
|
|
|
|
Approximately |
| |
|
|
|
|
|
|
|
|
|
Total Number of |
|
Dollar Value) of |
| |
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
Shares that May Yet |
| |
|
|
|
|
|
|
|
|
|
Part of Publicly |
|
Be Purchased Under |
| |
|
Total Number of |
|
Average Price Paid |
|
Announced Plans or |
|
the Plans or |
| Period |
|
Shares Purchased |
|
per Share |
|
Programs |
|
Programs |
| |
1/3/09-2/3/09
|
|
|
— |
|
|
|
— |
|
|
N/A(2)
|
|
N/A(2) |
2/4/09-3/3/09
|
|
|
6,664 |
(1) |
|
$ |
6.43 |
|
|
N/A(2)
|
|
N/A(2) |
3/4/09-4/3/09
|
|
|
2,090 |
|
|
$ |
7.28 |
|
|
N/A(2)
|
|
N/A(2) |
|
|
|
| (1) |
|
All shares of common stock reported in the table above were repurchased by Skyworks at the
fair market value of the common stock as of the period stated above, in connection with the
satisfaction of tax withholding obligations under restricted stock agreements between Skyworks
and certain of its key employees. |
| |
| (2) |
|
We have no publicly announced plans or programs. |
Item 5. Other Information
On May 12, 2009, the stockholders of the Company approved an amended and restated 2005 Long-Term
Incentive Plan that (1) increased the number of shares available for issuance under the plan by the
sum of (a) 12.5 million shares, (b) 846,714 shares, which was the number of shares available for
issuance under the 1999 Employee Long Term Incentive Plan (the “1999 Plan”) that were unused as of
April 26, 2009, and (c) the number of shares subject to awards outstanding under the 1999 Plan that
expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased after April 26,
2009, and (2) permits the grant of stock-based awards that are intended to qualify as
performance-based compensation under Section 162(m) of the Internal Revenue Code. The Section
162(m) limit on awards under the 2005 LTIP was also increased to 1.5 million shares per participant
per calendar year.
In addition, on May 12, 2009, the Company’s Compensation Committee approved payments to the
Company’s executive officers for the first half of fiscal 2009 under the 2009 Executive Incentive
Plan (the “Incentive Plan”). Each executive officer’s first half incentive award was consistent
with the metrics set forth in the Company’s previously disclosed 2009 Incentive Plan, although the
Compensation Committee exercised discretion permitted by the plan to make such award payments by
waiving the minimum operating income threshold for the first half of fiscal 2009, given that the
Company nearly achieved such objective despite the severe and unanticipated economic downturn that
occurred during the first half of fiscal 2009. Payments were made only for the performance metrics
which were achieved, and no payment was made based on the operating income metric. Accordingly,
the Chief Executive Officer, Chief Financial Officer, Executive Vice President and General Manager,
Front-End Solutions, Senior Vice President, Sales and Marketing, and Vice President, Worldwide
Operations earned a first half incentive award equal to approximately 14%, 8%, 14%, 26% and 11% of
their annual base salary, respectively. In addition, in recognition of their contributions to the
Company’s performance during the first half of fiscal 2009, the Compensation Committee approved
payments to approximately 800 other non-executive employees under non-executive incentive plans
containing terms and conditions similar to the Incentive Plan. Consistent with the Incentive Plan
(and other employee incentive plans), actual payments for the first six month performance period
were capped at 80% of the award earned, with 20% of the award earned held back until the end of the
fiscal year to ensure sustained financial performance.
Item 6. Exhibits
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|
|
| Number |
|
Description |
| |
31.1*
|
|
Certification of the Company’s Chief Executive Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a- 14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
31.2*
|
|
Certification of the Company’s Chief Financial Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
| |
|
|
| Number |
|
Description |
| |
32.1*
|
|
Certification of the Company’s Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
32.2*
|
|
Certification of the Company’s Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
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.
| |
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|
|
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|
| |
|
|
|
SKYWORKS SOLUTIONS, INC. |
|
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|
Date: May 13, 2009
|
|
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|
By:
|
|
/s/ David J. Aldrich
|
|
|
| |
|
|
|
David J. Aldrich, President and Chief |
|
|
| |
|
|
|
Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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By:
|
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/s/ Donald W. Palette
|
|
|
| |
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|
|
Donald W. Palette, Chief Financial Officer |
|
|
| |
|
|
|
Vice President (Principal Accounting and Financial Officer) |
|
|
EXHIBIT INDEX
| |
|
|
| Number |
|
Description |
| |
31.1
|
|
Certification of the Company’s Chief Executive Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a- 14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
31.2
|
|
Certification of the Company’s Chief Financial Officer pursuant to
Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 |
|
|
|
32.1
|
|
Certification of the Company’s Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
32.2
|
|
Certification of the Company’s Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |