Atmel 1Q'00 Net Income Up 151% as Sales Rise 48%; Earnings per share total $0.19, up 111% from 1Q'99

Business Wire, April 19, 2000

Business Editors and High Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--April 19, 2000

Atmel Corporation (NASDAQ: ATML), today announced record results for the first quarter ended March 31, 2000.

Revenues for the first quarter of 2000 were the largest in Atmel's history, totaling $429,186,000, up 48% from a year ago, and up 10% sequentially. Net income for the first quarter of 2000 totaled $41,852,000 or $0.19 per share on a fully diluted basis. Basic EPS for the quarter was $0.20. In the previous quarter (fourth quarter 1999), the Company reported net income of $33,039,000 or $0.16 per share. In last year's first quarter, the Company's net income was $16,698,000 or $0.09 per share before an exceptional charge for an accounting change. Including the exceptional charge, net loss in the first quarter of 1999 was $12,370,000 or $0.06 per share. All results reflect the 2-for-1 stock split, effective in December 1999.

George Perlegos, President and Chief Executive Officer commented, "Revenues for the first quarter of 2000 were Atmel's highest ever, and we are extremely pleased with our growth and profit performance. Revenues were ahead of our expectations driven by continued product sales strength, particularly in high density Flash and BiCMOS ASICs aimed at the wireless telecommunications end market, as well as accelerating growth in Europe and Asia. Profitability measures improved as our gross margin increased to 41.1 percent from 35.8 percent a year ago, and our operating margin more than doubled from a year ago to 16.2 percent due to our continued focus on expense control. Fully diluted earnings per share of $0.19 also more than doubled from a year ago, despite the additional shares from the secondary offering completed in February 2000.

"New orders booked in the quarter were strong, giving us confidence in the future. We are particularly pleased with the remarkable strength in order demand for our Smart Card ICs, which is driven by the proliferation of wireless, e-commerce and Internet security applications. Business conditions remain robust across the board, and the improving demand and firm pricing over a wide range of Atmel products gives us confidence in continuing to grow our revenues and margins.

"Having successfully completed a secondary offering of 18 million shares in February, Atmel raised over $600 million, positioning the Company to take full advantage of capacity expansion activities to meet the growing demand from our customers. Capital expenditures for the quarter were approximately $170 million and we are revising our full year capital expenditure plan from approximately $500 million to $1 billion. Our balance sheet remained very strong with ending cash and investments of $962 million, due in large part to the proceeds from the secondary offering."

In conclusion Mr. Perlegos added, "As we look out to the remainder of 2000 we are enthusiastic about the exciting growth opportunities we are addressing that take advantage of our leading expertise in advanced logic, nonvolatile memory, mixed signal, and radio frequency capabilities."

Founded in 1984, Atmel Corporation is headquartered in San Jose, California with principal manufacturing facilities in Colorado Springs, Colorado, Nantes and Rousset, France and Heilbronn, Germany. Atmel designs, manufactures and markets on a worldwide basis advanced logic, mixed-signal, nonvolatile memory, and RF semiconductors. Atmel is also a leading provider of system-level integration semiconductor solutions using advanced CMOS, BiCMOS, BiPolar and SiGe process technologies.

Atmel product and financial information can be retrieved from its Fax-on Demand service. In North America call 1(800) 292-8635. Internationally from a fax phone, dial 1(408) 441-0732. Requests may be sent via e-mail to literature@atmel.com or by visiting Atmel's website at http://www.atmel.com.

Except for historical information contained herein, the matters set forth in this press release are forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, including the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry overcapacity, financial stability in foreign markets, ability to integrate and manage acquisitions, and other risks detailed from time to time in the Atmel's SEC reports and filings.

                           Atmel Corporation
                 Condensed Consolidated Balance Sheets
                            (In thousands)

                                  March 31, 2000    December 31, 1999
                                  --------------    -----------------

Current assets:
 Cash and cash equivalents         $  802,684          $   251,272
 Short-term investments               159,036              161,190
 Accounts receivable, net             305,232              281,843
 Inventories                          270,048              274,065
 Other current assets                  75,489               70,938
                                -------------        -------------
Total current assets                1,612,489            1,039,308

Other assets                           36,757               37,040
Fixed assets, net                   1,039,864              938,562
                                -------------         ------------
         Total assets              $2,689,110           $2,014,910
                                 ============          ===========
Current liabilities:

Current portion of long-term debt    $144,975             $147,166
Trade accounts payable                281,744              278,562
Accrued liabilities and other         116,156               94,584
Deferred income on shipments
 to distributors                       30,030               31,500
                                 ------------         ------------
         Total current liabilities    572,905              551,812

Convertible notes                     278,019              275,899
Long-term debt less current portion   382,856              378,134
Other long-term liabilities             7,586                7,586
                                 ------------         ------------
         Total liabilities          1,241,366            1,213,431
                                 ------------         ------------


Shareholders' equity:
 Common stock                         950,420              346,007
 Retained earnings                    497,324              455,472
                                 ------------         ------------
        Total shareholders' equity  1,447,744              801,479
                                 ------------         ------------
Total liabilities and
 shareholders' equity              $2,689,110           $2,014,910
                                   ==========           ==========


                           Atmel Corporation
               Condensed Consolidated Income Statements
                 (In thousands, except per-share data)

                                             Three Months Ended
                                                  March 31
                                            2000               1999
                                            ----               ----
Net revenues:                             $429,186           $290,037

Expenses:
 Cost of sales                             252,722            186,165
 Research and development                   61,913             47,229
 Selling, general and administrative        45,110             35,920
                                            ------             ------
 Total expenses                            359,745            269,314
                                           -------            -------
Operating income                            69,441             20,723
Other income (expense), net                 (4,048)             5,367
                                           -------              -----
Income before taxes                         65,393             26,090
Income tax (provision)                     (23,541)            (9,392)
                                          --------            -------
Income before cumulative
 effect of accounting change                41,852             16,698
Cumulative effect of accounting
change (net of tax effect)                       0            (29,068)
                                          --------           --------

Net income (loss)                          $41,852           $(12,370)
                                          ========           =========
Basic net income (loss) per share
Income per share before cumulative
 effect of accounting change                 $0.20              $0.09

Cumulative effect of accounting
 change per share                             0.00             $(0.15)
                                            ------            -------
Basic net income (loss) per share            $0.20             $(0.06)
                                           =======            =======
Diluted net income (loss) per share
Income (loss) per share before
cumulative effect of accounting change       $0.19              $0.09
Cumulative effect of accounting
 change per share                             0.00             $(0.15)
                                            ------            -------
Diluted net income (loss) per share          $0.19             $(0.06)
                                           =======            =======
Shares used in basic net income
 (loss) per-share calculation              213,485            199,976
                                           =======            =======

Shares used in diluted net income
(loss) per-share calculation               239,328            199,976
                                           =======            =======