Atmel 3Q'00 Net Income Up 342% as Sales Rise 56% versus 3Q'99; Earnings per share total $0.16, up 300% from 3Q'99

Business Wire, Oct 19, 2000

Business Editors

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

Atmel Corporation (Nasdaq:ATML), today announced record results for the third quarter ended September 30, 2000.

Revenues for the third quarter of 2000 totaled $530,393,000, up 56% from a year ago, and up 11% sequentially. Net income for the third quarter of 2000 totaled $76,519,000 or $0.16 per share on a fully diluted basis. Basic EPS for the quarter was $0.17. In the previous quarter (second quarter 2000), the Company reported net income of $61,325,000 or $0.13 per share. In last year's third quarter, the Company's net income was $17,306,000 or $0.04 per share.

The earnings per share and number of shares used in the earnings-per-share data for all periods presented reflect the two-for-one stock split that was effective in August 2000.

George Perlegos, President and Chief Executive Officer commented, "We achieved yet another quarter of exceptional financial performance with revenues and net income for the third quarter of 2000 reaching the highest in Atmel's history. Revenues exceeded our expectations and were driven by continued sales strength across all product categories, robust end customer demand, a firm pricing environment, and the continued successful ramp of our manufacturing capacity. Sales growth was particularly strong in our proprietary AVR microcontroller product family.

"During the third quarter we finalized two long-term supply agreements with leading customers in the communications end market. One of these customers gave Atmel a significant cash advance in excess of $100 million to secure this agreement," added Mr. Perlegos. These agreements illustrate that our customers see a continued tight supply situation for our products over the coming years."

Mr. Perlegos continued, "This quarter we continued improving Atmel's profitability with our gross margin increasing to 44.4 percent from 37.8 percent last year, and our operating margin more than doubling from a year ago to 22.7 percent. These metrics demonstrate Atmel's dedication to expense control, and highlight the inherent leverage in our business model. Capital expenditures for the quarter were approximately $300 million, and our balance sheet remained very strong with ending cash and investments of $1.14 billion and EBITDA for the quarter of approximately $180 million. Receivables fell to 61 days and inventory turns improved to 89 days."

"As we stated earlier in the quarter, our results are not materially impacted by the current weakness in the Euro," added Mr. Perlegos. "Atmel's large amount of U.S. dollar-based sales and Euro-based costs act as a natural hedge against fluctuations in the value of the Euro and the U.S. dollar."

Mr. Perlegos concluded, " Our backlog at the end of the quarter remains very strong, giving us full confidence in the future. We are enthusiastic about the exciting growth opportunities we are addressing that take advantage of our leading expertise in a broad range of product areas, including advanced logic, security and radio frequency capabilities. On the manufacturing front we continued to ramp our 8 inch capacity. To increase our presence in leading edge manufacturing, during the quarter we acquired a fully facilitized 8 inch factory from Siemens in North Tyneside in England. We anticipate starting manufacturing in this facility by the middle of next year."

Atmel will hold a teleconference for the financial community at 3:00 PM Pacific Daylight Time today to discuss third quarter financial results. Atmel will provide a real-time audio broadcast of the teleconference in the Investor Relations page of its website at http://www.atmel.com. The webcast replay will be available for two weeks after the teleconference.

Atmel will also provide a telephone recording of the teleconference, which will be available at approximately 5:00 PM PDT today. Interested parties may listen to the playback of the teleconference by calling the following number: 1-303-590-3000 and entering the code number 764395.

Founded in 1984, Atmel Corporation is headquartered in San Jose, California with principal manufacturing facilities in Colorado Springs, Colorado, Grenoble, Nantes and Rousset, France and Heilbronn, Germany, Irving, Texas, and North Tyneside, England. 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, effective and cost efficient utilization of manufacturing capacity, 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.