Micrel, Inc. announced financial results for the second quarter ending June 30, 2008. Second quarter revenues of $70.6 million were at the high end of the company’s guidance range, increasing by $4.5 million, or 7%, from $66.1 million in the first quarter. This represented Micrel’s highest sequential revenue growth rate in four years. Second quarter revenues were up by $5.5 million, or 8%, from $65.1 million the year ago period. The sequential growth in revenues was led by stronger demand from customers serving the wireline communications, wireless handset, and Wifi voice-over-IP end markets, combined with record sales through the company’s global sell-through distributors.
Second quarter 2008 GAAP net income was $7.2 million, or $0.10 per diluted share. This compares with first quarter 2008 GAAP net income of $8.4 million, or $0.12 per diluted share, and GAAP net income of $8.6 million or $0.11 per diluted share in the year ago period. Expenses related to the company’s proxy contest were $2.7 million in the second quarter, which reduced GAAP net income by $0.023 per share. Subsequent to a special meeting of shareholders on May 22, 2008, Micrel announced on July 9, 2008 that Obrem Capital Management LLC had agreed to withdraw its slate of nominees for the board of directors, and support Micrel’s board nominees at the upcoming annual meeting of shareholders in September. "This reflects an ongoing cooperative relationship that Micrel is having with its largest independent shareholder," stated Ray Zinn, President and CEO of Micrel.
Second quarter 2008 non-GAAP net income was $10.0 million or $0.14 per diluted share. Non-GAAP results exclude the impact of revenues and cost of revenues related to intellectual property settlements, stock-based compensation expense, other operating income and expense items, proxy contest expenses, restructuring charges and credits, other income related to litigation settlements and their related tax effects.
"I am pleased with the strong revenue growth Micrel achieved in the second quarter," continued Zinn. "Despite uncertain economic conditions and the distractions of a proxy contest, the company was able to generate sequential revenue growth in all three of its major product groups. We were especially encouraged by the double digit growth in sales to customers in the wireless handset market during the quarter, which was driven by design win ramps in both high-end smart phones, and our new low cost portable power products. Unfortunately, the bottom line was impacted by expenses related to the proxy contest, which reduced second quarter GAAP net income by more than two cents per diluted share. However, during the quarter, we benefitted from the leverage inherent in our operating model. Excluding non-recurring items, approximately 50% of the sequential growth in revenues fell to operating profit in the second quarter."