Micrel Inc. (Micrel) has reported total net revenues of $259.4 million for the year-end 2008, compared with the total net revenues of $258 million in the previous year-end. It has also reported a net income of $28.3 million, or $0.40 per share, for the year-end 2008, compared with the net income of $44.1 million, or $0.57 per share, in the previous year-end.
The fourth quarter 2008 revenue of $55.2 million decreased by $12.4 million, or 18%, from $67.5 million in third quarter 2008. The fourth quarter revenues were lower by $9.4 million, or 15%, from $64.6 million in the same period of 2007. The sequential and year-over-year decrease in revenues was due to continued reduction in overall demand from the customers in nearly all geographies, as a result of the worldwide financial crisis that has considerably impacted all consumer related markets.
The fourth quarter 2008 GAAP net income of $4.9 million, or $0.07 per diluted share compares with third quarter 2008 GAAP net income of $7.7 million, or $0.11 per diluted share, and GAAP net income of $8.4 million or $0.11 per diluted share in the same period in 2007. The fourth quarter 2008 non-GAAP net income was $6.3 million, or $0.09 per diluted share. Non-GAAP results exclude the impact of stock-based compensation expense, proxy contest expenses, restructuring charges and credits, other income related to litigation settlements and their related tax effects.
Included in 2007 net income was a $15.5 million pre-tax gain linked with a first quarter legal settlement, which after income taxes, is equivalent to $0.12 per diluted share. The non-GAAP net income in 2008 was $34.4 million, or $0.49 per diluted share, compared with non-GAAP net income of $39.2 million, or $0.51 per diluted share in 2007. The gross margins for 2008 were 55% compared to 57% in 2007.
The economic downturn and its impact on demand from our customers were more dramatic than we originally anticipated, said Ray Zinn, president and chief executive officer of Micrel. As market conditions continued to weaken during the quarter, nearly all of our customers significantly reduced their orders and took actions to lower inventories. While this impacted our results in the quarter, I continue to be pleased with our operating execution and expense management. During the fourth quarter, total operating expenses were 10% lower than the third quarter. The Company has also maintained its quarterly dividend and stock repurchase programs. I am confident that we are taking the right steps to weather the current economic storm and prosper once market conditions stabilize.
Outlook:
Commenting on Micrel’s business outlook, Zinn said, Our customers continue to place orders to satisfy short-term demand and our visibility into longer-term customer demand continues to be limited due to short order lead times. During the fourth quarter, total bookings were less than revenues as our distributors continued to decrease inventory levels. However, the lean inventory levels coupled with pressure on the semiconductor industry to pull back its own inventories should result in less pressure on pricing. In addition, I am pleased with our design win momentum. We will continue to introduce approximately the same number of world class products as we did in 2008, which should help partially offset the ongoing macroeconomic challenges.
For the first quarter of 2009, the company estimates that revenues will decline between minus 12% to minus 17% on a sequential basis. The gross profit margin is anticipated to be in the range of 50% to 51%. Additionally, the company estimates that GAAP net income will be about $0.01 to $0.03 per diluted share.