Net sales for Microsemi's fourth quarter of 2011 achieved a record $227.3 M, up 50.3 percent from the fourth quarter of 2010 and up 4.9 percent from the third quarter of 2011. Net sales for fiscal year 2011 were a record $835.9 M, up 61.3 percent from fiscal year 2010.
Non-GAAP gross margin in the fourth quarter of 2011, which included only the effect of non-cash purchase accounting adjustments, was a record 57.3 percent, up 810 basis points from the fourth quarter of 2010 and up 20 basis points from the third quarter of 2011. For fiscal year 2011, non-GAAP gross margin was 56.1 percent, up 820 basis points from fiscal year 2010. Non-GAAP operating margin was 26.3 percent in the fourth quarter of 2011, up 420 basis points from the fourth quarter of 2010 and up 10 basis points from the third quarter of 2011. For fiscal year 2011, non-GAAP operating margin was 25.4 percent, an increase of 400 basis points from fiscal year 2010. Non-GAAP net income for the fourth quarter of 2011 was $45.6 M or $0.53 per diluted share compared to $28.8 M or $0.35 per diluted share for the fourth quarter of 2010 and $42.0 M or $0.49 per diluted share in the third quarter of 2011. For fiscal year 2011, non-GAAP net income was $157.1 M or $1.83 per diluted share compared to $92.8 M or $1.14 per diluted share in fiscal year 2010. For the fourth quarter and fiscal year 2011, the non-GAAP effective tax rate was 17.5 percent and 19.2 percent, respectively.
On a GAAP basis, gross margin in the fourth quarter of 2011 was 57.1 percent, up 800 basis points from the fourth quarter of 2010 and up 10 basis points from the third quarter of 2011. For fiscal year 2011, GAAP gross margin was 52.8 percent, up 490 basis points from fiscal year 2010. GAAP operating margin was 12.7 percent in the fourth quarter of 2011, up 150 basis points from the fourth quarter of 2010 and down 30 basis points from the third quarter of 2011. For fiscal year 2011, GAAP operating margin was 6.6 percent, a decrease of 420 basis points from fiscal year 2010. The decreases in operating margin reflect the impact of increased acquisition costs and non-cash amortization expense. GAAP net income for the fourth quarter of 2011 was $42.1 M or $0.49 per diluted share compared to net income of $6.6 M or $0.08 per diluted share for the fourth quarter of 2010 and net income of $30.6 M or $0.35 per diluted share in the third quarter of 2011. For fiscal year 2011, GAAP net income was $54.4 M or $0.63 per diluted share compared to $59.0 M or $0.72 per diluted share in fiscal year 2010. Adjustments to reconcile Microsemi's GAAP and non-GAAP results are further discussed below.
"Microsemi delivered another record revenue quarter with improved profitability in Q4," stated James J. Peterson, President and Chief Executive Officer of Microsemi. "Over the course of our fiscal 2011 we grew our business, successfully integrated our acquisitions, and improved profitability. As we look to December, we expect the business will feel the effects of the devastating floods in Thailand and the uncertain macroeconomic conditions worldwide, but we are excited about what we have accomplished and where we are going. In 2012, we look forward to a resumption of growth in the March quarter, driving profitability of Zarlink in line with our long term targets, and surpassing the $1 B sales mark, all while delivering strong cash flow and bottom line results."
