UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):  July 25, 2006

XILINX, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

0-18548

 

77-0188631

(State or other jurisdiction of incorporation)

 

(Commission File
Number)

 

(IRS Employer
Identification No.)

 

 

 

 

 

2100 Logic Drive, San Jose, California

 

95124

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:  (408) 559-7778

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o               Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o               Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o               Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o               Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 




Item 2.02  Results of Operations and Financial Condition

On July 25, 2006, Xilinx, Inc. issued a press release announcing results for the fiscal quarter ended July 1, 2006. A copy of this press release is furnished as Exhibit 99.1 to this report.

Use of Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company’s earnings release contains non-GAAP financial measures that exclude the effects of stock-based compensation and the requirements of Statement of Financial Accounting Standards No. 123(R), “Share-based Payment” (SFAS 123(R)). The non-GAAP financial measures used by management and disclosed by the Company exclude the statement of income effects of all forms of stock-based compensation and the effects of SFAS 123(R) upon the number of diluted shares used in calculating non-GAAP net income per share. These non-GAAP financial measures are not in accordance with or an alternative for GAAP measures and may be different from, and therefore not comparable to, non-GAAP measures used by other companies. The Company has provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Xilinx believes that the presentation of these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures and our reconciliations, provides useful information to management and investors regarding financial and business trends relating to Xilinx’s financial condition and results of operations. Xilinx management uses these non-GAAP financial measures, in addition to the corresponding GAAP measures, in its internal reviews of the financial results of the Company, its presentations of results and forecasts to the Board of Directors and its establishment of internal budgets. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with periods prior to the adoption of SFAS 123(R) and facilitates comparisons to internal performance forecasts and comparisons with other companies in our industry that separately identify stock-based compensation. Management further believes that where the adjustments used in calculating non-GAAP net income and non-GAAP net income per share are based on specific, identified charges that impact different line items in the statements of income (including cost of revenues, research and development, and selling, general and administrative expense), that it is useful to investors to know how these specific line items in the statements of income are affected by these adjustments. In particular, as Xilinx begins to apply SFAS 123(R), the Company believes that it is useful to investors to understand how the expenses associated with the application of SFAS 123(R) are being reflected on the Company’s statements of income.

The Company applied the modified prospective method of adoption of SFAS 123(R), under which the effects of stock-based compensation are reflected in the Company’s GAAP financial statement presentations for and after the first quarter of fiscal 2007, but are not reflected in results for prior periods. Gross margin, expenses (research and development and selling, general and administrative), operating income, income taxes, net income and net income per share are the primary financial measures that management uses for planning and forecasting future periods which are affected by stock-based compensation. Because management reviews these financial measures calculated without taking into account the effects of the new requirements under SFAS 123(R), these financial measures are treated as “non-GAAP financial measures” under Securities and Exchange Commission rules.




Item 9.01  Financial Statements and Exhibits

(d)   Exhibits

Exhibit No.

 

 

Description

 

 

 

 

99.1

 

Press Release of Xilinx, Inc. dated July 25, 2006.

 




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

XILINX, INC.

 

 

 

 

 

 

 

 

 

 

Date: July 26, 2006

 

By:

 

/s/ Thomas R. Lavelle

 

 

 

 

Thomas R. Lavelle

 

 

 

 

Vice President, Secretary and General Counsel

 




EXHIBIT INDEX

Exhibit No.

 

 

Description

 

 

 

 

99.1

 

Press Release of Xilinx, Inc. dated July 25, 2006.

 



Exhibit 99.1

Investor Relations Contact:
Lori Owen
Xilinx, Inc.
(408) 879-6911
ir@xilinx.com

XILINX ANNOUNCES FIRST QUARTER FISCAL 2007 EARNINGS

SAN JOSE, CA, JULY 25, 2006 — Xilinx, Inc. (Nasdaq: XLNX) today announced net revenues of $481.4 million in the first quarter of fiscal 2007, up 2% sequentially from the prior quarter and up 19% from the same quarter a year ago. First quarter net income of $82.8 million, or $0.24 per diluted share, included stock-based compensation of $26.8 million. The Company began expensing stock options in the first quarter of fiscal 2007 and, therefore, equivalent stock-based compensation expense was not reflected in the year-ago period when the Company earned $76.8 million, or $0.21 per diluted share.

Included in our results is a $1.5 million charge related to minor differences between approval documentation and certain recorded stock option grant dates. This one time charge was not material to any particular quarter in the Company’s history, and thus there is no restatement to the Company’s financial statements. The company has in nearly all cases followed a policy of issuing its stock options on pre-set dates. The investigation into our stock option practices is not yet complete. We anticipate its completion prior to filing the Company’s Form 10-Q for the first quarter of fiscal 2007.

Xilinx also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per outstanding share of common stock, payable on September 6, 2006 to all stockholders of record at the close of business on August 16, 2006.

Additional first quarter comparisons are represented in the chart below.

GAAP Results
(In millions, except EPS)

 

 

 

 

 

 

 

 

Growth Rates

 

 

 

Q1 FY 2007

 

Q4 FY 2006

 

Q1 FY 2006

 

Q-T-Q

 

Y-T-Y

 

Net revenues

 

$

481.4

 

$

472.3

 

$

405.4

 

2

%

19

%

Operating income

 

$

93.8

 

$

119.4

 

$

90.5

 

-21

%

4

%

Net income

 

$

82.8

 

$

110.7

 

$

76.8

 

-25

%

8

%

Diluted earnings per share

 

$

0.24

 

$

0.32

 

$

0.21

 

-25

%

14

%

 

Results excluding the effects of stock-based compensation
(In millions, except EPS)

 

 

 

 

 

 

 

 

Growth Rates

 

 

 

Q1 FY 2007

 

Q4 FY 2006

 

Q1 FY 2006

 

Q-T-Q

 

Y-T-Y

 

Net revenues

 

$

481.4

 

$

472.3

 

$

405.4

 

2

%

19

%

Operating income

 

$

122.1

 

$

119.4

 

$

90.5

 

2

%

35

%

Net income

 

$

105.5

 

$

110.7

 

$

76.8

 

-5

%

37

%

Diluted earnings per share

 

$

0.30

 

$

0.32

 

$

0.21

 

-6

%

43

%

 




Wireless infrastructure sales drove the increase in the Communications segment during the quarter. Sales from wireless customers were particularly strong in Europe, more than offsetting weakness in wireless applications in Japan. Sales from the Industrial and Other category increased 1% sequentially as strength from defense and industrial, scientific and medical applications offset weakness in test and measurement applications.

Business Review — March Quarter FY07

·                     Total inventory days at Xilinx and distribution were 117 days, down from 134 days last quarter.

·                     Accounts receivable days sales outstanding were 29, down from 37 in the prior quarter.

·                     Capital expenditures and depreciation were both $13 million.

Net Revenues by Geography:

 

 

Percentages

 

Growth Rates

 

 

 

Q1
FY 2007

 

Q4
FY 2006

 

Q1
FY 2006

 

Q-T-Q

 

Y-T-Y

 

North America

 

39

%

41

%

41

%

-1

%

15

%

Europe

 

24

%

22

%

20

%

10

%

42

%

Japan

 

11

%

14

%

14

%

-18

%

-7

%

Asia Pacific/ROW

 

26

%

23

%

25

%

12

%

21

%

 

Net Revenues by End Market:

 

 

Percentages

 

Growth Rates

 

 

 

Q1
FY 2007

 

Q4
FY 2006

 

Q1
FY 2006

 

Q-T-Q

 

Y-T-Y

 

Communications

 

49

%

48

%

51

%

3

%

13

%

Consumer & Automotive

 

15

%

15

%

14

%

2

%

31

%

Industrial & Other

 

26

%

27

%

22

%

1

%

43

%

Storage & Servers

 

10

%

10

%

13

%

-3

%

-13

%

 

Net Revenues by Product*:

 

 

Percentages

 

Growth Rates

 

 

 

Q1
FY 2007

 

Q4
FY 2006

 

Q1
FY 2006

 

Q-T-Q

 

Y-T-Y

 

New

 

39

%

37

%

27

%

8

%

78

%

Mainstream

 

43

%

43

%

51

%

1

%

-2

%

Base

 

12

%

14

%

16

%

-12

%

-8

%

Support

 

6

%

6

%

6

%

1

%

7

%


*                    Products are classified as follows:

New products: Virtex™-5, Virtex-4, Virtex-II Pro, Spartan™-IIE, Spartan-3, Spartan-3E, Easypathä and CoolRunner™- II products

Mainstream products: Virtex-II, Spartan-II, Spartan-XL, CoolRunner, Virtex-E and Virtex products

Base products: XC3000, XC3100, XC4000, XC4000XL, XC4000XLA, XC4000XV, XC4000E, XC4000EX, XC5200, XC9500, XC9500XL, XC9500XV and Spartan products

Support products: Configuration solutions, HardWire, Software & Support/Services

Highlights — June quarter fiscal 2007:

·                     On May 15, 2006, Xilinx announced initial shipments of Virtex-5 LX FPGAs, the first of four domain-optimized platforms in its new 65-nanometer (nm) Virtex-5 field programmable gate array (FPGA) family. Key design team innovations in process technology, architecture and product development methodology have led to considerable performance and density gains over previous generation 90-nm FPGAs — while reducing

2




dynamic power consumption and consuming less silicon area. Delivery of new Virtex-5 family FPGAs has commenced with the availability of the initial LX devices, and will continue through the first half of 2007.

·                     In June, Xilinx announced immediate availability of the 8.2i Integrated Software Environment (ISE™) tool suite, the latest release of its widely-used design solution, now supporting the Company’s newest line of 65nm Virtex-5 domain-optimized FPGAs. The ISE 8.2i design environment enables 30 percent faster performance and includes additional features to leverage the performance and power advantages of Virtex-5 devices.

Business Outlook — September Quarter FY07

·                     Revenues expected to be flat to down 5% sequentially.

·                     Gross margin expected to be 61% to 62%, including approximately $3 million of stock-based compensation charges.

·                     R&D and SG&A expenses are expected to increase 2% sequentially, including approximately $22 million of stock-based compensation.

·                     Other income expected to be approximately $20 million.

·                     Tax rate is expected to be approximately 24%.

·                     Fully diluted share count expected to decrease to approximately 345 million shares.

Business Update — September Quarter FY07

The Company expects to issue a second quarter business update press release after the market closes on Wednesday, September 13, 2006. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com.

 

This release contains forward-looking statements and projections. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including the general health of global economies as well as of the semiconductor industry, the health of our end markets and our customers’ customers, our ability to forecast end customer demand, customer acceptance of our new products, the ability of our customers to manage their inventories, a high dependence on turns business, higher-than-anticipated product delinquencies, more customer volume discounts than expected, greater product mix changes than anticipated, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to secure meaningful wafer capacity from our suppliers, our ability to secure adequate test, packaging and assembly capacity from our suppliers, our ability to successfully manage production at multiple foundries, variability in wafer pricing, and other risk factors listed in our most recent Form 10-K.

About Xilinx

Xilinx, Inc. (NASDAQ: XLNX) is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com.

3




XILINX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

July 1,

 

July 2,

 

April 1,

 

 

 

2006

 

2005

 

2006

 

Net revenues

 

$

481,362

 

$

405,379

 

$

472,337

 

Cost of revenues

 

192,059

 

158,482

 

178,193

 

Gross margin

 

289,303

 

246,897

 

294,144

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

97,582

 

78,704

 

86,396

 

Selling, general and administrative

 

94,418

 

75,987

 

81,888

 

Amortization of acquisition-related intangibles

 

2,031

 

1,756

 

1,929

 

Stock-based compensation related to prior years

 

1,489

 

 

 

Write-off of acquired in-process research and development

 

 

 

4,500

 

Total operating expenses

 

195,520

 

156,447

 

174,713

 

 

 

 

 

 

 

 

 

Operating income

 

93,783

 

90,450

 

119,431

 

Impairment loss on investments

 

(437

)

 

(1,418

)

Interest income and other, net

 

14,841

 

9,343

 

9,762

 

Income before income taxes

 

108,187

 

99,793

 

127,775

 

Provision for income taxes

 

25,391

 

22,952

 

17,034

 

Net income

 

$

82,796

 

$

76,841

 

$

110,741

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.24

 

$

0.22

 

$

0.32

 

Diluted net income per common share

 

$

0.24

 

$

0.21

 

$

0.32

 

Cash dividends declared per common share

 

$

0.09

 

$

0.07

 

$

0.07

 

 

 

 

 

 

 

 

 

Common and equivalent shares used in computing net income per share amounts:

 

 

 

 

 

 

 

Basic

 

341,853

 

350,705

 

344,683

 

Diluted

 

348,988

 

358,038

 

350,241

 

 




 

XILINX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 

 

 

July 1,

 

April 1,

 

 

 

2006

 

2006

 

 

 

(Unaudited)

 

(1)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash, cash equivalents and short-term investments

 

$

1,033,378

 

$

984,917

 

Investment in United Microelectronics Corporation, current portion

 

35,643

 

37,285

 

Accounts receivable, net

 

152,214

 

194,205

 

Inventories

 

194,640

 

201,029

 

Deferred tax assets and other current assets

 

254,958

 

230,812

 

Total current assets

 

1,670,833

 

1,648,248

 

 

 

 

 

 

 

Net property, plant and equipment

 

358,531

 

358,257

 

Long-term investments

 

585,853

 

616,296

 

Investment in United Microelectronics Corporation, net of current portion

 

228,674

 

239,209

 

Other assets

 

285,695

 

311,537

 

Total Assets

 

$

3,129,586

 

$

3,173,547

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

205,543

 

$

218,466

 

Deferred income on shipments to distributors

 

103,141

 

126,558

 

Total current liabilities

 

308,684

 

345,024

 

 

 

 

 

 

 

Deferred tax liabilities

 

97,842

 

92,153

 

 

 

 

 

 

 

Other long-term liabilities

 

8,806

 

7,485

 

 

 

 

 

 

 

Stockholders’ equity

 

2,714,254

 

2,728,885

 

Total Liabilities and Stockholders’ Equity

 

$

3,129,586

 

$

3,173,547

 


(1)             Derived from audited financial statements




Xilinx, Inc.
RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
( In thousands, except per share amounts)

 

 

Three Months Ended

 

 

 

July 1,

 

 

 

2006

 

 

 

(Unaudited)

 

 

 

 

 

GAAP OPERATING INCOME

 

$

93,783

 

Adjustment for stock-based compensation within:

 

 

 

Cost of revenues

 

3,642

 

Research and development

 

12,364

 

Selling, general and administrative

 

10,802

 

Stock-based compensation related to prior years

 

1,489

 

NON-GAAP OPERATING INCOME

 

$

122,080

 

 

 

 

 

GAAP NET INCOME

 

$

82,796

 

Adjustment for stock-based compensation within:

 

 

 

Cost of revenues

 

3,642

 

Research and development

 

12,364

 

Selling, general and administrative

 

10,802

 

Stock-based compensation related to prior years

 

1,489

 

Provision for income taxes

 

(5,571

)

NON-GAAP NET INCOME

 

$

105,522

 

 

 

 

 

GAAP DILUTED NET INCOME PER COMMON SHARE

 

$

0.24

 

Adjustment for stock-based compensation

 

0.06

 

NON-GAAP DILUTED NET INCOME PER COMMON SHARE

 

$

0.30

 

 

 

 

 

NON-GAAP DILUTED SHARES

 

346,648

 

 

 

 

 

GAAP GROSS MARGIN PERCENTAGE

 

60.1

%

Adjustment for stock-based compensation

 

0.8

%

NON-GAAP GROSS MARGIN PERCENTAGE

 

60.9

%

 

 

 

 

GAAP OPERATING MARGIN PERCENTAGE

 

19.5

%

Adjustment for stock-based compensation

 

5.9

%

NON-GAAP OPERATING MARGIN PERCENTAGE

 

25.4

%

 

 

 

 

GAAP NET MARGIN PERCENTAGE

 

17.2

%

Adjustment for stock-based compensation

 

4.7

%

NON-GAAP NET MARGIN PERCENTAGE

 

21.9

%

 

 

 

 

 

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company’s earnings release contains non-GAAP financial measures that exclude the effects of stock-based compensation and the requirements of Statement of Financial Accounting Standards No. 123(R), “Share-based Payment” (SFAS 123(R)). The non-GAAP financial measures used by management and disclosed by the Company exclude the statement of income effects of all forms of stock-based compensation and the effects of SFAS 123(R) upon the number of diluted shares used in calculating non-GAAP net income per share. These non-GAAP financial measures are not in accordance with or an alternative for GAAP measures and may be different from, and therefore not comparable to, non-GAAP measures used by other companies. The Company has provided reconciliations of the non-GAAP measures to the most directly comparable GAAP measures. Xilinx believes that the presentation of these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures and our reconciliations, provides useful information to management and investors regarding financial and business trends relating to Xilinx’s financial condition and results of operations. For additional information regarding these non-GAAP financial measures and their use by Company management, see the Form 8-K dated July 25, 2006 that Xilinx has filed with the SEC.