10-Q 1 smtc-20211031.htm 10-Q smtc-20211031
falseQ3000008894101/302022http://fasb.org/us-gaap/2021-01-31#AccountingStandardsUpdate201613MemberP1YP2YP3Y0.33330.33330.3333http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrent00000889412021-02-012021-10-3100000889412021-11-26xbrli:shares00000889412021-08-022021-10-31iso4217:USD00000889412020-07-272020-10-2500000889412020-01-272020-10-25iso4217:USDxbrli:shares0000088941us-gaap:ForeignExchangeContractMember2021-08-022021-10-310000088941us-gaap:ForeignExchangeContractMember2020-07-272020-10-250000088941us-gaap:ForeignExchangeContractMember2021-02-012021-10-310000088941us-gaap:ForeignExchangeContractMember2020-01-272020-10-250000088941us-gaap:InterestRateSwapMember2021-08-022021-10-310000088941us-gaap:InterestRateSwapMember2020-07-272020-10-250000088941us-gaap:InterestRateSwapMember2021-02-012021-10-310000088941us-gaap:InterestRateSwapMember2020-01-272020-10-2500000889412021-10-3100000889412021-01-310000088941us-gaap:CommonStockMember2021-08-010000088941us-gaap:TreasuryStockMember2021-08-010000088941us-gaap:AdditionalPaidInCapitalMember2021-08-010000088941us-gaap:RetainedEarningsMember2021-08-010000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-08-010000088941us-gaap:ParentMember2021-08-010000088941us-gaap:NoncontrollingInterestMember2021-08-0100000889412021-08-010000088941us-gaap:RetainedEarningsMember2021-08-022021-10-310000088941us-gaap:ParentMember2021-08-022021-10-310000088941us-gaap:NoncontrollingInterestMember2021-08-022021-10-310000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-08-022021-10-310000088941us-gaap:AdditionalPaidInCapitalMember2021-08-022021-10-310000088941us-gaap:CommonStockMember2021-08-022021-10-310000088941us-gaap:TreasuryStockMember2021-08-022021-10-310000088941us-gaap:CommonStockMember2021-10-310000088941us-gaap:TreasuryStockMember2021-10-310000088941us-gaap:AdditionalPaidInCapitalMember2021-10-310000088941us-gaap:RetainedEarningsMember2021-10-310000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-310000088941us-gaap:ParentMember2021-10-310000088941us-gaap:NoncontrollingInterestMember2021-10-310000088941us-gaap:CommonStockMember2021-01-310000088941us-gaap:TreasuryStockMember2021-01-310000088941us-gaap:AdditionalPaidInCapitalMember2021-01-310000088941us-gaap:RetainedEarningsMember2021-01-310000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-310000088941us-gaap:ParentMember2021-01-310000088941us-gaap:NoncontrollingInterestMember2021-01-310000088941us-gaap:RetainedEarningsMember2021-02-012021-10-310000088941us-gaap:ParentMember2021-02-012021-10-310000088941us-gaap:NoncontrollingInterestMember2021-02-012021-10-310000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-02-012021-10-310000088941us-gaap:AdditionalPaidInCapitalMember2021-02-012021-10-310000088941us-gaap:CommonStockMember2021-02-012021-10-310000088941us-gaap:TreasuryStockMember2021-02-012021-10-310000088941us-gaap:CommonStockMember2020-07-260000088941us-gaap:TreasuryStockMember2020-07-260000088941us-gaap:AdditionalPaidInCapitalMember2020-07-260000088941us-gaap:RetainedEarningsMember2020-07-260000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-260000088941us-gaap:ParentMember2020-07-260000088941us-gaap:NoncontrollingInterestMember2020-07-2600000889412020-07-260000088941us-gaap:RetainedEarningsMember2020-07-272020-10-250000088941us-gaap:ParentMember2020-07-272020-10-250000088941us-gaap:NoncontrollingInterestMember2020-07-272020-10-250000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-272020-10-250000088941us-gaap:AdditionalPaidInCapitalMember2020-07-272020-10-250000088941us-gaap:CommonStockMember2020-07-272020-10-250000088941us-gaap:TreasuryStockMember2020-07-272020-10-250000088941us-gaap:CommonStockMember2020-10-250000088941us-gaap:TreasuryStockMember2020-10-250000088941us-gaap:AdditionalPaidInCapitalMember2020-10-250000088941us-gaap:RetainedEarningsMember2020-10-250000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-250000088941us-gaap:ParentMember2020-10-250000088941us-gaap:NoncontrollingInterestMember2020-10-2500000889412020-10-250000088941us-gaap:CommonStockMember2020-01-260000088941us-gaap:TreasuryStockMember2020-01-260000088941us-gaap:AdditionalPaidInCapitalMember2020-01-260000088941us-gaap:RetainedEarningsMember2020-01-260000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-260000088941us-gaap:ParentMember2020-01-260000088941us-gaap:NoncontrollingInterestMember2020-01-2600000889412020-01-2600000889412020-01-272020-04-260000088941srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-01-260000088941srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ParentMember2020-01-260000088941srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-260000088941us-gaap:RetainedEarningsMember2020-01-272020-10-250000088941us-gaap:ParentMember2020-01-272020-10-250000088941us-gaap:NoncontrollingInterestMember2020-01-272020-10-250000088941us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-272020-10-250000088941us-gaap:AdditionalPaidInCapitalMember2020-01-272020-10-250000088941us-gaap:CommonStockMember2020-01-272020-10-250000088941us-gaap:TreasuryStockMember2020-01-272020-10-250000088941us-gaap:CostOfSalesMember2021-08-022021-10-310000088941us-gaap:CostOfSalesMember2020-07-272020-10-250000088941us-gaap:CostOfSalesMember2021-02-012021-10-310000088941us-gaap:CostOfSalesMember2020-01-272020-10-250000088941us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-08-022021-10-310000088941us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-272020-10-250000088941us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-02-012021-10-310000088941us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-272020-10-250000088941smtc:ProductDevelopmentAndEngineeringMember2021-08-022021-10-310000088941smtc:ProductDevelopmentAndEngineeringMember2020-07-272020-10-250000088941smtc:ProductDevelopmentAndEngineeringMember2021-02-012021-10-310000088941smtc:ProductDevelopmentAndEngineeringMember2020-01-272020-10-250000088941us-gaap:ShareBasedPaymentArrangementEmployeeMemberus-gaap:RestrictedStockUnitsRSUMember2021-02-012021-10-310000088941us-gaap:ShareBasedPaymentArrangementNonemployeeMembersmtc:RestrictedStockUnitsRSUsCashSettlementMember2021-02-012021-10-310000088941us-gaap:ShareBasedPaymentArrangementNonemployeeMembersmtc:RestrictedStockUnitsRSUsShareSettlementMember2021-02-012021-10-310000088941us-gaap:PerformanceSharesMember2021-02-012021-10-310000088941us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:PerformanceSharesMember2021-02-012021-10-310000088941us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:PerformanceSharesMember2021-02-012021-10-310000088941us-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:PerformanceSharesMember2021-02-012021-10-310000088941smtc:MarketPerformanceSharesMember2021-02-012021-10-31xbrli:pure0000088941us-gaap:ConvertibleDebtSecuritiesMember2021-10-310000088941us-gaap:ConvertibleDebtSecuritiesMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-10-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941us-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-01-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:TotalReturnSwapMemberus-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-10-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-10-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-01-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-01-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtSecuritiesMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-10-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-310000088941us-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-01-310000088941us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-01-310000088941srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201613Member2020-01-260000088941smtc:SignalIntegrityMember2021-01-310000088941smtc:WirelessandSensingMember2021-01-310000088941smtc:ProtectionMember2021-01-310000088941smtc:SignalIntegrityMember2021-10-310000088941smtc:WirelessandSensingMember2021-10-310000088941smtc:ProtectionMember2021-10-310000088941us-gaap:DevelopedTechnologyRightsMembersrt:MinimumMember2021-02-012021-10-310000088941srt:MaximumMemberus-gaap:DevelopedTechnologyRightsMember2021-02-012021-10-310000088941us-gaap:DevelopedTechnologyRightsMember2021-10-310000088941us-gaap:DevelopedTechnologyRightsMember2021-01-310000088941us-gaap:DevelopedTechnologyRightsMember2021-08-022021-10-310000088941us-gaap:DevelopedTechnologyRightsMember2020-07-272020-10-250000088941us-gaap:DevelopedTechnologyRightsMember2021-02-012021-10-310000088941us-gaap:DevelopedTechnologyRightsMember2020-01-272020-10-250000088941us-gaap:CustomerRelationshipsMember2021-08-022021-10-310000088941us-gaap:CustomerRelationshipsMember2020-07-272020-10-250000088941us-gaap:CustomerRelationshipsMember2021-02-012021-10-310000088941us-gaap:CustomerRelationshipsMember2020-01-272020-10-250000088941us-gaap:RevolvingCreditFacilityMember2021-10-310000088941us-gaap:RevolvingCreditFacilityMember2021-01-310000088941us-gaap:RevolvingCreditFacilityMember2021-02-012021-05-020000088941us-gaap:RevolvingCreditFacilityMember2021-02-012021-10-310000088941us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-02-012021-10-310000088941us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-02-012021-05-020000088941us-gaap:RevolvingCreditFacilityMembersmtc:OneMonthLIBORMember2021-02-012021-10-310000088941us-gaap:RevolvingCreditFacilityMembersmtc:OneMonthLIBORMember2021-02-012021-05-020000088941us-gaap:RevolvingCreditFacilityMember2019-11-070000088941smtc:NoncurrentdeferredtaxassetMember2021-10-310000088941smtc:NoncurrentdeferredtaxassetMember2021-01-310000088941us-gaap:OtherNoncurrentLiabilitiesMember2021-10-310000088941us-gaap:OtherNoncurrentLiabilitiesMember2021-01-310000088941srt:MinimumMemberus-gaap:EnvironmentalIssueMember2021-10-310000088941srt:MaximumMemberus-gaap:EnvironmentalIssueMember2021-10-310000088941us-gaap:EnvironmentalIssueMember2021-02-012021-10-310000088941us-gaap:EnvironmentalIssueMember2021-10-310000088941us-gaap:AccruedLiabilitiesMembersmtc:DeferredCompensationPlanForOfficersAndExecutivesMember2021-10-310000088941us-gaap:AccruedLiabilitiesMembersmtc:DeferredCompensationPlanForOfficersAndExecutivesMember2021-01-310000088941smtc:DeferredCompensationPlanForOfficersAndExecutivesMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-10-310000088941smtc:DeferredCompensationPlanForOfficersAndExecutivesMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-01-310000088941smtc:DeferredCompensationPlanForOfficersAndExecutivesMember2021-10-310000088941smtc:DeferredCompensationPlanForOfficersAndExecutivesMember2021-01-310000088941us-gaap:OtherAssetsMember2021-10-310000088941us-gaap:OtherAssetsMember2021-01-310000088941us-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:ArrowElectronicsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:ArrowElectronicsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:ArrowElectronicsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:ArrowElectronicsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:CEACInternationalLimitedMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:CEACInternationalLimitedMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:CEACInternationalLimitedMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:CEACInternationalLimitedMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMember2021-02-012021-10-310000088941us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembersmtc:FrontekTechnologyCorporationMember2021-01-312021-01-310000088941smtc:ArrowElectronicsMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-02-012021-10-310000088941smtc:ArrowElectronicsMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-312021-01-310000088941us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMember2021-02-012021-10-310000088941us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembersmtc:TrendTekTechnologyLtdAndAffiliatesMember2021-01-312021-01-310000088941smtc:CEACInternationalLimitedMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-02-012021-10-310000088941smtc:CEACInternationalLimitedMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-312021-01-31smtc:operating_segmentsmtc:reportable_segment0000088941smtc:SemiconductorProductsGroupMember2021-08-022021-10-310000088941smtc:SemiconductorProductsGroupMember2020-07-272020-10-250000088941smtc:SemiconductorProductsGroupMember2021-02-012021-10-310000088941smtc:SemiconductorProductsGroupMember2020-01-272020-10-250000088941us-gaap:OperatingSegmentsMember2021-08-022021-10-310000088941us-gaap:OperatingSegmentsMember2020-07-272020-10-250000088941us-gaap:OperatingSegmentsMember2021-02-012021-10-310000088941us-gaap:OperatingSegmentsMember2020-01-272020-10-250000088941us-gaap:CorporateNonSegmentMember2021-08-022021-10-310000088941us-gaap:CorporateNonSegmentMember2020-07-272020-10-250000088941us-gaap:CorporateNonSegmentMember2021-02-012021-10-310000088941us-gaap:CorporateNonSegmentMember2020-01-272020-10-250000088941smtc:SignalIntegrityMember2021-08-022021-10-310000088941smtc:SignalIntegrityMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:SignalIntegrityMember2020-07-272020-10-250000088941smtc:SignalIntegrityMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:SignalIntegrityMember2021-02-012021-10-310000088941smtc:SignalIntegrityMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:SignalIntegrityMember2020-01-272020-10-250000088941smtc:SignalIntegrityMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:WirelessandSensingMember2021-08-022021-10-310000088941smtc:WirelessandSensingMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:WirelessandSensingMember2020-07-272020-10-250000088941smtc:WirelessandSensingMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:WirelessandSensingMember2021-02-012021-10-310000088941smtc:WirelessandSensingMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:WirelessandSensingMember2020-01-272020-10-250000088941smtc:WirelessandSensingMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:ProtectionMember2021-08-022021-10-310000088941smtc:ProtectionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:ProtectionMember2020-07-272020-10-250000088941smtc:ProtectionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:ProtectionMember2021-02-012021-10-310000088941smtc:ProtectionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:ProtectionMember2020-01-272020-10-250000088941smtc:ProtectionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:SalesChannelThroughIntermediaryMember2021-08-022021-10-310000088941us-gaap:SalesChannelThroughIntermediaryMembersmtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:SalesChannelThroughIntermediaryMember2020-07-272020-10-250000088941us-gaap:SalesChannelThroughIntermediaryMembersmtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:SalesChannelThroughIntermediaryMember2021-02-012021-10-310000088941us-gaap:SalesChannelThroughIntermediaryMembersmtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:SalesChannelThroughIntermediaryMember2020-01-272020-10-250000088941us-gaap:SalesChannelThroughIntermediaryMembersmtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:SalesChannelDirectlyToConsumerMember2021-08-022021-10-310000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:SalesChannelDirectlyToConsumerMember2020-07-272020-10-250000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:SalesChannelDirectlyToConsumerMember2021-02-012021-10-310000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:SalesChannelDirectlyToConsumerMember2020-01-272020-10-250000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:SalesChannelConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:GeographicConcentrationRiskMembersrt:EuropeMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:GeographicConcentrationRiskMembersrt:EuropeMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:GeographicConcentrationRiskMembersrt:EuropeMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:GeographicConcentrationRiskMembersrt:EuropeMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:ChinaIncludingHongKongMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941smtc:ChinaIncludingHongKongMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941smtc:ChinaIncludingHongKongMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941smtc:ChinaIncludingHongKongMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-08-022021-10-310000088941country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-272020-10-250000088941country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-02-012021-10-310000088941country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-272020-10-250000088941smtc:StockRepurchaseProgramWIthNoExpirationDateMember2021-08-022021-10-310000088941smtc:StockRepurchaseProgramWIthNoExpirationDateMember2020-07-272020-10-250000088941smtc:StockRepurchaseProgramWIthNoExpirationDateMember2021-02-012021-10-310000088941smtc:StockRepurchaseProgramWIthNoExpirationDateMember2020-01-272020-10-2500000889412021-03-112021-03-110000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMember2021-01-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMember2021-01-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateSwapMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateSwapMember2021-01-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-10-310000088941us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-01-310000088941us-gaap:TotalReturnSwapMember2021-10-310000088941us-gaap:TotalReturnSwapMember2021-01-310000088941us-gaap:TotalReturnSwapMember2021-08-022021-10-310000088941us-gaap:TotalReturnSwapMember2021-02-012021-10-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
____________________________________
FORM 10-Q
____________________________________
(Mark One)
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended October 31, 2021
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from             to             
Commission File Number 001-06395
____________________________________ 
SEMTECH CORPORATION
(Exact name of registrant as specified in its charter)
 ____________________________________
Delaware 95-2119684
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)

200 Flynn Road, Camarillo, California, 93012-8790
(Address of principal executive offices, Zip Code)

Registrant’s telephone number, including area code: (805498-2111
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s) Name of each exchange on which registered
Common Stock par value $0.01 per shareSMTC The Nasdaq Global Select Market
____________________________________
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   x   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x  Accelerated filer  
Non-accelerated filer 
  Smaller reporting company  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  x 
Number of shares of common stock, $0.01 par value per share, outstanding at November 26, 2021: 64,436,830



SEMTECH CORPORATION
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 2021
 
2


Unless the context otherwise requires, the use of the terms "Semtech," "the Company," "we," "us" and "our" in this Quarterly Report on Form 10-Q refers to Semtech Corporation and, as applicable, its consolidated subsidiaries. This Quarterly Report on Form 10-Q may contain references to the Company’s trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
Special Note Regarding Forward-Looking and Cautionary Statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Forward-looking statements are statements other than historical information or statements of current condition and relate to matters such as future financial performance, future operational performance, the anticipated impact of specific items on future earnings, and our plans, objectives and expectations. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "estimate," "should," "will," "designed to," "projections," or "business outlook," or other similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected. Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the uncertainty surrounding the impact and duration of supply chain constraints and any associated disruptions; the uncertainty surrounding the impact and duration of the COVID-19 pandemic on global economic conditions and on the Company’s business and results of operations, including as a result of any regulatory vaccine mandate on our workforce, which could result in increased labor attrition and disruption, as well as difficulty securing future labor needs; competitive changes in the marketplace including, but not limited to, the pace of growth or adoption rates of applicable products or technologies; downturns in the business cycle; decreased average selling prices of the Company’s products; the Company’s reliance on a limited number of suppliers and subcontractors for components and materials; changes in projected or anticipated end-user markets; export restrictions and laws affecting the Company’s trade and investments including with respect to Huawei and certain of its affiliates and other entities identified by the U.S. government, and tariffs or the occurrence of trade wars; and the Company’s ability to forecast and achieve anticipated net sales and earnings estimates in light of periodic economic uncertainty, including impacts arising from Asian, European, and global economic dynamics.
Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in this Quarterly Report on Form 10-Q, including, without limitation, information under the captions "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and additional factors that accompany the related forward-looking statements in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 including, without limitation, information under the caption "Risk Factors," and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). In light of the significant risks and uncertainties inherent in the forward-looking information included herein that may cause actual performance and results to differ materially from those predicted, any such forward-looking information should not be regarded as representations or guarantees by the Company of future performance or results, or that its objectives or plans will be achieved, or that any of its operating expectations or financial forecasts will be realized. Reported results should not be considered an indication of future performance. Investors are cautioned not to place undue reliance on any forward-looking information contained herein, which reflect management’s analysis only as of the date hereof. Except as required by law, the Company assumes no obligation to publicly release the results of any update or revision to any forward-looking statement that may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated or future events, or otherwise.
The factors noted above, and the risks included in our SEC filings, may be increased or intensified as a result of the COVID-19 pandemic. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. In addition to regarding forward-looking statements with caution, you should consider that the preparation of the consolidated financial statements requires us to draw conclusions and make interpretations, judgments, assumptions and estimates with respect to certain factual, legal, and accounting matters. Our consolidated financial statements might have been materially impacted if we had reached different conclusions or made different interpretations, judgments, assumptions or estimates.
3


PART I - FINANCIAL INFORMATION
 
ITEM 1.Financial Statements

SEMTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
 
 Three Months EndedNine Months Ended
 October 31, 2021October 25, 2020October 31, 2021October 25, 2020
Net sales$194,932 $154,082 $550,308 $430,444 
Cost of sales71,243 60,021 206,326 167,371 
Gross profit123,689 94,061 343,982 263,073 
Operating costs and expenses:
Selling, general and administrative47,621 42,891 128,402 115,746 
Product development and engineering37,346 27,890 109,633 84,696 
Intangible amortization1,298 1,798 3,894 6,658 
Changes in the fair value of contingent earn-out obligations   (33)
Total operating costs and expenses86,265 72,579 241,929 207,067 
Operating income37,424 21,482 102,053 56,006 
Interest expense(1,233)(1,008)(3,617)(3,819)
Non-operating income (expense), net105 (236)412 11 
Investment impairments and credit loss reserves(216)(335)(930)(5,450)
Income before taxes and equity in net gains of equity method investments36,080 19,903 97,918 46,748 
Provision for income taxes3,018 1,580 9,179 2,523 
Net income before equity in net gains of equity method investments33,062 18,323 88,739 44,225 
Equity in net gains of equity method investments1,363 159 2,115 11 
Net income34,425 18,482 90,854 44,236 
Net loss attributable to noncontrolling interest(2)(5)(6)(11)
Net income attributable to common stockholders$34,427 $18,487 $90,860 $44,247 
Earnings per share:
Basic$0.53 $0.28 $1.40 $0.68 
Diluted$0.53 $0.28 $1.38 $0.67 
Weighted-average number of shares used in computing earnings per share:
Basic64,546 65,136 64,786 65,270 
Diluted65,299 65,967 65,664 66,050 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.
4


SEMTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
  Three Months EndedNine Months Ended
 October 31, 2021October 25, 2020October 31, 2021October 25, 2020
Net income $34,425 $18,482 $90,854 $44,236 
Other comprehensive income (loss), net:
Unrealized gain on foreign currency cash flow hedges, net 173  531 
Reclassifications of realized gain on foreign currency cash flow hedges, net to net income (244) (238)
Unrealized (loss) gain on interest rate cash flow hedges, net(388)(82)341 (1,702)
Reclassifications of realized loss on interest rate cash flow hedges, net to net income923 173 557 246 
Unrealized gain on available-for-sale securities   386 
Reclassification of realized gain on available-for-sale securities, net to net income   (757)
Change in defined benefit plans, net158 202 472 581 
Other comprehensive income (loss), net693 222 1,370 (953)
Comprehensive income$35,118 $18,704 $92,224 $43,283 
Comprehensive loss attributable to noncontrolling interest(2)(5)(6)(11)
Comprehensive income attributable to common stockholders$35,120 $18,709 $92,230 $43,294 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.









5


SEMTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
October 31, 2021January 31, 2021
Assets
Current assets:
Cash and cash equivalents$276,599 $268,891 
Accounts receivable, less allowances of $763 and $721, respectively
74,313 70,433 
Inventories105,159 87,494 
Prepaid taxes11,738 22,083 
Other current assets28,548 25,827 
Total current assets496,357 474,728 
Non-current assets:
Property, plant and equipment, net of accumulated depreciation of $248,988 and $233,779, respectively
130,734 130,934 
Deferred tax assets26,928 25,483 
Goodwill351,141 351,141 
Other intangible assets, net7,852 11,746 
Other assets108,288 88,070 
TOTAL ASSETS$1,121,300 $1,082,102 
Liabilities and Equity
Current liabilities:
Accounts payable$46,426 $50,189 
Accrued liabilities77,483 59,384 
Total current liabilities123,909 109,573 
Non-current liabilities:
Deferred tax liabilities1,127 976 
Long term debt175,556 179,195 
Other long-term liabilities102,310 93,405 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.01 par value, 250,000,000 shares authorized, 78,136,144 issued and 64,399,241 outstanding and 78,136,144 issued and 65,098,379 outstanding, respectively
785 785 
Treasury stock, at cost, 13,736,903 shares and 13,037,765 shares, respectively
(519,610)(438,798)
Additional paid-in capital481,761 473,728 
Retained earnings762,056 671,196 
Accumulated other comprehensive loss(6,798)(8,168)
Total stockholders’ equity718,194 698,743 
Noncontrolling interest204 210 
Total equity718,398 698,953 
TOTAL LIABILITIES AND EQUITY$1,121,300 $1,082,102 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.
6


SEMTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
Three Months Ended October 31, 2021
Common StockAccumulated Other Comprehensive Loss
Number of Shares OutstandingAmountTreasury Stock, at CostAdditional Paid-in CapitalRetained EarningsStockholders’ EquityNoncontrolling InterestTotal Equity
Balance at August 1, 202164,396,741 $785 $(499,199)$486,693 $727,629 $(7,491)$708,417 $206 $708,623 
Net income— — — — 34,427 — 34,427 (2)34,425 
Other comprehensive income— — — — — 693 693 — 693 
Share-based compensation— — — 13,289 — — 13,289 — 13,289 
Repurchase of common stock(387,163)— (30,000)— — — (30,000)— (30,000)
Treasury stock reissued389,663 — 9,589 (18,221)— — (8,632)— (8,632)
Balance at October 31, 202164,399,241 $785 $(519,610)$481,761 $762,056 $(6,798)$718,194 $204 $718,398 

Nine Months Ended October 31, 2021
Common Stock
Number of Shares OutstandingAmountTreasury Stock, at CostAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossStockholders’ EquityNoncontrolling InterestTotal Equity
Balance at January 31, 202165,098,379 $785 $(438,798)$473,728 $671,196 $(8,168)$698,743 $210 $698,953 
Net income— — — — 90,860 — 90,860 (6)90,854 
Other comprehensive income— — — — — 1,370 1,370 — 1,370 
Share-based compensation— — — 37,819 — — 37,819 — 37,819 
Repurchase of common stock(1,387,624)— (97,000)— — — (97,000)— (97,000)
Treasury stock reissued688,486 — 16,188 (29,786)— — (13,598)— (13,598)
Balance at October 31, 202164,399,241 $785 $(519,610)$481,761 $762,056 $(6,798)$718,194 $204 $718,398 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.
7


SEMTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)
(in thousands, except share data)
(unaudited)
Three Months Ended October 25, 2020
Common StockAccumulated Other Comprehensive Loss
Number of Shares OutstandingAmountTreasury Stock, at CostAdditional Paid-in CapitalRetained EarningsStockholders’ EquityNoncontrolling InterestTotal Equity
Balance at July 26, 202065,019,501 $785 $(424,095)$471,091 $637,053 $(7,341)$677,493 $240 $677,733 
Net income— — — — 18,487 — 18,487 (5)18,482 
Other comprehensive income— — — — — 222 222 — 222 
Share-based compensation— — — 12,333 — — 12,333 — 12,333 
Repurchase of common stock(439,921)— (24,046)— — — (24,046)— (24,046)
Treasury stock reissued386,713 — 9,895 (17,993)— — (8,098)— (8,098)
Balance at October 25, 202064,966,293 $785 $(438,246)$465,431 $655,540 $(7,119)$676,391 $235 $676,626 

Nine Months Ended October 25, 2020
Common StockAccumulated Other Comprehensive Loss
Number of Shares OutstandingAmountTreasury Stock, at CostAdditional Paid-in CapitalRetained EarningsStockholders’ EquityNoncontrolling InterestTotal Equity
Balance at January 26, 202065,758,115 $785 $(387,851)$458,579 $611,607 $(6,166)$676,954 $246 $677,200 
Cumulative-effect adjustment to beginning balance from adoption of ASU 2016-13— — — — (314)— (314)— (314)
Net income— — — — 44,247 — 44,247 (11)44,236 
Other comprehensive loss— — — — — (953)(953)— (953)
Share-based compensation— — — 34,757 — — 34,757 — 34,757 
Repurchase of common stock(1,527,834)— (66,433)— — — (66,433)— (66,433)
Treasury stock reissued736,012 — 16,038 (27,905)— — (11,867)— (11,867)
Balance at October 25, 202064,966,293 $785 $(438,246)$465,431 $655,540 $(7,119)$676,391 $235 $676,626 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.
8


SEMTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
 October 31, 2021October 25, 2020
Cash flows from operating activities:
Net income$90,854 $44,236 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization22,686 21,283 
Amortization of right-of-use assets3,289 2,924 
Investment impairments and credit loss reserves930 5,450 
Accretion of deferred financing costs and debt discount361 362 
Deferred income taxes(1,540)(7,121)
Share-based compensation40,697 36,103 
Gain on disposition of assets(34)(20)
Changes in the fair value of contingent earn-out obligations (33)
Equity in net gains of equity method investments(2,115)(11)
Corporate-owned life insurance, net4,720 4,197 
Changes in assets and liabilities:
Accounts receivable, net(3,880)3,227 
Inventories(17,665)(5,357)
Other assets8,130 (15,109)
Accounts payable(3,325)157 
Accrued liabilities15,816 1,992 
Other liabilities(6,787)(604)
Net cash provided by operating activities152,137 91,676 
Cash flows from investing activities:
Proceeds from sales of property, plant and equipment82 20 
Purchase of property, plant and equipment(18,081)(21,808)
Proceeds from sale of investments 327 
Purchase of investments(5,832)(10,938)
Premiums paid for corporate-owned life insurance(6,000) 
Net cash used in investing activities(29,831)(32,399)
Cash flows from financing activities:
Proceeds from revolving line of credit20,000  
Payments of revolving line of credit(24,000)(12,000)
Deferred financing costs (30)
Payment for employee share-based compensation payroll taxes(17,885)(16,957)
Proceeds from exercise of stock options4,287 5,090 
Repurchase of common stock(97,000)(66,433)
Net cash used in financing activities(114,598)(90,330)
Net increase (decrease) in cash and cash equivalents7,708 (31,053)
Cash and cash equivalents at beginning of period268,891 293,324 
Cash and cash equivalents at end of period$276,599 $262,271 
Supplemental disclosure of cash flow information:
Interest paid$3,237 $4,976 
Income taxes paid$2,989 $8,086 
Non-cash investing and financing activities:
Accounts payable related to capital expenditures$2,424 $3,419 
Conversion of notes into equity$626 $ 
The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.
9


SEMTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Organization and Basis of Presentation
Nature of Business
Semtech Corporation (together with its consolidated subsidiaries, the "Company" or "Semtech") is a leading global supplier of high performance analog and mixed-signal semiconductors and advanced algorithms. The end customers for the Company’s products are primarily original equipment manufacturers that produce and sell electronics.
Fiscal Year
The Company reports results on the basis of 52 and 53-week periods and ends its fiscal year on the last Sunday in January. The other quarters generally end on the last Sunday of April, July and October, although the first and second quarters of fiscal year 2022 end on the first Sunday of May and August, respectively. All quarters consist of 13 weeks except for one 14-week period in the fourth quarter of 53-week years. The third quarters of fiscal years 2022 and 2021 each consisted of 13 weeks.
Principles of Consolidation
The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company, in accordance with accounting principles generally accepted in the United States ("GAAP") and on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2021 ("Annual Report"). The Company’s interim unaudited condensed consolidated statements of income are referred to herein as the "Statements of Income." The Company’s interim unaudited condensed consolidated balance sheets are referred to herein as the "Balance Sheets" and interim unaudited condensed consolidated statements of cash flows as the "Statements of Cash Flows." In the opinion of the Company, these interim unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, the financial position of the Company for the interim periods presented. All intercompany balances have been eliminated. Because the interim unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for a complete set of consolidated financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report. The results reported in these interim unaudited condensed consolidated financial statements should not be regarded as indicative of results that may be expected for any subsequent period or for the entire year.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recently Adopted Accounting Guidance
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, "Simplifying the Accounting for Income Taxes," which modifies Accounting Standards Codification ("ASC") 740 to simplify the accounting for income taxes. This guidance impacts the accounting for hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of legal entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, ownership changes in investments from a subsidiary to an equity method investment and vice versa, interim period accounting for enacted changes in tax law and the year-to-date loss limitation in interim period tax accounting. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within this those fiscal years, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal year 2022. Adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistencies related to recognition of an acquired contract liability, and to payment terms and their effect on subsequent revenue recognized by the acquirer. Among other changes, this ASU requires that an acquirer account for acquired revenue contracts in accordance with ASC 606, "Revenue from Contracts with Customers," as if it had originated the contracts. If the acquirer is unable to assess or rely on how the acquiree applied ASC 606, the acquirer should consider the terms of the acquired contracts as of the contract inception or contract modification date in applying ASC 606 to determine what should be recorded at the acquisition date. The amendments also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract
liabilities from revenue contracts in a business combination. The guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
10


Note 2: Earnings per Share
The computation of basic and diluted earnings per share was as follows:
 Three Months EndedNine Months Ended
(in thousands, except per share data)October 31, 2021October 25, 2020October 31, 2021October 25, 2020
Net income attributable to common stockholders$34,427 $18,487 $90,860 $44,247 
Weighted-average shares outstanding–basic64,546 65,136 64,786 65,270 
Dilutive effect of share-based compensation753 831 878 780 
Weighted-average shares outstanding–diluted65,299 65,967 65,664 66,050 
Earnings per share:
Basic$0.53 $0.28 $1.40 $0.68 
Diluted$0.53 $0.28 $1.38 $0.67 
Anti-dilutive shares not included in the above calculations31 523 41 274
Diluted earnings per share incorporates the incremental shares issuable, calculated using the treasury stock method, upon the assumed exercise of non-qualified stock options and the vesting of restricted stock units and market-condition restricted stock unit awards if certain conditions have been met, but excludes such incremental shares that would have an anti-dilutive effect.
11


Note 3: Share-Based Compensation
Financial Statement Effects and Presentation
Pre-tax share-based compensation was included in the Statements of Income as follows:
Three Months EndedNine Months Ended
(in thousands)October 31, 2021October 25, 2020October 31, 2021October 25, 2020
Cost of sales$743 $654 $2,112 $1,734 
Selling, general and administrative12,528 9,404 26,985 24,864 
Product development and engineering4,070 3,480 11,600 9,505 
Total share-based compensation$17,341 $13,538 $40,697 $36,103 
Restricted Stock Units, Employees
The Company grants restricted stock units to certain employees, which are expected to be settled with shares of the Company's common stock. The grant date for these awards is equal to the measurement date. These awards are valued as of the measurement date, based on the fair value of the Company's common stock at the grant date, and recognized as share-based compensation expense over the requisite vesting period (typically 4 years). In the nine months ended October 31, 2021, the Company granted 731,563 restricted stock units to employees.
Restricted Stock Units, Non-Employee Directors
The Company maintains a compensation program pursuant to which restricted stock units are granted to the Company’s directors that are not employed by the Company or any of its subsidiaries. Under the Company's director compensation program, a portion of the restricted stock units granted under the program will be settled in cash and a portion will be settled in shares of the Company's common stock. Restricted stock units awarded under the program are scheduled to vest on the earlier of (i) one year after the grant date or (ii) the day immediately preceding the Company's annual meeting of stockholders in the year following the grant. The portion of a restricted stock unit award under the program that is to be settled in cash will, subject to vesting, be settled when the director who received the award separates from the board of directors. The portion of a restricted stock unit award under the program that is to be settled in shares of the Company's common stock will, subject to vesting, be settled promptly following vesting. In the nine months ended October 31, 2021, the Company granted to the non-employee directors 11,898 restricted stock units that settle in cash and 11,898 restricted stock units that settle in shares.
Total Stockholder Return ("TSR") Market-Condition Restricted Stock Units
The Company grants TSR market-condition restricted stock units (the "TSR Awards") to certain executives of the Company. The TSR Awards have a pre-defined market-condition, which determines the number of shares that ultimately vest, as well as a service condition. The TSR Awards are valued as of the grant date using a Monte Carlo simulation which takes into consideration the possible outcomes pertaining to the TSR market condition and expense is recognized on a straight line basis over the vesting periods and is adjusted for any actual forfeitures.
In the nine months ended October 31, 2021, the Company granted 81,688 TSR Awards, which are accounted for as equity awards. The market condition is determined based upon the Company’s TSR benchmarked against the TSR of the S&P SPDR Semiconductor ETF (NYSE:XSD) over one, two and three year periods (one-third of the awards vesting each performance period). Generally, the fiscal year 2022 TSR Award recipients must be employed for the entire performance period and be an active employee at the time of vesting of the awards. The grant-date fair value per unit of the TSR Awards granted in the nine months ended October 31, 2021 for each one, two and three year performance period was $67.41, $77.99 and $84.17, respectively.
Market-Condition Restricted Stock Units
In the nine months ended October 31, 2021, the Company granted an additional 54,928 restricted stock units with a different market condition. These additional awards are eligible to vest during the period commencing March 9, 2021, and ending March 5, 2024 (the "Performance Period") as follows: the restricted stock units covered by the award will vest if, during any consecutive 30 trading day period that commences and ends during the Performance Period, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. The grant-date fair value per unit of the awards granted in the nine months ended October 31, 2021 was $49.55.


12


Note 4: Available-for-sale securities
The following table summarizes the values of the Company’s available-for-sale securities:
 October 31, 2021January 31, 2021
(in thousands)Fair ValueAmortized
Cost
Gross
Unrealized Gain/(Loss)
Fair ValueAmortized
Cost
Gross
Unrealized Gain/(Loss)
Convertible debt$11,677 $13,862 $(2,185)$11,989 $13,244 $(1,255)
Total available-for-sale securities$11,677 $13,862 $(2,185)$11,989 $13,244 $(1,255)
The following table summarizes the maturities of the Company’s available-for-sale securities:
October 31, 2021
(in thousands)Fair ValueAmortized Cost
Within 1 year$10,466 $11,960 
After 1 year through 5 years1,211 1,902 
Total available-for-sale securities$11,677 $13,862 
The Company's available-for-sale securities consist of investments in convertible debt instruments issued by privately-held companies. The available-for-sale securities with maturities within one year were included in "Other current assets" and maturities greater than one year were included in "Other assets" in the Balance Sheets.






13


Note 5: Fair Value Measurements
The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value and prioritizes the inputs into three levels as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the assets or liabilities, either directly or indirectly.
Level 3—Unobservable inputs based on the Company’s own assumptions, requiring significant management judgment or estimation.
Instruments Measured at Fair Value on a Recurring Basis
The fair values of financial assets and liabilities measured and recorded at fair value on a recurring basis were presented in the Balance Sheets as follows:
 October 31, 2021January 31, 2021
(in thousands)Total(Level 1)(Level 2)(Level 3)Total(Level 1)(Level 2)(Level 3)
Financial assets:
Interest rate swap agreement$16 $ $16 $ $ $ $ $ 
Total return swap contracts175  175      
Convertible debt11,677   11,677 11,989   11,989 
Total financial assets$11,868 $ $191 $11,677 $11,989 $ $ $11,989 
Financial liabilities:
Interest rate swap agreement$654 $ $654 $ $1,782 $ $1,782