Skyworks Exceeds Q3 FY08 Guidance with 23 Percent Increase in Revenue, 79 Percent Growth in Operating Income

WOBURN, Mass.--(BUSINESS WIRE)--Skyworks Solutions, Inc. (NASDAQ:SWKS), an innovator of high performance analog and mixed signal semiconductors enabling mobile connectivity today announced third fiscal quarter 2008 results for the period ended June 27, 2008. Revenue for the quarter was $215.2 million, up 23 percent as compared to $175.1 million in the same period a year ago and above the company’s guidance for $210.0 million.

On a non-GAAP basis, operating income for the third fiscal quarter was $30.3 million, up 79 percent from $17.0 million in the prior year, while net income was $28.9 million versus $16.8 million in Q3 of fiscal 2007. Non-GAAP diluted earnings per share was a company record $0.18 and $0.01 better than consensus estimates. On a GAAP basis, operating income for the third fiscal quarter was $22.8 million as compared to $12.4 million in the year-ago timeframe, while net income was $20.5 million versus $11.4 million, respectively. GAAP diluted earnings per share was $0.12.

“Skyworks is delivering profitable growth driven by increasing diversification in wireless and adjacent analog markets, share gains and strong operational execution,” said David J. Aldrich, president and chief executive officer of Skyworks. “We believe that our unique technical breadth and manufacturing scale are strategically differentiating Skyworks and positioning us for sustainable, above market revenue growth with improving fundamentals.”

Third Fiscal Quarter Highlights

• Expanded gross margin to 40.6 percent on a non-GAAP basis (40.2 percent on a GAAP basis) – a 180 basis point year-over-year increase and the fifth consecutive quarter of improvement
• Increased operating margin to 14.1 percent on a non-GAAP basis (10.6 percent on a GAAP basis) – a 440 basis point year-over-year increase
• Generated $26.2 million of cash flow from operations
• Ramped energy management solutions in support of automated meter reading (AMR), advanced metering infrastructure (AMI) and ZigBee® applications
• Supported Microsoft’s Sync® initiative with low power control ICs, enabling fully integrated, voice-activated in-car communications for mobile phones and digital music
• Captured strategic reference design wins at Qualcomm for forthcoming CDMA2000, EDGE and 3G HSDPA architectures
• Powered more than 10 new Samsung 3G handset models – including the first European mobile TV slider phone

Fourth Fiscal Quarter 2008 Outlook

“New program launches, targeted design win ramps and market share gains are translating into improving order visibility,” said Donald W. Palette, vice president and chief financial officer of Skyworks. “As a result, we are forecasting September quarterly revenue to grow to $225 million. At the same time, we plan to deliver further operational improvements in product yields, equipment efficiency and cycle times. In turn, we intend to expand gross and operating margins and deliver non-GAAP diluted earnings per share of $0.20 for the period.”

Estimated non-GAAP diluted earnings per share for the fourth fiscal quarter excludes approximately $6 million of FASB Statement No. 123(R) - related expenses.

Non-GAAP results, which are a supplement to financial results based on GAAP, exclude certain charges including but not limited to share-based compensation, baseband exit charges, amortization of intangible assets and non-recurring items. The company believes these non-GAAP financial measures provide useful information to both management and investors by excluding certain charges and non-recurring items that may not be indicative of Skyworks’ ongoing operations and financial performance.

Skyworks' Third Fiscal Quarter 2008 Conference Call

Skyworks will host a conference call with analysts to discuss its third fiscal quarter 2008 results and business outlook today at 5:00 p.m. Eastern time (ET). To listen to the conference call via the Internet, please visit the investor relations section of Skyworks' Web site. To listen to the conference call via telephone, please call 888-213-3934 (domestic) or 913-312-0934 (international), confirmation code: 9614688.

Playback of the conference call will begin at 9 p.m. Eastern on July 17, and end at 9 p.m. Eastern on July 24. The replay will be available on Skyworks' Web site or by calling 888-203-1112 (domestic) or 719-457-0820 (international), pass code: 9614688.

About Skyworks

Skyworks Solutions, Inc. is an innovator of high performance analog and mixed signal semiconductors enabling mobile connectivity. The company's power amplifiers, front-end modules and direct conversion radios are at the heart of many of today's leading-edge multimedia handsets. Leveraging core technologies, Skyworks also offers a diverse portfolio of linear products that support automotive, broadband, cellular infrastructure, industrial and medical applications.

Headquartered in Woburn, Mass., Skyworks is worldwide with engineering, manufacturing, sales and service facilities throughout Asia, Europe and North America. For more information, please visit Skyworks’ Web site at: www.skyworksinc.com.

Safe Harbor Statement

This news release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information relating to future results and expectations of Skyworks (including certain projections and business trends). Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "believes," "plans," "may," "will," "continue," similar expressions, and variations or negatives of these words. All such statements are subject to certain risks and uncertainties that could cause actual results to differ materially and adversely from those projected, and may affect our future operating results, financial position and cash flows.

These risks and uncertainties include, but are not limited to: uncertainty regarding global economic and financial market conditions; the cyclical nature of the semiconductor industry and the markets addressed by our, and our customers', products; our ability to develop, manufacture and market innovative products in a highly price competitive and rapidly changing technological environment; fluctuations in our manufacturing yields due to our complex and specialized manufacturing processes; delays or disruptions in production due to equipment maintenance, repairs and/or upgrades; our reliance on several key customers for a large percentage of our sales; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; the availability and pricing of third party semiconductor foundry, assembly and test capacity and raw materials; our ability to timely and accurately predict market requirements and evolving industry standards, and to identify opportunities in new markets; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; losses or curtailments of purchases or payments from key customers, or the timing of customer inventory adjustments; our ability to rapidly develop new products and avoid product obsolescence; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; lengthy product development cycles that impact the timing of new product introductions; unfavorable changes in product mix; the quality of our products and any remediation costs; shorter than expected product life cycles; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; economic, social and political conditions in the countries in which we, our customers or our suppliers operate, including security and health risks, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; our ability to continue to grow and maintain an intellectual property portfolio and obtain needed licenses from third parties; and the uncertainties of litigation, including disputes over intellectual property, as well as other risks and uncertainties, including but not limited to those detailed from time to time in our filings with the Securities and Exchange Commission.

These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Note to Editors: Skyworks, Skyworks Solutions, Helios and Intera are trademarks or registered trademarks of Skyworks Solutions, Inc. or its subsidiaries in the United States and in other countries. All other brands and names listed are trademarks of their respective companies.

SKYWORKS SOLUTIONS, INC.
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
				Three Months Ended						Nine Months Ended
(in thousands, except per share amounts)
				June 27,			June 29,			June 27,			June 29,
				2008			2007			2008			2007
Net revenues			$	215,210		$	175,050		$	627,451		$	551,290
Cost of goods sold				128,776			106,418			378,312			338,640
Gross profit				86,434			68,632			249,139			212,650
Operating expenses:
	Research and development			36,561			30,549			107,236			92,344
	Selling, general and administrative			25,975			24,874			74,608			72,652
	Restructuring & other charges			-			257			-			5,730
	Amortization of intangibles			1,101			536			4,904			1,608
		Total operating expenses		63,637			56,216			186,748			172,334
Operating income				22,797			12,416			62,391			40,316
	Interest expense			(1,658	)		(2,565	)		(5,635	)		(9,928	)
	Other income, net			1,064			2,766			4,997			7,824
Income before income taxes				22,203			12,617			61,753			38,212
Provision for income taxes				1,737			1,194			5,536			2,555
Net income			$	20,466		$	11,423		$	56,217		$	35,657
	Earnings per share:
		Basic	$	0.13		$	0.07		$	0.35		$	0.22
		Diluted	$	0.12		$	0.07		$	0.34		$	0.22
	Weighted average shares:
		Basic		162,095			158,606			161,166			160,159
		Diluted		164,649			160,032			163,323			161,278

SKYWORKS SOLUTIONS, INC.
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES
					Three Months Ended						Nine Months Ended
					June 27,			June 29,			June 27,			June 29,
(in thousands)					2008			2007			2008			2007
GAAP gross profit				$	86,434		$	68,632		$	249,139		$	212,650
			Share-based compensation expense [a]		651			475			2,162			876
			Revenue adjustments [b]		-			105			-			105
			Cost of goods sold adjustments [b]		-			(1,249	)		-			(1,249	)
			Acquisition related expense [c]		330			-			1,281			-
Non-GAAP gross profit				$	87,415		$	67,963		$	252,582		$	212,382
Non-GAAP gross margin %					40.6	%		38.8	%		40.3	%		38.5	%
					Three Months Ended						Nine Months Ended
					June 27,			June 29,			June 27,			June 29,
(in thousands)					2008			2007			2008			2007
GAAP operating income				$	22,797		$	12,416		$	62,391		$	40,316
			Share-based compensation expense [a]		6,112			3,645			16,762			9,716
			Revenue adjustments [b]		-			105			-			105
			Cost of goods sold adjustments [b]		-			(1,249	)		-			(1,249	)
			Acquisition related expense [c]		330			-			1,281			-
			Selling, general and administrative adjustments [b]		-			1,287			(502	)		1,287
			Restructuring & other charges [b]		-			257			-			5,730
			Amortization of intangible assets [c]		1,101			536			4,904			1,608
Non-GAAP operating income				$	30,340		$	16,997		$	84,836		$	57,513
Non-GAAP operating margin %					14.1	%		9.7	%		13.5	%		10.4	%
					Three Months Ended						Nine Months Ended
					June 27,			June 29,			June 27,			June 29,
(in thousands)					2008			2007			2008			2007
GAAP net income				$	20,466		$	11,423		$	56,217		$	35,657
			Share-based compensation expense [a]		6,112			3,645			16,762			9,716
			Revenue adjustments [b]		-			105			-			105
			Cost of goods sold adjustments [b]		-			(1,249	)		-			(1,249	)
			Acquisition related expense [c]		330			-			1,281			-
			Selling, general and administrative adjustments [b]		-			1,287			(502	)		1,287
			Restructuring & other charges [b]		-			257			-			5,730
			Amortization of intangible assets [c]		1,101			536			4,904			1,608
			Deferred financing expense adjustment [d]		-			-			-			564
			Tax adjustments [e]		921			842			3,455			1,515
Non-GAAP net income				$	28,930		$	16,846		$	82,117		$	54,933