Semtech Corporation
200 Flynn Road
Camarillo, CA 93012-8790
May 3, 2018
Via EDGAR
Mr. Kevin J. Kuhar
Accounting Branch Chief
Division of Corporation Finance
United States Securities and Exchange Commission
Washington, D.C. 20549
Re: | Semtech Corporation |
Form10-K for the Fiscal Year Ended January 29, 2017 filed March 23, 2017
Form8-K filed November 29, 2017
FileNo. 001-06395
Dear Mr. Kuhar:
On behalf of Semtech Corporation (the “Company”), I submit this supplemental letter to our previously submitted correspondence dated February 7, 2018 made in response to the comments (the “Comments”) from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by letter dated January 25, 2018, relating to the Company’s above referenced filings. The Company’s supplemental response is set forth below. For the convenience of the Staff, we have restated initalics comment #5 followed by the Company’s response.
Form8-K filed November 29, 2017
Exhibit 99.1
5. | We note yournon-GAAP measures and changes based onnon-GAAP measures, such asnon-GAAP net sales andnon-GAAP gross profit, exclude the effects of the fair value of warrants issued to Comcast. Tell us how you considered Question 100.04 of the Compliance and Disclosure Interpretations onNon-GAAP Financial Measures when presenting your measures that exclude thenon-cash sales incentives provided to Comcast. That guidance indicates that it is not appropriate to presentnon-GAAP measures that substitute individually tailored revenue recognition and measurement methods for those of GAAP. |
This letter provides additional information related to the Company’s response in its letter dated February 7, 2018 to comment #5 in the Staff’s letter dated January 25, 2018 regarding the use ofnon-GAAP measures that exclude the effects of the fair value of warrants issued to Comcast in Exhibit 99.1 of Form8-K filed November 29, 2017. As disclosed in the Company’s press release furnished to the SEC as an Exhibit to the Form8-K filed on May 3, 2018, the Company accelerated the vesting of the remaining 586,956 unvested shares from the Warrant originally issued to a subsidiary of Comcast on October 5, 2016. The Warrant is now fully-vested and exercisable for a total of 869,565 shares. As a result of this action, the Company expects to record expense
Mr. Kevin J. Kuhar
May 3, 2018
Page | 2
related to the Warrant of $21.5 million, including $15.9 million related to this acceleration, which will be reflected as a reduction to net sales in the Company’s earnings release for its first fiscal quarter ended April 29, 2018. Because the Warrant is now fully vested, there will not be expense related to the Warrant in future periods.
Consistent with prior quarters since the Warrant was issued, the Company intends to continue to use the samenon-GAAP measures that exclude the effects of the fair value of the Warrant in its earnings release furnished on Form8-K for the fiscal quarter ended April 29, 2018. As discussed in the Company’s response letter dated February 7, 2018 to comment #5, the Company will enhance the purpose and use disclosure related to the measures to explain why investors find this information useful and how management uses these measures. However, since the Warrant has now been fully-vested and the Company will not record additional expense related to the Warrant in future periods, the Company will no longer report anynon-GAAP measures that adjust for the Warrant in future earnings releases after the earnings release for the fiscal quarter ended April 29, 2018.
You may contact me at (805)480-2191 if you have any further questions or comments.
Sincerely,
/s/ Emeka N. Chukwu
Emeka N. Chukwu
Executive Vice President and
Chief Financial Officer
Semtech Corporation