Microchip Technology Inc. (NASDAQ:MCHP) Q4 2019 Earnings Conference Call - Final Transcript
May 08, 2019 • 08:30 am ET
Good day everyone, and welcome to this Microchip's Fourth Quarter Fiscal 2019 Financial Results Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Eric Bjornholt, Chief Financial Officer. Please go ahead, sir.
Good morning, everybody. During the course of this conference call, we will be making projections and other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that such statements are predictions and actual events or results may differ materially. We refer you to our press releases of last evening's, as well as our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations.
And in attendance with me today are Steve Sanghi, Microchip's Chairman and CEO; and Ganesh Moorthy, Microchip's President and COO. I will comment on our fourth quarter and full fiscal year 2019 financial performance, and Steve and Ganesh will then give their comments on the results, discuss the current business environment, as well as our guidance and provide an update on our integration activities on our integration activities associated with the Microsemi acquisition. We will then be available to respond to specific investor and analyst questions.
We are including information in our press release in this conference call on various GAAP and non-GAAP measures. We have posted a full-GAAP to non-GAAP reconciliation on the Investor Relations page of our website at www.microchip.com, which we believe, you will find useful when comparing GAAP and non-GAAP results. I want to remind investors that during the quarter ending June 30, 2018, we adopted the new GAAP revenue recognition standard, which requires revenue to be recognized at the time products are sold to distributors versus our historical revenue recognition policy, where revenue on such transactions were deferred until the product was sold by our distributors to an end customer.
We continue to track and measure our performance internally based on direct revenue plus distribution sell-through activity and will provide a metric for this call to end-market demand in our earnings release each quarter. Therefore, along with our GAAP and non-GAAP results based on distribution selling, we will also provide investors with our end-market demand based on distribution sellout. But will not provide a P&L on end-market demand. End-market demand in the March 2019 quarter was $1.34 billion, which was $10.4 million above our GAAP revenue.
I will now go through some of the operating results, including net sales, gross margin, and operating expenses. I will be referring to these results on a non-GAAP basis, which is based on expenses prior to the effects of our acquisition activities, share-based compensation, and certain other adjustments. Our fiscal 2019 non-GAAP results are calculated as the sum of the non-GAAP sell-through-based information we disclosed previously for each of the first three quarters of fiscal 2019, plus the non-GAAP sell-in-based information disclosed today for the fourth quarter of fiscal 2019.
Net sales in the