A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on May 9, 2022 and will remain available until 5:00 p.m. (Eastern Time) on May 23, 2022. Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 5680955.
Cautionary Statement:
The statements in this release relating to the resilience of our model and the strength of our team as we continue to navigate through a challenging supply environment, our belief that our focus on operational excellence positions us well to achieve our long-term non-GAAP gross margin target of 68%, non-GAAP operating margin target of 45%, and free cash flow target of 38% through industry cycles, that our Preferred Supply Program continues to be greater than 50% of our aggregate backlog and more than 100% of our backlog in the most constrained capacity areas, our unsupported backlog continuing to climb and our lead times remaining stretched, that we expect to remain supply-constrained throughout 2022 and into 2023, our more active capital return strategy, our programmatic stock buyback program, that we are targeting $348.2 million return to shareholders in the June quarter via dividends and share repurchases, actively managing working capital requirements for the business, our belief that our debt exchange transactions will benefit stockholders by significantly reducing share count dilution to the extent our stock price appreciates over time, that we anticipate purchasing an additional $194.6 million of shares during the June quarter, that we remain focused on continuing to enhance our capital structure in the future, that demand continues to outpace supply, driving stronger customer engagements resulting in share gains in the end markets we serve, that we expect our net sales in the June quarter to be up between 4% and 8% sequentially, that at the mid-point of our guidance for the June quarter, net sales will be 24.6% higher than the year ago quarter, our first quarter fiscal 2023 guidance for net sales and GAAP and non-GAAP gross margin, operating expenses, operating income, other expense, net, income tax provision, net income, diluted common shares outstanding, earnings per diluted share, expected inventory days in the June 2022 quarter, capital expenditures for the June 2022 quarter and for all of fiscal 2023, continuing to add capital equipment to maintain, grow and operate our internal manufacturing capabilities to support the expected growth of our business, our belief that our end-market demand metric reflects true end-market demand based on when product is sold to direct customers or by our distributors to an end customer and our assumed average stock price in the June 2022 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: any continued economic uncertainty due to the impact of the COVID-19 pandemic (including lock-downs in China), actions taken or which may be taken by the Biden administration or the U.S. Congress, monetary policy (including increases in interest rates), political, geopolitical, trade or other issues in the U.S. or internationally (including the Ukraine-Russia military conflict), any further unexpected fluctuations or weakness in the U.S. and global economies (including China), changes in demand or market acceptance of our products and the products of our customers and our ability to meet any continued increases in market demand; the impact of current and future changes in U.S. corporate tax laws (including the Tax Cuts and Jobs Act of 2017), foreign currency effects on our business; the mix of inventory we hold and our ability to satisfy short-term orders from our inventory; changes in utilization of our manufacturing capacity and our ability to effectively manage and expand our production levels to meet any continued increases in market demand; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; our ability to realize the expected benefits of our preferred supply program; changes or fluctuations in customer order patterns and seasonality; our ability to obtain a sufficient supply of wafers from third party wafer foundries to meet our increasing needs and the cost of such wafers, our ability to obtain additional capacity from our suppliers to increase production to meet any continued increases in market demand; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions; the impact of inflation on our business; the impact of any future significant acquisitions that we may make; the costs and outcome of any current or future litigation or other matters involving our Microsemi acquisition, the Microsemi business, intellectual property, customers, or other issues; the costs and outcome of any current or future tax audit or investigation regarding our business or the business of Microsemi, our actual average stock price in the June quarter and the impact such price will have on our share count; fluctuations in our stock price and trading volume which could impact the number of shares we acquire under our share repurchase program and the timing of such repurchases; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns (including the COVID-19 pandemic) or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip's website ( www.microchip.com) or the SEC's website ( www.sec.gov) or from commercial document retrieval services.
Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this May 9, 2022 press release, or to reflect the occurrence of unanticipated events.
About Microchip:
Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. The Company's solutions serve more than 124,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.
Note: The Microchip name and logo, MPLAB, SST, and SuperFlash are registered trademarks of Microchip Technology Incorporated in the U.S.A. and other countries. Flashtec is a registered trademark of Microchip Technology Incorporated in the U.S.A. Silicon Storage Technology is a registered trademark of Microchip Technology Incorporated in other countries. memBrain and Switchtec are trademarks of Microchip Technology Incorporated in the U.S.A and other countries. All other trademarks mentioned herein are the property of their respective companies.
INVESTOR RELATIONS CONTACT:
J. Eric Bjornholt -- CFO
(480) 792-7804
