The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. We are not able to predict whether inventory at our distributors will increase or decrease during the quarter and are therefore providing a range of GAAP net sales guidance. In recent years, we have seen net inventory at our distributors increase or decrease by a significant amount in a single quarter.
| Microchip Consolidated Guidance | |||
| Net Sales | $1.420 to $1.487 billion | ||
| GAAP | Non-GAAP Adjustments | Non-GAAP(1) | |
| Gross Margin | 62.8% to 63.2% | $6.9 to $7.9 million | 63.3% to 63.7% |
| Operating Expenses(2) | 43.0% to 44.1% | $290.5 to $294.3 million | 23.2% to 23.6% |
| Operating Income | 18.8% to 20.2% | $297.4 to $302.2 million | 39.7% to 40.5% |
| Other Expense, net | $88.0 to $90.0 million | $13.0 million | $75.0 to $77.0 million |
| Income Tax Provision | $32.1 to $47.2 million(3) | $11.3 to $24.9 million | $20.8 to $22.3 million(4) |
| Net Income | $146.2 to $162.9 million | $321.7 to $340.1 million | $467.9 to $503.0 million |
| Diluted Common Shares Outstanding | Approximately 280.2 to
281.2 million shares | Approximately 280.2 to
281.2 million shares | |
| Earnings per Diluted Share | $0.52 to $0.58 | $1.15 to $1.21 | $1.67 to $1.79 |
| (1) | See the "Use of Non-GAAP Financial Measures" section of this release for information regarding our non-GAAP guidance. |
| (2) | We are not able to estimate the amount of certain Special Charges and Other, net that may be incurred during the quarter ending March 31, 2021. Therefore, our estimate of GAAP operating expenses excludes certain amounts that may be recognized as Special Charges and Other, net in the quarter ending March 31, 2021. |
| (3) | The forecast for GAAP tax expense excludes any unexpected tax events that may occur during the quarter, as these amounts cannot be forecasted. |
| (4) | Represents expected cash tax rate for fiscal 2021 excluding any transition tax payments associated with the Tax Cuts and Jobs Act. |
- Microchip's inventory days in the March 2021 quarter are expected to be in the range of 111 to 119 days, compared to 120 days at December 31, 2020. Our actual inventory level will depend on the inventory that our distributors decide to hold to support their customers, overall demand for our products and our production levels.
- Capital expenditures for the quarter ending March 31, 2021 are expected to be between $50 million and $60 million. Capital expenditures for all of fiscal 2021 are expected to be between $87 million and $97 million. We are continuing to invest in the equipment needed to support the growth of our production capabilities, and to mitigate industry capacity constraints, by bringing in-house some of our wafer fabrication, assembly and test operations that are currently outsourced.
