I found the reference regarding expansion of current facilities concurrent to the construction of the 2d fab. The following is from the 11/9/99 10Q. Notice how the company makes a distinction between capital expenditures to expand existing fab and capital expenditures for the new fab. BTW -- also note the $1 MM paid by RFMD for a license to use IBM's SiGe technology. I would love to know the scope of that license. That might be a steal for RFMD. Enough babbling. The 10Q:
"LIQUIDITY AND CAPITAL RESOURCES
"We have funded our operations to date through sales of equity and debt securities, bank borrowings, capital equipment leases and revenues from product sales. We completed our initial public offering in September 1997, and raised approximately $37.6 million, net of offering expenses. In January 1999, we completed a secondary public offering and raised approximately $133.4 million, net of offering expenses. As of September 30, 1999, we had working capital of approximately $134.2 million, including $43.1 million in cash and cash equivalents. Operating activities generated $3.4 million in cash for the six-month period ended September 30, 1999. This was primarily attributable to net income of $22.9 million, partially offset by increases in accounts receivable of $14.6 million, in inventories of $4.2 million, a decrease in accounts payable of $3.8 million, and a decrease in taxes payable of $3.2 million. Cash provided by operating activities for the six months ended September 30, 1998 was $2.4 million. The cash provided by operating activities during this period was primarily attributable to an increase in accounts payable of $6.9 million, increases in taxes payable of $0.8 million, and net income of $4.0 million. These increases were partially offset by increases in accounts receivable of $7.9 million and inventories of $2.0 million.
"The $103.1 million of cash used by investing activities for the six months ended September 30, 1999 was substantially related to the purchase of $24.6 million of capital equipment, primarily for use in our wafer fabrication facility, $23.9 million for the construction and outfitting of our new facility housing molecular beam epitaxy (MBE) wafer fabrication equipment, $5.0 million capitalized for the construction of our new corporate headquarters, $48.6 million in the purchase of short-term investments, and $1.0 million for the purchase of a technology license for silicon germanium from IBM. The $9.0 million of cash used by investing activities for the six months ended September 30, 1998 was primarily related to expenditures associated with the construction of our first GaAs HBT wafer fabrication facility and general corporate capital equipment requirements.
"The $4.7 million of cash used by financing activities for the six-month period ended September 30, 1999 related primarily to the repayments of capital lease obligations and increases in restricted cash associated with the financing of our new wafer fabrication facility. The $7.1 million of cash provided by financing activities for the six-month period ended September 30, 1998 related primarily to the receipt of proceeds from the exercise by TRW of a warrant covering 4,000,000 shares of common stock of $10.0 million, partially offset by $2.9 million in repayments of capital lease obligations.
"At September 30, 1999, we had total long-term capital commitments of $38.6 million, with $17.1 million relating to expansion of our first wafer fabrication facility and $21.5 million for general corporate requirements. The $17.1 million in long-term capital commitments relating to the wafer fabrication facility represents continued investment in the second phase expansion, as well as a portion of an expected additional $48.3 million investment to increase further wafer fabrication capacity that will consist of moving our MBE wafer starting equipment out of the facility to a new leased location, reconfiguring the space currently occupied by this equipment with additional wafer production equipment and hiring additional production personnel. We believe this additional investment in wafer fabrication capacity, which is expected to be completed by mid-2000, will bring our total wafer production capacity to approximately 50,000 wafers per year. We expect to fund this investment through a combination of existing cash on hand and capital leases.
"During the quarter ended September 30, 1999, we began construction of a second wafer fabrication facility. The full capacity output of the first phase of this facility is anticipated to be the equivalent of approximately 60,000 four-inch wafers and is projected to be completed and begin production-level wafer output in late 2000. An anticipated second phase of construction, which is expected to be completed near the end of 2001, would increase the facility's total output to the equivalent of 210,000 four-inch wafers per year. The projected cost for this facility is approximately $110 million for the first phase and $140 million for the second phase. The funding for the first phase will come primarily from a synthetic lease arrangement that we entered into on August 13, 1999. A synthetic lease is an asset-based financing structured to be treated as an operating lease for accounting purposes but as a loan for tax purposes. At present, the synthetic lease transaction is largely secured by cash collateral. The lease has a base term of five years and three months. At the end of the base term, the lease can be extended upon the agreement of the parties, or we may buy out the lease . . . ."
RK |
