CONEXANT Second-Quarter Revenues Up 58 Percent Year-Over-Year
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Expansion Platforms Revenue up Nearly 100 Percent; Pro Forma Net Income Increases 430 Percent Over Second Quarter Fiscal 1999
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--April 19, 2000-- Conexant Systems Inc. (Nasdaq:CNXT - news) Wednesday announced revenues of $501.7 million for its second fiscal quarter ended March 31, 2000, up 58 percent over second-quarter fiscal 1999 revenues of $316.9 million, and down slightly from first-quarter fiscal 2000 revenues of $510.0 million.
Pro forma net income for the quarter was $47.1 million, or $0.21 per diluted share, compared with pro forma net income of $8.9 million in the second quarter of fiscal 1999, or $0.05 per diluted share. Pro forma net income in the first quarter of 2000 was $53.3 million, or $0.24 per diluted share. These results exclude amortization of intangible assets and special charges related to the acquisitions of Maker Communications, Microcosm Communications and the broadband wireless unit of Oak Technology.
``Stronger than anticipated demand in several of our fastest-growing segments contributed to our outstanding second-quarter results,' said Dwight W. Decker, Conexant chairman and chief executive officer.
``Two of our divisions, network access and digital infotainment, set quarterly revenue records. In the aggregate, our expansion platform divisions grew almost 100 percent year-over-year. Areas of strength included digital cellular power amplifiers, high-speed networking devices and digital satellite set-top box receivers.'
The Network Access Division achieved record revenues of $125.2 million, up 166 percent year-over-year, reflecting strong across-the-board demand for wide-area network (WAN) transport, multi-service access and broadband access solutions. Results were driven by the continuing upgrade of the global network infrastructure to support the dramatic increase in Internet traffic.
The Wireless Communications Division recorded revenues of $96.0 million, up 68 percent year-over-year, as the division continued to benefit from worldwide end-market growth of digital cellular handsets.
The Digital Infotainment Division generated record revenues of $73.1 million, up 72 percent year-over-year, driven by strong demand for video processing solutions and satellite tuners and demodulators.
The Personal Imaging Division recorded revenues of $28.1 million, up 36 percent year-over-year, as leading office-equipment suppliers continued to rely on Conexant for fax modems and facsimile engines for multi-function peripheral solutions.
The Personal Computing Division delivered revenues of $179.3 million, up 20 percent year-over-year. Demand for PC dial-up modems remained solid throughout the quarter, with shipments of 15 million units, up more than 50 percent year-over-year. The division also shipped a record 2 million embedded modems.
``Based on current design-win activity and order visibility, we expect our expansion platforms to grow approximately 10 percent sequentially this quarter, with a significant contribution from our wireless and networking businesses. Personal computing revenues should rise modestly,' Decker continued.
``In the aggregate, we anticipate top-line growth to be in the range of 6-8 percent. Gross margins should remain at about the current 46-percent level, and we anticipate that operating expenses will decline slightly as a percent of sales. We expect research and development spending to increase in line with sales growth as we continue to invest in high growth market segments, particularly in the areas of Internet infrastructure, wireless communications and broadband access. Selling, general and administrative expenses should increase at approximately half the gross-rate of revenues.
``We expect to deliver sequential growth in operating profit of greater than 10 percent this quarter. For the full fiscal year, we are raising our revenue outlook by $100 million, from $2 billion to $2.1 billion, which would deliver growth of almost 50 percent over fiscal 1999,' Decker concluded.
Second-Quarter Product Highlights
The Network Access Division expanded its fiber-optic networking family with solutions used both at the edge and core of today's rapidly expanding Internet and telephony infrastructure. This included 10 gigabit-per-second (Gbps) amplifiers, transceivers and drivers for fiber-optic modules, a 3.2 Gbps crosspoint switch and companion re-timing circuit for high-speed networks, and a family of 2.5 Gbps solutions aimed at high-volume data communications traffic aggregation applications.
The Wireless Communications Division announced an advanced power-management technology that will significantly improve power amplifier efficiency. The division also introduced a family of radio frequency (RF) subsystems that provide code division multiple access (CDMA) phone manufacturers with an easy migration path to the emerging third-generation cdma2000 wireless standard. During the quarter, Conexant received a ``Best Supplier Award' from Samsung Electronics' Wireless Terminal Division. The annual award acknowledges the special efforts and importance of companies that supply Samsung with key solutions.
The Digital Infotainment Division delivered record shipments of its PCI and side-port video decoders for ``TV in the PC' applications.
The Personal Imaging Division captured numerous design wins based on its 14.4 Kbps, single-chip fax engine. This highly integrated solution includes telephone answering machine, speakerphone and caller ID functionality.
The Personal Computing Division introduced SmartSCM(TM), the industry's first single-chip modem solution to include all of the functions necessary for quickly and inexpensively incorporating global Internet connectivity into a broad range of Internet appliances such as game consoles and ``smart' handheld devices.
Recent Strategic Initiatives
After the close of the quarter, the company announced that it has agreed to acquire Philsar Semiconductor Inc. of Ottawa, Canada. Philsar is a privately held, leading developer of RF semiconductor solutions for personal wireless connectivity, including emerging standards such as Bluetooth, and RF components for 3G digital cellular handsets. Philsar will become a part of Conexant's Wireless Communications Division when the transaction is completed this quarter.
Conexant acquired Applied Telecom Inc., of Lisle, Ill., also after the close of the quarter. Applied Telecom, a leading supplier of telecommunications software and hardware products to top networking equipment companies, is now a part of Conexant's Network Access Division. |
