SIPEX Corporation Reports Fourth Quarter 2000 Preliminary Results
BILLERICA, Mass., Jan. 11 /PRNewswire/ -- SIPEX Corporation (Nasdaq: SIPX - news) today announced that revenue and earnings will be lower than the Company expected for the fourth quarter.
SIPEX reported that the lower than anticipated revenue and earnings for the fourth quarter were primarily due to two factors: lower than planned shipments of wafers from the Company's new wafer fabrication facility due to unexpected production delays and higher than expected cancellations and rescheduling of orders from distributors late in the quarter. The Company, which reported revenues of $22.0 million in the fourth quarter a year ago, said it expects revenue in the fourth quarter of 2000 to be approximately $23.0 to $27.0 million, which is below its previous internal forecast. The range of $23.0 million to $27.0 million contemplates the Company's decision to recognize revenue on a sell-through basis for a portion of its distribution business. The Company expects to complete its analysis of the one-time impact of the change on the fourth quarter revenue prior to its final earnings release in February.
The Company historically recognized revenue on shipments made to distributors. The Company is contemplating changing its accounting policy and deferring revenue on shipments to distributors in North America and Europe until the products are shipped out of distribution to the end customer. This more conservative policy recognizes the changing business environment in the Company's market place.
``While 2000 will be an excellent year with annual revenue and earnings growth in excess of 30%, nevertheless, we are very disappointed by the fourth quarter,'' said James E. Donegan, Chairman and CEO.
Mr. Donegan continued, ``We experienced production problems in the fourth quarter that were primarily related to the Company's high ESD interface product qualification. These wafer types were not run in the Company's new fab in the third quarter and the final qualification of these product types was delayed due to technical problems, which have since been resolved. As a result, the Company was unable to meet its' target for planned shipments during the fourth quarter. We believe the order cancellations and rescheduling were primarily from the Company's distributors adjusting their purchase requirements as a result of over-ordering in the past several months as a result of a tight chip supply in the industry at that time. This significantly affected our sales to distributors during the quarter; however, fourth quarter sales to OEMs from distributors remained very strong, thus showing continued end market strength for the Company's products.''
Mr. Donegan concluded, ``We believe that during the recent months of tight chip supplies, that the distribution channel had over-ordered and that once the distributors became comfortable with the delivery situation, they readjusted their open orders for our products. It is clear that the semiconductor industry has moved from a tight supply situation and while we are very encouraged by these solid Q4 distributor sell-through reports, we remain cautious about the next six months' environment relative to new bookings' strength. Furthermore, we remain confident that our fab will be capable of providing us with the majority of our wafer needs as we complete the transfer of production to our facility.''
SIPEX will conduct a conference call concerning this announcement on Friday, January 12th at 8:30AM EST. To gain access to this teleconference, the toll free number is 877-918-6721, passcode is SIPEX and the conference leader is Frank DiPietro. A live audio webcast will be available at videonewswire.com. A recording of this call will be available for replay through Wednesday, January 17, 2001. The toll free number for replay is 888-562-2892.
Actual results for the current quarter and further information will be available when the company has its' next earnings conference call scheduled for February 15, 2001.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking statements that involve risk and uncertainty, including statements regarding our revenue and earnings for the fourth quarter of 2000, our outlook for the first half of 2001 (including demand from our distribution channel), our expected production capacity and the general conditions of the semiconductor market. There are numerous factors that could cause the Company's actual results to differ materially from results predicted or implied in this news release.
Important factors affecting the Company's ability to achieve future revenue growth and operating results include the preliminary nature of the financial performance information being disclosed for Q4 2000, whether, and the extent to which, demand for the Company's products increases and reflects real end-user demand; the ability to successfully integrate Calogic and Alpha Semiconductor into the Company's operations, whether customer cancellations and delays of outstanding orders increase, and whether the Company is able to manufacture in the correct mix to respond to orders on hand and new orders received in the future; whether the Company is able to successfully implement its new Fab in a timely fashion; the amount of lead time provided by the Company's customers; whether the Company is able to achieve its new product development and introduction goals, including, without limitation, goals for conceiving and introducing timely new products that are well received in the marketplace; and its ability to design and introduce new products based on new technologies. In addition, the Company may experience unexpected delays or problems in qualifying and ramping up production in its new Fab in Milpitas, California and the failure of the Company to implement the new Fab successfully and in a timely fashion may impact future revenue growth and operating results.
Other important factors that could cause actual results to differ materially from those predicted include overall economic conditions, such as currency and other economic issues affecting Asia and other countries, demand for electronic products and semiconductors generally, demand for the end-user products for which the Company's semiconductors are suited, timely availability of raw material, equipment, supplies and services, unanticipated manufacturing problems, technological and product development risks, competitors' actions, and other risk factors described in the Company's filings with the Securities and Exchange Commission.
All forward-looking statements included in this document are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward- looking statement.
SIPEX Corporation is a leading manufacturer of high performance, high value-added analog integrated circuits. SIPEX serves the broad analog signal processing market with single, dual and multiprotocol interface circuits, low power and high voltage application specific circuits, electroluminescent driver, data converters and power management products. Applications for the Company's products include telecommunications including personal computers and peripherals, battery powered hand-held devices, cellular telephones, test equipment factory automation, networking, process controls and satellites.
For Further information, contact Frank R. DiPietro, Executive Vice President & CFO at SIPEX Corporation, 22 Linnell Circle, Billerica, MA 01821, Telephone (978) 671-1909.
Contact: Frank R. DiPietro
Executive Vice President, Finance
and Chief Financial Officer
(978) 671-1909
SOURCE: SIPEX Corporation
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