Beats recent guidance by a penny; upbeat outlook:
>>GREENSBORO, N.C., Oct. 15 /PRNewswire-FirstCall/ -- RF Micro Devices, Inc. (Nasdaq: RFMD - News), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, today reported financial results for its fiscal 2003 second quarter, ended September 30, 2002.
Financial Results
Revenues for the quarter were approximately $119.7 million, a sequential increase of approximately 15.2% versus revenues of $103.9 million for the quarter ended June 30, 2002 and an increase of approximately 21.8% versus revenues of $98.3 million for the corresponding quarter of fiscal 2002. Revenues and earnings per share exceeded the Company's most recent estimates, provided on September 24, 2002, of approximately $118 million in revenues and earnings per share of approximately $0.03, primarily as a result of increased demand in the final week of the quarter.
Gross profit for the quarter increased 11.0% sequentially to $46.0 million, versus $41.4 million for the quarter ended June 30, 2002 and increased 26.5%, versus $36.4 million for the prior year period. The year- over-year and sequential increases in gross profit were primarily attributable to the increase in the Company's revenues.
Other operating expenses in the September quarter totaled $0.6 million and were related to startup costs associated with the Company's Beijing facility. The Beijing facility became operational in the September quarter and, subsequently, operating costs associated with the Beijing facility were moved from other operating expenses to cost of goods sold. Approximately $0.3 million of operating expenses associated with the Beijing facility appear in cost of goods sold in the September quarter.
Net income for the quarter was $6.5 million, or $0.04 per diluted share, based on a 0.5% tax rate, compared to net income of $1.5 million, or $0.01 per diluted share, for the second quarter of fiscal 2002, based on a 14% tax rate. This compares sequentially to net income of $2.3 million, or $0.01 per share for the first quarter of fiscal 2003, based on a 1.6% tax rate.
Business Outlook And Financial Guidance
The Company is currently fully booked for the December 2002 quarter and currently anticipates revenues of approximately $128 million to $132 million and earnings per share of approximately $0.04 to $0.05, before the impact of the proposed acquisition of Resonext, which was announced separately today.
Comments From Management
David Norbury, CEO of RF Micro Devices, said, "Our growth was driven primarily by market share gains and diversification efforts. The introduction of new, highly integrated power amplifier (PA) modules accelerated our growth in GSM and CDMA PAs and helped to increase our sales to original equipment manufacturers (OEMs), original design manufacturers (ODMs) and contract manufacturers.
"Even as sales to our largest customer increased in absolute dollars in the September quarter, sales to all other customers increased as a percentage to more than half of revenues. Sales to our second largest customer grew substantially, and the world's third largest handset manufacturer firmly remained our third largest customer. Beyond OEMs, we saw continued strength from ODMs and contract manufacturers who combine our components with reference designs from industry leaders to achieve best-of-breed solutions. We believe our gains among OEMs, ODMs and contract manufacturers increased our PA leadership and give us leverage to sell our POLARIS(TM) TOTAL RADIO(TM) transceiver into these markets.
"WLAN revenues grew 35.4% from the previous quarter, and we estimate our WLAN components are currently included in greater than 20% of all WLAN devices. While we've achieved the number two position in 802.11b transceivers, our longer term goal is to be the leading supplier of WLAN chipsets. To that end, we announced separately today our agreement to acquire Resonext Communications, Inc. Resonext has assembled a world-class team focusing on the 802.11a and multi-band segments of the WLAN market, and we expect their capabilities will complement our 802.11b products and significantly increase our total addressable market. We further believe Resonext will help us accelerate to market an a/b/g multi-band chipset, and we expect our strategic relationship with Jazz Semiconductor will give us a distinct cost advantage in the WLAN market.
"Looking forward, the response to our POLARIS(TM) transceiver continues to be very strong from ODM and OEM customers, as well as from baseband providers. We've mated POLARIS(TM) to the handset basebands of three leading communications companies, and we anticipate similar announcements in the near future. Our strategy of partnering with the world's leading baseband suppliers reflects our customers' requests for a best-of-breed handset solution and significantly increases our competitive position in the handset component market. We believe these achievements, combined with our ongoing diversification efforts, position us to continue to grow in excess of our core handset market."
Dean Priddy, CFO and vice president of administration, stated, "We're pleased to have exceeded our revised September guidance for revenues and earnings per share, driven by increased demand as we exited the September quarter.
"Given our strong September revenue growth, we were able to increase operating income by 300 basis points. We continue to take market share in our core business, and we're more focused than ever on reducing costs. Additionally, we are making significant investments in our future that we believe improve our earnings potential going forward. This quarter, we are releasing extremely small, highly integrated PA modules that reduce our cost structure. In the March quarter, we plan to begin 6" GaAs HBT production, which we expect will further reduce our cost structure. Additionally, our technical team has identified techniques we believe will improve our test yields by several points. On the design side, we continue to push for higher levels of integration and are developing innovative low-cost packages that have IP protection. Finally, the cost advantage we've negotiated through our Jazz relationship reduces our cost of silicon components and will improve overall profitability as we transition manufacturing to Jazz.
"The success we're seeing in our core business allows us to continue making investments in multiple growing markets, including handset transceivers, wireless LAN, Bluetooth, GPS, and advanced technologies like gallium nitride. We remain convinced of the future of wireless markets and believe our strategy gives us a high likelihood of success."
RF Micro Devices will conduct a conference call at 5:00 p.m. (ET) today, October 15, 2002, to discuss fiscal 2003 second quarter results, comment on the Company's outlook and discuss the proposed Resonext transaction. The conference call will be broadcast live over the Internet and can be accessed by any interested party at www.streetevents.com or www.rfmd.com .
RF Micro Devices, Inc., an ISO 9001-certified manufacturer, designs, develops, manufactures and markets proprietary radio frequency integrated circuits (RFICs) primarily for wireless communications products and applications such as cellular and PCS phones, base stations, wireless LANs, and cable television modems. The Company offers a broad array of products -- including amplifiers, mixers, modulators/demodulators, and single-chip receivers, transmitters and transceivers -- representing a substantial majority of the RFICs required in wireless subscriber equipment. The Company's strategy is to focus on wireless markets by offering a broad range of standard and custom-designed RFICs in order to position itself as a "one-stop" solution for its customers' RFIC needs. RF Micro Devices, Inc. is traded on the Nasdaq National Market under the symbol RFMD.
This press release contains forward-looking statements that relate to RF Micro Devices' plans, objectives, estimates and goals. Words such as "expect," "anticipate," "intend," "plan," "project," "believe," and "estimate," and variations of these words and similar expressions, identify these forward- looking statements. RF Micro Devices' business is subject to numerous risks and uncertainties, including variability in quarterly operating results, the rate of growth and development of wireless markets, risks associated with the operation of wafer fabrication facilities, the Company's ability to manage rapid growth and to attract and retain skilled personnel, variability in production yields, raw material availability, manufacturing capacity constraints, dependence on a limited number of customers and dependence on third parties. These and other risks and uncertainties, which are described in more detail in RF Micro Devices' most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.
RF MICRO DEVICES®, RFMD® and POLARIS(TM) TOTAL RADIO(TM) are trademarks of RFMD, LLC. All other trade names, trademarks and registered trademarks are the property of their respective owners.
For more information about RFMD, please visit our website at www.rfmd.com .
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
2002 2001 2002 2001
(Unaudited) (Unaudited) (Unaudited)Unaudited)
Total revenue $119,735 $98,271 $223,677 $168,323
Costs and expenses:
Cost of goods sold 73,738 61,902 136,242 127,803
Research and development 22,570 16,977 45,621 32,992
Marketing and selling 8,732 6,805 17,146 13,370
General and administrative 4,777 3,483 8,977 6,743
Other operating expense 611 6,106 1,353 11,018
Impairment of long-lived
assets - - - 6,801
Total costs and
expenses 110,428 95,273 209,339 198,727
Operating income (loss) 9,307 2,998 14,338 (30,404)
Interest (expense) income,
net (2,788) (1,217) (5,433) (1,309)
Income (loss) before income
taxes $6,519 $1,781 $8,905 ($31,713)
Income tax expense (benefit) 34 249 71 (4,859)
Net income (loss) $6,485 $1,532 $8,834 ($26,854)
Net income (loss) per
share, diluted $0.04 $0.01 $0.05 ($0.16)
Weighted average outstanding
diluted shares 172,991 173,829 173,865 164,705
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
SEPTEMBER 30, MARCH 31,
2002 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $172,182 $157,648
Short-term investments 165,462 186,526
Accounts receivable, net 62,796 56,373
Inventories 61,289 38,734
Other current assets 11,271 16,689
Total current assets 473,000 455,970
Property and equipment, net 227,358 221,679
Intangible assets, net 10,846 11,754
Goodwill 34,525 34,525
Other assets 3,710 5,072
Total assets $749,439 $729,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $40,115 $31,599
Current obligations under capital leases 1,320 3,319
Total current liabilities 41,435 34,918
Long-term debt, net 295,048 294,248
Obligations under capital leases, less current
maturities 15 169
Other long-term liabilities 12,295 9,980
Total liabilities 348,793 339,315
Shareholders' equity:
Total shareholders' equity 400,646 389,685
Total liabilities and shareholders' equity $749,439 $729,000<<
Cheers, Tuck |
