Microsemi Announces Goodwill Charge Resulting from Adoption of SFAS 142
Tuesday June 3, 4:00 pm ET
IRVINE, Calif.--(BUSINESS WIRE)--June 3, 2003--Microsemi Corp. (Nasdaq:MSCC - News), a leading manufacturer of power management integrated circuits and hi-rel discrete semiconductors, today announced that it will record $14.7 million as an after-tax charge resulting from adoption of SFAS 142 "Goodwill and Other Intangible Assets."
The charge will be recorded as a transition year adjustment for the cumulative effect of a change in accounting principle, retroactively to Sept. 30, 2002, in accordance with the rule.
Microsemi adopted SFAS 142 as of the beginning of this fiscal year which began Sept. 30, 2002 and under the new rule was required to perform an initial impairment test in the year of transition. An independent valuation was performed and the initial impairment test of the carrying value of goodwill, utilizing an implied fair value test for each business unit, concluded that goodwill was impaired.
The second step, now completed, was to determine the amount of the impairment. The conclusion was reached that, of the approximately $26 million of goodwill that resulted from our previous acquisitions and remained unamortized as of Sept. 30, 2003, $22.7 million is impaired. This goodwill impairment charge is a non-cash charge.
The company recorded approximately $2.3 million of amortization of goodwill in fiscal year 2002. On a going-forward basis and in accordance with SFAS 142, it will not amortize the remaining $3.3 million of goodwill unless it is determined to be impaired during its periodic evaluation, which will be performed at least annually. For a more complete discussion of this newly adopted accounting rule, refer to the company's Form 10-Q filed on May 14, 2003 with the Securities and Exchange Commission.
About Microsemi
Microsemi is a leading designer, manufacturer and marketer of analog, mixed-signal and discrete semiconductors. The company's semiconductors manage and control or regulate power, protect against transient voltage spikes and transmit, receive and amplify signals.
Microsemi's products include individual components as well as complete circuit solutions that enhance customer designs by improving reliability, battery optimization, reducing size or protecting circuits. Markets the company serves include mobile connectivity, computer/peripherals, telecom/datacom, medical, industrial, automotive, digital media, space/satellite and military.
More information may be obtained by contacting the company directly or by visiting its Web site at microsemi.com.
Read the following factors that can materially affect Microsemi's future results.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Any statements set forth in the news release that are not entirely historical and factual in nature are forward-looking statements. For instance, all statements of belief and expectations are forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Potential risks and uncertainties include, but are not limited to, such factors as the difficulties regarding the making of estimates and projections, the hiring and retention of qualified technical personnel in a competitive labor market, acquiring and integrating new operations or assets, closing or disposing of operations or assets, rapidly changing technology and product obsolescence, the potential inability to realize cost savings or productivity gains and to improve capacity utilization, potential cost increases, weakness or competitive pricing environment of the marketplace, uncertain demand for and acceptance of the company's products, results of in-process or planned development or marketing and promotional campaigns, changes in demand for products, difficulties foreseeing future demand, effects of limited visibility of future sales, potential non-realization of expected orders or non-realization of backlog, unexpected business and economic conditions or adverse changes in current or expected industry conditions, business disruptions, future effects of the tragic events of Sept. 11, variations in customer order preferences, fluctuations in market prices of the company's common stock and potential unavailability of additional capital on favorable terms, difficulties in implementing company strategies, dealing with environmental matters or litigation, difficulties in determining and maintaining adequate insurance coverage, difficulties protecting patents and other proprietary rights, and inventory obsolescence. In addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer as well to the factors, uncertainties or risks identified in the company's most recent Form 10-K filed on Dec. 19, 2002, and the Form 10-Q filed on May 14, 2003, by Microsemi with the Securities and Exchange Commission. Additional risk factors may be identified from time to time in Microsemi's future filings. Microsemi does not undertake to supplement or correct any information in this release that is or becomes incorrect.
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Contact:
Microsemi Corp., Irvine
David R. Sonksen, (For Investor Inquiries), 949/221-7101
or
Cliff Silver, (Editorial), 949/221-7112
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Source: Microsemi Corp. |
