Earnings Released:
Unitrode Announces First-Quarter Net of $2.4 Million,
$.10 per Share, Before Special Charges
Merrimack, NH (May 12, 1998) -- Unitrode Corporation (NYSE--UTR), a manufacturer of analog/linear and mixed-signal integrated circuits, today announced for the first quarter ended May 2, 1998, that, excluding special charges, net income would have been $2.4 million, or $.10 per diluted share, on revenues of $28.0 million. Including special charges on a pre-tax basis of $7.1 million, the Company reported a net loss of $2.3 million, or $.10 per diluted share. In last year's first quarter, Unitrode reported net income of $6.6 million, or $.27 per diluted share, on net sales of $40.8 million.
The special charges included $2.6 million applied against cost of sales to account for a writedown of inventory, $2.5 million against other income (expense) to account for a reduction in the Company's carrying value of an equity investment in an outside foundry, and restructuring and merger costs of $2.0 million for costs associated with realigning the business to the current level of demand and costs associated with the proposed merger with BENCHMARQ Microelectronics, Inc.
Commenting on the first-quarter results, Robert J. Richardson, President and Chief Executive Officer of Unitrode, said, "As previously announced, Unitrode's revenues declined about 30% compared with last year's first quarter. The decline was primarily due to significantly reduced shipments to what had been the Company's largest customer, a disk-drive manufacturer. We do not expect to make any significant shipments to this customer until the next-generation product is qualified by the customer. During the quarter distributors continued to work down inventories. Although turns business (orders booked and shipped within the quarter) improved compared with previous quarters, inventory adjustments and model transitions in the personal computer market caused customers to cancel or delay previously scheduled shipments."
Commenting on the current outlook, Richardson noted, "We believe the adjustments in our inventory and employment levels, plus continuing cost control measures will stabilize profits at the current revenue level. But, we continue to be dependent on turns business for growth above this level."
He concluded, "New product design-in activity has been strong, particularly in the area of portable power management ICs, Low Voltage Differential SCSI circuits, and Hot Swap Power ManagerTM ICs. Many of these parts are scheduled for production in the new 6" BiCMOS wafer fabrication facility scheduled to ramp up at the end of the second quarter. In addition, the pending merger with BENCHMARQ will accelerate penetration of the portable power market, one of the Company's fastest growing market segments."
Statements in this news release are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Except for historical information, the matters set forth in this release are forward-looking and involve risk and uncertainty, including such factors, among others, as the ability to book and ship within the quarter, the demand for semiconductors generally and the specific demand for the Company's products, production capacity constraints, the timely introduction and qualification of new processes and products, and specifically the qualification and start-up of the Company's new wafer fabrication facility, the impact of competitive products and prices, unsettled conditions in the hard disk drive and personal computer market segments, and other risk factors described in the Company's filings with the Securities and Exchange Commission.
Unitrode designs and manufactures analog/linear and mixed-signal integrated circuits, principally to perform power management, motion control, and interface functions. Its products are sold throughout the world for a variety of computer, tele- and data- communications, defense/aerospace, industrial, and automotive applications. Further information about Unitrode may be found at the Company's homepage site: unitrode.com. |
