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RF MICRO DEVICES, INC. ANNOUNCES SECOND QUARTER RESULTS RECORD REVENUE
AND NET INCOME - MARGINS IMPROVE 400 BASIS POINTS
TUESDAY, OCTOBER 19, 1999 6:40 PM
- PRNewswire
GREENSBORO, N.C., Oct 19, 1999 /PRNewswire via COMTEX/ -- RF Micro Devices, Inc. (Nasdaq:RFMD), a leading provider
of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, today reported financial
results for its second quarter of fiscal 2000.
Revenues for the quarter ended September 30, 1999 were approximately $68.9 million, an increase of 119% over revenues of
$31.4 million for the corresponding quarter of fiscal 1999 and an increase of 11% from revenues of $62.0 million for the quarter
ended June 30, 1999. The increase in sequential revenues was primarily attributed to continued strong demand from the
handset industry.
Gross profit rose to $32.1 million, versus $9.7 million for the corresponding quarter of fiscal 1999, and was up 21.6%
sequentially over gross profit of $26.4 million for the quarter ended June 30, 1999. The gross profit margin for the quarter
increased sequentially 400 basis points to 46.6% from 42.6%. An increase in the percentage of revenues attributable to lower
cost output from the Company's GaAs HBT wafer fab facility was the primary reason for the gross margin expansion.
Net income for the quarter was $12.5 million, or $0.15 per diluted share, compared to net income of $2.4 million, or $0.03 per
diluted share, for the second quarter of fiscal 1999, and net income of $10.4 million, or $0.12 per diluted share, for the first
quarter of fiscal 2000. The provision for income taxes was 35% of pretax earnings in the first and second quarters of fiscal 2000
compared to 23% in the second quarter of fiscal 1999.
Comments from Management David Norbury, President and Chief Executive Officer, stated, "We're pleased to report another
very solid quarter. Demand from our traditional customers remained strong for the quarter and, based on continued expansion in
the wireless handset market, we currently expect that trend to continue through at least the remainder of this fiscal year. In
particular, our relationship with Motorola continues to expand, with our parts being designed into several high-volume handsets
that are currently expected to go into production next summer. These Motorola handsets are expected to include multiple
RFMD silicon and GaAs HBT components.
"We also established relationships with new customers during the quarter. Specifically, we are very pleased to be developing
key components with Qualcomm, a customer we have not worked with for a number of years. In addition, our recent design
wins with a number of new Chinese customers manufacturing GSM handsets for the Chinese market are currently anticipated
to result in significant revenue growth over the next 12 months. Working directly with these customers is important because the
Chinese government is demanding that an increasing percentage of telecommunications end-products be manufactured by
Chinese manufacturers.
"A recurring message we've been hearing from our customers is a concern over future component capacity shortages. Major
handset manufacturers appear to be trying to strengthen relationships with a reduced number of suppliers to increase their
leverage. Because of this, it is becoming increasingly important for a supplier to have the capacity to respond quickly and in the
volumes necessary to support large customers. For this reason, we have made significant improvements in the two areas that
have limited our capacity in the past -- GaAs HBT wafer availability and product design resources. First, the increasing output
from our GaAs HBT fabrication facility that came on line in September, 1998, along with improved availability of wafers
purchased from TRW, have virtually eliminated our near-term wafer capacity constraints. Longer term, our recently announced
second GaAs HBT facility, which is now under construction, is expected to have approximately four times the full capacity
output of our current fab and should give us a significant competitive advantage when it comes on line. Second, we have been
fortunate in our ability to recruit a significant number of experienced design engineers who are enabling us to support more
customer requirements in a more timely fashion. Many of these new designers are located in our design centers in Scotts
Valley, CA, Cedar Rapids, IA, Boston and Phoenix as well as in our main Greensboro facilities.
"We're also making new investments in sales and marketing to support future growth. Domestic regional sales offices are being
established. Also, our first international sales and applications support office, located in the UK, is providing a dramatic
increase in customer activity after having been operational for only a few months. Other international offices are in the planning
stage," Norbury concluded.
RF Micro Devices, Inc., an ISO 9001 certified manufacturer, designs, develops, manufactures and markets proprietary RFICs for
wireless communications applications such as cellular and PCS phones, cordless phones, wireless LANs, wireless local loop
handsets, industrial radios, wireless security systems and remote meter readers. The Company offers a broad array of products
-- including amplifiers, mixers, modulators/demodulators, and single- chip receivers, transmitters and transceivers -- that
represent 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 the Company's plans, objectives, estimates and goals.
Words such as "expects," "anticipates," "intends," "plans," "believes" and "estimates, " and variations of such words and
similar expressions, identify such forward-looking statements. The Company's business is subject to numerous risks and
uncertainties, including probable variability in the Company's quarterly operating results, manufacturing capacity constraints,
risks associated with the Company's operation of its current wafer fabrication facility and the construction of an additional
facility, dependence on a limited number of customers, variability in production yields, the Company's ability to manage rapid
growth, dependence on third parties and risks associated with doing business in Asia and other areas of the world. These and
other risks and uncertainties, which are described in more detail in the Company's 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.
R F Micro Devices, Inc.
Statement of Operations
(In Thousands)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
1999 1998 1999 1998
Total revenue $68,921 $31,415 $130,969 $54,856
Costs and expenses:
Cost of goods sold 36,827 21,690 72,473 37,293
Research and
development 7,370 3,224 13,409 6,000
Marketing and selling 4,640 2,520 8,273 4,696
General and
administrative 2,007 1,122 3,915 1,991
Total costs and
expenses $50,845 $28,556 $98,070 $49,980
Operating income $18,075 $2,859 $32,900 $4,876
Other income (expense),
net 1,109 (183) 2,312 (28)
Income before income
taxes $19,185 $2,676 $35,212 $4,848
Income taxes 6,715 321 12,324 821
Net income $12,470 $2,355 $22,888 $4,027
Net income per share $0.15 $.03 $0.27 $.06
Diluted shares
outstanding 85,401 69,292 85,046 68,800
R F Micro Devices, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
September 30, March 31,
(Unaudited) (Audited)
1999 1999
ASSETS
Current assets:
Cash and cash equivalents $88,320 $147,545
Accounts receivable, net 38,310 23,697
Inventories 31,532 27,335
Current deferred tax asset 900 898
Other current assets 476 243
Total current assets 159,538 199,718
Property and equipment, net 115,956 67,431
Technology license 3,965 3,078
Restricted cash 7,187 3,860
Non-current deferred tax asset 1,088 1,088
Other assets 4,000 583
Total assets $291,734 $275,758
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accruals $ 22,299 $24,700
Taxes payable (340) 2,854
Current obligations under capital leases 4,316 4,246
Total current liabilities 26,275 31,800
Long-term debt, less current maturities -- --
Obligations under capital leases, less
current maturities 10,496 12,587
Non-current deferred tax liability 465 465
Total liabilities 37,236 44,852
Shareholders' equity 254,498 230,906
Total liabilities and shareholders'
equity $291,734 $275,758
SOURCE RF Micro Devices, Inc.
(C) 1999 PR Newswire. All rights reserved.
prnewswire.com
-0-
CONTACT: Dean Priddy, Chief Financial Officer of RF Micro Devices,
336-664-1233; or general info, Doug DeLieto, analyst info, Elizabeth Eakeley,
or media info, Marty Gitlin, 212-661-8030, of The Financial Relations Board
(RFMD)
GEOGRAPHY: North Carolina
INDUSTRY CODE: CPR
SUBJECT CODE: ERN
QCOM
198
+2 5/16
RELATED SYMBOLS
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RFMD
46 1/8
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