Conexant Announces Record First- Quarter Revenues and Continued Strong Profit Growth
Revenues Up 73 Percent Year Over Year
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Jan. 19, 2000--Conexant Systems Inc. (Nasdaq:CNXT - news) Wednesday announced record revenues of $510.0 million for the first quarter of fiscal 2000, ended Dec. 31, 1999; up 73 percent over the $294.7 million reported in the first quarter of fiscal 1999.
Revenues were up 13 percent sequentially over the $452.2 million in revenues reported for the fourth quarter of fiscal 1999. Net income for the quarter increased 36 percent sequentially to $51.8 million, or $0.24 per diluted share, compared with net income of $38.0 million, or $0.18 per diluted share, in the prior quarter. In the year-ago period, the company reported a net loss of $57.1 million, or $0.30 per share on a pro-forma basis.
The per-share results reflect the company's two-for-one stock split effected on Oct. 29, 1999.
``We are extremely pleased to deliver record revenues and continued strong profit growth in our first quarter of fiscal 2000,' said Dwight W. Decker, chairman and chief executive officer of Conexant.
``Conexant is firing on all cylinders. We achieved strong revenue growth from each of our five businesses and record product shipments across a broad range of our portfolio including networking and wireless communications, digital infotainment, personal imaging and personal computing.'
The Network Access Division achieved record revenues of $118.5 million, up 184 percent year-over-year and 12 percent sequentially, fueled by the on-going global upgrade of the Internet infrastructure.
The division again delivered record unit shipments across all three product segments: broadband access devices, including symmetrical and asymmetrical digital subscriber line (DSL) products; multi-service access chipsets; and wide area network (WAN) transport, including high-end 2.4 gigabit-per-second optical networking transceivers, asynchronous transfer mode (ATM) solutions and T/E framing and line interface units.
The Wireless Communications Division generated record revenues of $103.0 million, up 128 percent year-over-year and 9 percent sequentially, benefiting from continued strong demand for power amplifiers and radio frequency products addressing the worldwide digital cellular handset market.
The Digital Infotainment Division achieved record revenues of $67.1 million, up 70 percent year-over-year and 25 percent sequentially. Growth was primarily driven by demand for video decoders for TV-in-the-PC applications, and satellite set-top box tuners/demodulators and back-channel telephony solutions.
The Personal Imaging Division recorded revenues of $31.2 million, up 95 percent year-over-year and 12 percent sequentially, driven by record shipments of fax modems, continued growth of multifunction peripherals (MFPs) and production ramp of the division's CMOS imager chipset for universal serial bus (USB) PC web-camera applications.
The Personal Computing Division delivered revenues of $190.1 million, up 25 percent year-over-year and 12 percent sequentially, with record V.90 dial-up modem shipments to PC manufacturers and retail aftermarket customers, and for embedded applications such as Internet gaming machines.
``I am enormously proud of the performance delivered by the Conexant team this past quarter. Looking forward, many of our end markets exhibit seasonal weakness in the second fiscal quarter. This market dynamic has typically produced sequential revenue declines of around 10 percent. However, our current business outlook is for a somewhat smaller sequential decline of between 5 to 10 percent.
``We expect to maintain gross margins at the current 46 percent level, and anticipate that total operating expenses will remain essentially flat in absolute dollars relative to the first quarter, excluding acquisition-related charges,' Decker said.
``For the full fiscal year, we believe we are well positioned to grow significantly faster than the overall semiconductor industry. We expect to deliver more than $2 billion in revenues, an increase of approximately 40 percent over fiscal 1999. Further, we anticipate achieving our target operating margin of 15 percent before the end of this fiscal year, well ahead of the schedule we set for ourselves at our spin-off last year,' Decker added.
First-Quarter Product Highlights
-- The Network Access Division introduced AutoBaud(TM) technology,
developed in partnership with Lucent Technologies. The new
technology is designed to significantly enhance the connection
set-up process between SDSL equipment operating at any one of the
dozens of line rates that SDSL technology supports by avoiding
time-consuming manual line qualification.
-- During the quarter, the Wireless Communications Division shipped
more than 15 million digital cellular power amplifiers for
code-division multiple access (CDMA) and global system for mobile
communications (GSM) handsets.
-- The Digital Infotainment Division began sampling the industry's
first single-chip silicon tuner that is optimized to meet the
cost and power requirements of digital cable modems and set-top
box products. The division also introduced the DStreamATSC(TM)
single-card reference platform for receiving and displaying HDTV
broadcasts on standard PC monitors.
-- The Personal Imaging Division introduced InternetDesktop(TM)
application software, allowing users of a variety of imaging
products to capture and send images directly to Internet Web
sites.
-- The Personal Computing Division announced the AccessRunner(TM)
consumer ADSL modem solution that PC manufacturers can
cost-effectively bundle into their systems to enable up to
8 Mbps Internet access over regular phone lines.
Recent Strategic Initiatives
-- Conexant announced that it is acquiring Maker Communications,
based in Framingham, Mass., a pioneer in network protocol
processing and traffic management solutions. Maker's products
enable flexible, feature-rich processing of packets, cells and
frames at the link, network and transport layers, and complement
Conexant's low-power, high-density and high-performance solutions
at the physical and link layers. Combining Maker's family of
network processors with Conexant's Network Access business will
create an unmatched portfolio of physical layer and network
processing solutions.
-- The company completed the acquisition of Microcosm
Communications, based in Bristol, United Kingdom, a leading
supplier of silicon-based optical networking transceivers.
Microcosm's strength at the edge of the network for high-volume
data communications traffic aggregation complements Conexant's
strong position at the high-speed core of telecommunications
optical networking infrastructures. With the acquisition,
Conexant's optical networking portfolio will span the entire
spectrum of transceiver solutions from OC-3 to OC-192 speeds.
-- Conexant acquired the wireless broadband business unit of Oak
Technology Inc., located in Bristol, United Kingdom. The unit has
established itself as a leading developer of broadband wireless
communications technology for the digital terrestrial TV
marketplace. The acquisition significantly extends Conexant's
reach from the digital cable and satellite TV market segments
into the emerging market for semiconductor system solutions used
in digital terrestrial TV sets and set-top boxes.
About Conexant
With revenues of approximately $1.5 billion, Conexant is the world's largest independent company focused exclusively on providing semiconductor products and systems solutions for communications electronics. With more than 30 years of experience in developing communications technology, the company draws upon its expertise in mixed-signal processing to deliver integrated systems and semiconductor products for a broad range of communications applications.
These products facilitate communications worldwide through wireline voice and data communications networks, cordless and cellular wireless telephony systems, personal imaging devices and equipment, and emerging cable and wireless broadband communications networks.
The company aligns its business into five product platforms: Network Access, Wireless Communications, Digital Infotainment, Personal Imaging and Personal Computing. Conexant is a member of the Nasdaq-100 Index, which represents the largest and most active stocks listed on The Nasdaq Stock Market across major industry groups. For more information, visit Conexant at www.conexant.com. |
