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Strategies & Market Trends : Guidance II -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (34)	8/29/2001 5:51:37 AM
From: 2MAR$	Respond to of 2077

MSCC Completes Acquisitions; Raises Guidance and Effects 2-for-1 Stock Split as of Open today... Business Editors and High-Tech Writers IRVINE, Calif.--(BUSINESS WIRE)--Aug. 28, 2001--Microsemi Corp. (Nasdaq:MSCC), today announced raising of the median of its revenue guidance, in part as a result of the previously reported closings of the acquisitions of the assets of Compensated Devices Inc. (CDI) and New England Semiconductor Corp. (NES), and the deferred ex-dividend date of tomorrow. Acquisitions The acquisitions are believed to strengthen Microsemi's position in the growing military, space and medical markets, but are not the sole reason for the revised expectations. The acquisitions were completed for $11.5 million and $9.1 million for CDI and NES, respectively, in cash and notes and assumption of debt and other obligations. CDI had specialized in high reliability space and military qualified diode, rectifier, and Schottky products utilizing a proprietary high temperature glass sealing process. CDI's customers included Lockheed/Martin, Litton, Raytheon, Honeywell, Rockwell and Hughes Aircraft. New England Semiconductor was a manufacturer of aerospace grade bipolar transistors for JAN-S certified, MIL-S-19500 and ISO9001 qualified products. NES' customers included Hughes Space and Com, Rockwell, Lockheed/Martin, Boeing and Honeywell. Since the acquisitions were completed mid-quarter, they are expected to have only a modest impact on revenues and earnings for the fourth quarter and are expected to be more accretive in subsequent quarters. Outlook Overall demand in the company's impacted markets seems to be stabilizing, though uncertainty still exists. As the company has discussed, it has been refocusing Microsemi's resources on higher margin and higher growth application-specific products. Also as part of its gross margin improvement program the company continues to exit lower margin commodity businesses. The impact of this strategy has been to improve its expectations for long-term operating results. The company believes this to be the best strategy to enhance shareholder value for now, and the future, whenever the overall macroeconomic downturn returns to the robustness of a year ago. As the result of the acquisitions and the above factors, including its goal to improve gross margins irrespective of market conditions, the company is raising the range of its revenue guidance from $57 million to $61 million, to $57 million to $62 million, and reconfirming the following guidance given in its last earnings conference call: -- Gross Margins are expected to increase by 25 to 75 basis points in the fourth quarter over the third quarter gross margins of 34.1%. -- SG&A spending to remain flat with the third quarter. -- R&D spending in the fourth quarter is expected to increase by 25 basis points over the third quarter. -- The tax rate for the fourth quarter is expected to be 33%. 2-for-1 Stock Split All transferees of record of Microsemi's Common Stock, after Aug. 14, 2001 hold due bills that entitle them to the distribution of a 2-for-1 stock split as of immediately after the markets close on Aug. 28, 2001. Tomorrow will be the deferred ex-dividend date of the 2-for-1 stock split, and Common Stock prices will adjust on account of new due bills ceasing to be written. Before effecting any prior orders on the ex-date, all investors should correct any open orders to correctly reflect the price and quantity of shares after the 2-for-1 stock split and later confirm that their account balances reflect the stock split. Before the opening of the Nasdaq Stock Market on the ex-dividend date, the company will make a more formal announcement with more details. About Microsemi Microsemi is a leading designer, manufacturer and marketer of analog, mixed-signal and discrete semiconductors. The company's semiconductors manage and regulate power, protect against transient voltage spikes and transmit, receive and amplify signals. Microsemi products include individual components as well as complete circuit solutions that enhance customer designs by providing battery optimization, reducing size or protecting circuits. Markets the company serves include mobile connectivity, computer/peripherals, telecommunications, medical, industrial/commercial, space/satellite and military. More information may be obtained by contacting the company directly or by visiting its Web site at microsemi.com.