RF Micro Devices Announces Fiscal 2002 Second
Quarter Results
Quarterly Highlights:
-- Revenues Grow 40.3% Sequentially To $98.3 Million -- Quarterly
Earnings Per Share Equal $0.01 -- Gross Profit Increases 930 Basis
Points -- Module Revenues Increase 86.3% Sequentially -- Company
Anticipates December Revenues of $99 To $103 Million
GREENSBORO, N.C., Oct. 16 /PRNewswire/ -- RF Micro Devices, Inc. (Nasdaq: RFMD -
news), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless
communications applications, today reported financial results for its fiscal 2002 second quarter,
ended September 30, 2001.
Financial Results
Revenues for the quarter were approximately $98.3 million, a sequential increase of
approximately 40.3% versus revenues of $70.1 million for the quarter ended June 30, 2001 and
a decrease of approximately 3.9% versus revenues of $102.2 million for the corresponding
quarter of fiscal 2001. Revenues were ahead of the Company's prior guidance for the quarter,
which was provided on September 10, 2001 and estimated a 30% sequential revenue growth,
primarily as a result of increased turns business. Power amplifier (PA) module revenues
increased 86.3% sequentially and represented 43.4% of revenues in the September quarter,
versus 32.6% of revenues in the June quarter.
Gross profit for the quarter increased 87.2% sequentially to $36.4 million, versus $19.4 million
for the quarter ended June 30, 2001, excluding a special inventory charge taken in the June
quarter, and decreased 29.9%, versus $51.9 million for the prior year period. The
year-over-year decrease in gross profit was primarily attributable to the decrease in the
Company's revenues, the initial higher cost of goods sold associated with the Company's module
products and greater than normal yield losses associated with the steep ramp of the module
business. The sequential increase in gross profit was primarily attributable to the sequential
increase in the Company's revenues as well as the impact of cost reduction and yield
improvement initiatives implemented earlier in the fiscal year. Gross profit margin increased
sequentially 930 basis points to 37.0% from 27.7% in the prior quarter. Including the special
inventory charge, gross profit was $4.2 million for the quarter ended June 30, 2001.
During the September quarter, other operating expenses totaled $6.1 million. Other operating expenses represent startup costs
associated with the Company's second wafer fabrication facility (wafer fab) and the Company's facility in China. Currently, the
wafer fab is expected to commence operations in the December quarter, and construction of the China facility is expected to be
complete in the fall of 2002.
Net income for the quarter was $1.5 million, or $0.01 per diluted share, based on a 14% tax rate, compared to net income of $17.7
million, or $0.10 per diluted share, for the second quarter of fiscal 2001, based on a 38% tax rate. This compares sequentially to a
net loss of $7.5 million, or ($0.05) per share, excluding the special charge, for the first quarter of fiscal 2002, based on a 33% tax
rate. Including the total special charge, net loss for the first quarter of fiscal 2002 was $33.5 million, or ($0.20) per share, based on
a 0% tax rate.
Separately, the Company announced today that it expects to file an amended Form 10-Q for its fiscal quarter ended June 30, 2001
to reflect the recognition of an income tax benefit, following consultation with its independent auditors and further review of its
deferred tax assets and liabilities relative to income tax carry-backs and carry-forwards. The net effect of the tax benefit is
anticipated to lower the June quarterly loss by approximately $5 million to $6 million and lower the June quarterly loss per share by
approximately $0.03 to $0.04. Sequential comparisons in today's announcement do not reflect the anticipated tax benefit.
Business Outlook And Financial Guidance
The Company's believes that its backlog currently supports a range of revenues from $99 million to $103 million for the quarter
ending December 31, 2001.
Gross margin for the December quarter is currently expected to range from 34% to 36%. The projected decrease in gross margin
is attributable to the opening of the Company's second wafer fab. Operating expenses in the December quarter, excluding other
operating expenses associated with the Company's second wafer fab and its China facility, are currently expected to increase
sequentially approximately 5%, due mainly to increased investments in the Company's R&D activities. Other operating expenses
are anticipated to decrease to a range from $2.0 million to $3.0 million. The Company anticipates its tax rate will be approximately
14% for the quarter and the remainder of the year. Taking these factors into account, the Company currently expects earnings per
share for the December 2001 quarter will be approximately $0.01 to $0.02 before charges related to the acquisition of RF Nitro
Communications, Inc.
Near-term variables that could impact the Company's ability to sustain profitability include wafer fab capacity utilization, module
product margin improvements, product mix and other items outside the control of the Company.
Comments From Management
David Norbury, president and chief executive officer of RF Micro Devices, said, ``We are very pleased to report our return to
profitability in September, a full quarter ahead of original expectations. During the September quarter, we experienced increased
demand from multiple handset customers across all major air interface standards. Our ability to respond quickly to that demand
enabled us to beat our internal earnings and revenue estimates.''
``We're excited about new handset platforms that are either beginning to ramp or are scheduled to ramp in subsequent quarters.
We believe we are very well positioned to continue to grow in excess of the overall handset market.
``We're also pleased to announce the acquisition of RF Nitro. We expect Gallium Nitride (GaN) will ultimately displace silicon in
high-power applications such as base station power amplifiers. RF Nitro has assembled a world-class team of engineering talent,
and we believe their process and design expertise will have an immediate impact on maintaining our technology leadership.''
Dean Priddy, CFO and vice president of administration, stated, ``I'm particularly pleased to report the 930 basis-point increase in
gross margins to 37 percent. The improved margins demonstrate our dedication -- and the contribution of our supply chain -- to
achieving world-class cost targets and manufacturing yields.''
Priddy continued, ``I'm also pleased that inventory control and cycle-time reduction initiatives are reflected positively on our
balance sheet, with inventory turns improving to 5.4. The ability to respond quickly to changes in customer demand will help us
continue to manage our business though all types of business environments.''
RF Micro Devices, Inc., an ISO 9001-certified manufacturer, designs, develops, manufactures and markets proprietary radio
frequency integrated circuits (RFICs) primarily for wireless communications products and applications such as cellular and PCS
phones, base stations, wireless LANs, and cable television modems. The Company offers a broad array of products - including
amplifiers, mixers, modu lators/demodulators, and single-chip receivers, transmitters and transceivers - representing 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 RF Micro Devices' plans, objectives, estimates and goals.
Words such as ``expects,'' ``anticipates,'' ``intends,'' ``plans,'' ``projects,'' ``believes,'' and ``estimates,'' and variations of these words
and similar expressions, identify these forward-looking statements. RF Micro Devices' business is subject to numerous risks and
uncertainties, including variability in quarterly operating results, the rate of growth and development of wireless markets, risks
associated with the operation of wafer fabrication facilities, its ability to manage rapid growth and to attract and retain skilled
personnel, variability in production yields, raw material availability, manufacturing capacity constraints, dependence on a limited
number of customers and dependence on third parties. These and other risks and uncertainties, which are described in more detail
in RF Micro Devices' most recent 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.
RF MICRO DEVICES® and RFMD® are trademarks of RFMD, LLC. All other tradenames, trademarks and registered
trademarks are the property of their respective owners.
For more information about RFMD, please visit our website at www.rfmd.com .
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
2001 2000 2001 2000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total revenue $98,271 $102,220 $168,323 $200,426
Costs and expenses:
Cost of goods sold 61,902 50,346 127,803 97,988
Research and
development 16,977 14,748 32,992 28,922
Marketing and selling 6,805 7,569 13,370 14,913
General and
administrative 3,483 3,346 6,743 7,065
Other operating
expense 6,106 - 11,018 -
Impairment of
long-lived assets - - 6,801 -
Total costs and
expenses 95,273 76,009 198,727 148,888
Operating income (loss) 2,998 26,211 (30,404) 51,538
Interest (expense)
income, net (1,217) 1,497 (1,309) 2,367
Income (loss) before
income taxes $1,781 $27,708 ($31,713) $53,905
Income tax expense 249 9,975 249 19,930
Net income (loss) $1,532 $17,733 ($31,962) $33,975
Net income (loss)
per share, diluted $0.01 $ 0.10 ($0.19) $ 0.20
Weighted average
outstanding diluted
shares 173,829 173,661 164,705 174,054
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
SEPTEMBER 30, MARCH 31,
2001 2001
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $185,305 $266,076
Short-term investments 155,170 75,162
Accounts receivable, net 50,386 38,610
Inventories 45,849 71,015
Other current assets 9,650 41,451
Total current assets 446,360 492,314
Property and equipment, net 206,916 208,571
Non-current deferred tax asset 20,624 -
Technology licenses, net 12,997 13,424
Other assets 13,826 6,622
Total assets $700,723 $720,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $25,145 $24,023
Current obligations under capital leases 4,580 4,976
Total current liabilities 29,725 28,999
Long-term debt, net 293,465 292,700
Non-current deferred tax liability 22,541 19,471
Obligations under capital leases, less current
maturities 1,213 3,263
Other long-term liabilities 9,836 -
Total liabilities 356,780 344,433
Shareholders' equity:
Total shareholders' equity 343,943 376,498
Total liabilities and shareholders'
equity $700,723 $720,931
SOURCE: RF Micro Devices, Inc. |
