Microsemi Announces Phase 2 of Consolidations
Monday October 20, 6:12 pm ET
-- Consolidation of Santa Ana, Calif. Plant
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 20, 2003-- -- Fabless Model Expansion
Microsemi Corp. (Nasdaq:MSCC - News), today announced that as part of the second phase of its Factory Utilization Enhancement Program it will consolidate the operations of its Santa Ana, Calif. hi-rel products plant into other Microsemi manufacturing plants.
The company is in the process of determining whether assets of the Santa Ana plant are impaired in value by this action and if there are impaired assets, the associated impairment charge to be recorded in accordance with FAS 144 (Accounting for Impairment of Long-Lived Assets). In addition, other consolidation associated costs such as inventory, workforce reduction, relocation, excess manufacturing and reorganization charges will be reported as restructuring costs in accordance with FAS 146 (Accounting for cost of exit or disposal activities), as applicable, and also reflected in our pro forma adjustments to the company's operating results, as realized.
The Santa Ana plant represents approximately 20% of Microsemi's annual revenues, occupies 123,000 square feet and has approximately 380 employees. Costs associated with the completion of this phase of the company's consolidation program are expected to range from $10 million to $15 million over the next 12 to 18 months. These actions are, however, expected to result in annual cost savings of $8 million to $12 million, or for comparison purposes, approximately 400 to 600 basis points of fiscal year 2003 company-wide revenues.
The consolidation of the Santa Ana Plant is expected to result in minimal impact on revenues. Microsemi intends to continue its history of non-obsolescence of its hi-rel product lines, as well as to place customer service the number one priority during this consolidation effort.
Additionally, over the last two years the company has developed wireless LAN, lighting and other analog mixed signal power management I/C products that will be manufactured on a fabless model at foundries using larger wafers and smaller geometries. As a result of this, the company has available fab capacity at its existing wafer manufacturing facility in Garden Grove, Calif. which will be utilized to replace the smaller wafer capacity at the Santa Ana plant.
The completion of these two important steps (consolidation of the hi-rel Santa Ana plant and going to a fabless model for new I/C products) are very important to the achievement of its company-wide operating profit objectives.
The initiation of the second phase of the company's consolidation program follows a very active first phase which included the closure, sale or consolidation of plants in Bombay, India; Hong Kong; West Palm Beach, Fla.; Montgomeryville, Pa.; Carlsbad, Calif.; Melrose, Mass. and Watertown, Mass.
Microsemi management will conduct a conference call to answer questions related to this announcement on Tuesday, Oct. 21, 2003 at 11 a.m. EDT (8 a.m. PDT). To participate in the conference call by telephone, please call: 877-264-1110 or 706-634-1357 at approximately 10:50 a.m. EDT (7:50 a.m. PDT).
A telephonic replay will be available from 2 p.m. EDT (11 a.m. PDT) on Tuesday, Oct. 21, 2003 through 2 p.m. EDT (11 a.m. PDT) on Tuesday, Oct. 28, 2003. To access the replay, please call 800-642-1687 or 706-645-9291. Please enter the following ID Number: 3557492.
To access the webcast, please log on to: www.vcall.com. To listen to the live webcast, please go to this Web site approximately 15 minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live Webcast, a replay will be available shortly after the call on the Vcall Web site for 90 days.
About Microsemi
Microsemi is a leading designer, manufacturer and marketer of analog, mixed-signal and discrete semiconductors. The company's semiconductors typically manage and control or regulate power, protect against transient voltage spikes and transmit, receive and amplify signals.
Microsemi's products include individual components as well as complete circuit solutions that enhance customer designs by improving reliability, battery optimization, reducing size or protecting circuits. Markets the company serves include mobile connectivity, computer/peripherals, datacom, medical, industrial, automotive, digital media, space/satellite and military.
More information may be obtained by contacting the company directly or by visiting its Web site at microsemi.com.
Please Read the Following Factors That Can Materially Affect Microsemi's Future Results
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Any statements set forth in the news release that are not entirely historical and factual in nature are forward-looking statements. For instance, all statements of belief and expectations are forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Potential risks and uncertainties include, but are not limited to, such factors as the difficulties regarding the making of estimates and projections, the hiring and retention of qualified personnel in a competitive labor market, acquiring and integrating new operations or assets, closing or disposing of operations or assets, rapidly changing technology and product obsolescence, the potential inability to realize cost savings or productivity gains and to improve capacity utilization, potential cost increases, weakness or competitive pricing environment of the marketplace, uncertain demand for and acceptance of the company's products, results of in-process or planned development or marketing and promotional campaigns, changes in demand for products, difficulties foreseeing future demand, effects of limited visibility of future sales, potential non-realization of expected orders or non-realization of backlog, product returns, product liability, and other potential unexpected business and economic conditions or adverse changes in current or expected industry conditions, business disruptions, epidemics, disasters, wars or potential future effects of the tragic events of Sept. 11, variations in customer order preferences, fluctuations in market prices of the company's common stock and potential unavailability of additional capital on favorable terms, difficulties in implementing company strategies, dealing with environmental matters or litigation, difficulties in determining and maintaining adequate insurance coverage, difficulties protecting patents and other proprietary rights, and inventory obsolescence. In addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer as well to the factors, uncertainties or risks identified in the company's most recent Form 10-K filed on Dec. 19, 2002, and the Form 10-Q filed on Aug. 12, 2003, by Microsemi with the Securities and Exchange Commission which relates to the second quarter. Additional risk factors may be identified from time to time in Microsemi's future filings, including the Form 10-Q which will be filed that relates to the third quarter. Microsemi does not undertake to supplement or correct any information in this release that is or becomes incorrect.
Contact:
Microsemi Corp., Irvine
David R. Sonksen (For Investor Inquiries), 949-221-7101
or
Cliff Silver (Editorial), 949-221-7112
Source: Microsemi Corp. |
