Microsemi Reports Fiscal 2004 First Quarter Results
Thursday January 22, 4:00 pm ET
-- First Quarter Pro Forma EPS of $0.11 Per Share Beats First Call Consensus Guidance of $0.09 Per Share
IRVINE, Calif.--(BUSINESS WIRE)--Jan. 22, 2004-- -- Net Sales in First Quarter Increase 4% over Fourth Quarter
* Pro Forma Gross Margins Increase 230 Basis Points over Fourth Quarter
* GAAP Gross Margins Increase 190 Basis Points over Fourth Quarter
* Pro Forma Net Income Increases 50% over Fourth Quarter
* GAAP Net Income Increases 50% over Fourth Quarter
Microsemi Corp. (Nasdaq:MSCC - News) today reported results for its fiscal year 2004 first quarter ended Dec. 28, 2003.
For the first quarter, net sales were $54.9 million, an increase of 20% from net sales of $45.9 million in the year-ago first quarter and an increase of 4% from net sales of $52.8 million in the fourth quarter of fiscal year 2003. First quarter pro forma net income was $3.3 million, or $0.11 per share diluted, up from $0.2 million, or $0.01 per share diluted, in the year-ago first quarter and up 50% from the $2.2 million, or $0.07 per share diluted, in the fourth quarter of fiscal year 2003. Pro forma gross margins for the first quarter were 35.1%, a 230 basis point improvement over the fourth quarter pro forma gross margin of 32.8% and a 390 basis point improvement over the 31.2% pro forma gross margin in the year ago first quarter. The improvement in gross margin in the first quarter resulted from: (1) higher gross margins on new products; (2) improved factory utilization; (3) cost savings resulting from Phase I of the company's consolidations program; and (4) increased revenues.
President and CEO James J. Peterson stated, "Due to continuing strength in our markets our results again exceeded analyst expectations and continue to demonstrate successful execution of our plans."
For the first quarter, Microsemi reported GAAP earnings of $2.4 million, or $0.08 per diluted share, compared to earnings of $1.6 million, or $0.05 per diluted share, in the fourth quarter of fiscal year 2003 and compared to a loss of $16.3 million, or $0.56 per share diluted, in the year-ago first quarter. As detailed in the attached "Schedule Reconciling GAAP Earnings to Pro Forma Earnings," the GAAP loss for last year's first quarter (fiscal year 2003) included the transition year impairment of goodwill of $14.7 million after tax, for the cumulative effect of a change in accounting principle, retroactively to Sept. 30, 2002, in accordance with the adoption last year of SFAS 142 "Goodwill and Other Intangible Assets," as well as amortization of acquisition related intangible assets, restructuring costs and other special charges and credits, all of which were excluded in the company's determination of pro forma amounts.
The book-to-bill ratio for the quarter was 1.06.
Business Outlook
The company's current outlook for net sales in the second quarter of fiscal year 2004 is 3 to 5 percent greater than the net sales in the first quarter. Pro forma earnings per share diluted for the second quarter are currently expected to be $0.12 to $0.14. The gross margin percentage for the second quarter is expected to increase 70 to 120 basis points over the first quarter. Excluding the effect of any restructuring charges from its consolidation program, earnings in the second quarter of fiscal year 2004, in accordance with GAAP, are expected to be $0.11 to $0.13 per share diluted, including a $0.2 million after-tax charge for amortization of acquisition-related intangible assets.
About Microsemi
Microsemi is a leading designer, manufacturer and marketer of high performance analog and mixed-signal integrated circuits and high reliability discrete semiconductors. The company's semiconductors 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 integrated circuit solutions that enhance customer designs by improving performance and reliability, battery optimization, reducing size or protecting circuits. The principal markets the company serves include implanted medical, defense/aerospace, notebook computers and monitors, automotive and mobile connectivity applications.
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, inventory obsolescence and customer qualification of products, manufacturing facilities and processes. 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, 2003 by Microsemi with the Securities and Exchange Commission. Additional risk factors may be identified from time to time in Microsemi's future filings. Microsemi does not undertake to supplement or correct any information in this release that is or becomes incorrect.
MICROSEMI CORP.
Pro Forma Consolidated Income Statements
(In thousands, except per share amounts)
Quarter Ended
Dec. 29, Dec. 28,
2002 2003
NET SALES $45,869 $54,945
Cost of sales 31,579 35,643
GROSS MARGIN 14,290 19,302
Operating expenses:
Selling, general and administrative 9,017 9,707
Research and development 4,963 4,750
Total operating expenses 13,980 14,457
OPERATING INCOME 310 4,845
Interest and other income (expense), net (60) 90
INCOME BEFORE INCOME TAXES 250 4,935
Provision for income taxes 82 1,629
PRO FORMA NET INCOME $ 168 $ 3,306
Pro Forma Earnings per share:
Basic $ 0.01 $ 0.11
Diluted $ 0.01 $ 0.11
Common and common equivalent
shares outstanding:
Basic 28,905 29,190
Diluted 29,150 30,701
MICROSEMI CORP.
Schedule Reconciling GAAP Earnings to Pro Forma Earnings
(in thousands, except per share amounts)
Quarter Ended
Dec. 29, Dec. 28,
2002 2003
GAAP NET INCOME (LOSS) $(16,295) $ 2,354
The pro forma amounts have been adjusted
to exclude the following items:
Amortization of intangible assets (323) (302)
Restructuring charges:
Inventory write-off (200)(a) --
Workforce reduction (686) --
Facility and asset abandonment (477)(a) --
Facilitation costs -- (710)(a)
Excess manufacturing cost (584)(a) (410)(a)
Goodwill impairment (22,705) --
Non-recurring loss on sale of asset (428) --
(25,403) (1,422)
Income tax effect 8,940 470
Net effect of adjustments to GAAP net income (16,463) (952)
PRO FORMA NET INCOME $ 168 $ 3,306
(a) Items affecting cost of sales
Adjustment to earnings (loss) per share:
Basic $ (0.57) $ (0.03)
Diluted $ (0.57) $ (0.03)
Common and common equivalent shares
outstanding:
Basic 28,905 29,190
Diluted 28,905 30,701
To supplement the consolidated financial results prepared under
generally accepted accounting principles ("GAAP"), Microsemi uses a
non-GAAP or pro forma measure of net income that equals GAAP net
income adjusted to exclude certain costs, expenses and gains. Pro
forma net income gives an indication of Microsemi's baseline
performance in regard to the operating results before gains, losses or
other charges that are considered by management to be outside of
Microsemi's core operating results. In addition, pro forma net income
is among the primary indicators management uses as a basis for
planning and forecasting future periods. These measures are not in
accordance with, or an alternative for, GAAP and may be materially
different from pro forma measures used by other companies. Microsemi
computes pro forma net income principally by adjusting GAAP net income
with the impact of acquisition-related charges, restructuring charges,
and non-recurring charges and credits.
MICROSEMI CORP.
Unaudited Consolidated Income Statements
(In thousands, except per share amounts)
Quarter Ended
Dec. 29, Dec. 28,
2002 2003
NET SALES $ 45,869 $54,945
Cost of sales 32,840 36,763
GROSS MARGIN 13,029 18,182
Operating expenses:
Selling, general and administrative 9,017 9,707
Research and development 4,963 4,750
Amortization of intangible assets 323 302
Restructuring charges 686 --
Loss on sale of asset 428 --
Total operating expenses 15,417 14,759
OPERATING INCOME (LOSS) (2,388) 3,423
Interest and other income (expense), net (60) 90
INCOME (LOSS) BEFORE
INCOME TAXES (2,448) 3,513
Provision (benefit) for income taxes (808) 1,159
Income (loss) before cumulative effect of a
change in accounting principle (1,640) 2,354
Cumulative effect of a change in accounting
principle, net of income taxes (14,655) --
NET INCOME (LOSS) $(16,295) $ 2,354
Basic and Diluted earnings (loss) per share:
Earnings (loss) before cumulative effect
of a change in accounting principle $ (0.05) $ 0.08
Cumulative effect of a change
in accounting principle $ (0.51) $ --
Earnings (loss) per share $ (0.56) $ 0.08
Common and common equivalent shares outstanding:
Basic 28,905 29,190
Diluted 28,905 30,701
MICROSEMI CORP.
Condensed Unaudited Consolidated Balance Sheets
(in thousands)
Sept. 28, Dec. 28,
2003 2003
ASSETS
Current Assets:
Cash and cash equivalents $ 29,353 $ 35,617
Accounts receivable, net 28,866 28,874
Inventories 53,679 53,759
Deferred income taxes 5,239 5,239
Other Current assets 1,234 1,507
Total current assets 118,371 124,996
Property and equipment, net 62,973 61,992
Deferred income taxes 10,162 10,162
Goodwill 3,258 3,258
Other intangible assets, net 6,622 6,319
Other assets 4,257 4,316
TOTAL ASSETS $205,643 $211,043
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 31,203 $ 32,432
Long-term debt 449 436
Other long-term liabilities 4,131 4,067
Shareholders' equity 169,860 174,108
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $205,643 $211,043
Contact:
Microsemi Corp., Irvine
David R. Sonksen (for investor inquiries), 949-221-7101
Source: Microsemi Corp. |
