Rising revenue cures a lot of ills, especially when you are running an under-utilized factory (SP1).
This is generally true, unless of course one is selling below cost! In any case, how good is SPSN's B/S at the end of this Q and how does the B/S and I/S compare vs. same Q last year? Let's look at it-
Spansion Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Quarter Ended
Jun. 29 Mar. 30 Jul. 1
2008 2008 2007
(Unaudited) (Unaudited) (Unaudited)
Net sales $612,720 $570,272 $609,172
Cost of sales (*) 503,571 475,810 501,033
Gross profit 109,149 94,462 108,139
Other expenses:
Research and development 108,303 120,321 110,900
Sales, general and administrative 68,264 64,764 61,947
Acquisition related in-process
research and development - 10,800 -
Restructuring charges (*) 9,922 - -
Operating loss (77,340) (101,423) (64,708)
Interest and other income (expense),
net 2,536 3,379 11,672
Interest expense (27,663) (20,991) (17,542)
Loss before income taxes (102,467) (119,035) (70,578)
Benefit for income taxes (1,824) (564) (3,676)
Net loss $(100,643) $(118,471) $(66,902)
Net loss per common share
Basic and diluted (**) $(0.63) $(0.85) $(0.50)
Shares used in per share calculation
- Basic and diluted (**) 160,196 138,765 134,827
* Restructuring charges for the quarter ended June 29, 2008 include
$3,123 related to cost of sales.
** Shares used in per share calculation is computed based on the
weighted-average number of common shares outstanding during the period.
The shares used in net loss per common share calculation for the
quarters ended Jun. 29, 2008 and Mar. 30, 2008 included
22,729 thousand and 3,247 thousand of weighted-average common shares,
respectively, related to the acquisition of Saifun Semiconductors Ltd.
Spansion Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Jun. 29 Mar. 30 Dec. 30
2008 2008 2007*
Assets (Unaudited) (Unaudited)
Current assets:
Cash and cash equivalents $240,442 $333,051 $199,092
Marketable securities 108,479 121,900 216,650
Accounts receivable, net 371,399 340,431 379,962
Inventories 636,389 633,102 583,869
Deferred income taxes 29,133 31,597 26,607
Prepaid expenses and other current
assets 43,277 51,181 46,452
Total current assets 1,429,119 1,511,262 1,452,632
Property, plant and equipment, net 2,365,211 2,488,538 2,271,964
Deferred income taxes 40,014 35,640 29,957
Acquisition related intangible
assets, net 60,437 63,113 -
Goodwill 19,289 17,782 -
Other assets 85,619 75,947 61,092
Total Assets $3,999,689 $4,192,282 $3,815,645
Liabilities and Stockholders' Equity
Current liabilities:
Note payable to banks under revolving
loans $128,930 $130,418 $-
Accounts payable and accrued
liabilities 694,255 669,790 643,764
Accrued compensation and benefits 78,099 71,698 60,778
Income taxes payable 4,809 4,267 13,818
Deferred income on shipments to
distributors 46,688 54,629 39,957
Current portion of long-term debt
and capital lease obligations 144,767 160,313 101,797
Total current liabilities 1,097,548 1,091,115 860,114
Deferred income taxes 7,023 4,393 186
Long-term debt and capital lease
obligations 1,312,377 1,362,578 1,299,536
Other long-term liabilities 28,595 24,872 23,361
Stockholders' equity 1,554,146 1,709,324 1,632,448
Total liabilities and stockholders'
equity $3,999,689 $4,192,282 $3,815,645
* Derived from the December 30, 2007 audited financial statements of
Spansion Inc.
1. Interest Expense went up by 10.1MM, Interest Income went down by 9.1MM (these are really sticky!)
2. SG&A went up by 6.3MM. Sales relatively flat while 1 & 2 happened.
3. Current Assets without Inventory is 792.73MM Current Liabilities are at 1097.55MM (these are almost entirely sure shots!) Valuation of inventory on books is questionable and declining in value with time. They will spend a little less than 200MM next 2Q's but Cash on hand is dwindling fast.
Unless pricing in NOR improves and the market opportunity gets bigger, SPSN will die a slow painful death! They are barely profitable at GM levels after reduction of R&D expenses and since the industry is in oversupply, pricing is unlikely to improve and competition will be fierce with a question of survival for key players. |
