7/17/2002 - RF Micro Devices, Inc. (Nasdaq: RFMD), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, today reported financial results for its fiscal 2003 first quarter ended June 30, 2002.
Revenue for the fiscal 2003 first quarter was approximately $103.9 million, a sequential increase of 3.5% compared to revenue of $100.4 million for the fiscal 2002 fourth quarter ended March 31, 2002. Quarterly revenue increased approximately 48.4% versus revenue of $70.1 million for the corresponding quarter of fiscal 2002. Revenue exceeded the Company's prior estimate of $98 million to $101 million for the quarter, which was provided on June 7, 2002, because components shipped to the handset market in the last month of the quarter exceeded customer forecasts.
As announced last year, the Company incurred a $22.1 million special charge in the fiscal 2002 first quarter ended June 30, 2001. The special charge was comprised of a $15.3 million inventory reserve charge and a $2.8 million asset impairment charge, as a result of the shift in demand from MMICs to modules, and a $4.0 million asset impairment charge, as a result of the transition of the Company's packaging line to an all-R&D facility. Comparisons of the financial results for the most recent quarter with the fiscal 2002 first quarter are provided below with and without the impact of these charges.
Consistent with guidance provided on June 7, 2002, gross profit margin for the fiscal 2003 first quarter decreased sequentially 90 basis points to 39.9%, versus 40.8% in the prior quarter. Compared to the corresponding quarter of fiscal 2002, gross profit margin increased 3,400 basis points from 5.9%, including the special charge, and increased 1,220 basis points from 27.7%, excluding the special charge. Gross profit for the quarter increased 1.2% sequentially to $41.4 million, versus $40.9 million in the prior quarter. Compared to the corresponding quarter of fiscal 2002, gross profit increased 898.3% from $4.2 million, including the special charge, and increased 113.0% from $19.4 million, excluding the special charge. The sequential decrease in gross profit margin for the quarter was primarily attributable to declines in average selling prices (ASPs). The sequential increase in gross profit for the quarter was primarily attributable to increased sales volumes.
During the June 2002 quarter, other operating expenses totaled $0.7 million, versus $0.5 million in the March 2002 quarter. Other operating expenses currently represent startup costs related to the Company's facility in China, which is currently expected to be complete in the fall of 2002.
Other (expense) income, net in the fiscal 2003 first quarter equaled a loss of ($2.6) million, compared to a loss of ($6.0) million in the prior quarter. The sequential decrease in other (expense) income, net was primarily attributable to a $3.6 million write-down taken in the fiscal 2002 fourth quarter.
Net income for the quarter was $2.3 million, or $0.01 per diluted share, compared to net loss of $28.4 million, or ($0.17) per share, including the special charge, and a net loss of $9.7 million, or ($0.06) per share, excluding the special charge, for the first quarter of fiscal 2002. This compares sequentially to net income of $2.8 million, or $0.02 per diluted share, for the fourth quarter of fiscal 2002. The fiscal 2002 fourth quarter included a tax benefit of $2.5 million, primarily related to additional carryback benefits allowed under the Job Creation and Worker Assistance Act, which was signed into law on March 9, 2002.
Business Outlook And Financial Guidance
RF Micro Devices anticipates the markets for components for wireless handsets and wireless LAN products will continue to grow in line with industry estimates. In addition, the Company expects to improve its market share position while reducing its cost structure. In the near term, the Company anticipates gross profit margin will trend downward as ASPs decline. The impact of this decline will be partially offset by benefits obtained from higher wafer fab utilization and continued improvements in yields. Although RF Micro Devices did not experience a decline in ASPs in the March 2002 quarter, the Company continues to anticipate ASPs for 2002 will decline 15% to 20%, which is consistent with annual ASP declines in prior years.
As a result of these factors and given current backlog, the Company currently anticipates revenues for the quarter ending September 30, 2002 will increase sequentially 5% to 10% and earnings per share will be approximately $0.01 to $0.02.
To improve profitability, the Company continues to implement cost reduction and yield improvement initiatives in its core handset market, including the development of next-generation, highly integrated power amplifiers. In addition, the Company continues to invest aggressively in new markets, such as wireless LAN, Bluetooth(TM), satellite radio, Global Positioning Systems (GPS) and wireless infrastructure. RF Micro Devices believes participation in these markets, as well as the ramp of next-generation PA modules and the POLARIS(TM) TOTAL RADIO(TM) transceiver, will serve to improve margins while diversifying revenues by customers and end markets.
Comments From Management
David Norbury, chief executive officer of RF Micro Devices, said, "We are very pleased to report record revenue for the Company, which we believe is due primarily to continued strength in sales of our handset components and market share gains in the wireless LAN market. We experienced a surge in orders late in the quarter, some of which we were able to book and ship quickly. The Company continues to diversify its revenues across customers and end markets, as evidenced by the addition of a new ten-percent customer this quarter and ongoing growth in sales of wireless LAN products.
"In handsets, we believe our opportunities for market share gains are across multiple customers. We currently expect sequential growth in our sales to each of the top-five handset manufacturers - who represent more than two-thirds of the global handset market combined. In fact, we are announcing separately today that we have begun high-volume production shipments of GSM power amplifiers to Samsung. We also continue to work closely with other major participants in the handset market, including emerging handset manufacturers, emerging handset designers and contract manufacturers. Finally, we continue to experience strong interest and favorable design activity surrounding our POLARIS(TM) TOTAL RADIO(TM) transceiver, and we continue to anticipate commencing production of commercial volumes of this product late this calendar year.
"We are encouraged by our early success in the wireless LAN market, which is forecast by industry analysts to grow 40% to 80% this year. Sales of our wireless LAN products increased sequentially 90% to $5.9 million in the June quarter, and we estimate our market share jumped from approximately 10% in the March quarter to the high teens in the June quarter, in just two full quarters of volume production shipments.
"We are committed to improving the Company's outlook for earnings growth, and we are continuing to take steps to reduce costs and improve yields. We are also focusing our resources on new products and new markets with margin structures that exceed our current corporate average margins. We are encouraged by success against these initiatives, and we look forward to announcing our progress throughout the fiscal year."
Dean Priddy, CFO and vice president of administration, said, "Cash flow from operations was $21.4 million and total cash flow was $6.6 million in the June quarter. We continue to closely manage our balance sheet, which is gaining increasing importance with the leading handset OEMs. While customers expect technology leadership, low cost and a strong supply chain, long-term financial viability is becoming increasingly important, especially in building long-term customer relationships. We're demonstrating to our customers a world-class technology roadmap and the financial wherewithal to execute on that roadmap."
RF Micro Devices will conduct a conference call at 5:00 p.m. (ET) today, July 16, 2002, to discuss fiscal 2002 fourth quarter results and comment on the Company's outlook. The conference call will be broadcast live over the Internet and can be accessed by any interested party at www.streetevents.com or www.rfmd.com. The call will also be available live by dialing (303) 262-2190.
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, modulators/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 "expect," "anticipate," "intend," "plan," "project," "believe," and "estimate," 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, the Company's 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(R), RFMD(R) and POLARIS(TM) TOTAL RADIO(TM) are trademarks of RFMD, LLC. All other tradenames, trademarks and registered trademarks are the property of their respective owners. BLUETOOTH is a trademark owned by Bluetooth SIG, Inc., U.S.A. and licensed for use by RF Micro Devices, Inc.
For more information about RFMD, please visit our website at www.rfmd.com
Previous Page | News by Category | News Search
If you found this page useful, bookmark and share it on: