8/27/2004 - Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, reported financial results for the first quarter of fiscal 2005, which ended August 1, 2004.
The results for Q1-2005 represent the eleventh consecutive quarter of sequential revenue growth for Tundra, and a record quarter for both revenue and profit.
GUIDANCE FOR Q2-2005
RAPIDIO® MOMENTUM CONTINUES
Tundra continues to drive the RapidIO ecosystem. Its RapidIO products are key elements in systems like Ensemble, a serial RapidIO Advanced Telecom Computing Architecture (AdvancedTCA®) development platform that Tundra, and RapidIO ecosystem partner Mercury Computer, demonstrated during the keynote address at the Motorola Smart Network Developers Forum (SNDF) earlier this year. Hundreds of customers attended this event and their interest in RapidIO technology reinforced the vision Tundra has for RapidIO.
In Q1-2005 Tundra reinforced its ongoing commitment to the RapidIO Standard. At the RapidIO Trade Association's Annual General Meeting, Tundra's contributions were recognized and the Company was re-elected to the Association's Steering Committee. Tundra is also represented on the Association's Technical and Marketing Working Groups.
RapidIO has evolved into a serial interconnect technology opening a larger market for Tundra and its customers. Recently Tundra announced that serial RapidIO System Interconnect products are in development.
"Tundra is currently investing $7M per quarter in research and development to build next generation products that will strengthen our lead in System Interconnect," said Jim Roche , President and CEO of Tundra. "We continue to work closely with lead customers in our target markets to develop products that they value."
Tundra continues to collaborate with industry leaders such as Freescale Semiconductor, IBM, Intel, Motorola and Texas Instruments to develop next generation System Interconnect products and to serve customers.
"This ongoing activity points to an increase in the outsourcing trend," said Jim Roche. "Today we estimate that only 10% of System Interconnect is outsourced, however as our partners' and their customers' cost and time-to-market pressures increase, we project that this trend will grow to where 90% of System Interconnect requirements are outsourced, enabling them to build and maintain their competitive advantage. Tundra is well positioned to meet this demand."
"In addition to our ongoing investment in product development, Tundra continues to pursue our acquisition strategy," said Norm Paquette, Chief Financial Office of Tundra. "During the last two fiscal years we successfully completed two acquisitions. The first was for the Tsi310TM PCI-X Bus Bridge product line from IBM, and the second was for the Tsi106TM and Tsi107TM PowerPC Host Bridge product line from Motorola Semiconductor Group (now known as Freescale Semiconductor)."
"Both of these acquisitions have been highly successful for Tundra," said Norm Paquette. "The share offering that we completed in April gives us a solid cash base to implement our acquisition strategy which is to strengthen our product portfolio, deepen our customer and partner relationships, and grow our company."
CONTINUED GROWTH IN VME
Also in the quarter, Tundra released the Tundra Tsi148TM PCI-X-to-VMEbus Bridge to production. Tundra is the world leader in VME System Interconnect technology with more than 10 years experience in providing VME solutions and technical support to the embedded systems industry. The Tsi148 is a next generation VME device designed to maximize PCI-X transactions for VME applications. The Tsi148 was collaboratively developed with Motorola Computer Group as part of the industry's VME Renaissance program. Tundra's VME early access partners - a group of lead VME customers - also contributed to the design of the Tsi148 and had access to device prototypes for their designs at the beginning of this year.
"We are pleased with the positive reception that this device has received from our customers," said Jim Roche. "Tundra will continue to deliver VME solutions in support of the industry's ongoing VME Renaissance."
Tundra will host an analyst conference call and audio web cast (www.tundra.com ) on August 25, 2004 at 5:00 pm (EDT) to discuss this earnings update. To listen by phone, call 416-640-4127. Replay of the call will be available two hours following the call until September 1, 2004. To listen to the conference call replay call 416-640-1917 and enter pass code number: 21090846#.
To view the financial results for Q1-2005 visit www.tundra.com
The difference between pro forma and GAAP earnings is due to stock-based compensation expense, goodwill impairment charges and amortization of intangibles and other assets associated with Tundra's recent acquisitions. Tundra uses pro forma measures internally to evaluate and manage operating performance as well as to forecast and plan.
Tundra Semiconductor Corporation designs, develops, and markets standards-based System Interconnect for use by the world's leading communications and storage system companies. Tundra supports RapidIO, VME, and PCI standards. Tundra System Interconnect is a vital communications technology that enables customers to connect critical system components while compressing development cycles and maximizing performance. Applications include wireless infrastructure, storage networking, network access, military technology, and industrial automation. Tundra headquarters are located in Ottawa, Ontario, Canada. The Company also has a design center in South Portland, Maine, and sales offices in the U.K., across the U.S. and in Asia. Tundra sells its products worldwide through a network of direct sales personnel, independent distributors and manufacturers' representatives. Tundra employs about 200 employees worldwide.
TUNDRA is a registered trademark of Tundra Semiconductor Corporation (Canada, U.S. and U.K.). TUNDRA, the Tundra logo, Tsi106, Tsi107, Tsi148, Tsi310, and Design. Connect. Go. are trademarks of Tundra Semiconductor Corporation.
Comment respecting any Forward Looking Statement in this release
Tundra Semiconductor Corporation is a public company with common shares listed for trading on The Toronto Stock Exchange (TSX:TUN) in Canada. All figures, unless otherwise noted, are stated in Canadian dollars in accordance with accounting principles generally accepted in Canada. The Company cautions that the forward-looking statements in this release are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to factors such as customer demand, product shipping schedules, product mix, competitive products, pricing pressure, and changes in the embedded systems market specifically. Additional information identifying risks and uncertainties is contained in the Company's filings with the various provincial securities commissions.
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