2/25/2005 - Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, reported financial results for the third quarter of fiscal 2005, which ended January 30, 2005.
"Despite the difficult business environment faced by most semiconductor companies, Tundra remained profitable," says Jim Roche, President and CEO of Tundra. "We believe this reflects the underlying strength of our business and our ability to compete effectively in challenging conditions. In the longer term we foresee end markets stabilizing and inventories clearing, leading to increased customer demand for outsourced standards-based System Interconnect."
GUIDANCE FOR Q4-2005
"Our results are in line with the guidance we delivered for Q3-2005. Our outlook for the next quarter reflects the continuing softness in the semiconductor industry and the build-up of customer inventories," says Norm Paquette, Chief Financial Officer of Tundra. "In Q4-2005, margins will remain steady as we continue to focus on operational controls while building for our future."
"Recently, Tundra announced the industry's first serial RapidIO® switch - the Tundra Tsi568ATM. This announcement was welcomed by partners, customers, members of the RapidIO ecosystem, and reflects the growing customer demand for Tundra System Interconnect," says Jim Roche. "This serial RapidIO switch joins the Tundra Tsi500TM RapidIO Multiport Switch, which was released to full production in Q3-2005."
The industry is undergoing a fundamental technological evolution. Physics limits the transmission speed of the bus-based architectures that are historically used in embedded systems. Next generation processors - and the systems they drive - demand the speed, performance and reliability that switch fabric devices can deliver. Tundra continues to lead the industry and is the first to bring standards-based switch fabric System Interconnect to market.
The trend in Tundra's target markets - wireless infrastructure, storage networking, network access, military technology, and industrial automation - to outsource elements that are critical to their systems but not competitive differentiators, continues to gain momentum. More customers are choosing to outsource their System Interconnect requirements to Tundra, so they can focus on building their core competencies while they accelerate their time-to-market.
The Tundra Tsi134TM Host Bridge, designed as part of a co-development agreement with Intel Corporation, demonstrates this outsourcing trend. Tundra owns the intellectual property developed for the Tsi134 and is using it as part of the foundation for its growing standards-based host bridge product portfolio. Tundra plans to launch a next-generation PowerPC® Host Bridge in the first half of this calendar year.
In December 2004, Tundra teamed with IBM Corporation to be a founding member of Power.org, an open standards community built around chips and systems that use Power ArchitectureTM technology. For close to a decade, Tundra has designed and manufactured host bridges for PowerPC processors. The Power.org community gives Tundra a unique position from which to influence the direction of PowerPC-based System Interconnect. It strengthens Tundra's partnership with the key players in the PowerPC market - such as Freescale Semiconductor and IBM - and reinforces Tundra's market leadership in PowerPC System Interconnect. Power.org also introduces Tundra's standards-based, off-the-shelf System Interconnect to a broader Power Architecture audience.
In Q3-2005 Tundra continued to extend its global reach. Adding to investments in Asia and Europe, Tundra opened offices near San Jose, California and Tokyo, Japan. These developments demonstrate Tundra's ongoing commitment to customers and their growing demand for leading-edge System Interconnect products.
CONFERENCE CALL DETAILS
Tundra will host an analyst conference call and audio web cast (www.tundra.com) on February 22, 2005 at 5:00 pm (EST) to discuss this earnings update. To listen by phone, call 416-640-4127. Media are invited as 'listen only' participants of the call. Replay of the call will be available two hours following the call until March 1, 2005. To listen to the conference call replay call 416-640-1917 and enter pass code number: 2111151#.
To view the financial results for Q3-2005 visit www.tundra.com
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/X 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.
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 acquisitions. Tundra uses pro forma measures internally to evaluate and manage operating performance as well as to forecast and plan.
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.
TUNDRA is a registered trademark of Tundra Semiconductor Corporation (Canada, U.S. and U.K.). TUNDRA, the Tundra logo, Tsi134, Tsi500, Tsi568A are trademarks of Tundra Semiconductor Corporation.
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