Second Fiscal Quarter Financial Results
Conexant presents financial results based on Generally Accepted Accounting Principles (GAAP) as well as selected non-GAAP financial measures intended to reflect its core results of operations. The company believes these core financial measures provide investors with additional insight into its underlying operating results. Core financial measures exclude non-cash and other non-core items as fully described in the GAAP to non-GAAP reconciliation in the accompanying financial data.
Revenues for the second quarter of fiscal 2008 were $174.0 million. Core gross margins were 45.0 percent of revenues. Core operating expenses were $72.3 million, and core operating income was $6.0 million. Conexant’s core net loss was $3.3 million, or $0.01 per diluted share.
On a GAAP basis, gross margins for the second quarter of fiscal 2008 were 45.4 percent of revenues. GAAP operating expenses were $204.7 million. GAAP operating loss was $125.7 million and GAAP net loss was $142.0 million, or $0.29 per share. The GAAP net loss in the quarter included an asset impairment charge of $121.7 million primarily related to the write-down of goodwill associated with the Broadband Media Processing business.
The company ended the quarter with $164.1 million in cash and cash equivalents. Cash declined by approximately $68.0 million, due in large measure to the company’s re-purchase of $53.6 million of its floating rate senior notes.
Business Perspective
“I am pleased to be a part of the Conexant team and enthusiastic about our company’s long-term prospects,” said Scott Mercer, who joined Conexant as chief executive officer on April 14, 2008. “In the coming weeks and months, I will be focusing on our overall strategy, and on improving our financial performance and position.
“For the second fiscal quarter, we exceeded our expectations entering the quarter,” Mercer said. “We anticipated revenues in a range between $165 million and $170 million, and we delivered $174 million. Core gross margins came in at the high end of the range we provided, and core operating expenses were significantly lower than we expected, which reflects the team’s commitment to reducing costs.”
Business Outlook
Conexant expects revenues for the third quarter of fiscal 2008 to be in a range between $167 million and $171 million, which includes revenues from its Broadband Media Processing product lines.
Conference Call Today
Financial analysts, members of the media, and the public are invited to participate in a conference call that will take place today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time. Scott Mercer, chief executive officer, Christian Scherp, president, and Karen Roscher, senior vice president and chief financial officer, will discuss second fiscal quarter financial results, the company’s third-quarter outlook, and the transaction involving the company’s Broadband Media Processing product lines.
To listen to the conference call via telephone, dial 866-650-4882 (in the US and Canada) or 706-679-7338 (from other international locations); participant pass code: Conexant. Conference ID number: 39978883. To listen via the Internet, visit the Investor Relations section of Conexant's Web site at www.conexant.com/ir. Playback of the conference call will be available shortly after the call concludes and will be accessible on Conexant's Web site at www.conexant.com/ir or by calling 800-642-1687 (in the US and Canada) or 706-645-9291 (from other international locations); Conference ID number: 39978883.
About Conexant
Conexant’s comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of $809 million in fiscal year 2007. The company is headquartered in Newport Beach, Calif. To learn more, please visit www.conexant.com
Safe Harbor Statement
“Safe Harbor”
Statement under the Private Securities Litigation Reform Act of 1995:
This release includes forward-looking statements intended to qualify for
the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
generally can be identified by phrases such as Conexant or its
management “ believes, ”
“ expects, ” “ anticipates, ”
“ foresees, ” “ forecasts, ”
“ estimates ” or
other words or phrases of similar import. Similarly, statements in this
release that describe our business strategy, outlook, objectives, plans,
intentions or goals also are forward-looking statements. All such
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those in the forward-looking statements.
