Decker returns to the position he held from the time of Conexant's spin-off from Rockwell International in 1999 through to the company's merger with GlobespanVirata, Inc., which was completed on Feb. 27, 2004. At the time of the merger, Armando Geday, CEO of GlobespanVirata, became CEO of the combined company, and Decker assumed the role of non-executive chairman. Decker now replaces Geday, who resigned for personal reasons.
"I want to thank Armando for his commitment and dedication under difficult circumstances," Decker said, "and I look forward to leading Conexant through this challenging period. I have begun to work with the company's senior management to re-energize, motivate and focus the efforts of the entire Conexant team. We have also initiated a comprehensive reassessment of our leadership with the goal of improving our market execution and our ability to deliver predictable financial performance.
"From a financial performance perspective, we have now developed a plan to reduce pro forma operating expenses from the September-quarter level of $95 million to approximately $80 million exiting the current fiscal year," Decker said. "When complete, this will be a reduction of more than 25 percent from our combined expense level prior to the merger, and will represent approximately $120 million in annual savings. The primary drivers of the newly planned expense reductions are an increasing shift of product development resources to lower-cost regions, and a continued merger-related SG&A consolidation.
"We expect to maintain gross margins of at least 40 percent, and with these operating expense reductions, our pro forma net income breakeven revenue level will be reduced to $220 million per quarter," Decker said. "We anticipate that we will achieve this new revenue breakeven level no later than the end of calendar 2005.
"If we execute according to our plan, I am confident that we will have a focused and effective product development engine, and that we will steadily improve financial performance and systematically rebuild shareholder value," Decker concluded.
About Dwight Decker
Dr. Dwight W. Decker served as Conexant's chairman and chief executive officer from the time of the company's spin-off from Rockwell International in January 1999 through Feb. 27, 2004, when the merger with GlobespanVirata was completed. At that time, he became chairman of the board of the combined company. Decker joined Rockwell International in 1989. Prior to the Conexant spin-off from Rockwell, Decker was senior vice president of Rockwell and president of Rockwell Semiconductor Systems.
He serves as chairman of the board for Skyworks Solutions, Inc. (NASDAQ:SWKS), a wireless communications chipmaker and Mindspeed Technologies, Inc. (NASDAQ:MSPD), a communications infrastructure semiconductor company. He also serves on the boards of Jazz Semiconductor, a privately held wafer foundry, BCD Semiconductor, a privately held analog component manufacturer in China, and Pacific Life, a provider of life insurance and financial-services products.
Decker received his bachelor's degree in mathematics and physics from McGill University and his doctorate in applied mathematics from the California Institute of Technology.
Note to Editors, Analysts and Investors
A conference call with Dwight Decker, Conexant's new chief executive officer, will take place on Tuesday, Nov. 9, at 1:30 p.m. Pacific time / 4:30 p.m. Eastern time. To listen to the conference call via telephone, dial 866-710-0179 (domestic) or 334-323-9854 (international); security code: Conexant. 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 877-919-4059 (domestic) or 334-323-7226 (international); pass code: 29901749.
About Conexant
Conexant's innovative semiconductor solutions are driving broadband communications, enterprise networks and digital home networks worldwide. The company has leveraged its expertise and leadership position in modem technologies to enable more Internet connections than all of its competitors combined, and continues to develop highly integrated silicon solutions for broadband data and media processing networks.
Key products include client-side xDSL and cable modem solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and dial-up modems. Conexant's suite of networking components includes a leadership portfolio of IEEE 802.11a/b/g-compliant WLAN chipsets, software and reference designs, as well as solutions for applications based on HomePlug(SM) and HomePNA(TM). The company also offers a complete line of asymmetric and symmetric DSL central office solutions, which are used by service providers worldwide to deliver broadband data, voice, and video over copper telephone lines.
Conexant is a fabless semiconductor company that recorded more than $900 million in revenues in fiscal year 2004. The company has approximately 2,400 employees worldwide, and is headquartered in Newport Beach, Calif. To learn more, please visit us at www.conexant.com.
Safe Harbor Statement
This press release contains statements relating to our future results (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: the substantial losses the company has incurred recently; the cyclical nature of the semiconductor industry and the markets addressed by the company's and its customers' products; demand for and market acceptance of new and existing products; successful development of new products; the timing of new product introductions; the availability of manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; product obsolescence; the ability to develop and implement new technologies and to obtain protection for the related intellectual property; the uncertainties of litigation; and the risk that the businesses of Conexant and GlobespanVirata have not yet been completely and may not be integrated successfully, as well as other risks and uncertainties, including those detailed from time to time in our Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Note to Editors: Conexant is a registered trademark of Conexant Systems, Inc. Other brands and names contained in this release are the property of their respective owners.
Contact:
Conexant Systems, Inc. Gwen Carlson (Media), 949-483-7363 or Bruce Thomas (Investors), 949-483-2698