(*)Underlying results (net of tax) in Q4-2013 are based on IFRS, adjusted to exclude share-based compensation charges and related charges for National Insurance of US$2.2 million, excluding US$1.1 million of amortisation of intangibles associated with the acquisition of SiTel (now Dialog B.V.), excluding US$2.0 million non-cash effective interest expense in connection with the convertible bond, excluding US$ 0.2 million non-cash effective interest expense related to a licensing agreement entered into in Q3-2012, excluding US$0.5 million acquisition and integration expenses in connection with the purchase of iWatt and excluding US$2.8 million of amortisation and depreciation expenses associated with the acquisition of iWatt, deferred sales and related cost of sales that were reversed in connection with the iWatt business integration of US$ 0.6 million were brought back. Furthermore the gain of US$ 3.2 million from the release of an earn-out provision in relation to the iWatt acquisition was reversed and a recorded income related to a payment the company received in connection with the insolvency of BenQ of US$0.7 million was also taken out.
The term "underlying" is not defined in IFRS and therefore may not be comparable with similarly titled measures reported by other companies. Underlying measures are not intended as a substitute for, or a superior measure to, IFRS measures. Underlying results (net of tax) have been fully reconciled to IFRS results (net of tax) above. All other underlying measures disclosed within this report are a component of this measure and adjustments between IFRS and underlying measures for each of these measures are a component of those disclosed above.
(**) EBITDA in Q4 2014 is defined as operating profit excluding depreciation for property, plant and equipment, (Q4 2014:US$5.4 million, Q4 2013:US$5.4 million), amortisation of intangible assets (Q4 2014:US$9.8 million, Q4 2013:US$9.1 million) and losses on disposals and impairment of fixed assets (Q4 2014:US$0.1 million, Q4 2013:US$0.8 million).
(***) Free Cash Flow in FY 2014 is defined as net income of US$138.1 million plus amortisation and depreciation of US$55.6 million, plus net interest expense of US$14.4 million, plus change in working capital of US$47.8 million and minus capital expenditure of US$43.0 million.
In Q4 2014 we added new custom PMIC design wins both across new platforms and next generation models at our largest customers. Additionally, during the quarter we successfully delivered the beginning of a steep ramp of new products launched by our customers.
Dialog continued to lead in delivering the highest level of power management integration and power efficiency in its PMIC products. This allowed us to increase the Average Sales Price (ASP) of our products by 16%, excluding the Power Conversion segment, from $2.30 in 2013 to $2.66 in 2014.
In support of our diversification programs, Q4 saw the start of high volume shipments for our SmartBond(TM) - Bluetooth(R) Smart - solution. With the technology being rapidly adopted across multiple IoT segments, we added new design wins in applications including wireless charging, wearables, smart home and human interface devices. Dialog's SmartBondTM remains the industry's smallest footprint solution in addition to consuming less than half the power of competing devices, critical parameters for IoT applications demanding long battery lifetime. Throughout Q4 2014 and the first few weeks of 2015 we rolled out a number of new products from the Power Conversion Business segment. We entered the MR16 - low voltage (12 volt) downlight LED form factor - market segment with an excellent dimming and universal transformer compatibility solution. Additionally, we launched a new dimming platform, delivering the ultimate in dimming performance while eliminating more than 20 external components from the bill of materials. These two devices allow Dialog to continue its market leadership in the dimming segment of the fast growing LED domestic retrofit market.
Power Conversion made also significant progress with large ODMs in Asia in the quick charge segment with the development of new products which accommodate the latest proprietary quick charge protocols of various companies.
Our sub-PMIC multi-phase DC-DC approach in 2014 allowed us to accelerate adoption of our technology for the China smartphone market. Through our strategic cooperation with Mediatek with sub-PMIC ICs for their MT6595 and MT6795 Octa-core reference platforms, we added design wins with Meizu, Lenovo and other top emerging China smartphone brands. Additionally, Q4 saw the start of volume production of a new custom PMIC for LG's new NUCLUN application processor which is sold alongside our sub-PMIC solution in LG's latest smartphone models.
Leveraging the unique advantages of our touch technology, Q4 2014 also saw the start of volume production of our Smartwave(TM) multi-touch display solution by a top US PC OEM in a low cost 23 inch All-in-One PC.
Dialog Semiconductor invites you today at 09.00 am (London) / 10.00 am (Frankfurt) to take part in a live conference call and to listen to management's discussion of the Company's Q4 and full year 2014 performance, as well as guidance for Q1 2015. Participants will need to register using the link below labelled 'Online Registration'. A full list of dial-in numbers will also be available.
Webcast & Telephone Registration:
Conference Number: +44 (0)207 192 8000