First Fiscal Quarter Financial Results
Conexant presents financial results based on Generally Accepted Accounting Principles (GAAP) as well as select 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 certain 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 first quarter of fiscal 2009 were $86.5 million. Core gross margins were 54.1 percent of revenues. Core operating expenses were $43.5 million, and core operating income was $3.3 million. Core net loss from continuing operations was $2.9 million, or $0.06 per share.
On a GAAP basis, gross margins were 53.4 percent of revenues. GAAP operating expenses were $46.5 million. GAAP operating loss was $0.4 million, and GAAP net loss from continuing operations was $10.5 million, or $0.21 per share.
The company ended the quarter with $110.3 million in cash and cash equivalents, a sequential increase of approximately $4.4 million.
The company recently completed actions that resulted in the elimination of approximately 140 positions worldwide, which represented a total headcount reduction of more than 11 percent. Conexant also announced that it has suspended the company match for the domestic 401(k) plan and imposed stringent restrictions on spending.
In total, the company expects to save approximately $4 million per quarter when it realizes the full benefit of the headcount reductions in the June-ending third quarter of fiscal 2009.
“In an environment where we continued to see customer push-outs and cancellations, I’m pleased to report that we met the updated guidance we provided in December,” said Scott Mercer, Conexant’s chairman and chief executive officer. “Revenues of $86.5 million were consistent with the range we anticipated, and core gross margins of 54.1 percent of revenues were at the high end of our revised expectations. Core operating income of $3.3 million and a core net loss from continuing operations of $2.9 million, or $0.06 per share, were also within the ranges we expected.
“The worldwide economic crisis that has impacted the financial performance of many of our peers, customers, and suppliers has dramatically affected us as well,” Mercer said. “In response to our declining revenues and deteriorating financial performance, we recently completed cost-reduction actions that included a significant headcount reduction. This reduction will not affect any of our major product-development programs. By keeping our teams and investments essentially intact, we put ourselves in a position to gain market share when the economic recovery eventually begins. Until then, we will continue to focus on contributing to the success of our customers by delivering innovative products on schedule.”
Conexant expects revenues for the second quarter of fiscal 2009 to be in a range between $68 million and $74 million, or 14 to 21 percent lower sequentially, as a result of the effects of the overall economic environment. Core gross margins for the second fiscal quarter are expected to be between 52 and 53 percent of revenues. The company expects core operating expenses to be approximately $42 million. As a result, the company anticipates that the second fiscal quarter core operating loss will be in a range between $3 million and $7 million. Core net loss is expected to be between $0.18 and $0.26 per share.
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 (ET)/ 2:00 p.m. Pacific Time (PT). Scott Mercer, chairman and chief executive officer, Christian Scherp, president, and Jean Hu, senior vice president and chief financial officer, will discuss first quarter fiscal 2009 financial results and the company’s outlook. To listen to the conference call via telephone, dial 866-650-4882 (in the U.S. and Canada) or 706-679-7338 (from other international locations); participant pass code: Conexant; Conference ID number: 82022913.
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 U.S. and Canada) or 706-645-9291 (from other international locations); Conference ID number: 82022913.
Conexant’s comprehensive portfolio of innovative semiconductor solutions
includes products for imaging, video, audio, and Internet connectivity
applications. Conexant is a fabless semiconductor company that recorded
revenues of more than $500 million in fiscal year 2008. The company is
headquartered in Newport Beach, Calif. To learn more, please visit