Product category:
Communications ICs (Wired)
News Release from: Zarlink Semiconductor
Edited by the Electronicstalk Editorial
Team on 22 July 2003
Zarlink works to reduce break-even point
Zarlink Semiconductor has released results for the fiscal 2004 first quarter ended 27th June 2003.
Zarlink Semiconductor has released results for the fiscal 2004 first quarter ended 27th June 2003 First quarter revenue was US $53.7 million, up 2% from US $52.8 million for the previous quarter and up 12% from the US $48.0 million reported for the same period last year
This article was originally published on Electronicstalk on 7 Feb 2001 at 8.00am (UK)
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The increases were principally in the ultra-low-power communications and network communications segments.
As expected, Zarlink recorded a first quarter net loss of US $6.2 million, or US $0.05 per share.
In comparison, the company recorded a net loss of US $8.7 million or US $0.07 per share for the same period in fiscal 2003.
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"I am pleased by the progress we are making in a market that continues to pose challenges", said Patrick J Brockett, President and Chief Executive Officer, Zarlink Semiconductor.
"To improve our financial performance, we will be taking steps to further reduce our break-even point.
These actions will take place during the second quarter".
Gross margin for the first quarter was 48% of revenue, down slightly as expected from 50% in the fourth quarter and up from the 46% recorded in the same period last year.
Compared with the previous quarter, the reduction in gross margin was due primarily to the mix of certain lower-margin consumer communications products.
Cash (the company's cash comprises cash, cash equivalents, short-term investments and restricted cash) at the end of the first quarter was US $108 million, down from US $119 million in the previous quarter.
The decrease was principally due to scheduled, annual payments for CAD (computer assisted design) licences and tools, and to the timing of sales late in the quarter to result in higher trade receivables.
The combination of cash, cash equivalents, short-term investments and restricted cash is a non-GAAP measure, which is discussed below and reconciled in this press release.
R and D expenses in the first quarter were US $19.2 million or 36% of revenue.
This was down from the US $20.7 million spent in the previous quarter and down from US $20.4 million for the same period in fiscal 2003.
R and D spending in the first quarter was reduced due to the timing of certain spending and to further cost control.
Selling and Administrative (S and A) expenses were US $11.6 million in the first quarter and included severance costs of US $0.2 million.
This compares with US $13.0 million for the previous quarter, which included severance costs of US $1.6 million, and was down slightly from US $12.1 million for the same period last year.
As usual, the company is forecasting slower activity over the summer.
Seasonally, the second fiscal quarter is its slowest, and the company expects revenues will decline sequentially to approximately US $51 million.
This will still be 11% above the US $46 million in the second quarter of fiscal year 2003.
Consistent with the seasonality, the company's 90-day backlog decreased from US $38 million to US $33 million.
The company also announced further cost reductions as it finalises its outsourcing programs and streamlines operations.
These reductions are expected to generate annualised savings of US $24 million, the quarterly benefit of which will largely be realised in the third quarter of fiscal 2004.
Accordingly, the company expects to record additional charges of approximately US $8 million, or US $0.06 per share, in the second quarter of fiscal 2004, related to reducing its global workforce by approximately 10%, and the cost of further outsourcing initiatives.
As a result of these actions and the sales guidance given above, the company expects to record a second quarter net loss of approximately US $0.12 per share.
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