Product category:
Communications ICs (Wired)
News Release from: Zarlink Semiconductor
Edited by the Electronicstalk Editorial
Team on 24 May 2005
Weak second half for Zarlink
Zarlink Semiconductor has released fourth quarter and fiscal 2005 results for the year ended 25th March 2005.
Zarlink Semiconductor has released fourth quarter and fiscal 2005 results for the year ended 25th March 2005, prepared in accordance with US generally accepted accounting principles (GAAP) As expected, fourth quarter revenue was US $48.4 million, compared with US $51.2 million in the fourth quarter of fiscal 2004
This article was originally published on Electronicstalk on 7 Feb 2001 at 8.00am (UK)
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Zarlink recorded a fourth quarter net loss of US $23.9 million, or US $0.19 per share.
This figure includes severance costs of US $11.9 million, of which US $2.5 million was included in cost of goods, US $2.3 million was included in research and development (R and D) expenses, and US $7.1 million was included in selling and administration (S and A) expenses.
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The fourth quarter loss also included asset impairment and excess space provisions of US $4.0 million, inventory provisions and other production charges of US $3.7 million, and a tax expense of US $0.4 million.
Also included in the results for the quarter was a net gain resulting from installment payments of US $6.0 million on the note receivable from X-FAB Semiconductor Foundries.
In the fiscal 2004 fourth quarter, the company reported a net loss of US $2.3 million, or US $0.02 per share.
Gross margin in the fourth quarter was 27% of revenue, compared with 44% in the third quarter.
Gross margin was impacted by severance costs of US $2.5 million, as the company continued to reduce operations costs, in addition to inventory and other production charges of US $3.7 million.
For fiscal 2005, Zarlink recorded revenue of US $214.2 million, up 8% from US $198.5 million in fiscal 2004.
The net loss in fiscal 2005 was US $20.8 million, or US $0.18 per share, an improvement on the net loss of US $38.6 million, or US $0.32 per share, in fiscal 2004.
"Despite a weaker second half, I am pleased that in fiscal 2005 we achieved revenue growth and significantly reduced our loss", said Kirk K Mandy, President and Chief Executive Officer, Zarlink Semiconductor.
"Our focus is now on restoring profitability and positive cash flow, and repositioning the business to take advantage of high-growth opportunities in communications semiconductors".
"We are determined to make Zarlink successful and continue to review strategic alternatives for the company".
R and D expenses in the fourth quarter were US $19.0 million or 39% of revenue, compared with US $15.7 million or 31% of revenue in the third quarter, and US $17.2 million, or 34% of revenue, in the fourth quarter of fiscal 2004.
R and D expenses in the current quarter were higher primarily due to severance costs totalling US $2.3 million, related to the company ceasing work on its digital decoder program, and other headcount reductions within the ultra low-power communications and network communications segments.
Selling and administrative (S and A) expenses were US $20.9 million in the fourth quarter, as compared with US $12.7 million or 25% of revenue in the third quarter, and US $11.0 million in the fourth quarter of fiscal 2004.
S and A expenses in the current quarter were impacted primarily by severance costs totalling US $7.1 million, related to senior management, sales, and other administrative functions in the USA, Canada, and other geographic regions.
Based on a lower opening order backlog of US $31 million, reflecting weakness in certain product segments and geographic markets, Zarlink is forecasting that revenues will be between US $43.0 million and US $45.0 million in the first quarter of fiscal 2006.
Zarlink will also record a US $1.9 million gain, relating to the receipt of the final instalment on a note receivable payment from X-FAB Semiconductor Foundries.
As a result of these events, and the revenue guidance given above, Zarlink expects to record a first quarter net loss of US $0.05 to US $0.06 per share.
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