Analogue market slowness hits Sipex

Sipex Corp has reported fiscal first quarter operating results, with net sales of US $16.9 million, down 11% from the fourth quarter of 2006.

Sipex Corp has reported fiscal first quarter operating results.

Net sales for the first quarter of 2007 were US $16.9 million, down 11% from the fourth quarter of 2006 net sales of $18.9 million and down 6% from net sales of $17.9 million recorded in the year-ago period.

First quarter 2007 GAAP net loss was $6.3 million, or $0.34 per share, compared with GAAP net loss of $14.3 million, or $0.80 per share, in the previous quarter and GAAP net loss of $13.8 million, or $0.78 per share, in the year-ago period.

The first quarter 2007 GAAP net loss included stock-based compensation of $0.9 million, or $0.05 per share.

First quarter 2007 non-GAAP net loss was $5.3 million, or $0.29 per share, compared with $11.7 million, or $0.66 per share, in the previous quarter and compared with $5.9 million, or $0.33 per share in the first quarter of 2006.

Non-GAAP results exclude the impact of stock-based compensation, restructuring and impairment charges, and additional depreciation expense.

"This morning we released an announcement that Sipex has signed a definitive merger agreement with Exar Corporation".

"This combination will immediately broaden our product portfolio addressing key networking and industrial segments and accelerate penetration into high-end consumer applications", stated Ralph Schmitt, CEO of Sipex.

"The combined companies will be able to use Exar's system level expertise to boost the combined companies' strength in power management, interface, serial communications and network transmissions to provide complete solutions for customer applications, driving toward higher level integration and delivering more value to our customers".

"The combination will also enable a stronger presence in the high growth Asian marketplace".

"Having strategic technical resources close to the customer base is critical to the long-term success of driving integrated mixed-signal system solutions".

"While we continued to experience much of the same analogue market slowness as many of our competitors, we are encouraged by the improvement in our gross margins and a reduction in our net loss from both a GAAP and nonGAAP perspective".

"The improvement in our gross margins reflected the continued transition to our fabless manufacturing model and the benefits of the lower manufacturing cost structure".

"During the first quarter, we continued to experience the decline in our optical storage products revenues as we wind down our focus in this market".

"Our optical storage product family contributed a more pronounced revenue decline in the first quarter than did our core product families in interface and power management products", stated Schmitt.

"Most of the revenue decline of our optical storage products is now behind us".

"The decision to minimise our efforts in optical storage will help our margin improvement plans as well as focus our efforts on our two larger, under-penetrated markets".

"The revenue decline in our core product families in the first quarter was attributed primarily to a decline in our power products driven by seasonality in the handset markets".

"Revenues in our interface products were flat compared with the prior quarter, as we saw a steady improvement in the industrial portion of that market, offsetting the seasonality of the consumer based portion of the interface market".

"Sipex's improved delivery of new products continues with the introduction of 10 new products in the first quarter".

"Most notable were the completion of our high speed RS485 product line and our first entry into the Profibus interface arena".

"We also released new power products for display systems".

"One of these product offerings is used in the new high growth organic light- emitting diode (OLED) market".

"This is targeted at high volume applications such as digital still cameras and portable media players", described Schmitt.

"We hit a significant milestone in April, by being listed on the NASDAQ Capital Market".

"This is a major step in our continuing improvement of Sipex".

"In the first quarter of 2007 our overall financial results improved as we began to realise the benefits of our restructuring initiatives", explained Ray Wallin, CFO of Sipex.

"We reduced our operating expenses, excluding restructuring and impairment charges, in the first quarter of 2007 by $1.1 million, compared with the previous quarter".

"We also improved our gross margins as we transitioned to the lower cost fabless model".

"While we continue to sell off older, higher cost inventory, we anticipate continuing improvements in our gross margins as we source more of our revenues from the fabless model".

"While we continued to experience the impact of the soft market conditions in the first quarter, we believe the inventory correction for the overall analogue market is now behind us", stated Schmitt.

"Besides our near term, stand alone business prospects, we are very excited about the opportunity of the combined companies of Sipex and Exar".

"We will diligently work to get this transaction closed over the next few months in order to accelerate our plans to drive improved shareholder value".

Back to top