Skyworks Delivers Record Revenues, Operating Income In Q2 2004
Exceeds top and bottom line expectations
Woburn, MA -- Skyworks Solutions, Inc. today announced record revenues of $183.5 million for the second fiscal quarter ended April 2, 2004, up 5% sequentially from $175.1 million. This performance exceeded the company's guidance of flat sequential revenue. Year-over-year, revenues for the quarter were up 17% from $157.4 million.
On a pro forma basis, excluding amortization of intangible assets and special items, operating income for the second fiscal quarter was $13.1 million, up 18% sequentially and up 226% year-over-year. Second fiscal quarter pro forma earnings per share was $0.05, and $0.01 better than First Call consensus estimates.
Second fiscal quarter GAAP operating loss was $4.4 million, including $17.5 million in charges primarily related to the write-down of legacy baseband technology licenses that were established prior to the merger between Alpha Industries and Conexant's wireless business, and the consolidation of software development design centers. These charges result from the company's intensified focus in its Cellular Systems business on the advanced multimedia applications required by a growing roster of customers, thus invalidating older technology licenses. Including these items, GAAP loss per share for the second fiscal quarter was $0.06.
"Despite seasonality in the wireless handset market, Skyworks delivered record results, solidly growing both our top and bottom lines. We gained market share in key product areas, highlighted by the ramp of our portfolio of next generation power amplifiers, front-end modules, RF solutions and cellular systems," said David J. Aldrich, Skyworks' president and CEO. "Our ability to outpace the growth of the overall wireless industry demonstrates the tremendous efforts of product development, marketing and operations teams as customers increasingly turn to our highly integrated wireless semiconductor solutions. The product pipeline has never looked better and we believe last quarter's performance is a precursor to an exceptional year."
- Received LG Electronics' 2003 Best Quality Award for outstanding product quality and customer service
- Generated approximately $19 million of cash flow from operations
- Ended the quarter with $197 million in cash
- Delivered more than four million of the industry's most highly integrated front-end module solution, integrating switch and power amplifier (PA) functionality
- Commenced shipments of GSM/GPRS PA modules at Samsung Electronics, supporting more than a dozen new feature-rich handsets
- Gained PA module market share, with unit shipments up by more than 40% on a year-over-year basis
- Unveiled the world's smallest single chip GSM/GPRS quad-band direct conversion transceiver
- Scored Ningbo Bird, China's largest domestic handset supplier, as a new front-end module plus direct conversion transceiver customer
- Captured initial EDGE RF subsystem design wins at leading OEMs and ODMs
- Ramped high volume CDMA 1X transmit and receive chain solutions at LG Electronics
- Supported NEC's ramp of their N910 family of handsets
- Added Arima, one of Taiwan's leading ODMs, to the growing list of system customers
- Introduced GSM/GPRS system solution at China-based CEC Telecom
- Provided enabling platform to Mio Technology for new 8390 smartphones
Cellular Infrastructure and Wireless Data
- Shipped more than 30 million wireless LAN (WLAN) switches
- Received initial high volume WLAN front-end module production orders in support of a tier-one supplier
- Increased GPRS, EDGE and 3G linear base station component shipments driven by service provider deployments throughout China, India and South America
Third Fiscal Quarter 2004 Outlook
"Based on record backlog and order trends across the business, we expect to grow revenues another 5% sequentially in the June quarter," said Allan M. Kline, Skyworks' VP and CFO. "Operationally, we anticipate that gross margins will expand with operating expenses declining as a%age of sales. In turn, we expect to further demonstrate our business model's leverage by improving operating profitability by roughly 15% sequentially and delivering EPS of $0.07.
"Additionally, we have notified the holder of our $45 million, 15% note, that on May 12, 2004 we intend to call this debt which has a conversion price of $7.87 per share. This transaction will eliminate $45 million of long-term debt, reduce our quarterly interest expense by $1.8 million and be accretive to EPS going forward," concluded Kline.
Source: Skyworks Solutions