EXHIBIT 99.1
| | | |
Contact: | | Investor Relations Contact: |
| Thomas Stites | | Timea Parris |
| Mindspeed Technologies, Inc. | | Mindspeed Technologies, Inc. |
| (949) 579-3650 | | (949) 579-6283 |
MINDSPEED®REPORTS FISCAL 2005 THIRD QUARTER RESULTS
Delivers Revenues of $27.7 Million Achieving High End of Company’s Expectations
NEWPORT BEACH, Calif., July 25, 2005– Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today announced revenues of $27.7 million for the third quarter of fiscal 2005, which ended June 30, 2005, achieving the high end of its previously announced expectations of approximately flat-to-up-5 percent sequential quarterly revenue growth compared to the $26.6 million reported in the second quarter of fiscal 2005.
Revenues from multiservice access voice-over-IP (VoIP) solutions grew three percent sequentially over the prior quarter, contributing 32 percent of total third quarter revenues. Revenues from high-performance analog devices were approximately flat sequentially and represented 25 percent of total quarterly revenues. T/E carrier transmission product revenues increased 18 percent sequentially to 26 percent of the total. Revenues from ATM/MPLS network processor solutions declined three percent from the prior quarter to contribute the remaining 17 percent of third quarter revenues.
“We are very pleased to have achieved the high end of our revenue expectations in the third fiscal quarter and to have reduced our pro forma operating loss by an additional 25 percent sequentially,” said Raouf Halim, Mindspeed’s chief executive officer. “During the past quarter we experienced a significant pick-up in orders across the majority of our product families and across all geographic regions, and we believe that market conditions are beginning to improve.”
Gross margin for the third quarter of fiscal 2005 was $19.5 million, or 70 percent of revenues. Mindspeed’s pro forma operating loss for the third quarter of fiscal 2005 was $8.0 million, a reduction of 25 percent from the pro forma operating loss of $10.7 million reported in the
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 2 |
second quarter of fiscal 2005. Presented on a GAAP basis, Mindspeed’s operating loss for the third quarter was $8.7 million, as compared to $18.2 million in the prior quarter. The reduction in the GAAP operating loss includes a $6.2 million decrease in amortization of intangible assets as a result of assets becoming fully amortized.
Mindspeed’s pro forma net loss for the third quarter of fiscal 2005 was $8.8 million, or $0.09 per share, based on approximately 102.7 million average shares outstanding, compared to the pro forma net loss of $10.9 million, or $0.11 per share, in the prior quarter based on approximately 102.1 million average shares outstanding. Presented on a GAAP basis, the net loss for the third quarter of fiscal 2005 was $9.5 million, or $0.09 per share, compared to $18.4 million, or $0.18 per share in the prior quarter. Combined cash and marketable securities totaled $64.2 million at June 30, 2005.
As described below, the pro forma results, which are a supplement to financial results based on generally accepted accounting principles (GAAP), exclude amortization of intangible assets and special items. Mindspeed uses pro forma information to evaluate its operating performance and believes this presentation provides investors with additional insight into underlying operating results by excluding amortization of intangible assets and the effects of special items which include restructuring charges, asset impairments and other significant discrete items that may not be indicative of Mindspeed’s core operating results. Cash consumption is the net increase (decrease) in cash and cash equivalents excluding the sale of convertible senior notes, deferred financing costs and purchases and sales of marketable securities. These measures provide an operating perspective not immediately apparent from GAAP operating loss or net loss. In addition, Mindspeed has historically reported similar financial measures and believes that the inclusion of comparative numbers provides consistency in its financial reporting. These measures of earnings and cash flows are not in accordance with, or an alternative for, GAAP and may be different from pro forma measures used by other companies. A reconciliation of the pro forma and GAAP results is included in the accompanying financial data.
Outlook
Mindspeed expects fourth-quarter revenues to be up approximately 5-to-10 percent sequentially. The company expects overall gross margin to be approximately 69 percent and expects quarterly pro forma operating expenses (which exclude amortization of intangible assets
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 3 |
and special items) to be approximately $26 million. As a result, Mindspeed expects its fiscal 2005 fourth quarter pro forma operating loss to be approximately 30 percent lower than in the third fiscal quarter, and to further reduce its cash consumption.
Third Quarter Fiscal 2005 Conference Call
Mindspeed will conduct a conference call to discuss its third quarter fiscal 2005 results this afternoon, Monday, July 25, at 2:00 p.m. PDT/5:00 p.m. EDT. To listen to the conference call via telephone, call 877-804-1919 (domestic) or 334-323-7224 (international); security code: Mindspeed. To listen via the Internet, visit the investor relations section of Mindspeed’s web site atwww.mindspeed.com under About Us/Investors. The replay of the conference will be available immediately after the conclusion of the call. The replay will be available on Mindspeed’s web site atwww.mindspeed.com or by calling 877-919-4059 (domestic) or 334-323-7226 (international); pass code: 88164922.
About Mindspeed Technologies®
Headquartered in Newport Beach, Calif., Mindspeed Technologies, Inc. designs, develops and sells semiconductor networking solutions for communications applications in enterprise, access, metropolitan and wide area networks.
The company’s four key product families include high-performance analog transmission and switching solutions, multiservice access products designed to support voice and data services across wireline and wireless networks, T/E carrier physical-layer and link-layer devices, and ATM/MPLS network processors.
Mindspeed’s products are used in a wide variety of network infrastructure equipment including voice and media gateways, high-speed routers, switches, access multiplexers, cross-connect systems, add-drop multiplexers and digital loop carrier equipment.
To learn more, visit us atwww.mindspeed.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include the information under the heading “Outlook” and other information regarding the company’s expectations, goals or intentions, including, but not limited to, statements regarding operating and performance trends such as product demand by product family and region, order rates, and market conditions. These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about the company and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. Such risks and uncertainties include, but are not limited to: market demand for the company’s new and existing products; the company’s ability to reduce its cash consumption; reduction of inventory at key customers; pricing pressures and other competitive factors; order and shipment uncertainty; availability of capital needed for the company’s business; and the company’s ability to maintain operating expenses within anticipated levels. Risks and uncertainties that could cause the company’s actual results to differ from those set forth in any forward-looking statement are discussed in more detail under “Certain Business Risks”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended September 30, 2004, as well as similar disclosures in the company’s subsequent SEC filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 4 |
MINDSPEED TECHNOLOGIES, INC.
Pro Forma Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | June 30, | | | Mar. 31, | | | Dec. 31, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2004 | | | 2004 | | | 2005 | | | 2004 | |
| Net revenues | | $ | 27,738 | | | $ | 26,644 | | | $ | 26,316 | | | $ | 35,360 | | | $ | 80,698 | | | $ | 92,856 | |
| Cost of goods sold (a) | | | 8,207 | | | | 8,316 | | | | 7,982 | | | | 10,155 | | | | 24,505 | | | | 26,182 | |
| | | | | | | | | | | | | | | | | | | |
| Gross margin | | | 19,531 | | | | 18,328 | | | | 18,334 | | | | 25,205 | | | | 56,193 | | | | 66,674 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development | | | 16,748 | | | | 18,613 | | | | 19,604 | | | | 19,095 | | | | 54,965 | | | | 59,639 | |
| Selling, general and administrative | | | 10,797 | | | | 10,430 | | | | 10,662 | | | | 12,114 | | | | 31,889 | | | | 34,987 | |
| | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 27,545 | | | | 29,043 | | | | 30,266 | | | | 31,209 | | | | 86,854 | | | | 94,626 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma operating loss | | | (8,014 | ) | | | (10,715 | ) | | | (11,932 | ) | | | (6,004 | ) | | | (30,661 | ) | | | (27,952 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income (expense), net | | | (193 | ) | | | (254 | ) | | | — | | | | (82 | ) | | | (447 | ) | | | 267 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma loss before income taxes | | | (8,207 | ) | | | (10,969 | ) | | | (11,932 | ) | | | (6,086 | ) | | | (31,108 | ) | | | (27,685 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | 561 | | | | (63 | ) | | | 398 | | | | 816 | | | | 896 | | | | 1,289 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma net loss | | $ | (8,768 | ) | | $ | (10,906 | ) | | $ | (12,330 | ) | | $ | (6,902 | ) | | $ | (32,004 | ) | | $ | (28,974 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma net loss per share, basic and diluted | | $ | (0.09 | ) | | $ | (0.11 | ) | | $ | (0.12 | ) | | $ | (0.07 | ) | | $ | (0.31 | ) | | $ | (0.30 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted-average number of shares used in per share computation | | | 102,698 | | | | 102,075 | | | | 100,804 | | | | 99,467 | | | | 101,859 | | | | 97,440 | |
| | | | | | | | | | | | | | | | | | | |
Pro forma operating loss, pro forma net loss and pro forma net loss per share exclude the amortization of intangible assets and special charges. A reconciliation of pro forma and GAAP results is presented in the following table.
| (a) | | Cost of goods sold includes the favorable effect of sales of certain inventories written down to a zero cost basis during fiscal 2001. The favorable effect of such sales, by quarter, was approximately $1.7 million (June 2005), $3.4 million (March 2005), $2.0 million (December 2004) and $2.5 million (June 2004). For the nine months ended June 30, 2005 and 2004, the favorable effect of such sales was $7.2 million and $6.3 million, respectively. |
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 5 |
MINDSPEED TECHNOLOGIES, INC.
Reconciliation of Pro Forma Results to GAAP
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | June 30, | | | Mar. 31, | | | Dec. 31, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2004 | | | 2004 | | | 2005 | | | 2004 | |
Reconciliation of Pro Forma Operating Loss to Operating Loss | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma operating loss | | $ | (8,014 | ) | | $ | (10,715 | ) | | $ | (11,932 | ) | | $ | (6,004 | ) | | $ | (30,661 | ) | | $ | (27,952 | ) |
| Amortization of intangible assets and special items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 824 | | | | 6,981 | | | | 12,676 | | | | 12,609 | | | | 20,481 | | | | 37,716 | |
| Special charges (b) | | | (125 | ) | | | 508 | | | | 5,473 | | | | — | | | | 5,856 | | | | 387 | |
| Employee separation costs (c) | | | — | | | | — | | | | — | | | | 630 | | | | — | | | | 630 | |
| | | | | | | | | | | | | | | | | | | |
| Operating loss | | $ | (8,713 | ) | | $ | (18,204 | ) | | $ | (30,081 | ) | | $ | (19,243 | ) | | $ | (56,998 | ) | | $ | (66,685 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Pro Forma Net Loss to Net Loss | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma net loss | | $ | (8,768 | ) | | $ | (10,906 | ) | | $ | (12,330 | ) | | $ | (6,902 | ) | | $ | (32,004 | ) | | $ | (28,974 | ) |
| Amortization of intangible assets and special items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 824 | | | | 6,981 | | | | 12,676 | | | | 12,609 | | | | 20,481 | | | | 37,716 | |
| Special charges (b) | | | (125 | ) | | | 508 | | | | 5,473 | | | | — | | | | 5,856 | | | | 387 | |
| Employee separation costs (c) | | | — | | | | — | | | | — | | | | 630 | | | | — | | | | 630 | |
| | | | | | | | | | | | | | | | | | | |
| Net loss | | $ | (9,467 | ) | | $ | (18,395 | ) | | $ | (30,479 | ) | | $ | (20,141 | ) | | $ | (58,341 | ) | | $ | (67,707 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Pro Forma Net Loss Per Share to Net Loss Per Share | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss per share, basic and diluted: | | | | | | | | | | | | | | | | | | | | | | | | |
| Pro forma net loss | | $ | (0.09 | ) | | $ | (0.11 | ) | | $ | (0.12 | ) | | $ | (0.07 | ) | | $ | (0.31 | ) | | $ | (0.30 | ) |
| Amortization of intangible assets and special items | | | — | | | | (0.07 | ) | | | (0.18 | ) | | | (0.13 | ) | | | (0.26 | ) | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | |
| Net loss | | $ | (0.09 | ) | | $ | (0.18 | ) | | $ | (0.30 | ) | | $ | (0.20 | ) | | $ | (0.57 | ) | | $ | (0.69 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Cash Consumption to Net Increase (Decrease) in Cash and Cash Equivalents | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash consumption | | $ | (7,890 | ) | | $ | (6,727 | ) | | $ | (8,395 | ) | | $ | (4,883 | ) | | $ | (23,012 | ) | | $ | (25,368 | ) |
| Sale of convertible senior notes | | | — | | | | — | | | | 43,930 | | | | — | | | | 43,930 | | | | — | |
| Deferred financing costs | | | (18 | ) | | | (95 | ) | | | (320 | ) | | | — | | | | (433 | ) | | | — | |
| Net sales (purchases) of marketable securities | | | 4,867 | | | | (44,875 | ) | | | (3,253 | ) | | | — | | | | (43,261 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (3,041 | ) | | $ | (51,697 | ) | | $ | 31,962 | | | $ | (4,883 | ) | | $ | (22,776 | ) | | $ | (25,368 | ) |
| | | | | | | | | | | | | | | | | | | |
| (b) | | Special charges consist of asset impairments and restructuring charges. |
| |
| (c) | | Employee separation costs consist of severance benefits payable to certain former officers of the company as a result of organizational changes. |
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 6 |
MINDSPEED TECHNOLOGIES, INC.
Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | June 30, | | | Mar. 31, | | | Dec. 31, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2004 | | | 2004 | | | 2005 | | | 2004 | |
| Net revenues | | $ | 27,738 | | | $ | 26,644 | | | $ | 26,316 | | | $ | 35,360 | | | $ | 80,698 | | | $ | 92,856 | |
| Cost of goods sold (d) | | | 8,207 | | | | 8,316 | | | | 7,982 | | | | 10,155 | | | | 24,505 | | | | 26,182 | |
| | | | | | | | | | | | | | | | | | | |
| Gross margin | | | 19,531 | | | | 18,328 | | | | 18,334 | | | | 25,205 | | | | 56,193 | | | | 66,674 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Research and development | | | 16,748 | | | | 18,613 | | | | 19,604 | | | | 19,095 | | | | 54,965 | | | | 59,639 | |
| Selling, general and administrative | | | 10,797 | | | | 10,430 | | | | 10,662 | | | | 12,744 | | | | 31,889 | | | | 35,617 | |
| Amortization of intangible assets | | | 824 | | | | 6,981 | | | | 12,676 | | | | 12,609 | | | | 20,481 | | | | 37,716 | |
| Special charges (e) | | | (125 | ) | | | 508 | | | | 5,473 | | | | — | | | | 5,856 | | | | 387 | |
| | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 28,244 | | | | 36,532 | | | | 48,415 | | | | 44,448 | | | | 113,191 | | | | 133,359 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating loss | | | (8,713 | ) | | | (18,204 | ) | | | (30,081 | ) | | | (19,243 | ) | | | (56,998 | ) | | | (66,685 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income (expense), net | | | (193 | ) | | | (254 | ) | | | — | | | | (82 | ) | | | (447 | ) | | | 267 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | (8,906 | ) | | | (18,458 | ) | | | (30,081 | ) | | | (19,325 | ) | | | (57,445 | ) | | | (66,418 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | 561 | | | | (63 | ) | | | 398 | | | | 816 | | | | 896 | | | | 1,289 | |
| | | | | | | | | | | | | | | | | | | |
| Net loss | | $ | (9,467 | ) | | $ | (18,395 | ) | | $ | (30,479 | ) | | $ | (20,141 | ) | | $ | (58,341 | ) | | $ | (67,707 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss per share, basic and diluted | | $ | (0.09 | ) | | $ | (0.18 | ) | | $ | (0.30 | ) | | $ | (0.20 | ) | | $ | (0.57 | ) | | $ | (0.69 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted-average number of shares used in per share computation | | | 102,698 | | | | 102,075 | | | | 100,804 | | | | 99,467 | | | | 101,859 | | | | 97,440 | |
| | | | | | | | | | | | | | | | | | | |
| (d) | | Cost of goods sold includes the favorable effect of sales of certain inventories written down to a zero cost basis during fiscal 2001. The favorable effect of such sales, by quarter, was approximately $1.7 million (June 2005), $3.4 million (March 2005), $2.0 million (December 2004) and $2.5 million (June 2004). For the nine months ended June 30, 2005 and 2004, the favorable effect of such sales was $7.2 million and $6.3 million, respectively. |
| |
| (e) | | Special charges consist of asset impairments and restructuring charges. |
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 7 |
MINDSPEED TECHNOLOGIES, INC.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
| | | | | | | | | |
| | | June 30, | | | September 30, | |
| | | 2005 | | | 2004 | |
ASSETS
|
| Current Assets | | | | | | | | |
| Cash and cash equivalents (f) | | $ | 20,862 | | | $ | 43,638 | |
| Marketable securities, current (f) | | | 42,473 | | | | — | |
| Receivables, net | | | 14,769 | | | | 19,618 | |
| Inventories | | | 10,061 | | | | 11,986 | |
| Other current assets | | | 5,519 | | | | 6,114 | |
| | | | | | | |
| Total current assets | | | 93,684 | | | | 81,356 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 16,421 | | | | 20,979 | |
| Intangible assets, net | | | — | | | | 20,385 | |
| Other assets (f) | | | 4,243 | | | | 3,580 | |
| | | | | | | |
| Total assets | | $ | 114,348 | | | $ | 126,300 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| Current Liabilities | | | | | | | | |
| Accounts payable | | $ | 12,327 | | | $ | 13,112 | |
| Deferred revenue | | | 3,358 | | | | 3,471 | |
| Accrued compensation and benefits | | | 8,004 | | | | 9,282 | |
| Restructuring | | | 3,395 | | | | 2,823 | |
| Other current liabilities | | | 3,071 | | | | 3,586 | |
| | | | | | | |
| Total current liabilities | | | 30,155 | | | | 32,274 | |
| | | | | | | | | |
| Convertible senior notes | | | 44,121 | | | | — | |
| Other liabilities | | | 2,788 | | | | 3,099 | |
| | | | | | | |
| Total liabilities | | | 77,064 | | | | 35,373 | |
| | | | | | | | | |
| Stockholders’ equity | | | 37,284 | | | | 90,927 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 114,348 | | | $ | 126,300 | |
| | | | | | | |
| (f) | | Combined cash and marketable securities consist of the following: |
| | | | | | | | | |
| | | June 30, | | | September 30, | |
| | | 2005 | | | 2004 | |
| Cash and cash equivalents | | $ | 20,862 | | | $ | 43,638 | |
| Marketable securities, current | | | 42,473 | | | | — | |
| Marketable securities, noncurrent, included in other assets | | | 831 | | | | — | |
| | | | | | | |
| | | | | | | | | |
| Combined cash and marketable securities | | $ | 64,166 | | | $ | 43,638 | |
| | | | | | | |
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| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 8 |
MINDSPEED TECHNOLOGIES, INC.
Consolidated Condensed Statements of Cash Flows
(unaudited, in thousands)
| | | | | | | | | |
| | | Nine months ended | |
| | | June 30, | |
| | | 2005 | | | 2004 | |
Cash Flows From Operating Activities | | | | | | | | |
| Net loss | | $ | (58,341 | ) | | $ | (67,707 | ) |
| Adjustments required to reconcile net loss to net cash used in operating activities: | | | | | | | | |
| Depreciation | | | 7,072 | | | | 8,605 | |
| Amortization of intangible assets | | | 20,481 | | | | 37,716 | |
| Asset impairments | | | 604 | | | | — | |
| Inventory provisions | | | 977 | | | | 2,805 | |
| Other non-cash items, net | | | 728 | | | | 138 | |
| Changes in assets and liabilities: | | | | | | | | |
| Receivables | | | 5,000 | | | | (6,604 | ) |
| Inventories | | | 948 | | | | (10,663 | ) |
| Accounts payable | | | (785 | ) | | | 1,092 | |
| Deferred revenue | | | (113 | ) | | | 1,207 | |
| Accrued expenses and other current liabilities | | | 173 | | | | (1,731 | ) |
| Other | | | 412 | | | | 1,892 | |
| | | | | | | |
| | | | | | | | | |
| Net cash used in operating activities | | | (22,844 | ) | | | (33,250 | ) |
| | | | | | | |
| | | | | | | | | |
Cash Flows From Investing Activities | | | | | | | | |
| Capital expenditures | | | (3,232 | ) | | | (3,935 | ) |
| Sale of assets | | | 149 | | | | 54 | |
| Net purchases of marketable securities | | | (43,261 | ) | | | — | |
| | | | | | | |
| | | | | | | | | |
| Net cash used in investing activities | | | (46,344 | ) | | | (3,881 | ) |
| | | | | | | |
| | | | | | | | | |
Cash Flows From Financing Activities | | | | | | | | |
| Sale of convertible senior notes | | | 43,930 | | | | — | |
| Exercise of stock options and warrants | | | 2,915 | | | | 11,827 | |
| Deferred financing costs | | | (433 | ) | | | (64 | ) |
| | | | | | | |
| Net cash provided by financing activities | | | 46,412 | | | | 11,763 | |
| | | | | | | |
| Net decrease in cash and cash equivalents | | | (22,776 | ) | | | (25,368 | ) |
| Cash and cash equivalents at beginning of period | | | 43,638 | | | | 80,121 | |
| | | | | | | |
| Cash and cash equivalents at end of period | | $ | 20,862 | | | $ | 54,753 | |
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-more-
| | |
| Mindspeed Reports Fiscal 2005 Third Quarter Results | | 9 |
MINDSPEED TECHNOLOGIES, INC.
Selected Corporate Data
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | June 30, | | | Mar. 31, | | | Dec. 31, | | | June 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2004 | | | 2004 | | | 2005 | | | 2004 | |
| Gross margin % | | | 70 | % | | | 69 | % | | | 70 | % | | | 71 | % | | | 70 | % | | | 72 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating activities | | $ | (7,358 | ) | | $ | (5,663 | ) | | $ | (9,823 | ) | | $ | (4,959 | ) | | $ | (22,844 | ) | | $ | (33,250 | ) |
| Investing activities | | | 4,110 | | | | (46,567 | ) | | | (3,887 | ) | | | (812 | ) | | | (46,344 | ) | | | (3,881 | ) |
| Financing activities | | | 207 | | | | 533 | | | | 45,672 | | | | 888 | | | | 46,412 | | | | 11,763 | |
| | | | | | | | | | | | | | | | | | | |
| Net increase (decrease) in cash | | $ | (3,041 | ) | | $ | (51,697 | ) | | $ | 31,962 | | | $ | (4,883 | ) | | $ | (22,776 | ) | | $ | (25,368 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation (g) | | $ | 2,118 | | | $ | 2,355 | | | $ | 2,599 | | | $ | 2,738 | | | $ | 7,072 | | | $ | 8,605 | |
| Capital expenditures | | | 769 | | | | 1,701 | | | | 762 | | | | 812 | | | | 3,232 | | | | 3,935 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues by region: | | | | | | | | | | | | | | | | | | | | | | | | |
| Americas | | $ | 8,314 | | | $ | 9,976 | | | $ | 11,414 | | | $ | 11,451 | | | $ | 29,704 | | | $ | 36,241 | |
| Europe | | | 3,399 | | | | 3,005 | | | | 3,466 | | | | 5,866 | | | | 9,870 | | | | 14,281 | |
| Asia-Pacific | | | 16,025 | | | | 13,663 | | | | 11,436 | | | | 18,043 | | | | 41,124 | | | | 42,334 | |
| | | | | | | | | | | | | | | | | | | |
| | | $ | 27,738 | | | $ | 26,644 | | | $ | 26,316 | | | $ | 35,360 | | | $ | 80,698 | | | $ | 92,856 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues by product line: | | | | | | | | | | | | | | | | | | | | | | | | |
| Multiservice access DSP products | | $ | 8,974 | | | $ | 8,744 | | | $ | 6,470 | | | $ | 9,472 | | | $ | 24,188 | | | $ | 21,553 | |
| High-performance analog products | | | 6,854 | | | | 6,916 | | | | 6,258 | | | | 9,319 | | | | 20,028 | | | | 19,191 | |
| T/E carrier products | | | 7,195 | | | | 6,117 | | | | 8,425 | | | | 11,289 | | | | 21,737 | | | | 33,977 | |
| ATM/MPLS network processor products | | | 4,715 | | | | 4,867 | | | | 5,163 | | | | 5,255 | | | | 14,745 | | | | 17,842 | |
| Other | | | — | | | | — | | | | — | | | | 25 | | | | — | | | | 293 | |
| | | | | | | | | | | | | | | | | | | |
| | | $ | 27,738 | | | $ | 26,644 | | | $ | 26,316 | | | $ | 35,360 | | | $ | 80,698 | | | $ | 92,856 | |
| | | | | | | | | | | | | | | | | | | |
| (g) | | Does not include amortization of intangible assets. |
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