NEWS RELEASE
AT RF MICRO DEVICES AT FRB/WEBER SHANDWICK
Dean Priddy Doug DeLieto Kerry Thalheim
Chief Financial Officer Dir., Investor Relations (212) 445-8000
(336) 931-7152 (336) 931-7968
FOR IMMEDIATE RELEASE
JULY 15, 2003
RF MICRO DEVICES ANNOUNCES FINANCIAL RESULTS
FINANCIAL HIGHLIGHTS:
- Revenue Increases 26.5% Year-Over-Year And Decreases 4.9% Sequentially To
$131.5 Million
- Company Improves Gross Margin 190 Basis Points Sequentially To 31.4%
- Company Exceeds Guidance Of ($0.05) To ($0.06) Provided On April 22, 2003
By Reporting Quarterly Loss Per Share Of ($0.04)
- Company Generates Positive Cash Flow Of $8.4 Million And Strengthens
Balance Sheet By Completing $230 Million Convertible Subordinated Notes
Offering
- Company Currently Has Backlog To Support September 2003 Quarterly Revenue
In the Low $130-Million Range And Anticipates Continued Improvement In
Gross Margin
GREENSBORO, NC, JULY 15, 2003 -- RF Micro Devices, Inc. (Nasdaq: RFMD), a
leading provider of proprietary radio frequency integrated circuits (RFICs) for
wireless communications applications, today reported financial results for its
fiscal 2004 first quarter, ended June 30, 2003.
FINANCIAL RESULTS
Revenue for the quarter was $131.5 million, an increase of 26.5% versus revenue
of $103.9 million for the corresponding quarter of fiscal 2003, and a sequential
decrease of 4.9% versus revenue of $138.3 million for the quarter ended March
31, 2003. The Company's financial results for the quarter reflect continued
strength at leading handset original equipment manufacturers (OEMs), offset by
weakness at handset original design manufacturers (ODMs) and for the Company's
802.11b products. The Company believes it increased its market share in its core
market of power amplifiers (PAs) for handsets.
Gross profit for the quarter was $41.2 million, which was down slightly from
$41.4 million in the prior year period, and up 1.1% sequentially versus $40.8
million in the March 2003 quarter. The year-over-year decrease in gross profit
was primarily attributable to product mix. The sequential increase in gross
profit was primarily attributable to improved test yield.
Net loss for the quarter was ($8.1) million, or ($0.04) per diluted share,
compared to net income of $2.3 million, or $0.01 per diluted share, for the
first quarter of fiscal 2003. This compares sequentially to a net loss of
($13.0) million, or ($0.07) per share for the fourth quarter of fiscal 2003.
In the prior quarter, ended March 31, 2003, the Company's net loss included a
non-cash write-down of investments of approximately $1.8 million and non-cash
depreciation expense of approximately $2.1 million.
BUSINESS OUTLOOK AND FINANCIAL GUIDANCE
RF Micro Devices believes order visibility has improved and currently
anticipates its gross margin will continue to show improvement in the September
quarter.
The Company currently has backlog to support September 2003 quarterly revenue in
the low $130-million range and anticipates a quarterly loss of approximately
($0.04) to ($0.05), on a GAAP basis, which includes approximately $2 million, or
approximately ($0.01) per share, in one-time, non-cash charges associated with
the repurchase of 3.75% convertible subordinated notes. Excluding the one-time,
non-cash charges, on a non-GAAP basis, the Company anticipates a September
quarterly loss of approximately ($0.03) to ($0.04).
The Company is including this non-GAAP comparison, which excludes expenses that
are unusual in nature and not expected to recur, in order to better present the
anticipated underlying financial performance of the business.
COMMENTS FROM MANAGEMENT
Bob Bruggeworth, president and CEO, said, "We're pleased to have shown improved
financial performance in our core business, as evidenced by gross margin
improvement. We're also encouraged by the recent increase in order rates, which
have rebounded nicely from April and May levels. Additionally, we're approaching
new product cycles in handsets, wireless LAN and other wireless markets, and
we're encouraged by customer interest."
Dean Priddy, CFO and vice president of administration, said, "We continued to
strengthen our balance sheet in the June quarter, which allows us the
flexibility to continue to execute on our corporate strategy. Cash flow from
operations was $23.3 million and net cash flow was $8.4 million. In early July,
we completed a $230 million dollar 1.5% coupon rate convertible offering and
repurchased $150 million of our higher coupon 3.75% convertible debt, with the
reduced interest expense beginning to show in the second quarter's financial
results."
RF Micro Devices will conduct a conference call at 5:00 p.m. (ET) today, July
15, 2003, to discuss fiscal 2004 first quarter results and comment on the
Company's outlook. The conference call will be broadcast live over the Internet
and can be accessed by any interested party at WWW.STREETEVENTS.COM or by going
to WWW.RFMD.COM and clicking on "Investor Info."
RF Micro Devices, Inc., an ISO 9001- and ISO 14001-certified manufacturer,
designs, develops, manufactures and markets proprietary RFICs primarily for
wireless communications products and applications such as cellular and PCS
phones, base stations, WLANs, and cable television modems. The Company offers a
broad array of products - including amplifiers, mixers, modulators/demodulators,
and single-chip receivers, transmitters and transceivers - representing a
substantial majority of the RFICs required in wireless subscriber equipment. The
Company's goal is to be the premier supplier of low-cost, high-performance
integrated circuits and solutions for applications that enable wireless
connectivity. RF Micro Devices, Inc. is traded on the Nasdaq National Market
under the symbol RFMD. For more information about RFMD, please visit
WWW.RFMD.COM.
This press release contains forward-looking statements that relate to RF Micro
Devices' plans, objectives, estimates and goals. Words such as "expects,"
"anticipates," "intends," "plans," "projects," "believes," and "estimates," and
variations of these words and similar expressions, identify these
forward-looking statements. RF Micro Devices' business is subject to numerous
risks and uncertainties, including variability in quarterly operating results,
the rate of growth and development of wireless markets, risks associated with
the operation of wafer fabrication, molecular beam epitaxy and test, tape and
reel facilities and the Company's conversion from four-inch to six-inch wafer
manufacturing, its ability to manage rapid growth and to attract and retain
skilled personnel, variability in production yields, its ability to control and
reduce costs and improve gross margins on highly integrated products, dependence
on a limited number of customers and dependence on third parties. These and
other risks and uncertainties, which are described in more detail in RF Micro
Devices' most recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission, could cause actual results and developments to be
materially different from those expressed or implied by any of these
forward-looking statements.
RF MICRO DEVICES(R) and RFMD(R) are trademarks of RFMD, LLC. All other trade
names, trademarks and registered trademarks are the property of their respective
owners.
For more information about RFMD, please visit our website at www.rfmd.com.
FINANCIAL TABLES FOLLOW
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(Unaudited)
THREE MONTHS ENDED
JUNE 30, 2003 JUNE 30, 2002
--------------- ---------------
Total revenue $ 131,521 $ 103,942
Operating costs and expenses:
Cost of goods sold 90,283 62,504
Research and development 31,335 23,051
Marketing and selling 10,297 8,414
General and administrative 4,552 4,200
Other operating expenses 527 742
--------- ---------
Total operating costs and expenses 136,994 98,911
--------- ---------
(Loss) income from operations (5,473) 5,031
Other (expense) income, net (2,462) (2,645)
--------- ---------
(Loss) income before income taxes (7,935) 2,386
Income tax expense 149 37
--------- ---------
Net (loss) income $ (8,084) $ 2,349
========= =========
Net (loss) income per share, diluted $ (0.04) $ 0.01
Weighted average outstanding diluted shares 184,032 174,529
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
JUNE 30, 2003 JUNE 30, 2002
--------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 167,956 $ 164,422
Short-term investments 97,019 92,187
Accounts receivable, net 64,056 66,849
Inventories 60,262 57,781
Other current assets 5,625 11,382
----------- -----------
Total current assets 394,918 392,621
Property and equipment, net 307,548 312,013
Goodwill 110,006 110,006
Long-term investments 63,461 59,440
Intangible assets, net 55,448 56,486
Other assets 2,027 2,259
----------- -----------
Total assets $ 933,408 $ 932,825
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 49,804 $ 46,879
Short-term payable, net 29,788 29,604
Other current liabilities 212 1,057
----------- -----------
Total current liabilities 79,804 77,540
Long-term debt, net 296,281 295,865
Other long-term liabilities 5,158 2,020
----------- -----------
Total liabilities 381,243 375,425
Total shareholders' equity 552,165 557,400
----------- -----------
Total liabilities and shareholders' equity $ 933,408 $ 932,825
=========== ===========