[OBJECT OMITTED] NEWS RELEASE
AT RF MICRO DEVICES AT THE FINANCIAL
Dean Priddy Doug DeLieto RELATIONS BOARD
Chief Financial Officer Dir., Investor Relations Alison Ziegler
(336) 931-7152 (336) 931-7968 (212) 445-8432
FOR IMMEDIATE RELEASE
OCTOBER 21, 2003
RF MICRO DEVICES ANNOUNCES RECORD FINANCIAL RESULTS
SEPTEMBER QUARTER HIGHLIGHTS:
- Revenue Grows 24.3% Sequentially To $163.5 Million
- Gross Profit Margin Increases 760 Basis Points To 39.0%
- Net Income Per Share Equals $0.06, Including A $2.6 Million, Non-Cash
Charge Related To The Repurchase Of Convertible Notes
- Based On Current Backlog, The Company Currently Expects Double-Digit
Sequential Revenue Growth To The Low $180 Million Range And Quarterly
Earnings Per Share Of $0.08 To $0.09 For The December Quarter
GREENSBORO, NC, OCTOBER 21, 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 second quarter ended September 30, 2003.
FINANCIAL RESULTS
Revenue for the quarter was $163.5 million, an increase of 36.5% versus revenue
of $119.7 million for the corresponding quarter of fiscal 2003, and a sequential
increase of 24.3% versus revenue of $131.5 million for the quarter ended June
30, 2003. The Company's record quarterly revenue reflected strength in the
market for cellular handsets and share gains in the Company's core market of
components for cellular handsets.
Gross profit for the quarter was $63.8 million, an increase of 38.7% versus
$46.0 million for the prior year period, and a sequential increase of
approximately 54.7% from $41.2 million for the quarter ended June 30, 2003.
Gross profit margin increased sequentially to 39.0%, versus 31.4% in the prior
quarter and 38.4% in the corresponding quarter of fiscal 2003. The
year-over-year and sequential increases in gross profit margin were primarily
attributable to improved yields, higher volumes and cost savings from the
ongoing conversion from four-inch to six-inch gallium arsenide (GaAs) wafer
fabrication.
Net income for the quarter was $11.4 million, or $0.06 per diluted share,
compared to net income of $6.5 million, or $0.04 per diluted share, for the
second quarter of fiscal 2003 and net loss of ($8.1) million, or ($0.04) per
diluted share, for the prior quarter ended June 30, 2003.
Net income for the September 2003 quarter included approximately $2.6 million,
or approximately ($0.01) per share, in non-cash charges associated with the
repurchase of 3.75% convertible subordinated notes.
BUSINESS OUTLOOK AND FINANCIAL GUIDANCE
Based on current backlog, RF Micro Devices currently expects a double-digit
sequential revenue increase to the low-$180 million range in the December 2003
quarter. Additionally, the Company currently anticipates quarterly net income in
the range of $0.08 to $0.09 per share.
COMMENTS FROM MANAGEMENT
Bob Bruggeworth, president and CEO of RF Micro Devices, said, "We are extremely
pleased with our September quarter financial performance, which was driven
primarily by strong customer demand, gross margin improvement and expense
control. Additionally, we attained a number of notable operational achievements
during the quarter, including reductions in manufacturing cycle times, yield
improvements, the ramping of our six-inch GaAs wafer manufacturing and increased
productivity throughout the supply chain.
"From a competitive standpoint, we have never been better positioned to increase
our dollar content in handsets. Our non-power amplifier handset business grew
approximately 37 percent in September, and we believe we're positioned for
substantial new market share with our POLARIS(TM) family of GSM/GPRS/EDGE
transceivers. In fact, we currently have POLARIS transceiver design wins with
four of the top-five original equipment manufacturers, with production expected
to begin in the first half of calendar 2004."
Dean Priddy, CFO and vice president of administration, said, "Our financial
performance during the September quarter reflects our commitment to profitable
growth and operational excellence. We set several Company records during the
quarter, including bookings, revenue, inventory turns, yields, manufacturing
cycle times and net cash flow."
RF Micro Devices will conduct a conference call at 5:00 p.m. ET today to discuss
today's press release. The conference call will be broadcast live over the
Internet and can be accessed by any interested party at WWW.STREETEVENTS.COM or
WWW.RFMD.COM (under Investor Info). A replay will be available by dialing (303)
590-3000 and entering pass code 533550.
RF Micro Devices, Inc., an ISO 9001- and ISO 14001-certified manufacturer,
designs, develops, manufactures and markets proprietary radio frequency
integrated circuits (RFICs) primarily for wireless communications products and
applications such as cellular and PCS phones, base stations, wireless LANs, 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 strategy
is to focus on wireless markets by offering a broad range of standard and
custom-designed RFICs in order to position itself as a "one-stop" solution for
its customers' RFIC needs. RF Micro Devices, Inc. is traded on the Nasdaq
National Market under the symbol RFMD.
This press release contains forward-looking statements that relate to RF Micro
Devices' plans, objectives, estimates and goals. Words such as "expect,"
"anticipate," "intend," "plan," "project," "believe," and "estimate," 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 facilities and the Company's conversion from
four inch to six inch wafer manufacturing, the Company's ability to manage rapid
growth and to attract and retain skilled personnel, variability in production
yields, raw material availability, manufacturing capacity constraints,
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), RFMD(R) and POLARIS(TM)TOTAL RADIO(TM) 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 SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------- --------------- --------------- ---------------
Total revenue $163,464 $ 119,735 $294,985 $223,677
Costs and expenses:
Cost of goods sold 99,653 73,738 189,936 136,242
Research and development 30,568 22,570 61,903 45,621
Marketing and selling 11,437 8,732 21,734 17,146
General and administrative 5,219 4,777 9,771 8,977
Other operating expense 527 611 1,054 1,353
---------------- --------------- --------------- ---------------
Total costs and expenses 147,404 110,428 284,398 209,339
---------------- --------------- --------------- ---------------
Operating income 16,060 9,307 10,587 14,338
Interest (expense) income, net (4,470) (2,788) (6,932) (5,433)
---------------- --------------- --------------- ---------------
Income before income taxes $ 11,590 $ 6,519 $ 3,655 $ 8,905
Income tax expense 183 34 332 71
---------------- --------------- --------------- ---------------
Net income $ 11,407 $ 6,485 $ 3,323 $ 8,834
================ =============== =============== ===============
Net income per share, diluted $ 0.06 1 $ 0.04 $ 0.02 $ 0.05
================ =============== =============== ===============
Weighted average outstanding diluted
shares 219,238 1 173,199 189,041 173,866
================ =============== =============== ===============
<FN>
1 For the purposes of determining diluted net income per share during the second
quarter of fiscal 2004, the weighted average outstanding diluted shares were
calculated to include 29.1 million shares as if the 1.5% convertible
subordinated notes due in 2010 were converted ("assumed conversion") during the
fiscal 2004 second quarter, in accordance with FAS 128. Due to the assumed
conversion of the 1.5% notes, the Company used adjusted net income of $12.4
million, which includes the interest expense of $1.0 million related to the 1.5%
notes.
</FN>
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, MARCH 31,
2003 2003
(UNAUDITED)
----------------------- -----------------------
ASSETS
Current assets:
Cash and cash equivalents $198,034 $164,422
Short-term investments 112,781 92,187
Accounts receivable, net 80,733 66,849
Inventories 52,457 57,781
Other current assets 6,725 11,382
----------------------- -----------------------
Total current assets 450,730 392,621
Property and equipment, net 300,924 312,013
Goodwill 110,006 110,006
Long-term investments 63,610 59,440
Intangible assets, net 53,454 56,486
Other assets 1,985 2,259
----------------------- -----------------------
Total assets $980,709 $932,825
======================= =======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 53,373 $ 46,879
Other short-term liabilities, net 30,187 30,661
----------------------- -----------------------
Total current liabilities 83,560 77,540
Long-term debt, net 324,017 295,865
Other long-term liabilities 4,814 2,020
----------------------- -----------------------
Total liabilities 412,391 375,425
Shareholders' equity:
Total shareholders' equity 568,318 557,400
----------------------- -----------------------
Total liabilities and shareholders' equity $980,709 $932,825
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