EXHIBIT 99.1
RF MICRO DEVICES
NEWS RELEASE
At RF Micro Devices:
Dean Priddy Doug DeLieto
Chief Financial Officer Dir., Investor Relations
(336) 931-7152 (336) 931-7152
At the Financial Relations Board
Alison Ziegler
(212) 445-8432
For Immediate Release
July 20, 2004
RF MICRO DEVICES ANNOUNCES FINANCIAL RESULTS
FOR FIRST QUARTER OF FISCAL 2005
Financial Highlights:
- - Revenue Increases 26.0% Year-Over-Year And 1.4% Sequentially To
$165.8 Million
- - Company Improves Gross Margin 180 Basis Points Sequentially To
39.1%
- - GAAP Earnings Per Share Total $0.02 And Non-GAAP Pro Forma
Earnings Per Share Total $0.06
- - Company Generates Cash Flow From Operations Of $29.4 Million And
Strengthens Balance Sheet
- - Company Begins Production Shipments Of POLARIS-Trademark- 1 TOTAL
RADIO-Trademark- GSM/GPRS Transceivers
- - Company Achieves Full Type Approval (FTA) Of POLARIS-Trademark- 2
TOTAL RADIO-Trademark- GSM/GPRS/EDGE Transceivers
- - Company Currently Anticipates September 2004 Quarterly Revenue
That Is Consistent With June 2004 Quarterly Revenue
Greensboro, NC, July 20, 2004 -- 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 2005 first quarter ended June 30,
2004.
Financial Results
Revenue for the quarter was $165.8 million, which represented a year-
over-year increase of 26.0% versus revenue of $131.5 million for the
corresponding quarter of fiscal 2004 and a sequential increase of 1.4%
versus revenue of $163.4 million for the quarter ended March 31, 2004.
Gross profit for the quarter was $64.9 million, which represented a
year-over-year increase of 57.3% compared to $41.2 million in the prior
year period, and a sequential increase of 6.5% versus $60.9 million in
the quarter ended March 31, 2004. The year-over-year increase in gross
profit was primarily attributable to increased sales, and the
sequential increase in gross profit was primarily attributable to
improved test yields for certain module products. Gross profit margin
improved sequentially 180 basis points to 39.1% from 37.3% in the 2004
quarter ended March 31, 2004.
Net income in accordance with U.S. generally accepted accounting
principles (GAAP) for the quarter ended June 30, 2004 was $3.0 million,
or $0.02 per diluted share, compared with a GAAP net loss of ($8.2)
million, or ($0.04) per diluted share, for the quarter ended June 30,
2003. This compares sequentially to a GAAP net loss of ($0.9) million,
or less than one cent per share for the quarter March 31, 2004.
In addition to reporting net income (loss) and net income (loss) per
share in accordance with GAAP, RF Micro Devices has begun to separately
report these items on a non-GAAP basis, referred to as pro forma, in
order to exclude the effect of certain non-recurring and non-cash
items. For the purposes of this press release, all references to "pro
forma" results reflect non-GAAP financial information. In the quarter
ended June 30, 2004, pro forma results excluded $9.7 million in
expenses, including an in-process R&D charge of approximately $6.2
million related to the acquisition of SiliconWave, as well as
approximately $3.5 million in non-cash expenses related to the
amortization of deferred stock-based compensation and the amortization
of transaction-related intangibles.
After excluding these items, pro forma net income for the quarter ended
June 30, 2004 was $12.7 million, or $0.06 per diluted share. This
compares with a pro forma net loss of ($4.6) million, or ($0.03) per
diluted share, for the first quarter of 2004, and pro forma net income
of $10.2 million, or $0.05 per diluted share, for the quarter ended
March 31, 2004.
In the quarter ended June 30, 2003, pro forma results excluded
approximately $3.6 million in non-cash expenses related to the
amortization of deferred stock-based compensation and the amortization
of transaction-related intangibles. In the quarter ended March 31,
2004, pro forma results excluded approximately $11.1 million in non-
cash expenses, including approximately $7.7 million related to the
discontinuation of a manufacturing supply agreement, as well as
approximately $3.4 million in non-cash expenses related to the
amortization of deferred stock-based compensation and the amortization
of transaction-related intangibles. A reconciliation of the Company's
GAAP financial results to pro forma financial results is provided in
the financial statement portion of this release.
RF Micro Devices believes pro forma reporting provides useful
supplemental information to the investment community and facilitates a
better understanding of its results of operations. RF Micro Devices
has chosen to provide this supplemental information to investors to
enable them to perform additional comparisons of operating results and
as a means to analyze its financial performance without the impact of
certain non-cash expenses or unusual items that may obscure trends in
the Company's underlying performance. These disclosures should not be
viewed as a substitute for operating results determined in accordance
with GAAP, nor are they necessarily comparable to non-GAAP performance
measures that may be presented by other companies.
Business Outlook And Financial Guidance
RF Micro Devices currently anticipates revenue in the quarter ending
September 30, 2004 will be consistent with June 2004 quarterly revenue.
GAAP net income per share is currently expected to be approximately
$0.01 to $0.02, and pro forma net income per share is currently
expected to be approximately $0.03 to $0.04, which excludes
approximately $3.2 million in non-cash expenses related to the
amortization of deferred compensation and intangible assets.
RF Micro Devices anticipates the worldwide handset market is on track
to sell more than 600 million units in calendar year 2004, reflecting
solid, double-digit unit growth over 2003. The Company also expects
handset sales in the second half of calendar year 2004 will be stronger
than in the first half of calendar year 2004. RF Micro Devices'
forecasted revenue in the September 2004 quarter reflects the Company's
expectation that worldwide handset unit volume in the September quarter
will be approximately in line with the June quarter, with sequential
unit growth resuming in the December quarter.
Comments From Management
Bob Bruggeworth, president and CEO, said, "During the June quarter, we
continued to focus our efforts on the areas of our business we control,
and in those areas we excelled. We believe we took share in our core
market of power amplifiers during the June quarter, and we believe we
took share in transceivers with every POLARIS-Trademark- 1 TOTAL RADIO-
Trademark- transceiver that we shipped. Within the Bluetooth-Registered
Trademark-market, order rates were strong, and we expect we are on
track to double our Bluetooth revenue this quarter.
"We began production shipments during the June quarter of our POLARIS-
Trademark- 1 TOTAL RADIO-Trademark- GSM/GPRS transceiver. We achieved
full type approval (FTA) with our POLARIS-Trademark- 2 TOTAL RADIO-
Trademark- GSM/GPRS/EDGE transceiver with a top-tier handset OEM, and
we are currently in the FTA process with another
top-tier OEM. We remain on schedule to deliver mass production
shipments of our POLARIS-Trademark- 2 transceiver, totaling more than
one million units, in the December quarter. We continue to believe
that the market for EDGE handsets is larger than industry experts
originally estimated, and we believe our POLARIS-Trademark- 2 TOTAL
RADIO-Trademark- transceiver and power amplifiers for EDGE will gain
market share in the December quarter and continue to gain share in
calendar year 2005."
Dean Priddy, CFO and vice president of administration, said, "We are
pleased to report our 180-basis point improvement in gross margin in
the June quarter, which we achieved primarily through yield improvement
across our highest volume power amplifier modules. We have
considerable opportunity to continue to expand our margins this fiscal
year through ongoing cost savings initiatives, such as continued
improvements in manufacturing yields and the ramp of our internal
module assembly operations. Additionally, we are very pleased with the
strength of our balance sheet and particularly with our solid cash flow
from operations and net cash flow."
RF Micro Devices will conduct a conference call at 5:00 p.m. (ET)
today, July 20, 2004, to discuss fiscal 2005 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.fulldisclosure.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
radio frequency integrated circuits (RFICs) for wireless communications
products and applications. The Company is a leading supplier of power
amplifiers, one of the most critical radio frequency (RF) components in
cellular phones. The Company is also the leading manufacturer of GaAs
HBT, which offers distinct advantages over other technologies for the
manufacture of current- and next-generation power amplifiers. The
Company's products are included primarily in cellular phones, base
stations, wireless local area networks (WLANs), cable television modems
and global positioning systems (GPS). The Company derives revenue from
the sale of standard and custom-designed products. The Company offers
a broad array of products including amplifiers, mixers,
modulators/demodulators and single-chip transmitters, Bluetooth-
Registered Trademark- products and receivers and transceivers that
represent 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 other foreign and domestic
manufacturing facilities, our ability to attract and retain skilled
personnel and develop leaders, variability in production yields, our
ability to reduce costs and improve gross margins by implementing
innovative technologies, our ability to bring new products to market,
our ability to increase production capacity quickly in response to
increases in demand for our 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-Registered Trademark-, RFMD-Registered Trademark- and
POLARIS-Trademark- TOTAL RADIO-Trademark- are trademarks of RFMD, LLC.
BLUETOOTH is a trademark owned by Bluetooth SIG, Inc., U.S.A. and
licensed for use by RF Micro Devices, Inc. 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,
2004 2003
-------------- --------------
Total revenue $ 165,774 $ 131,521
Costs and expenses:
Cost of goods sold 100,887 90,283
Research and development 35,346 31,335
Marketing and selling 11,132 10,297
General and administrative 5,836 4,552
Other operating expense 6,603 527
--------- ---------
Total costs and expenses 159,804 136,994
Operating income (loss) 5,970 (5,473)
Loss in equity method investee (1,761) (138)
Other expense, net (1,191) (2,462)
--------- ---------
Income (loss) before
income taxes $ 3,018 $ (8,073)
Income tax expense 5 149
--------- ---------
Net income (loss) $ 3,013 $ (8,222)
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Net income (loss) per share,
diluted $ 0.02 $ (0.04)
========= =========
Weighted average outstanding
diluted shares 191,166 184,032
========= =========
RF MICRO DEVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------------------------
June 30, June 30, March 31,
2004 2003 2004
-----------------------------------------
GAAP net income (loss) $ 3,013 $ (8,222) $ (859)
======= ======= =======
Adjustments:
Amortization of deferred
stock compensation $ 1,864 $ 1,752 $ 1,845
Amortization of intangible assets 1,617 1,861 1,575
In process research and
development charge 6,201 -- --
Impairment charge -- -- 7,678
------- ------- -------
Pro forma net income 12,695 (4,609) 10,239
Plus: Income impact of assumed
conversions for interest on 1.50%
convertible notes 1,042 -- 1,052
------- ------- -------
Pro forma net income (loss) plus
assumed conversion of notes - Numerator
for diluted income (loss) per share $ 13,737 $ (4,609) $ 11,291
======= ======= =======
GAAP weighted average outstanding
diluted shares 191,166 184,032 185,819
Adjustments:
Diluted stock options -- -- 6,193
Assumed conversion of 1.50%
convertible notes 30,144 -- 30,144
------- ------- -------
Pro forma weighted average outstanding
diluted shares 221,310 184,032 222,156
======= ======= =======
Pro forma net income (loss) per
share, diluted $ 0.06 $ (0.03) $ 0.05
======= ======= =======
RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, March 31,
2004 2004
(Unaudited) (Audited)
--------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 191,537 $ 220,915
Short-term investments 142,121 106,930
Accounts receivable, net 81,735 86,287
Inventories 68,162 58,552
Other current assets 10,502 10,098
--------- ---------
Total current assets 494,057 482,782
Property and equipment, net 280,334 280,356
Goodwill 114,806 110,006
Long-term investments 59,609 62,908
Intangible assets, net 51,929 50,165
Other assets 1,897 1,799
--------- ---------
Total assets $1,002,632 $ 988,016
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 64,538 $ 55,548
Other short-term
liabilities, net 294 336
--------- ---------
Total current liabilities 64,832 55,884
Long-term debt, net 324,943 324,626
Other long-term liabilities 4,434 4,368
--------- ---------
Total liabilities 394,209 384,878
Shareholders' equity:
Total shareholders' equity 608,423 603,138
--------- ---------
Total liabilities and
shareholders' equity $1,002,632 $ 988,016
========= =========