Exhibit 99.1
FOR IMMEDIATE RELEASE Investor Relations:
September 3, 2002 Pete Groth
207-775-8660
investor@fairchildsemi.com
Corporate Communications:
Fran Harrison
207-775-8576
fran.harrison@fairchildsemi.com
Public Relations Firm:
Barbara Ewen
CHEN PR
781-466-8282
bewen@chenpr.com
NEWS RELEASE
FAIRCHILD SEMICONDUCTOR UPDATES THIRD QUARTER 2002 BUSINESS OUTLOOK
South Portland, Maine - Kirk Pond, president, CEO and chairman of the Board of
Fairchild Semiconductor (NYSE: FCS), one of the largest global suppliers of high
performance power products for multiple end markets, today stated the company's
orders have remained seasonally soft through July and August. Third quarter
revenues now look to be flat to slightly down from second quarter levels,
compared with the company's previous guidance range of flat to slightly up
sequential quarterly revenue growth. Third quarter gross margins are now
expected to be down roughly 1% from the second quarter.
"The summer season is usually a slower time for orders, and this year has been
no exception," said Pond. "Orders from the computing and consumer segments have
been the softest this quarter, while orders from cellular handset suppliers have
been relatively firm. During this slower bookings period, we have seen a more
aggressive pricing environment for our mature discrete, standard logic and
standard linear products.
"As we discussed in our second quarter earnings conference call, our second
quarter ending distributor inventories for our products remained in a normal
range of about 13.5 weeks," said Pond. "Globally our distributors are growing
more conservative in their asset management and are planning to decrease their
inventories this quarter, so we were very encouraged to see that July worldwide
distribution resales were 10% higher than June resales, while July-ending
inventories dropped 3% from June levels. Based on our preliminary reports we
believe that distribution channel inventories for our products will be flat to
down again in August.
"Currently our visibility into the fourth quarter remains limited," stated Pond.
"While we still anticipate a strengthening in orders in September, the recent
more conservative outlooks from industry leading computer and retail electronics
suppliers lead us now to believe the fourth quarter seasonal upturn will be very
modest compared with past years and lower pricing may partially offset increased
unit demand.
"We're continuing our manufacturing efforts to reduce costs and improve factory
utilization," said Pond. "We're ahead of our original plan to ramp our new
assembly and test facility in China next year which we expect to significantly
improve gross margins on our high voltage power products. We also are qualifying
new power processes in our South Portland and Mountaintop fabs which are
allowing us to improve factory utilization and support increased demand while
minimizing additional capital spending. Our new product introductions are on
track and we expect to continue to increase our mix of higher margin power and
analog products. Our second quarter equity offering allowed us to significantly
reduce our debt load which further strengthened our balance sheet. With our
current strong cash balance, reduced interest expenses, and our track record of
14 consecutive quarters of positive operating cash flow, we feel we are
well-positioned to continue to improve our financial results as we move through
this slower-paced market recovery."
Fairchild expects to report its third quarter financial results on October 17,
2002.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS:
The paragraphs above contain forward-looking statements that are based on
management's assumptions and expectations and that involve risk and uncertainty.
Forward-looking statements usually, but do not always, contain forward-looking
terminology such as "we believe," "we expect," or "we anticipate," or refer to
management's expectations about Fairchild's future performance. Many factors
could cause actual results to differ materially from those expressed in
forward-looking statements. Among these factors are the following: changes in
overall global or regional economic conditions; changes in demand for our
products; changes in inventories at our customers and distributors;
technological and product development risks; availability of manufacturing
capacity; availability of raw materials; competitors'
actions; loss of key customers; order cancellations or reduced bookings; changes
in manufacturing yields or output; and significant litigation. These and other
risk factors are discussed in the company's quarterly and annual reports filed
with the Securities and Exchange Commission (SEC) and available at the Investor
Relations section of Fairchild Semiconductor's web site at
investor.fairchildsemi.com or the SEC's web site at www.sec.gov.
ABOUT FAIRCHILD SEMICONDUCTOR:
Fairchild Semiconductor International (NYSE: FCS) is a leading global supplier
of high performance products for multiple end markets. With a focus on
developing leading edge power and interface solutions to enable the electronics
of today and tomorrow, Fairchild's components are used in computing,
communications, consumer, industrial and automotive applications. Fairchild's
10,000 employees design, manufacture and market power, analog & mixed signal,
interface, logic, and optoelectronics products from its headquarters in South
Portland, Maine, USA and numerous locations around the world. Please contact us
on the web at www.fairchildsemi.com.