FINANCIAL CONTACT: David R. Sonksen
Executive Vice President and Chief Financial Officer
Tel: (949) 221-7101
EDITORIAL CONTACT: Cliff Silver
Manager, Corporate Communications
Tel: (949) 221-7112
Microsemi Reports Improved Sales and Profits Over
Prior Quarter
o Second Quarter Results beat Consensus Estimates
o Revenues Increase 5% over First Quarter
o Positive Book-to-Bill Ratio of 1.06 for Second Quarter
Irvine, CA - (BusinessWire) - April 24, 2003 - Microsemi Corporation (Nasdaq:
MSCC) today reported results for its fiscal 2003 second quarter.
Net sales for the quarter ended March 30, 2003 were $48.2 million, down 12%
compared to net sales of $55.0 million in the second quarter of 2002, but up 5%
from net sales of $45.9 million in the first quarter. Second quarter pro forma
net income was $0.8 million, or $0.03 per share diluted, down 69% compared to
$2.6 million, or $0.09 per share diluted, in the second quarter of last year but
up 385% from the $0.2 million, or $0.01 per share diluted, in our first quarter
of fiscal year 2003. Pro forma earnings are explained in the attached tables.
James J. Peterson, President and CEO, stated that, "we are very pleased with our
second quarter results which reflect a 5% sequential quarter over quarter
increase in sales and a $0.02 sequential increase in pro forma earnings per
share diluted."
Revenues for the first six months of fiscal 2003 were $94.1 million compared to
the first six months of last fiscal year of $112.0 million. Pro forma net income
for the first six months of fiscal year 2003 totaled $1.0 million, or $0.03 per
share diluted, compared to $7.6 million, or $0.25 per share diluted, in the
first half of fiscal year 2002.
The book-to-bill ratio for the quarter was 1.06.
Our earnings as calculated under Generally Accepted Accounting Principles for
the second quarter were $2.1 million, or $0.07 per share diluted, compared to
losses of $2.6 million, or $0.09 per share diluted in the second quarter of last
year and $1.6 million, or $0.06 per share diluted in our first quarter of fiscal
year 2003. Our earnings as calculated under Generally Accepted Accounting
Principles for the first six months of fiscal year 2003 were $0.5 million, or
$0.02 per share diluted, compared to $1.6 million, or $0.06 per share diluted in
the first six months of last year.
Business Outlook
The book-to-bill ratio for the first two quarters has seen positive change.
Based upon this and other factors, the sales outlook for the third quarter is
expected to be up 2 to 4 percent over the second quarter. Pro forma earnings per
share diluted for the third quarter are expected to be between $0.03 and $0.05.
Non pro forma (or GAAP) based earnings are expected to be $0.02 to $0.04 per
share diluted reflecting the $0.3 million after tax charge for amortization of
acquisition-related intangible costs. The gross margin percentage for the third
quarter is expected to increase 20 to 50 basis points over the second quarter.
About Microsemi
Microsemi is a leading designer, manufacturer and marketer of analog,
mixed-signal and discrete semiconductors. The company's semiconductors manage
and control or regulate power, protect against transient voltage spikes and
transmit, receive and amplify signals.
Microsemi's products include individual components as well as complete circuit
solutions that enhance customer designs by improving reliability, battery
optimization, reducing size or protecting circuits. Markets the company serves
include mobile connectivity, computer/peripherals, telecom/datacom, medical,
industrial, automotive, digital media, space/satellite and military.
More information may be obtained by contacting the company directly or by
visiting its web site at http://www.microsemi.com.
Please read the following factors that can materially affect Microsemi's future
results.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Any statements set forth in the news release that are not entirely
historical and factual in nature are forward-looking statements. For instance,
all statements of belief and expectations are forward-looking statements.
Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Potential risks and
uncertainties include, but are not limited to, such factors as the difficulties
regarding the making of estimates and projections, the hiring and retention of
qualified technical personnel in a competitive labor market, acquiring and
integrating new operations or assets, closing or disposing of operations or
assets, rapidly changing technology and product obsolescence, the potential
inability to realize cost savings or productivity gains and to improve capacity
utilization, potential cost increases, weakness or competitive pricing
environment of the marketplace, uncertain demand for and acceptance of the
company's products, results of in-process or planned development or marketing
and promotional campaigns, changes in demand for products, difficulties
foreseeing future demand, effects of limited visibility of future sales,
potential non-realization of expected orders or non-realization of backlog,
unexpected business and economic conditions or adverse changes in current or
expected industry conditions, business disruptions, future effects of the tragic
events of September 11, variations in customer order preferences, fluctuations
in market prices of the company's common stock and potential unavailability of
additional capital on favorable terms, difficulties in implementing company
strategies, dealing with environmental matters or litigation, difficulties in
determining and maintaining adequate insurance coverage, difficulties protecting
patents and other proprietary rights, and inventory obsolescence. In addition to
these factors and any other factors mentioned elsewhere in this news release,
the reader should refer as well to the factors, uncertainties or risks
identified in the company's most recent Form 10-K filed on December 19, 2002,
and the Form 10-Q filed on February 12, 2003, filed by Microsemi with the
Securities and Exchange Commission. Additional risk factors may be identified
from time to time in Microsemi's future filings. Microsemi does not undertake to
supplement or correct any information in this release that is or becomes
incorrect.
Investor Inquiries: David R. Sonksen, Microsemi Corporation, Irvine, CA (949)
221-7101.
(Financial Tables Follow)
- (more) -
MICROSEMI CORPORATION
Pro Forma Consolidated Income Statements
(In thousands, except per share amounts)
Quarter ended Six months ended
----------------------------- -----------------------------
March 31, March 30, March 31, March 30,
2002 2003 2002 2003
NET SALES $ 54,969 $ 48,217 $ 111,987 $ 94,086
Cost of sales 35,035 32,981 70,234 64,560
------------ ------------ ------------ ------------
GROSS MARGIN
19,934 15,236 41,753 29,526
Operating expenses:
Selling, general and administrative 10,088 9,091 19,207 18,108
Research and development 5,793 4,825 10,947 9,788
------------ ------------ ------------ ------------
Total operating expenses 15,881 13,916 30,154 27,896
------------ ------------ ------------ ------------
OPERATING INCOME 4,053 1,320 11,599 1,630
Interest and other expense, net (220) (105) (314) (165)
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 3,833 1,215 11,285 1,465
Provision for income taxes 1,265 401 3,724 483
------------ ------------ ------------ ------------
PRO FORMA NET INCOME $ 2,568 $ 814 $ 7,561 $ 982
============ ============ ============ ============
Pro Forma Earnings per share:
Basic $ 0.09 $ 0.03 $ 0.27 $ 0.03
Diluted $ 0.09 $ 0.03 $ 0.25 $ 0.03
Common and common equivalent shares outstanding:
Basic 28,607 28,934 28,469 28,920
Diluted 29,855 29,340 29,987 29,244
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MICROSEMI CORPORATION
Schedule Reconciling Pro Forma Earnings to GAAP Earnings
(in thousands, except per share amounts)
The pro forma amounts have been adjusted to exclude the following items:
Quarter ended Six months ended
----------------------------------- ----------------------------------
March 31, March 30, March 31, March 30,
2002 2003 2002 2003
Amortization of goodwill, in fiscal year
2002, and other intangible assets $ (844) $ (390) $ (1,936) $ (713)
Restructuring charges:
Inventory write-off (1,580) - (1,580) (200)
Workforce reduction (2,047) - (2,047) (686)
Facility and asset abandonment (1,688) - (1,688) (477)
Excess manufacturing cost - - - (584)
Reorganization charges - (509) - (509)
Assets impairment (1,607) - (1,607) -
Gain on sales of assets, net - 2,821 - 2,393
-------------- ---------------- --------------- ---------------
(7,766) 1,922 (8,858) (776)
Income tax effect 2,563 634 2,923 (256)
-------------- ---------------- --------------- ---------------
Net effect of pro forma
adjustments on net income $ (5,203) $ 1,288 $ (5,935) $ (520)
============== ================ =============== ===============
Adjustments on (Loss) Earnings per
share:
Basic $ (0.18) $ 0.04 $ (0.21) $ (0.01)
Diluted $ (0.18) $ 0.04 $ (0.21) $ (0.01)
Common and common equivalent shares outstanding:
Basic 28,607 28,934 28,469 28,920
Diluted 28,607 29,340 28,469 28,920
Microsemi provides unaudited pro forma results as additional information for its
operating results. These measures are not in accordance with, or an alternative
for, generally accepted accounting principles (GAAP) and may be different from
pro forma measures used by other companies.
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MICROSEMI CORPORATION
Unaudited Consolidated Income Statements
(In thousands, except per share amounts)
Quarter ended Six months ended
-------------------------------------- ---------------------------------
March 31, March 30, March 31, March 30,
2002 2003 2002 2003
NET SALES $ 54,969 $ 48,217 $ 111,987 $ 94,086
Cost of sales 36,615 33,490 71,814 66,330
---------------- ------------------ ------------- --------------
GROSS MARGIN 18,354 14,727 40,173 27,756
Operating expenses:
Selling, general and administrative 10,088 9,091 19,207 18,108
Research and development 5,793 4,825 10,947 9,788
Amortization of goodwill, in 2002,
and other intangible assets 844 390 1,936 713
Restructuring charges 3,735 - 3,735 686
Gain on sales of assets, net - (2,821) - (2,393)
Asset impairment 1,607 - 1,607 -
---------------- ------------------ ------------- --------------
Total operating expenses 22,067 11,485 37,432 26,902
---------------- ------------------ ------------- --------------
OPERATING INCOME (LOSS) (3,713) 3,242 2,741 854
Interest and other expense, net (220) (105) (314) (165)
---------------- ------------------ ------------- --------------
INCOME (LOSS) BEFORE
INCOME TAXES (3,933) 3,137 2,427 689
Provision (Benefit) for income
taxes (1,298) 1,035 801 227
---------------- ------------------ ------------- --------------
NET INCOME (LOSS) $ (2,635) $ 2,102 $ 1,626 $ 462
================ ================== ============= ==============
Earnings (Loss) per share:
Basic $ (0.09) $ 0.07 $ 0.06 $ 0.02
Diluted $ (0.09) $ 0.07 $ 0.06 $ 0.02
Common and common equivalent shares outstanding:
Basic 28,607 28,934 28,469 28,920
Diluted 28,607 29,340 29,987 29,123
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MICROSEMI CORPORATION
Condensed Unaudited Consolidated Balance Sheets
(in thousands)
September 29, 2002 March 30, 2003
------------------ --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 23,060 $ 22,583
Accounts receivable, net 32,435 28,887
Inventories 52,040 50,407
Other current assets 6,434 6,182
------------- ----------------
Total current assets 108,059
113,969
Property and equipment, net 65,608 62,553
Other assets 37,191 39,146
------------- ----------------
TOTAL ASSETS $ 216,768 $ 209,758
============= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 29,922 $ 24,993
Long-term debt 4,356 494
Other long-term liabilities 4,044 3,993
Stockholders' equity 178,446 180,278
------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 216,768 $ 209,758
============= ================