OTTAWA, June 5 /PRNewswire-FirstCall/ - Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX:TUN), a leader in System Interconnect, today reported financial results for the fourth quarter of fiscal 2008, which ended April 30, 2008.
OTTAWA, June 5 /PRNewswire-FirstCall/ – Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX:TUN), a leader in System Interconnect, today reported financial results for the fourth quarter of fiscal 2008, which ended April 30, 2008.
Q4-2008 RESULTS: – Q4 Revenue: $17.9 million – Q4 Pro forma earnings: $1.5 million – Q4 Pro forma diluted earnings per share: $0.07 – Q4 GAAP Results: loss of $3.9 million or $0.20 per diluted share
Revenue for the fourth quarter of fiscal year 2008 was $17.9 million, comprised of $8.6 million in the Communications market segment, $6.4 million in the Computing/Storage market segment, and $2.9 million in Design Services. Quarterly revenue represents a 22% increase from the third quarter of fiscal year 2008 and a 19% decrease over the fourth quarter in fiscal year 2007. Pro forma earnings for the quarter were $1.5 million, compared to earnings of $0.3 million in the third quarter of fiscal year 2008 and compared to $3.4 million in the fourth quarter of fiscal year 2007. GAAP loss for the quarter was $3.9 million or $0.20 per diluted share, compared to a loss of $54.0 million or $2.73 loss per diluted share in the third quarter in fiscal year 2008, and earnings of $1.7 million or $0.08 per diluted share in the fourth quarter fiscal year 2007. The GAAP loss in the fourth quarter of fiscal 2008 was driven by a $4.7 million write down of an intangible asset and the GAAP loss in the third quarter of fiscal 2008 was driven largely by a goodwill impairment charge of $50.6 million.
Fiscal Year 2008 RESULTS: – FY2008 Revenue: $70.6 million – FY2008 Pro forma earnings: $4.6 million – FY2008 Pro forma diluted earnings per share: $0.23 – FY2008 GAAP Results: loss of $59.6 million or $3.00 per diluted share
Revenue for fiscal year 2008 was $70.6 million, a 17% decrease over fiscal year 2007. Pro forma earnings of $4.6 million represent a 57% decrease compared to $10.8 million in fiscal year 2007. Pro forma diluted earnings per share of $0.23 represent a 57% decrease compared to $0.54 in fiscal year 2007. For the fiscal year, GAAP losses were $59.6 million or $3.00 per diluted share, down from earnings of $2.0 million or $0.10 per diluted share in fiscal year 2007.
"We are pleased with the operational financial results in the fourth quarter which were at the high end of the guidance we provided in March. We see several indicators showing that the previously soft telecommunications market is stabilizing and that the inventory correction at some of our key accounts is now behind us and this is having a positive impact on our revenues. Furthermore, our Design Services team, SLE, had a very strong quarter with revenue exceeding our expectations," said Daniel Hoste, President and Chief Executive Officer, Tundra.
"Looking forward to fiscal year 2009, we are expecting much more stability in the telecommunications market and in the currency. We expect that our design wins and leadership products in RapidIO, PCI Express and VME will drive future growth," continued Hoste.
Management offers the following outlook for the first quarter of fiscal year 2009:
– Q1 Revenue is expected to be in the range of $16.5 million to $18.5 million – Q1 Pro forma diluted earnings per share is expected to be in the range of $0.02 to $0.06
"Revenue for the first quarter of fiscal 2009 is expected to be relatively flat, however our products business is expected to continue its growth trend at a rate of 2% to 4% in the quarter," said David Long, Chief Financial Officer, Tundra. "We expect our core products business to increase in revenue while we expect design services revenue to return to a regular run rate."
Q4-2008 Highlights Corporate Highlights: – On June 3, Tundra announced that it had terminated a product acquisition agreement and a license agreement with IBM. The acquired product was to be based on an IBM Power Architecture(TM) 90 nm processor core. IBM recently notified Tundra that the performance of the core is lower than previously stated. As a result of the decision to terminate the product acquisition agreement, and based on Tundra's review of the current IBM performance data for the 65nm core, Tundra has also made the decision to terminate the license agreement signed in November 2007. Tundra intends to actively pursue alternative means of executing against its smart System Interconnect (sSI) strategy to bring intelligent System Interconnect solutions to broader global markets. – On April 7, the Toronto Stock Exchange (TSX) accepted the Company's notice of intention to make a normal course issuer bid. The Tundra Board of Directors approved Tundra's purchase of up to 983,530 common shares (representing approximately 5% of the 19,670,613 outstanding Tundra common shares as of March 31, 2008). The normal course issuer bid commenced on April 9, 2008 and will terminate on April 8, 2009 or at such time as Tundra has purchased the maximum number of shares permitted under the bid. Management and the Board of Directors of Tundra believe that the market price of Tundra's common shares, from time to time, may not reflect the inherent value of the Corporation. – Tundra recently launched a new website, and "MyTundra" customer portal. The enhanced features and functionality of this new online site and portal further expand Tundra's world-class customer support offering to its global customer base. The site enhancements were created with Tundra's customers in mind, making more options available than ever before to assist communications and computing/storage customers with their market-leading designs. New features include a MyTundra portal – a unique service environment that provides visibility and secure access to Tundra's comprehensive portfolio of product documentation and support tools and resources; enhanced search capabilities to obtain information and obtain technical support quickly; and improved navigation throughout the website enabling easy access to all areas of the site. – Also in the quarter, Tundra appointed Mr. Bob Solberg to the position of Vice President of Design Services. Mr. Solberg is a co-founder of Silicon Logic Engineering and has more than 25 years of experience in leading design services teams and will be a significant asset to the Tundra Leadership Team. Prior to co-founding SLE, Mr. Solberg worked at Cray Research where he held multiple engineering management positions, including management roles for several of Cray's J90 series and T3E supercomputer projects. Product Highlights: – Tundra's Tsi381(TM) PCI Express(R) Bridge was selected by I-View Communication for its high performance PCI Express DVR video capture cards for next generation surveillance systems. The I-View PCIe video capture card combines the high performance ACP-915 PCI One Chip Decoder from Alogics, and the reliable x1 PCIe bridging capability of Tundra's Tsi381 PCIe Bridge. I-View evaluated a number of PCIe to PCI bridges for their design and selected the Tundra Tsi381 for its superior performance, quality and reliability. I-View was able to easily integrate the Tsi381 with Alogics ACP-915, enabling it to achieve significantly better performance than any other solution. This performance advantage allowed I-View to quickly bring to market a product that provides its customers the best video quality and frame rate. The combined ACP-915/Tsi381 solution offered I-View maximum video throughput performance over the PCIe interface, enabling I-View's video capture card to produce the highest video quality for its customers. – Texas Instruments has selected the Tsi574(TM) RapidIO(R) Switch to cluster its wireless infrastructure optimized DSPs on its new 6484 AMC evaluation platform. The 1 GHz single core DSP and evaluation module targets Beyond3G applications including HSPA/HSPA+, LTE and WiMAX Wave 2. The evaluation module includes the Tsi574 RapidIO Switch to interconnect TI's processors on the board, leveraging Tundra's high performance interconnect capability and Tundra's interoperability track record with TI's suite of wireless DSPs. High bandwidth applications, such as wireless infrastructure designs, require multiple high performance DSPs for data processing. Tundra's RapidIO Switch technology allows multiple DSPs on a single board to pass high bandwidth data at maximum transfer rates. – Tundra recently introduced the Tsi572(TM) Serial RapidIO Switch, a scalable, low power switch, which adds another processor aggregation solution to Tundra's industry-leading portfolio of RapidIO products. The Tsi572 is ideal for cost sensitive applications, allowing designers to take advantage of the powerful functionality of Tundra's RapidIO Switches, including; scalability, performance, hardware multicast, and low latency. The new Tsi572 Switch is the lowest power RapidIO Switch available on the market today, compliant with the RapidIO 1.3 specification. Tundra's new Tsi572 Switch offers designers the performance and reliability of RapidIO with lower port count and lower power consumption, at a cost that suits their high volume applications. Designers can rely on the proven interoperability of the Tsi57x product line and socket compatibility of the Tsi572 with the Tsi576(TM). The Tsi572 is ideally suited for a broad spectrum of wireless, wireline, and imaging/video applications. – Tundra also announced that VMETRO, a leader in embedded computing solutions, has selected the Tsi578(TM) Serial RapidIO Switch to enable high performance processing, for its new Quad-Core Processing Engine and Single Board Computer. VMETRO recently launched two new 6U VPX-REDI offerings, which use the Tsi578 for large-scale DSP aggregation and Tundra's Tsi148(TM) VME Bridge, the highest bandwidth VMEbus bridge available on the market today. By using Tundra's Tsi578 RapidIO switch, VMETRO's VPX multi-processor boards provide a system fabric with the features their customers demand – low latency, low overhead, high throughput, peer-to-peer communication, reliability, and scalability. No other fabric offers this complete set of features. Customer's deploying VMETRO's new MPE730 and SBC731 with RapidIO across the VPX backplane will get the performance and reliability they need for their multi-processing applications. Conference Call and Webcast
Tundra management will hold a conference call today June 5, 2008 at 5:00pm EST to discuss additional details regarding this earnings update. You can access the conference call via any of the following:
Teleconference: 1.416-644-3416 Replay: 1.416-640-1917, Passcode: 21271801#. (Available until June 14, 2008)
Web Cast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2285140 or www.tundra.com
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading communications, computing and storage companies with System Interconnect products, intellectual property (IP) and design services backed by world-class customer service and technical support. Tundra's track record of product leadership includes over a decade of bridges and switches enabling key industry standards: RapidIO(R), PCI, PCI-X, PCI Express(R), Power Architecture(TM), VME, HyperTransport(TM), Interlaken, and SPI4.2. Tundra's products deliver high functional quality and simplified board design and layout, with specific focus on system level signal integrity. Tundra's design services division, Silicon Logic Engineering, Inc., offers industry-leading ASIC and FPGA design services, semiconductor intellectual property and product development consulting. Tundra's technology connects critical components in high performance embedded systems around the world. For more information, please visit www.tundra.com.
The difference between pro forma and GAAP earnings is due to stock-based compensation expense, goodwill impairment charges and amortization of intangibles and other assets associated with Tundra's acquisitions. Tundra uses pro forma measures internally to evaluate and manage operating performance as well as to forecast and plan.
Tundra Semiconductor Corporation is a public company with common shares listed for trading on the Toronto Stock Exchange (TSX:TUN) in Canada. All figures, unless otherwise noted, are stated in Canadian dollars in accordance with accounting principles generally accepted in Canada.
Forward Looking Information
The Company cautions that the forward-looking information in this release is based on certain assumptions made by the Company that may prove to be inaccurate. Assumptions made include assumptions about: stability of the telecommunications market, appropriate customer inventory levels, minimal currency fluctuation, the movement of products from design wins to production within customer products, the Company's ability to bring to market the products currently under development, as well as stability of customer need for design services.
Furthermore, the Company cautions that the forward-looking statements in this release are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to variable factors such as customer demand and customer inventory management, customer relationships, product development, new services offerings, product shipping schedules, product mix, competitive products and services, pricing pressure, changes in the Company's target markets, including but not limited to the telecommunications market, and currency fluctuation . The Company assumes no obligation to update or revise any forward-looking statements. Additional information identifying risks and uncertainties is contained in the Company's filings with the various provincial securities commissions which are available online at www.sedar.com.
TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor Corporation in Canada, the United States, the European Union and the People's Republic of China. Design.Connect.Go. Tsi148, Tsi381, Tsi572, Tsi576, Tsi574 Tsi578, are trademarks of Tundra Semiconductor Corporation. RapidIO is a trademark of the RapidIO Trade Association, Inc. The PowerPC name, Power Architecture name, and the PowerPC logotype are trademarks of International Business Machines Corporation, used under license therefrom. Other registered and unregistered trademarks are the property of their respective owners.
Development of the Tundra Tsi57x product line was made possible in part with the assistance of the Technology Partnerships Canada Program.
(C) Copyright 2008 Tundra Semiconductor Corporation. All rights reserved. Information subject to change without notice. TUNDRA SEMICONDUCTOR CORPORATION PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS For the fiscal quarters ended April 30, 2008 and April 30, 2007 (Canadian dollars, amounts in thousands except per share data) Three months ended Year ended ———————— ———————— April 30 April 30 April 30 April 30 2008 2007 2008 2007 (Unaudited) (Unaudited) (Audited) (Audited) Revenue: Product $ 15,024 $ 19,144 $ 61,525 $ 75,208 Service 2,888 3,016 9,061 10,052 ————————————————————————- 17,912 22,160 70,586 85,260 Cost of revenue: Product 5,184 5,192 20,027 22,258 Service 1,930 1,583 5,656 5,495 ————————————————————————- 7,114 6,775 25,683 27,753 ————————————————————————- Gross margin 10,798 15,385 44,903 57,507 Expenses: Sales and marketing 2,822 3,869 11,548 14,220 General and administration 1,745 2,457 8,009 9,810 Research and development 4,891 6,608 21,964 25,742 ————————————————————————- 9,458 12,934 41,521 49,772 Pro forma earnings from operations 1,340 2,451 3,382 7,735 Interest and other income 416 39 2,374 2,256 ————————————————————————- Pro forma earnings before income taxes 1,756 2,490 5,756 9,991 Income tax provision (recovery) 280 (878) 1,107 (776) ————————————————————————- PRO FORMA EARNINGS $ 1,476 $ 3,368 $ 4,649 $ 10,767 ————————————————————————- Pro forma earnings per share Basic $ 0.07 $ 0.17 $ 0.23 $ 0.54 Diluted $ 0.07 $ 0.17 $ 0.23 $ 0.54 Weighted average number of common shares outstanding Basic 19,694 19,955 19,848 19,926 Diluted 19,694 19,995 19,916 20,041 TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME(LOSS) For the fiscal quarters ended April 30, 2008 and April 30, 2007 (Canadian dollars, amounts in thousands except per share data) Three months ended Year ended ———————— ———————— April 30 April 30 April 30 April 30 2008 2007 2008 2007 (Unaudited) (Unaudited) (Audited) (Audited) Revenue: Product $ 15,024 $ 19,144 $ 61,525 $ 75,208 Service 2,888 3,016 9,061 10,052 ————————————————————————- 17,912 22,160 70,586 85,260 Cost of revenue: Product 5,184 5,192 20,027 22,258 Service 1,930 1,583 5,656 5,495 ————————————————————————- 7,114 6,775 25,683 27,753 ————————————————————————- Gross margin 10,798 15,385 44,903 57,507 Expenses: Sales and marketing 2,822 3,869 11,548 14,220 General and administration 1,745 2,457 8,009 9,810 Research and development 4,891 6,608 21,964 25,742 Stock-based compensation 592 549 2,274 3,105 Amortization of acquisition-related intangible assets 889 1,166 3,876 4,982 Restructuring charges (250) – 3,713 – ————————————————————————- 10,689 14,649 51,384 57,859 Earnings (loss) from operations 109 736 (6,481) (352) Interest and other income 416 39 2,374 2,256 Impairment of intangible assets (4,749) – (4,749) – Impairment of goodwill 590 – (49,981) – ————————————————————————- Earnings (loss) before income taxes (3,634) 775 (58,837) 1,904 Income tax provision (recovery) 280 (878) 786 (141) ————————————————————————- NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ (3,914) $ 1,653 $ (59,623) $ 2,045 ————————————————————————- Earnings (loss) per share Basic $ (0.20) $ 0.08 $ (3.00) $ 0.10 Diluted $ (0.20) $ 0.08 $ (3.00) $ 0.10 Weighted average number of common shares outstanding Basic 19,694 19,955 19,848 19,926 Diluted 19,694 19,995 19,848 20,041 TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED BALANCE SHEETS (Canadian dollars, amounts in thousands) (Audited) April April 2008 2007 ASSETS Current assets Cash and cash equivalents $ 23,861 $ 18,340 Short-term investments 35,373 42,379 Accounts receivable 7,470 7,745 Inventories 6,226 9,282 Prepaid expenses and other current assets 3,288 4,497 Future income tax asset 2,970 2,997 ————————————————————————- 79,188 85,240 Other assets 1,919 1,895 Investment tax credits recoverable 8,976 8,370 Property, plant and equipment 16,272 17,747 Intangible assets 5,720 9,770 Goodwill – 50,571 Future income tax asset 4,638 3,037 ————————————————————————- $ 116,713 $ 176,630 ————————————————————————- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 9,913 $ 11,125 Income tax payable 131 105 ————————————————————————- 10,044 11,230 Shareholders' equity Share capital 181,006 183,204 Contributed surplus 10,087 6,997 Deficit (84,424) (24,801) ————————————————————————- 106,669 165,400 ————————————————————————- $ 116,713 $ 176,630 ————————————————————————- TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the fiscal quarters ended April 30, 2008 and April 30, 2007 (Canadian dollars, amounts in thousands) Three months ended For the year ———————— ———————— April 30 April 30 April 30 April 30 2008 2007 2008 2007 (Unaudited) (Unaudited) (Audited) (Audited) Operating activities: Earnings (loss) $ (3,914) $ 1,653 $ (59,623) $ 2,045 Items not affecting cash: Amortization of property, plant and equipment and asset impairments 2,077 2,187 8,357 9,786 Amortization of acquisition-related intangible assets 889 1,166 3,876 4,982 Stock-based compensation 592 549 2,274 3,105 Investment tax credit recoverable 1,325 (250) (606) (2,636) Future income taxes (1,471) 122 (1,574) (512) Impairment of intangible assets 4,749 – 4,749 – Impairment of goodwill (590) – 49,981 – ————————————————————————- 3,657 5,427 7,434 16,770 Cash effect of changes in: Accounts receivable (617) 1,227 275 1,761 Inventories 1,057 1,411 3,056 (3,127) Prepaid expenses and other assets (341) (1,038) 1,162 (530) Accounts payable and accrued liabilities (500) (3,999) (829) (627) Income taxes payable 205 (1,104) 26 (822) ————————————————————————- 3,461 1,924 11,124 13,425 ————————————————————————- Investing activities: Acquisition of capital assets (299) (1,678) (6,685) (10,441) Acquisition of business – (216) – (18,744) Purchased intangibles – – (4,749) – Acquisition of short-term investments – – (35,373) (42,379) Proceeds on disposal of short-term investments – – 42,379 11,393 ————————————————————————- (299) (1,894) (4,428) (60,171) ————————————————————————- Financing activities: Net proceeds on the issue of common shares – 166 426 1,842 Repurchase of shares (200) (1,020) (1,601) (1,020) Repayment of debt – – – (650) ————————————————————————- (200) (854) (1,175) 172 ————————————————————————- Increase (decrease) in cash and cash equivalents 2,962 (824) 5,521 (46,574) Cash and cash equivalents, beginning of period 20,899 19,164 18,340 64,914 ————————————————————————- Cash and cash equivalents, end of period 23,861 18,340 23,861 18,340 Short-term investments, end of period 35,373 42,379 35,373 42,379 ————————————————————————- Cash, cash equivalents and short-term investments, end of period $ 59,234 $ 60,719 $ 59,234 $ 60,719 ————————————————————————-
SOURCE TUNDRA SEMICONDUCTOR CORPORATION