Tundra Reports Revenue and Earnings at High End of Guidance
OTTAWA, Aug. 28 /PRNewswire-FirstCall/ – Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX:TUN), a leader in System Interconnect, today reported financial results for the first quarter of fiscal 2009, which ended August 3, 2008.
- Q1 Revenue: $18.0 million
- Q1 Pro forma earnings: $1.2 million
- Q1 Pro forma diluted earnings per share: $0.06
- Q1 GAAP Results: earnings of $0.4 million or $0.02 per diluted share
- Q1 Product Revenue: up 4% over previous quarter
Revenue for the first quarter of fiscal year 2009 was $18.0 million, comprised of $8.9 million in the Communications market segment, $6.8 million in the Computing/Storage market segment, and $2.3 million in Design Services. Quarterly revenue represents a 1% increase from the fourth quarter of fiscal year 2008 and a 10% decrease compared to the first quarter in fiscal year 2008. Pro forma earnings for the quarter were $1.2 million or $0.06 per share, compared to earnings of $1.5 million or $0.07 per share in the fourth quarter of fiscal year 2008 and compared to $1.9 million or $0.10 per share in the first quarter of fiscal year 2008. GAAP earnings for the quarter were $0.4 million or $0.02 per diluted share, compared to a loss of $3.9 million or $0.20 per diluted share in the fourth quarter of fiscal year 2008, and a loss of $1.0 million or $0.05 per diluted share in the first quarter fiscal year 2008.
"We are pleased with the financial results of the first quarter of fiscal 2009. Revenue and pro forma earnings were at the high end of the guidance we provided at the close of the fourth quarter, and we also achieved more than 4% growth in product revenue as projected. Our cash position remains strong at more than $58 million and our cash generated from operations was once again positive," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "In the first quarter we adapted our growth strategy to focus on maintaining our leadership position in RapidIO and on addressing new, broader, larger markets by expanding our PCI Express portfolio. We are excited about this strategy, setting up Tundra for steady growth from both product lines, while we continue to carefully manage our financial performance," continued Hoste.
Management offers the following outlook for the second quarter of fiscal year 2009:
– Q2 Revenue is expected to be in the range of $16.5 million to $18.5 million – Q2 Pro forma diluted earnings per share is expected to be in the range of $0.03 to $0.07 "Our outlook for the second quarter is expected to be consistent with first quarter guidance, with a continued focus on delivering solid cash performance," said David Long, Chief Financial Officer, Tundra Semiconductor. Q1-2009 Highlights – Tundra announced that it has been selected by ZTE Corporation, a leading global provider of telecommunications equipment and network solutions, to supply Tundra's high performance PCI Express(R) (PCIe) product for ZTE's Next Generation Platform System Graphics Card. ZTE selected Tundra's high performance semiconductor to improve overall performance on its new Graphics Card. Tundra's PCIe interconnect solution has typical power consumption of 1.3W, and incorporates power management to minimize power consumption during operation. In addition, Tundra's PCIe product offers the flexibility, high performance, small footprint, low power consumption and drop-in compatibility that ZTE required for its new design. – In the quarter Tundra introduced an evaluation platform centered on its Tsi620(TM) multi-standard RapidIO(R) Switch. In addition to the Tundra Tsi620, the multi-platform evaluation platform works in conjunction with Texas Instruments (TI) TMS320TCI6487 high performance multi-core DSP and an Altera(R) Stratix(R) III FPGA to enable prototyping and, ultimately, cost reduction in applications such as high performance wireless and video processing, medical imaging and military signal- processing solutions. The platform will allow customers to use the RapidIO protocol for DSP or processor aggregation, while leveraging the Tsi620's hardware bridging to low cost PCI-enabled processors. The platform offers communication with a variety of cost competitive PCI-enabled microprocessors through a PMC connector, providing additional cost saving opportunities. TI's 3GHz embedded DSP delivers exceptional performance in computationally challenging applications. On the evaluation platform, the Tsi620 interfaces with Altera's Stratix III FPGA to leverage RapidIO over XGMII. This results in low latency while leveraging the RapidIO protocol and allows customers to access RapidIO processor clusters from an FPGA without SerDes. The complete solution allows customers to reduce their time-to-market, and the bill-of-materials (BOM) in end applications by over $100 compared to other solutions. Finally, it is with deep regret that we announced in July that Mike Unger, a long-standing member of the Tundra Board of Directors, passed away after a short illness. Mike served on Tundra's Board of Directors since 2001, after a long and successful career at Nortel Networks, his last role there being President of the Optical Networks Division. As a Director of Tundra's business, and as Chair of the Board's Human Resources, Corporate Governance and Nominating Committee, Mike demonstrated grace, balance, wisdom and good judgment in all that he did, and always had the best interests of Tundra's Shareholders and Employees in mind. Mike's positive attitude and good nature will be sorely missed. Conference Call and Webcast Tundra management will hold a conference call today August 28, 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: 1.416-644-3414 Replay: 1.416-640-1917, Passcode: 21280986#. (Available until Sept 4, 2008) Web Cast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2389420 About Tundra 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, restructuring charges, 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. and Tsi620 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 Tsi620 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 three months ended August 3, 2008 and July 29, 2007 (Canadian dollars, amounts in thousands except per share data) (Unaudited) Three months ended ————————- August 3 July 29 2008 2007 Revenue Product $ 15,696 $ 18,054 Service 2,315 2,004 ————————————————————————- 18,011 20,058 Cost of revenue Product 5,973 5,608 Service 1,594 1,174 ————————————————————————- 7,567 6,782 ————————————————————————- Gross margin 10,444 13,276 Expenses Sales and marketing 3,099 3,028 General and administration 2,062 2,408 Research and development 4,438 5,962 ————————————————————————- 9,599 11,398 Pro forma earnings from operations 845 1,878 Interest and other income 443 686 ————————————————————————- Pro forma earnings before income taxes 1,288 2,564 Income tax provision 95 629 ————————————————————————- PRO FORMA EARNINGS $ 1,193 $ 1,935 ————————————————————————- Pro froma earnings per share Basic $ 0.06 $ 0.10 Diluted $ 0.06 $ 0.10 Weighted average number of common shares outstanding Basic 19,625 19,932 Diluted 19,625 19,970 TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) For the three months ended August 3, 2008 and July 29, 2007 (Canadian dollars, amounts in thousands except per share data) (Unaudited) Three months ended ————————- August 3 July 29 2008 2007 Revenue Product $ 15,696 $ 18,054 Service 2,315 2,004 ————————————————————————- 18,011 20,058 Cost of revenue Product 5,973 5,608 Service 1,594 1,174 ————————————————————————- 7,567 6,782 ————————————————————————- Gross margin 10,444 13,276 Expenses Sales and marketing 3,099 3,028 General and administration 2,062 2,408 Research and development 4,438 5,962 Stock-based compensation 450 488 Amortization of acquisition-related intangible assets 306 1,082 Restructuring charges – 1,659 ————————————————————————- 10,355 14,627 Earnings (loss) from operations 89 (1,351) Interest and other income 443 686 ————————————————————————- Earnings (loss) before income taxes 532 (665) Income tax provision 95 308 ————————————————————————- NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ 437 $ (973) ————————————————————————- Earnings (loss) per share Basic $ 0.02 $ (0.05) Diluted $ 0.02 $ (0.05) Weighted average number of common shares outstanding Basic 19,625 19,932 Diluted 19,625 19,932 TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED BALANCE SHEETS (Canadian dollars, amounts in thousands) August 3 April 30 2008 2008 (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents $ 58,537 $ 23,861 Short-term investments – 35,373 Accounts receivable 8,766 7,470 Inventories 5,998 6,226 Prepaid expenses and other current assets 2,258 3,288 Future income tax asset 2,705 2,970 ————————————————————————- 78,264 79,188 Other assets 1,912 1,919 Investment tax credits recoverable 9,116 8,976 Property, plant and equipment 18,399 16,272 Intangible assets 5,399 5,720 Future income tax asset 5,017 4,638 ————————————————————————- $ 118,107 $ 116,713 ————————————————————————- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 10,769 $ 9,913 Income tax payable 189 131 ————————————————————————- 10,958 10,044 Shareholders' equity Share capital 180,159 181,006 Contributed surplus 10,977 10,087 Deficit (83,987) (84,424) ————————————————————————- 107,149 106,669 ————————————————————————- $ 118,107 $ 116,713 ————————————————————————- TUNDRA SEMICONDUCTOR CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended August 3, 2008 and July 29, 2007 (Canadian dollars, amounts in thousands) (Unaudited) Three months ended ————————- August 3 July 29 2008 2007 Operating activities Earnings (loss) $ 437 $ (973) Items not affecting cash Amortization of property, plant and equipment and asset impairments 1,810 1,997 Amortization of acquisition-related intangible assets 306 1,082 Stock-based compensation 450 488 Investment tax credits recoverable (140) (128) Future income taxes (114) (1,058) ————————————————————————- 2,749 1,408 Cash effect of changes in Accounts receivable (1,296) (1,060) Inventories 228 1,462 Prepaid expenses and other assets 1,037 168 Accounts payable and accrued liabilities 814 (1,263) Income taxes payable 58 (115) ————————————————————————- 3,590 600 ————————————————————————- Investing activities Acquisition of property, plant and equipment (3,922) (4,148) Proceeds on disposal of short-term investments 35,373 42,379 ————————————————————————- 31,451 38,231 ————————————————————————- Financing activities Net proceeds on the issue of common shares – 250 Share repurchase (365) – ————————————————————————- (365) 250 ————————————————————————- Increase in cash and cash equivalents 34,676 39,081 Cash and cash equivalents, beginning of period 23,861 18,340 ————————————————————————- Cash and cash equivalents, end of period 58,537 57,421 Short-term investments, end of period – – ————————————————————————- Cash, cash equivalents and short-term investments, end of period $ 58,537 $ 57,421 ————————————————————————-
SOURCE TUNDRA SEMICONDUCTOR CORPORATION