FREMONT, Calif., Jan. 28 /PRNewswire-FirstCall/ -- Exar Corporation (Nasdaq: EXAR), today reported financial results for its fiscal 2010 third quarter ended December 27, 2009.
Net sales for the third quarter of fiscal 2010 were $33.9 million compared to net sales of $31.6 million for the prior quarter and $26.3 million for the third quarter of fiscal 2009.
The GAAP gross margin for the third quarter of fiscal 2010 was 50.2% compared to 44.6% for the prior quarter and 40.7% in the third quarter of fiscal 2009.
On a non-GAAP basis, the gross margin for the third quarter of fiscal 2010 was 54.1% compared to 51.5% for the prior quarter and 45.3% in the third quarter of fiscal 2009.
The GAAP net loss for the third quarter of fiscal 2010 was $3.8 million, or $0.09 net loss per share, compared to a net loss of $8.2 million, or $0.19 net loss per share in the prior quarter, and a net loss of $63.8 million, or $1.49 net loss per share, for the third quarter of fiscal 2009.
On a non-GAAP basis, the net income was $0.1 million for the third quarter of fiscal 2010, compared to net loss of $2.7 million, or $0.06 net loss per share, in the previous quarter, and a net loss of $0.7 million, or $0.02 net loss per share, in the third quarter of fiscal 2009.
The Company ended the third quarter of fiscal 2010 with cash, cash equivalents and short-term marketable securities of $218.3 million.
"Revenue and gross margins continued to improve. We achieved breakeven non-GAAP net income and met our short term goal of returning to positive non-GAAP EBITDA. We expect continued improvement in both revenue and gross margins in the current quarter," said Pete Rodriguez, the Company's president and chief executive officer. "We released thirty-five new products in calendar 2009 and are excited about market reaction to our new products, especially Power XR. We believe these new products will continue to gain traction and increasingly contribute to the Company's expected revenue growth."
For the fourth quarter of fiscal 2010 ending March 28, 2010, the Company projects that net sales will be between $35 million and $37 million. The non-GAAP gross margin is expected to be between 54% and 56%. Operating expenses are expected to be between $19.5 million and $20.5 million on a non-GAAP basis.
The Company's statements about its future financial performance or operating plans are based on current information and expectations and the Company undertakes no duty to update such statements. These statements are forward-looking and actual results could differ materially due to various risks and uncertainties, some of which are described herein.
Results Conference Call
The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company's financial results for the third quarter of fiscal 2010, today, Thursday, January 28, 2010 at 1:30 p.m. PST. To access the conference call, please dial (800) 230-1951 by 1:20 p.m. PST and use conference ID number 143156. In addition, a live webcast will also be available.
To access the webcast, please go to the Company's Investor Relations Homepage at: http://www.exar.com. A replay of the call will be available starting at 5:00 p.m. PST this afternoon until 11:59 p.m. PST on February 4, 2010. To access the replay, please dial (800) 475-6701 and use conference ID number 143156.
Product Line Highlights:
Power Management
http://www.exar.com/Common/Content/News.aspx?id=5560
http://www.exar.com/Common/Content/News.aspx?id=5858
DataCom and Storage
http://www.exar.com/Common/Content/News.aspx?id=5572
http://www.exar.com/Common/Content/News.aspx?id=5570
Interface
http://www.exar.com/Common/Content/News.aspx?id=5640
http://www.exar.com/Common/Content/News.aspx?id=5638
http://www.exar.com/Common/Content/News.aspx?id=5738
Safe Harbor Statement
The Company's statements about its future financial performance, changes in gross margins, net sales and operating expenses, resource allocation and its impact on future performance and product development initiatives, design win conversion, distribution and OEM trends, supply chain issues among others, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as customer and distributor relationships; limited visibility associated with customer or distributor demand for the Company's products; the possible loss of, or decrease in orders from, an important customer; cash balances; vendor capacity, quality or throughput constraints; successful integration of acquired businesses; possible disruption in commercial activities as a consequence of terrorist activity, natural disasters, armed conflict or health issues; successful development, market acceptance and demand for the Company's products, including those for which the Company has achieved design wins; competitive factors, such as pricing or competing solutions; customer ordering patterns; accounting considerations related to impairment analyses or acquisition related issues; the level of inventories maintained at the Company's OEMs and distributors; and the Company's successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company's SEC reports, including the Annual Report on Form 10-K for the year ended March 29, 2009 and the Quarterly Reports on Form 10-Q for the periods ended June 28, 2009 and September 27, 2009.
Generally Accepted Accounting Principles
The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.exar.com or the SEC's website at: http://www.sec.gov. For the periods presented, we are disclosing non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, separation costs of executive officers, acceleration of depreciation on abandoned equipment, goodwill and other intangible asset impairment, impairment charges on investments, and income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company's future periods. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.
About Exar
Exar Corporation delivers highly differentiated silicon, software and subsystem solutions for industrial, consumer, and enterprise applications. For nearly 40 years, Exar's comprehensive knowledge of end-user markets along with the underlying analog/mixed signal and digital technologies has enabled innovative solutions that meet the needs of the evolving connected world. Exar's technology portfolio includes solutions for power management, serial interfaces, packet-based and TDM wireline communications, enterprise storage optimization, and data security. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit: www.exar.com.
EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) (Unaudited) DECEMBER 27, MARCH 29, 2009 2009 ASSETS Current assets: Cash and cash equivalents $22,166 $89,002 Short-term marketable securities 196,090 167,341 Accounts receivable (net of allowances of $567 and $572) 13,164 7,452 Accounts receivable, related party (net of allowances of $492 and $736) 4,472 1,796 Inventories 13,623 15,678 Other current assets 4,975 3,274 Deferred income taxes, net 289 62 Total current assets 254,779 284,605 Property, plant and equipment, net 43,858 42,549 Goodwill 2,621 - Intangible assets, net 24,917 7,359 Other non-current assets 4,851 1,876 Total assets $331,026 $336,389 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $8,198 $5,391 Accrued compensation and related benefits 5,533 4,773 Deferred income and allowances on sales to distributors 3,742 3,208 Deferred income and allowances on sales to distributors, related party 9,353 7,040 Other accrued expenses 9,849 7,014 Total current liabilities 36,675 27,426 Long-term lease financing obligations 14,527 15,633 Other non-current obligations 3,977 1,236 Total liabilities 55,179 44,295 Total stockholders' equity Preferred stock, $.0001 par value; 2,250,000 shares authorized; no shares outstanding - - Common stock, $.0001 par value; 100,000,000 shares authorized; 43,794,381 and 43,036,271 shares issued and outstanding at December 27, 2009 and March 29, 2009, respectively (net of treasury shares) 4 4 Additional paid-in capital 718,651 710,787 Accumulated other comprehensive income 1,491 802 Treasury stock at cost, 19,924,369 shares at December 27, 2009 and March 29, 2009 (248,983) (248,983) Accumulated deficit (195,316) (170,516) Total stockholders' equity 275,847 292,094 Total liabilities and stockholders' equity $331,026 $336,389
EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER SEPTEMBER DECEMBER DECEMBER DECEMBER 27, 2009 27, 2009 28, 2008 27, 2009 28, 2008 Net sales $24,458 $23,118 $17,201 $70,686 $58,953 Net sales, related party 9,473 8,470 9,104 25,695 32,311 Total net sales 33,931 31,588 26,305 96,381 91,264 Cost of sales: Cost of sales 11,273 11,843 10,821 36,005 33,339 Cost of sales, related party 4,505 4,088 3,998 12,381 15,053 Amortization of purchased intangible assets 1,108 1,567 782 4,015 2,693 Total cost of sales 16,886 17,498 15,601 52,401 51,085 Gross profit 17,045 14,090 10,704 43,980 40,179 Operating expenses: Research and development 11,674 12,288 8,092 36,256 24,317 Goodwill and other intangible asset impairment - - 59,676 - 59,676 Selling, general and administrative 10,688 11,375 9,099 37,175 30,146 Total operating expenses 22,362 23,663 76,867 73,431 114,139 Loss from operations (5,317) (9,573) (66,163) (29,451) (73,960) Other income and expense, net: Interest income and other, net 1,835 1,700 2,570 5,289 7,775 Interest expense (323) (326) (266) (973) (927) Impairment charges on investments - (245) (34) (317) (1,488) Total other income and expense, net 1,512 1,129 2,270 3,999 5,360 Loss before income taxes (3,805) (8,444) (63,893) (25,452) (68,600) Benefit from income taxes (43) (281) (70) (652) (129) Net loss $(3,762) $(8,163) $(63,823) $(24,800) $(68,471) Loss per share: Basic loss per share $(0.09) $(0.19) $(1.49) $(0.57) $(1.60) Diluted loss per share $(0.09) $(0.19) $(1.49) $(0.57) $(1.60) Shares used in the computation of loss per share: Basic 43,648 43,550 42,889 43,504 42,866 Diluted 43,648 43,550 42,889 43,504 42,866 Note: Certain amounts previously reported above have been reclassified to conform to the current periods' presentation.
EXAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER SEPTEMBER DECEMBER DECEMBER DECEMBER 27, 2009 27, 2009 28, 2008 27, 2009 28, 2008 GAAP gross margin 50.2% 44.6% 40.7% 45.6% 44.0% Stock-based compensation 0.3% 0.5% 0.5% 0.4% 0.5% Amortization of acquired intangible assets 3.3% 5.0% 3.0% 4.2% 3.0% Fair value adjustment of acquired inventories 0.3% 1.4% - 2.4% - Acquisition- related costs - 0.1% - - 0.1% Acceleration of depreciation on abandoned equipment - - 1.1% - 0.3% Non-GAAP gross margin 54.1% 51.5% 45.3% 52.6% 48.0% GAAP research and development expenses $11,674 $12,288 $8,092 $36,256 $24,317 Stock-based compensation 467 748 392 1,701 1,231 Amortization of acquired intangible assets 635 635 200 1,858 726 Acquisition- related costs 128 192 - 877 - Acceleration of depreciation on abandoned equipment - - 437 - 437 Non-GAAP research and development expenses $10,444 $10,713 $7,063 $31,820 $21,923 GAAP selling, general and administrative expenses $10,688 $11,375 $9,099 $37,175 $30,146 Stock-based compensation 751 767 768 2,225 2,012 Amortization of acquired intangible assets 178 179 122 499 446 Acquisition- related costs 297 620 - 4,843 541 Separation costs of executive officers - - - 162 - Acceleration of depreciation on abandoned equipment - - 437 - 437 Non-GAAP selling, general and administrative expenses $9,462 $9,809 $7,772 $29,446 $26,710 GAAP operating expenses $22,362 $23,663 $76,867 $73,431 $114,139 Stock-based compensation 1,218 1,515 1,160 3,926 3,243 Amortization of acquired intangible assets 813 814 322 2,357 1,172 Acquisition- related costs 425 812 - 5,720 541 Separation costs of executive officers - - - 162 - Acceleration of depreciation on abandoned equipment - - 874 - 874 Goodwill and other intangible asset impairment - - 59,676 - 59,676 Non-GAAP operating expenses $19,906 $20,522 $14,835 $61,266 $48,633 GAAP operating loss $(5,317) $(9,573) $(66,163) $(29,451) $(73,960) Stock-based compensation 1,335 1,666 1,278 4,310 3,727 Amortization of acquired intangible assets 1,921 2,381 1,105 6,372 3,865 Fair value adjustment of acquired inventories 92 447 - 2,326 - Acquisition- related costs 425 830 - 5,744 656 Separation costs of executive officers - - - 162 - Acceleration of depreciation on abandoned equipment - - 1,174 - 1,174 Goodwill and other intangible asset impairment - - 59,676 - 59,676 Non-GAAP operating loss $(1,544) $(4,249) $(2,930) $(10,537) $(4,862) GAAP net loss $(3,762) $(8,163) $(63,823) $(24,800) $(68,471) Stock-based compensation 1,335 1,666 1,278 4,310 3,727 Amortization of acquired intangible assets 1,921 2,381 1,105 6,372 3,865 Fair value adjustment of acquired inventories 92 447 - 2,326 - Acquisition- related costs 425 830 - 5,744 656 Separation costs of executive officers - - - 162 - Acceleration of depreciation on abandoned equipment - - 1,174 - 1,174 Goodwill and other intangible asset impairment - - 59,676 - 59,676 Impairment charges on investments - 245 34 317 1,488 Income tax effects 107 (136) (103) (181) (122) Non-GAAP net income (loss) $118 $(2,730) $(659) $(5,750) $1,993 GAAP loss per share $(0.09) $(0.19) $(1.49) $(0.57) $(1.60) Stock-based compensation 0.03 0.04 0.03 0.10 0.09 Amortization of acquired intangible assets 0.04 0.05 0.03 0.15 0.09 Fair value adjustment of acquired inventories - 0.01 - 0.05 - Acquisition- related costs 0.01 0.02 - 0.13 0.02 Separation costs of executive officers - - - 0.00 - Acceleration of depreciation on abandoned equipment - - 0.03 - 0.03 Goodwill and other intangible asset impairment - - 1.39 - 1.39 Impairment charges on investments - 0.01 0.00 0.01 0.03 Non-GAAP diluted earnings (loss) per share $0.00 $(0.06) $(0.02) $(0.13) $0.05 Shares used in earnings (loss) per share --- GAAP 43,648 43,550 42,889 43,504 42,866 The effect of dilutive potential common shares due to reporting Non-GAAP net income 314 - - - - The effect of removing stock-based compensation expense under SFAS 123R for Non-GAAP presentation purpose (109) - - - - Shares used in diluted earnings per share --- Non-GAAP 43,853 43,550 42,889 43,504 42,866 Notes: Certain amounts may not total due to rounding. Certain amounts previously reported above have been reclassified to conform to the current periods' presentation.
SOURCE Exar Corporation
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