Spansion Inc. Reports Fourth Quarter 2009 Results

SUNNYVALE, Calif., Jan. 15 /PRNewswire-FirstCall/ -- Spansion Inc. today announced operating results for its fourth quarter and fiscal year ended December 27, 2009.  Spansion reported fourth quarter of 2009 net sales of $307.1 million and its second consecutive profitable quarter with net income on a U.S. GAAP basis of $4.3 million, or diluted net income per share of $0.02.  Operating income for the quarter was $20.7 million and U.S. GAAP gross and operating margins were 33.1% and 6.7%, respectively.    

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"Spansion's core markets showed strength this quarter and helped the company easily surpass our expectations for revenue in 2009," said John Kispert, Spansion president and CEO.  "With our restructuring and reorganization activities largely behind us, we look forward to continued strong results in 2010."

Non-GAAP net income for the fourth quarter of 2009, excluding restructuring, reorganization, and other special charges and credits, was $29.8 million, or net income per share of $0.17. Reconciliation between U.S. GAAP operating results and non-GAAP operating results is provided following the financial statements in this release.

The company increased its cash position by over $61 million and ended the fourth quarter of 2009 with $324.9 million in cash, compared to $263.6 million at the end of the third quarter of fiscal 2009 and $116.4 million at the end of the fourth quarter of 2008.  

"The continued margin improvement on lower net sales is a result of Spansion's strategy to focus on embedded and targeted wireless applications," said Randy Furr, Spansion CFO.  "The company's sound financial management, including operational expense control and working capital management, helped increase the cash position over $225 million since first quarter 2009, resulting in approximately $325 million of cash and equivalents at year-end."

Restructuring

Spansion's second amended disclosure statement and its plan of reorganization were approved by the U.S. Bankruptcy Court on December 22, 2009.  A confirmation hearing for the plan of reorganization is scheduled for February 11, 2010.  

Prior to the filing of our Annual Report on Form 10-K for the fiscal year ended December 27, 2009, the company may settle, in connection with the company's Chapter 11 bankruptcy proceedings, pre-petition claims of creditors.  Consequently, the company may be required, in accordance with U.S. GAAP, to record adjustments related to any such settlement of pre-petition claims.  These adjustments may change reorganization items and net income presented in the statement of operations, and liabilities subject to compromise presented in the balance sheet.  As a result, there could be a material change to the statement of operations and balance sheet reported in this release.

Spansion Japan

On March 3, 2009, Spansion Japan Limited commenced corporate reorganization proceedings under the Japanese Corporate Reorganization Law (Kaisha Kosei Ho) in the Tokyo District Court. As a result, and in accordance with U.S. GAAP, the financial results of Spansion Japan Limited are not included in the consolidated financial results of Spansion Inc. after March 3, 2009. On January 8, 2010, the company announced that it reached verbal agreements in principle with its former subsidiary, Spansion Japan, to acquire Spansion Japan's distribution business and to obtain foundry services, including wafer and sort services, from Spansion Japan.  Additional details can be read in Spansion's 8-K filing on January 11, 2010, which can be accessed at http://investor.spansion.com.

Use of Non-GAAP Financial Information

The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for or superior to, the company's financial results presented in accordance with U.S. GAAP.  The non-GAAP financial measures presented by the company may be different than the non-GAAP financial measures presented by other companies.

The non-GAAP and supplemental information is provided to enhance the user's overall understanding of the company's operating performance. Specifically, the company believes the non-GAAP information provides useful measures to investors regarding the company's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP.

About Spansion

Spansion (Pink Sheets: SPSNQ) is a leading Flash memory solutions provider dedicated to enabling, storing and protecting digital content in automotive, consumer electronics, networking and wireless applications. Spansion is focused exclusively on designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. For more information, visit http://www.spansion.com.

Spansion®, the Spansion logo, MirrorBit®, MirrorBit® Eclipse™, ORNAND™, EcoRAM™ and combinations thereof, are trademarks and registered trademarks of Spansion LLC in the United States and other countries. Other names used are for informational purposes only and may be trademarks of their respective owners.

Cautionary Statement

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those statements. The risks and uncertainties include the company's ability to: manage costs; achieve adequate liquidity; complete the chapter 11 reorganization process; execute on its new strategic focus; reach a sustainable business model; survive as a stand-alone entity; reach operational efficiency; and reach and sustain profitability. The risks and uncertainties related to the chapter 11 cases include: the company's ability to finalize, execute and obtain necessary court approvals for the definitive agreements with Spansion Japan regarding the sale of the distribution business and foundry services; depend on Spansion Japan for wafer production and distribution of products in Japan, due to actions taken by either (i) Spansion Japan (at the direction of the Spansion Japan trustee or pursuant to orders of the Japanese court in the Spansion Japan corporate reorganization proceeding or otherwise) or (ii) the company or Spansion LLC (pursuant to the orders of the U.S. Bankruptcy Court or otherwise); the company's ability to transfer wafer production capacity to another location or to a third-party foundry, or to find alternative methods of distributing and selling its products in the event that Spansion Japan is not successful or has difficulties in reorganizing; any other actions or orders taken by the U.S. Bankruptcy Court that may impact the company's operations; any negative impacts on the company's business, results of operations, financial position or cash management arrangements; the inability to freely deploy cash resources throughout the company's various geographical locations as all or part of the total worldwide cash may not be available in either the United States or for working capital as a result of limitations inherent in the chapter 11 cases in the United States or Spansion Japan's corporate reorganization proceeding or as a result of various restrictions in certain geographies; the negative impact on relationships with employees, customers, suppliers and contract manufacturers and other stakeholders; the failure of the company to obtain the U.S. Bankruptcy Court orders substantially on the terms applied for; the failure of the company to obtain the requisite approvals of affected creditors or the courts for the proposed plan or reorganization, or to successfully implement such a plan or obtain sufficient exit financing, if required, within the time granted by the U.S. Bankruptcy Court, leading to the likely liquidation of the company's assets; and that following the approval of the proposed plan of reorganization, the company's outstanding common stock will be cancelled. In addition, the instability of the global economy and tight credit markets could continue to adversely impact the company's business in several respects, including adversely impacting credit quality and insolvency risk of the company and its customers and business partners, including suppliers and distributors; bookings; and reductions and deferrals of demand for Spansion products. The company urges investors to review in detail the risks and uncertainties discussed in the company's Securities and Exchange Commission filings, including but not limited to the company's most recent Annual Report on Form 10-K for and Quarterly Reports on Form 10-Q. Unless otherwise required by applicable laws, the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

http://www.spansion.com

SOURCE Spansion Inc.