-- Net Sales for Fiscal Year 2004 Increased 24% over Fiscal Year 2003 -- Net Sales for Fourth Quarter Increased 6% over Third Quarter -- Net Sales Increased 29% Over Year Ago Fourth Quarter
IRVINE, Calif., Nov. 18, 2004 (PRIMEZONE) -- Microsemi Corporation (Nasdaq:MSCC) today reported results for its fourth quarter ended September 26, 2004 and its full 2004 fiscal year.
For the fourth quarter, net sales were $68.0 million, an increase of 29% from net sales of $52.8 million in the year-ago fourth quarter and an increase of 6% from net sales of $64.1 million in the third quarter. Fourth quarter pro forma net income was $8.0 million, or $0.13 per share diluted, up 264% from $2.2 million, or $0.04 per share diluted, in the year-ago fourth quarter and up 33% from the $6.0 million, or $0.10 per share diluted, in the third quarter. Pro forma gross margins for the fourth quarter were 38.9%, a 150 basis point improvement over the third quarter pro forma gross margins of 37.4% and a 610 basis point improvement over the 32.8% pro forma gross margins in the year ago fourth quarter.
For the fiscal year, net sales were $244.8 million, an increase of 24% compared to last fiscal year's net sales of $197.4 million. Fiscal year 2004 pro forma net income totaled $21.5 million, or $0.35 per share diluted, up 378% from pro forma net income of $4.5 million, or $0.08 per share diluted, in fiscal year 2003.
For the fourth quarter, Microsemi reported GAAP earnings for the fourth quarter of $0.9 million, or $0.01 per share diluted, a decline of 44%, compared to GAAP earnings of $1.6 million, or $0.03 per share diluted, in the year-ago fourth quarter and down 74% from GAAP earnings of $3.5 million, or $0.06 per share diluted, in the third quarter. Gross margins based on GAAP for the fourth quarter were 26.7%, a 740 basis point decline from the third quarter GAAP gross margins of 34.1% and a 450 basis point decline from the 31.2% GAAP gross margins in the year-ago fourth quarter.
For the full fiscal year 2004, Microsemi reported GAAP income of $5.6 million, or $0.09 per share diluted, compared to a loss of $11.5 million, or $0.20 loss per share diluted, in fiscal year 2003.
The book-to-bill ratio for the fourth quarter was 1.05.
"We are very pleased with our results for the fourth quarter," stated James J. Peterson, President and CEO. "Net sales and pro forma earnings have increased for eight consecutive quarters and we have seen continuing strength in our markets."
Business Outlook
Sequentially Microsemi expects its sales for the first quarter to be up two to three percent. Microsemi expects its pro forma earnings per share diluted for the first quarter to be $0.13 to $0.14. Sequentially, Microsemi expects its pro forma gross margin percentage for the first quarter to increase 70 to 130 basis points.
Microsemi regularly announces such an outlook quarterly, in the form of issuing a news release and does not undertake to update any of this information between such public announcements, and please refer to the "SAFE HARBOR" STATEMENT below for risks that may affect future actual results.
About Microsemi
Microsemi is a leading designer, manufacturer and marketer of high performance analog and mixed-signal integrated circuits and high reliability 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 integrated circuit solutions that enhance customer designs by improving performance and reliability, battery optimization, reducing size or protecting circuits. The principal markets the company serves include implanted medical, military/aerospace and satellite, notebook computers and monitors, automotive and mobile connectivity applications.
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 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 delay or inability to realize cost savings or productivity gains and to improve capacity utilization, potential cost increases including but not limited to the potential costs of compliance with the new accounting and legal requirements mandated in fiscal year 2005 under Section 404 of the Sarbanes-Oxley Act and any costs of related infrastructure weakness, challenges like 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, product returns, product liability, and other potential business and economic conditions or adverse changes in current or expected industry conditions, potential business disruptions, epidemics, disasters, wars or potential future effects of the tragic events of September 11, 2001, 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, inventory obsolescence, or potential challenges dealing with governmental and customer qualification of our products, manufacturing facilities and processes. In addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer to the factors, uncertainties or risks identified in Microsemi's most recent Form 10-K filed by Microsemi with the SEC and Microsemi's subsequent Forms 10-Q and 8-K, which could identify additional risks. Microsemi may also identify further risks from time to time. 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.
The Microsemi Corporation Logo Can Be Found At: http://Www.Primezone.Com/Newsroom/Prs/?Pkgid=1233
MICROSEMI CORPORATION
Consolidated Income Statements
(In thousands, except per share amounts)
Quarter ended Fiscal year ended
------------------ --------------------
Sept. 28, Sept. 26, Sept. 28, Sept. 26,
2003 2004 2003 2004
------- ------- -------- --------
NET SALES $52,751 $67,985 $197,371 $244,805
Cost of sales 36,270 49,837 136,830 167,377
------- ------- -------- --------
GROSS MARGIN 16,481 18,148 60,541 77,428
Operating expenses:
Selling, general
and administrative 9,547 10,004 37,006 38,880
Research and
development 4,606 4,648 19,368 20,010
Amortization of
intangible assets 304 304 1,320 1,212
Restructuring charges -- 614 686 6,855
Gain on sales of
assets, net (212) -- (2,605) --
Impairments of long
lived assets -- 1,506 -- 2,506
------- ------- -------- --------
Total operating
expenses 14,245 17,076 55,775 69,463
------- ------- -------- --------
OPERATING INCOME 2,236 1,072 4,766 7,965
Interest and other
income (expense),
net 81 126 (15) 305
------- ------- -------- --------
INCOME BEFORE
INCOME TAXES 2,317 1,198 4,751 8,270
Provision for
income taxes 765 302 1,568 2,636
------- ------- -------- --------
Income before
cumulative effect
of a change in
accounting principle 1,552 896 3,183 5,634
Cumulative effect of
a change in accounting
principle, net of
income taxes -- -- (14,655) --
------- ------- -------- --------
NET INCOME(LOSS) $ 1,552 $ 896 $(11,472) $ 5,634
======= ======= ======== ========
Basic earnings (loss)
per share
Earnings before a
change in accounting
principle $ 0.03 $ 0.02 $ 0.05 $ 0.10
Change in accounting
principle -- -- (0.25) --
------- ------- -------- --------
Earnings (loss)
per share $ 0.03 $ 0.02 $ (0.20) $ 0.10
======= ======= ======== ========
Diluted earnings (loss)
per share
Earnings before a
change in accounting
principle $ 0.03 $ 0.01 $ 0.05 $ 0.09
Change in accounting
principle -- -- (0.25) --
------- ------- -------- --------
Earnings (loss) per
share $ 0.03 $ 0.01 $ (0.20) $ 0.09
======= ======= ======== ========
Common and common
equivalent shares
outstanding:
Basic 58,040 59,693 57,906 59,168
Diluted 60,306 62,574 59,018 61,987
MICROSEMI CORPORATION
Schedule Reconciling GAAP Earnings to Pro Forma Earnings
(in thousands)
Quarter ended Fiscal year ended
------------------ -------------------
Sept. 28, Sept. 26, Sept. 28, Sept. 26,
2003 2004 2003 2004
------- ------- -------- -------
GAAP NET INCOME (LOSS) $ 1,552 $ 896 $(11,472) $ 5,634
======= ======= ======== =======
The pro forma amounts have
been adjusted to exclude the
following items:
Excluded from cost
of sales
Transitional idle
capacity and
inventory abandonments $ 832 $ 8,314 $ 2,602 $13,202
Excluded from operating
expenses
Amortization of intangible
assets 304 304 1,320 1,212
Cumulative effect of a
change in accounting
principle for goodwill -- -- 22,705 --
Gain on sales of assets,
net (212) -- (2,605) --
Impairment of long-lived
asset -- 1,506 -- 2,506
Restructuring related
costs -- 614 686 6,855
------- ------- -------- -------
924 10,738 24,708 23,775
Income tax effect 305 3,637 8,711 7,939
------- ------- -------- -------
Net effect of adjustments
to GAAP net Income $ 619 $ 7,101 $ 15,997 $15,836
======= ======= ======== =======
PRO FORMA NET INCOME $ 2,171 $ 7,997 $ 4,525 $21,470
======= ======= ======== =======
Schedule Reconciling Reported financial Ratios
Quarter ended
---------------------------------
Sept. 28, June 27, Sept. 26,
2003 2004 2004
-------- ------- --------
GAAP gross margin 31.2% 34.1% 26.7%
Effect of reconciling
items on gross margin 1.6% 3.3% 12.2%
Pro forma gross margin 32.8% 37.4% 38.9%
To supplement the consolidated financial results prepared under
generally accepted accounting principles ("GAAP"), Microsemi uses
a pro forma measure of results that does not conform with GAAP.
Our pro forma measure of results equals GAAP results adjusted to
exclude certain costs, expenses and gains. We believe that pro
forma results may give an indication of Microsemi's baseline
performance from its ongoing operations before restructuring
related and other gains, losses or other charges that are
considered by management to be outside of the company's core
ongoing operating results. In addition, Microsemi's management
uses pro forma results to measure performance and as a basis for
planning and forecasting future periods. These measures are not
in accordance with, or an alternative for, GAAP and may be
materially different from "pro forma" measures or any other
metrics used by other companies. Microsemi computes pro forma
results principally by adjusting GAAP results with a reversal of
the impact of acquisition-related charges, restructuring charges,
and other charges and credits.
MICROSEMI CORPORATION
Pro Forma Consolidated Income Statements
(In thousands, except per share amounts)
Quarters ended Fiscal year ended
----------------- --------------------
Sept. 28, Sept. 26, Sept. 28, Sept. 26,
2003 2004 2003 2004
------- ------- -------- --------
NET SALES $52,751 $67,985 $197,371 $244,805
Cost of sales 35,438 41,523 134,228 154,175
------- ------- -------- --------
GROSS MARGIN 17,313 26,462 63,143 90,630
Operating expenses:
Selling, general and
administrative 9,547 10,004 37,006 38,880
Research and development 4,606 4,648 19,368 20,010
------- ------- -------- --------
Total operating expenses 14,153 14,652 56,374 58,890
------- ------- -------- --------
OPERATING INCOME 3,160 11,810 6,769 31,740
Interest and other income
(expense), net 81 126 (15) 305
------- ------- -------- --------
INCOME BEFORE INCOME
TAXES 3,241 11,936 6,754 32,045
Provision for income taxes 1,070 3,939 2,229 10,575
------- ------- -------- --------
PRO FORMA NET INCOME $ 2,171 $ 7,997 $ 4,525 $ 21,470
======= ======= ======== ========
Pro Forma Earnings per share:
Basic $ 0.04 $ 0.13 $ 0.08 $ 0.36
Diluted $ 0.04 $ 0.13 $ 0.08 $ 0.35
Common and common equivalent
shares outstanding:
Basic 58,040 59,693 57,906 59,168
Diluted 60,306 62,574 59,018 61,987
MICROSEMI CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 28, 2003 Sept. 26, 2004
-------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 29,353 $ 45,118
Accounts receivable, net 28,866 42,219
Inventories 53,679 54,555
Deferred income taxes 5,239 8,490
Other current assets 1,234 5,447
-------- --------
Total current assets 118,371 155,829
Property and equipment, net 62,973 55,629
Deferred income taxes 10,162 8,772
Goodwill 3,258 3,258
Other intangible assets, net 6,622 5,411
Other assets 4,257 4,098
-------- --------
TOTAL ASSETS $205,643 $232,997
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 31,203 $ 43,487
Long-term debt 449 386
Other long-term liabilities 4,131 4,247
Stockholders' equity 169,860 184,877
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $205,643 $232,997
======== ========