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Fairchild Semiconductor Reports Results for the Second Quarter 2014(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 22 July 2014 Release date- 17072014 - SAN JOSE, Calif. - Fairchild Semiconductor (NASDAQ: FCS), a leading global supplier of power semiconductors, today announced results for the second quarter ended June 29, 2014. Fairchild reported second quarter sales of $371.6 million, up 8 percent from the prior quarter and 4 percent higher than the second quarter of 2013. Fairchild reported second quarter net income of $17.8 million or $0.14 per diluted share compared to a net loss of $9.3 million or $0.07 per diluted share in the prior quarter and a net loss of $7.5 million or $0.06 per diluted share in the second quarter of 2013. Gross margin was 33.4 percent compared to 30.3 percent in the prior quarter and 29.1 percent in the year-ago quarter. Fairchild reported second quarter adjusted gross margin of 33.4 percent, up 310 basis points from the prior quarter and 360 basis points higher than the second quarter of 2013. Gross margin in quarters prior to the second quarter of 2014 excluded accelerated depreciation related to a line closure. Adjusted net income was $25.2 million or $0.20 per diluted share, compared to adjusted net income of $4.9 million or $0.04 per diluted share in the prior quarter and $1.7 million or $0.01 per diluted share in the second quarter of 2013. See the Reconciliation of Net Income to Adjusted Net Income exhibit included in this press release for more details on the other adjustment items. 'Fairchild continues to deliver steady sales growth due to improved execution and broad-based demand strength,' said Mark Thompson, Fairchild's chairman and CEO. 'Our distribution sell-through or POS has grown for six consecutive quarters while our weeks of inventory in the channel decreased again to about 9 weeks. We are managing the supply chain very well to maintain short lead times and lean, yet responsive inventory levels to better support our customers. Our current backlog is modestly higher than a quarter ago and we expect to grow sales again in the third quarter. We generated strong cash flow in the second quarter due to improved earnings coupled with low capital spending and favorable changes in working capital. We repurchased 4 percent of our outstanding shares of stock during the second quarter and we plan to continue returning cash to shareholders. Second Quarter Financials 'Adjusted gross margin increased 3 points sequentially due to better manufacturing execution in the second quarter and improved product mix,' said Mark Frey, Fairchild's executive vice president and CFO. 'R&D and SG&A expenses were $98.0 million, up 2 percent sequentially due to the annual merit increase and equity vesting offset by some one-time benefit cost reductions. Free cash flow was a positive $70 million for the second quarter. We ended the second quarter with total cash and securities exceeding our debt by $120 million which was up slightly from the prior quarter despite repurchasing $69 million in stock. This was due to higher net income, lower capital spending and favorable changes in working capital. Forward Guidance 'We expect sales to be in the range of $370 to $385 million for the third quarter,' said Frey. 'We expect adjusted gross margin to be 34.0 to 35.0 percent due primarily to higher sales and factory loadings as well as improved product mix. We anticipate R&D and SG&A spending to be $97 to $99 million due to higher variable compensation expenses and lack of the one-time cost benefit in the prior quarter offset by seasonal spending reductions. The adjusted tax rate is forecast at 15 percent plus or minus 3 percentage points for the quarter. Consistent with our usual practices, we are not assuming any obligation to update this information, although we may choose to do so before we announce third quarter results.' Adjusted gross margin, adjusted net income and free cash flow are non-GAAP financial measures and should not be considered replacements for GAAP results. See additional information on our non-GAAP financial measures and reconciliations to the most comparable GAAP measures in the appropriate reconciliation exhibit included in this press release as well as our SEC filings related to this announcement. Special Note on Forward Looking Statements: Some of the paragraphs above, including the one headed 'Forward Guidance,' contain forward-looking statements that are based on management's assumptions and expectations and involve risk and uncertainty. Other forward-looking statements may also be found in this news release. Forward-looking statements usually, but do not always, contain forward-looking terminology such as 'we believe,' 'we expect,' or 'we anticipate,' or refer to management's expectations about Fairchild's future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: failure to maintain order rates at expected levels; failure to achieve expected savings from cost reduction actions or other adverse results from those actions; changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks, including the risks of failing to maintain the right to use some technologies or failing to adequately protect our own intellectual property against misappropriation or infringement; availability of manufacturing capacity; the risk of production delays; availability of raw materials at competitive prices; competitors' actions; loss of key customers, including but not limited to distributors; the inability to attract and retain key management and other employees; order cancellations or reduced bookings; changes in manufacturing yields or output; risks related to warranty and product liability claims; risks inherent in doing business internationally; changes in tax regulations or the migration of profits from lower tax jurisdictions to higher tax jurisdictions; regulatory risks and significant litigation. These and other risk factors are discussed in the company's quarterly and annual reports filed with the Securities and Exchange Commission (SEC) and available at the Investor Relations section of Fairchild Semiconductor's web site at investor.fairchildsemi.com or the SEC's web site at www.sec.gov. About Fairchild Semiconductor: Fairchild has a rich history as a pioneer in the semiconductor industry and that pioneering spirit endures today. In an era where diversity can dilute focus and hamper innovation, we specialize in the development and manufacturing of a complete portfolio of low- to high-power solutions for the mobile, industrial, cloud, automotive, lighting, and computing industries. Fairchild is one of the most reliable partners in the industry, offering the shortest time from concept to silicon, expert FAEs for customer support, and a flexible, multi-source supply chain. Our vision is clear - anticipate the power efficiencies demanded by tomorrow's electronic products and deliver an amazing design experience. Delivering this vision is Fairchild's way of making the world a cleaner and a better place. We accomplish this via a deeply human-centric approach: engage our employees, and strive to delight all our customers with great products at a fair price. If you use a smart phone, drive a car, own a modern appliance, or enjoy film animation you have experienced the power of Fairchild. Fairchild is unique in its deployment of design thinking in conceiving and delivering these advanced products. Our foundation is our guiding principles, which recognizes the inseparability of engaged employees and delighted customers, and encourages our employees to simplify, challenge, explore, play, excel, respect, go fast, and be direct. Please contact us on the web at www.fairchildsemi.com. Editorial Contacts Dan Janson Investor Relations (207) 775-8660 [email protected] Sajal Sahay WW Corporate Marketing (408) 221-9615 [email protected] (c) 2014 Electronic News Publishing - |