OTTAWA, ON, Aug. 28 /CNW Telbec/ - Tundra Semiconductor Corporation
(TSX:TUN), the leader in System Interconnect, today reported financial results
for the first quarter of fiscal 2007, which ended July 30, 2006.
Q1-2007 RESULTS:
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- Q1-2007 revenue of $19.5M (up 3% quarter-over-quarter; up 7% compared
to Q1-2006)
- Pro forma earnings of $2.0M (down 24% quarter-over-quarter, up 9%
compared to Q1-2006)
- Pro forma diluted earnings per share of $0.10 (down from $0.13 in
Q4-2006; up from $0.09 in Q1-2006)
- GAAP loss for Q1-2007 of $0.7M or $0.03 per diluted share (down from
GAAP earnings of $6.8M or $0.35 in Q4-2006; down from GAAP earnings of
$1.0M or $0.05 in Q1-2006)
"Tundra ended the first quarter of 2007 with 3% quarter over quarter
growth and an increase in revenue of 7% over a year ago, despite a temporary
softness in the communications infrastructure market during a traditionally
slower part of the year," said Jim Roche, President and CEO of Tundra. "Our
business remains strong and profitable. Our Alliance and Silicon Logic
Engineering (SLE) acquisitions both performed within the guidance range for
Q1-2007, with Alliance contributing revenue of $1.9M for the full quarter and
SLE contributing $1.5M over the last two months of the quarter. Our outlook
for Q2-2007 is strong - we anticipate continued positive contributions from
our acquisitions as well as continued growth in all regions. This growth will
be facilitated by our global expansion, specifically with new offices in
Asia-Pacific and our agreements with Atmel and Avnet to expand our reach to
sell into the high-performance communications, embedded computing, industrial
automation and military markets. I am confident that our strategy is sound and
that we can expect continued growth in the future."
"In the past quarter, Tundra delivered pro forma diluted earnings within
the range of our guidance despite lower than expected revenues and gross
margins," said Norm Paquette, Chief Financial Officer of Tundra. "This
positive performance resulted from continued financial controls, a reduced tax
rate, and lower headcount due to longer than expected recruiting cycles. We
believe the combination of our products, customer and partner relationships,
and global presence points to continued growth for the Company."
GUIDANCE FOR Q2-2007:
- Revenue will grow to between $21.0M and $23.0M
- Pro forma diluted earnings per share will be in the range of $0.09 to
$0.12
- Gross margins will be in the mid-sixties
"We anticipate that Q2-2007 will be a strong quarter based on positive
market activity and the strength of Tundra's product portfolio. This is
reflected in our guidance, which shows an increase in revenue of between 7%
and 17%," added Mr. Paquette.
PRODUCT AND MARKET LEADERSHIP
Leadership in Serial RapidIO(R)
Tundra continues to expand its portfolio of market leading Serial RapidIO
switches. Complementing its May announcement of the Tsi574(TM) switch
targeting DSP-intensive processing applications, Tundra launched the
Tsi576(TM) switch for DSP-based wireless, networking and video applications in
July. The Tsi576 expands the Company's high-performance RapidIO(R) switch
portfolio targeted for a wide variety of DSP-based applications such as
wireless base stations, media gateways, video infrastructure and image
processing. Tundra's combined product line of high-performance serial RapidIO
products provides customers with a wide selection of features and
configurability to meet their specific design needs.
Also in this quarter, Tundra announced that RIOLAB(TM), the world's first
RapidIO interoperability lab, commenced full operations on schedule, and
started accepting reservations for test sessions from vendors and OEMs
involved in RapidIO-based product development. To facilitate access to RIOLAB,
an inclusive and easy-to-navigate web site, www.rio-lab.com, also was
introduced. Launched by Tundra Semiconductor in February 2006 as evidence of
Tundra's ongoing commitment to the RapidIO standard, RIOLAB is a
state-of-the-art testing facility that provides the RapidIO ecosystem with
device interoperability and specification compliance testing.
GLOBAL EXPANSION
Executing on its strategy to meet customer needs across markets and
geographies, Tundra announced an agreement licensing Atmel Corporation to
deliver a selection of Tundra's portfolio of high-performance interconnect
devices with enhanced capabilities for applications requiring
extended-temperature and extended-reliability specifications. As a result,
Tundra and Atmel-Grenoble will offer comprehensive processing systems
solutions in the high-performance telecommunications, embedded computing,
industrial, military and space markets. Atmel will be able to offer host
bridges for PowerPC(R) and RapidIO interconnect products as either commercial
devices upscreened to meet extended-reliability demands, such as high
temperature range, burn-in or other specific qualifications, or as high
reliability devices assembled and tested by Atmel to military screening levels
such as MIL-PRF 38535.
Recently, Tundra signed Avnet Electronics Marketing Americas as a
value-added distributor in North America, expanding Tundra's product and
support delivery to customers in the region. Avnet will promote, supply and
support Tundra products to address the growing demand from communications,
networking, storage, and information technology leaders for Tundra's System
Interconnect products.
In addition, Tundra took significant steps to support its growing customer
base in the Asia-Pacific region, and more specifically within China, by
opening new offices in Shenzhen and in Shanghai. Tundra is well-established in
the region with growing demand from key communications, networking, storage,
and information technology leaders for its RapidIO, PCI, PCI-X and VME System
Interconnect products. The Company plans to continue to execute its
Asia-Pacific growth strategy by adding offices in Taiwan and South Korea to
enhance its sales, support and design-in expertise in the region. This,
combined with an expanded sales team in the European Union and North America,
effectively supports its customers' competitiveness in the global marketplace.
CONFERENCE CALL AND WEBCAST
Tundra management will be holding a conference call today, August 28, 2006
at 5:15 p.m. EST to discuss additional details regarding this earnings update.
You may access the conference call via any of the following:
Teleconference: 416-644-3414
Replay: 416-640-1917, Passcode: 21198418(pound key). The replay will be
available through September 5, 2006.
Web Cast: http://
www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1554740
ABOUT TUNDRA
Tundra Semiconductor Corporation (TSX:TUN) is the global leader in System
Interconnect providing world-class customer and technical support,
leading-edge semiconductor solutions and design services to the world's
foremost communications, networking, storage system, and information
technology vendors. Consistently delivering on system level performance
promises that reduce time to market, Tundra System Interconnect products
ensure market advantage in wireless infrastructure, storage networking,
network access, military, industrial automation, and information technology
applications. Silicon Logic Engineering, Inc. (SLE), Tundra's semiconductor
design services division, offers industry-leading ASIC design services,
semiconductor intellectual property and product development consulting. For
more information, please visit www.tundra.com.
The difference between pro forma and GAAP earnings is due to stock-based
compensation expense, goodwill impairment charges and amortization of
intangibles and backlog 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.
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 customer demand for the Company's
products and services, the Company's ability to maintain and enhance existing
customer relationships, as well as the Company's ability to bring to market
the products currently under development.
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 factors such as customer
demand, customer relationships, new product development, new services
offerings, product shipping schedules, product mix, competitive products and
services, pricing pressure, and changes in the embedded systems market
specifically. Additional information identifying risks and uncertainties is
contained in the Company's filings with the various provincial securities
commissions.
TUNDRA is a registered trademark of Tundra Semiconductor Corporation
(Canada, U.S. and U.K.). TUNDRA and the Tundra logo are registered marks of
Tundra Semiconductor Corporation in Canada, European Union and People's
Republic of China (registration is pending in the United States). Tsi574,
Tsi576 and Design.Connect.Go are trademarks of Tundra Semiconductor
Corporation. RapidIO is a trademark of the RapidIO Trade Association, Inc.
RIOLAB is a trademark of RIOLAB Corporation (Canada, U.S. and U.K.). The
PowerPC name is a trademark 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 Tsi574 and Tundra Tsi576 was made possible in
part with the assistance of the Technology Partnerships Canada Program.
(C) Copyright 2006 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
TUNDRA SEMICONDUCTOR CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(Canadian dollars, amounts in thousands except per share data)
For the
fiscal quarter ended
----------------------------
July 30 July 31
2006 2005
(Unaudited) (Unaudited)
Revenue:
Product $ 17,943 $ 18,196
Service 1,518 0
-------------------------------------------------------------------------
19,461 18,196
Cost of revenue:
Product 5,878 6,366
Service 1,081 0
-------------------------------------------------------------------------
6,959 6,366
Gross margin 12,502 11,830
-------------------------------------------------------------------------
Expenses
Sales and marketing 3,544 2,766
General and administration 1,781 1,422
Research and development 5,936 5,039
-------------------------------------------------------------------------
11,261 9,227
Pro forma earnings from operations 1,241 2,603
Interest and other income 763 225
-------------------------------------------------------------------------
Pro forma earnings before income taxes 2,004 2,828
Income tax recovery (provision) (25) (1,012)
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 1,979 $ 1,816
-------------------------------------------------------------------------
Pro forma earnings per share
Basic $ 0.10 $ 0.09
Diluted $ 0.10 $ 0.09
Weighted average number of common shares outstanding
Basic 19,619 19,502
Diluted 19,883 19,664
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TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands except per share data)
For the
fiscal quarter ended
----------------------------
July 30 July 31
2006 2005
(Unaudited) (Unaudited)
Revenue:
Product $ 17,943 $ 18,196
Service 1,518 0
-------------------------------------------------------------------------
19,461 18,196
Cost of revenue:
Product 5,878 6,366
Service 1,081 0
-------------------------------------------------------------------------
6,959 6,366
Gross margin 12,502 11,830
-------------------------------------------------------------------------
Expenses
Sales and marketing 3,544 2,766
General and administration 1,781 1,422
Research and development 5,936 5,039
Stock-based compensation 632 458
Amortization of purchased intangibles
and other assets 1,375 546
-------------------------------------------------------------------------
13,268 10,231
Earnings (loss) from operations (766) 1,599
Interest and other income 763 225
-------------------------------------------------------------------------
Earnings (loss) before income taxes (3) 1,824
Income tax recovery (provision) (660) (815)
-------------------------------------------------------------------------
NET EARNINGS (LOSS) (663) 1,009
-------------------------------------------------------------------------
Deficit, beginning of period (26,846) (37,608)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (27,509)$ (36,599)
-------------------------------------------------------------------------
Earnings per share
Basic $ (0.03)$ 0.05
Diluted $ (0.03)$ 0.05
Weighted average number of common shares
outstanding
Basic 19,619 19,502
Diluted 19,883 19,664
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
July 30 April 30
2006 2006
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 44,322 $ 64,914
Short term investments 11,393 11,393
Accounts receivable 8,255 7,759
Inventories 7,929 5,502
Prepaid expenses and other
current assets 3,541 3,445
Future income tax asset 3,968 1,433
-------------------------------------------------------------------------
79,408 94,446
Long-term prepaids 2,024 2,155
Capital assets 23,849 20,541
Purchased intangibles and other assets 8,782 1,534
Goodwill 50,355 37,325
Future income tax asset 8,186 10,038
-------------------------------------------------------------------------
$ 172,604 $ 166,039
-------------------------------------------------------------------------
CURRENT LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 11,083 $ 10,140
Income tax payable 857 927
-------------------------------------------------------------------------
11,940 11,067
Shareholders' equity
Share capital 183,605 177,882
Contributed surplus 4,568 3,936
Deficit (27,509) (26,846)
-------------------------------------------------------------------------
160,664 154,972
-------------------------------------------------------------------------
$ 172,604 $ 166,039
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the
fiscal quarter ended
----------------------------
July 30 July 31
2006 2005
(Unaudited) (Unaudited)
Operating activities
Net earnings (loss) $ (663)$ 1,009
Items not affecting cash:
Amortization of capital assets and asset
impairments 2,362 930
Amortization of purchased intangibles and
other assets 1,375 546
Stock-based compensation 632 458
Future income taxes (898) (510)
-------------------------------------------------------------------------
2,808 2,433
Cash effect of changes in:
Accounts receivable 1,251 1,262
Income tax payable (70) (1,151)
Inventories (1,774) 318
Prepaid expenses and other current assets 297 1,013
Accounts payable and accrued liabilities (209) (2,589)
-------------------------------------------------------------------------
2,303 1,286
Investing activities
Acquisition of capital assets (4,985) (2,780)
Acquisition of short term investments 0 (40,451)
Acquisition of business (18,528) 0
-------------------------------------------------------------------------
(23,513) (43,231)
Financing activities
Net proceeds on the issue of common shares 1,268 46
Repayment of debt (650) -
-------------------------------------------------------------------------
618 46
Increase (decrease) in cash and cash
equivalents (20,592) (41,899)
Cash and cash equivalents, beginning of
period 64,914 68,190
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 44,322 $ 26,291
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