Revenue Increases 3% Year-Over-Year
OTTAWA, Aug. 27 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, today reported financial results for the first quarter of fiscal 2008, which ended July 29, 2007.
Q1-2008 RESULTS:
- Q1 Revenue: $20.1 million
- Q1 Pro forma earnings: $1.9 million
- Q1 Pro forma diluted earnings per share: $0.10
- Q1 GAAP results: loss of $1.0 million or $0.05 per diluted share
Revenue for the first quarter of fiscal year 2008 was $20.1 million, a 3% increase over the first quarter in fiscal year 2007, and a 9% decrease from the fourth quarter of fiscal year 2007. Pro forma earnings of $1.9 million represent a 2% decrease compared to the first quarter of fiscal year 2007, and a 42% decrease over the fourth quarter of fiscal year 2007. On a GAAP basis the company had a loss for the quarter of $1.0 million or $0.05 per diluted share, compared to a loss of $0.7 million or $0.03 per diluted share in the first quarter of fiscal year 2007, down from a gain of $1.7 million or $0.08 per diluted share in the fourth quarter of fiscal year 2007. The loss on a GAAP basis reflects the one time restructuring charge of $1.7 million which was announced in May, in conjunction with an organizational realignment.
"The first quarter of 2008 concluded with 3% year-over-year revenue growth and included key customer announcements from Huawei and RadiSys, two examples of the continued adoption of our industry-leading Serial RapidIO solutions," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "Our products business remains solid and our outlook for Q2-2008 is steady. The Design Services business however, fell short of our expectations as the transition of resources from a large project in the fourth quarter to a number of smaller projects in the first quarter proved to be challenging," continued Hoste.
"Performance of our products business in the first quarter, in US dollars, was slightly ahead of our expectations. However, the strength of the Canadian dollar had a negative impact on our results, both top and bottom line," said David Long, Chief Financial Officer, Tundra Semiconductor.
Management offers the following outlook for the second quarter of fiscal year 2008:
- Revenue is expected to be in the range of $19.0 million and
$22.0 million
- Pro forma diluted earnings per share are expected to be in the range of
$0.05 to $0.09
Q1-2008 Highlights:
- Tundra was selected by Huawei Technologies Co. Ltd. (Huawei), a leader
in next generation telecommunications networks, to provide Serial
RapidIO(R) Switches to enable Huawei's next generation production
systems. Huawei selected Tundra's first-to-market Serial RapidIO Switch
because the solution solved their design requirement to cluster many
Digital Signal Processor's (DSPs) while keeping processor overhead at
an industry-low. Tundra's Tsi568A(TM) Switch offers high
inter-processor bandwidth, with up to 10 Gbps per link. Tundra's
Tsi568A is the ideal solution for Huawei's design as it offers; low
power at 120-200mW per port, a large port count with 16x1 solution in a
small 27x27mm form factor, as well as ports individually configurable
by width and speed to optimize intra component connectivity.
- Tundra recently announced the release of a Serial RapidIO development
platform that combines the industry's highest performing programmable
digital signal processors (DSPs) and the lowest power Serial RapidIO
Switch available. The platform leverages Serial RapidIO interconnect
technology, using Tundra's Tsi578(TM) switch to cluster four Freescale
MSC8144 multi-core DSPs in an AMC single-width form factor. Tundra and
Freescale created the solution to address interconnect bandwidth
requirements of up to 10 Gbps between on-board components in key
applications such as wireless base stations, radio network controllers,
media gateways, video conferencing and radar signal processing. These
processing-intensive applications require high performance DSPs and the
high throughput, low latency characteristics of a RapidIO solution.
- Tundra now offers customers a complete portfolio of proven, high
performance, low-cost PCI and PCI-X bridges. In Q1-FY2008, Tundra
launched the new Tsi352(TM) PCI-to-PCI Bridge which offers designers
the opportunity to extend a system's load capability limit beyond that
of a single PCI bus by allowing motherboard designers to add more PCI
devices or more PCI option card slots than a single PCI bus can
support. The Tsi352 joins the Tsi340(TM) and Tsi350(TM) to complete
Tundra's PCI-to-PCI bridge portfolio. Similar in features and
functionality, the three PCI Bridge solutions offered by Tundra provide
compatible footprints for most standard 32-bit PCI bridges on the
market today.
- RadiSys Corporation, a leading global provider of advanced embedded
solutions, has selected the Tundra Tsi578 Serial RapidIO Switch for its
Promentum(TM) ATCA-9100 Media Resource Module. RadiSys recently
launched the Advanced Telecommunications Computing Architecture (ATCA)
Digital Signal Processing (DSP) blade, which uses the Tsi578 as its
Serial RapidIO interconnection for large-scale DSP aggregation. The
Promentum ATCA-9100 responds to increasing customer demand for high
performance solutions that address the growing number of applications
requiring media processing. RadiSys selected Tundra's Tsi578 with
multicast because the Switch offered large-scale DSP aggregation
capabilities with proven interoperability, lower power and minimal
latency - all critical requirements for the highly intensive network
applications that the ATCA-9100 targets.
Corporate Announcements:
- In August, Tundra signed a strategic agreement to acquire a new product
from a leading global solutions and engineering services provider. The
agreement is a significant first step in executing Tundra's previously
announced smart interconnect solutions strategy. This product
represents a new product line and new market opportunity for Tundra.
Based on strong I/O management experience, Tundra intends to use its
existing design teams to develop future products in this new product
line and in the broader smart interconnect solutions product portfolio.
- Mr. Tracy Richardson joined the Tundra Leadership Team in the first
quarter of fiscal 2008, in the role of Vice President Marketing. Tracy
is responsible for development and deployment of Tundra's global market
driven strategy and is responsible for the strategic and product
marketing, architecture and applications engineering teams. With over
20 years of executive management in semiconductors and computing
systems notably at Digital Equipment, Intel and as Chief Executive
Officer of Stargen, and with experience in business development, sales
and marketing, engineering and strategy development, Tracy will play a
central role in augmenting the Company's leadership position in System
Interconnect.
- Mr. Cesar Cesaratto has been appointed to the Tundra Semiconductor
Board of Directors, effective July 2007. Cesar's career has included
more than 30 years with Nortel Networks, spanning product development,
business development, operations, and sales and marketing in both North
America and Europe. The experience and depth of background that Cesar
gained during his executive tenure at Nortel will be a significant
asset to Tundra's governing Board.
CONFERENCE CALL AND WEBCAST
Tundra management will be holding a conference call today, August 27, 2007
at 5:00 p.m. EST to discuss additional details regarding this earnings update.
You may access the conference call via any of the following:
Teleconference: +1.416.644.3414
Replay: +1.416.640.1917 Pass code: 21243186(number sign). The replay will
be available through September 3, 2007.
Web Cast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1970540
ABOUT TUNDRA
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with smart System Interconnect
products and design services backed by world-class customer service and
technical support. Tundra's track record of product leadership includes over a
decade of bridges and switches enabling key industry standards: RapidIO(R),
PCI, PCI-X, PCI Express(R), PowerPC(R), VME, HyperTransport(TM), Interlaken,
and SPI4.2. Tundra's products deliver high functional quality and simplified
board design and layout, with specific focus on system level signal integrity.
Tundra's design services division, Silicon Logic Engineering, Inc., offers
industry-leading ASIC and FPGA design services, semiconductor intellectual
property and product development consulting. Tundra's smart technology
connects critical components in high performance embedded systems around the
world. 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, but are not limited to; customer demand
for the Company's products and services, the Company's ability to maintain and
enhance existing customer relationships, and leverage existing partnerships,
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 and partner relationships, new product development, new
services offerings, product shipping schedules, product mix, competitive
products and services, pricing pressure, exchange rate fluctuations, 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, People's Republic
of China and the United States. Tsi568A, Tsi578, Tsi574, Tsi576, Tsi340,
Tsi350, Tsi352 and Design.Connect.Go. are trademarks of Tundra Semiconductor
Corporation. RapidIO is a trademark of the RapidIO Trade Association, Inc. 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 Tsi578, Tsi574 and Tsi576 was made possible in
part with the assistance of the Technology Partnerships Canada Program.
(C) Copyright 2007 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
TUNDRA SEMICONDUCTOR CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(Canadian dollars, amount s in thousands except per share data)
For the
fiscal quarter ended
-------------------------
July 29 July 30
2007 2006
(Unaudited) (Unaudited)
Revenue:
Product $ 17,953 $ 17,943
Service 2,105 1,518
-------------------------------------------------------------------------
20,058 19,461
Cost of revenue:
Product 5,608 5,878
Service 1,174 1,081
-------------------------------------------------------------------------
6,782 6,959
Gross margin 13,276 12,502
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Expenses
Sales and marketing 3,028 3,544
General and administration 2,408 1,781
Research and development 5,962 5,936
-------------------------------------------------------------------------
11,398 11,261
Pro forma earnings from operations 1,878 1,241
Interest and other income 686 763
-------------------------------------------------------------------------
Pro forma earnings before income taxes 2,564 2,004
Income tax provision 629 25
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 1,935 $ 1,979
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Pro forma earnings per share
Basic $ 0.10 $ 0.10
Diluted $ 0.10 $ 0.10
Weighted average number of common shares
outstanding
Basic 19,932 19,619
Diluted 19,970 19,883
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TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(Canadian dollars, amount s in thousands except per share data)
For the
fiscal quarter ended
-------------------------
July 29 July 30
2007 2006
(Unaudited) (Unaudited)
Revenue:
Product $ 17,953 $ 17,943
Service 2,105 1,518
-------------------------------------------------------------------------
20,058 19,461
Cost of revenue:
Product 5,608 5,878
Service 1,174 1,081
-------------------------------------------------------------------------
6,782 6,959
Gross margin 13,276 12,502
-------------------------------------------------------------------------
Expenses
Sales and marketing 3,028 3,544
General and administration 2,408 1,781
Research and development 5,962 5,936
Stock-based compensation 488 632
Amortization of purchased intangibles
and backlog 1,082 1,375
Restructuring charges 1,659 -
-------------------------------------------------------------------------
14,627 13,268
Loss from operations (1,351) (766)
Interest and other income 686 763
-------------------------------------------------------------------------
Loss before income taxes (665) (3)
Income tax provision 308 660
-------------------------------------------------------------------------
NET LOSS (973) (663)
-------------------------------------------------------------------------
Deficit, beginning of period (24,801) (26,846)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (25,774) $ (27,509)
-------------------------------------------------------------------------
Loss per share
Basic $ (0.05) $ (0.03)
Diluted $ (0.05) $ (0.03)
Weighted average number of common
shares outstanding
Basic 19,932 19,619
Diluted 19,932 19,619
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TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
July 29 April 30
2007 2007
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 57,421 $ 18,340
Short term investments - 42,379
Accounts receivable 8,805 7,745
Inventories 7,820 9,282
Prepaid expenses and other current assets 4,279 4,497
Future income tax asset 2,844 2,997
-------------------------------------------------------------------------
81,169 85,240
Long-term prepaids 1,945 1,895
Capital assets 24,494 22,343
Purchased intangibles and other assets 4,092 5,174
Goodwill 50,571 50,571
Future income tax asset 12,745 11,407
-------------------------------------------------------------------------
$ 175,016 $ 176,630
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 9,852 $ 11,125
Income tax payable - 105
-------------------------------------------------------------------------
9,852 11,230
Shareholders' equity
Share capital 183,580 183,204
Contributed surplus 7,358 6,997
Deficit (25,774) (24,801)
-------------------------------------------------------------------------
165,164 165,400
-------------------------------------------------------------------------
$ 175,016 $ 176,630
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TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the
fiscal quarter ended
-------------------------
July 29 July 30
2007 2006
(Unaudited) (Unaudited)
Operating activities
Net loss $ (973) $ (663)
Items not affecting cash:
Amortization of capital assets and
asset impairments 1,997 2,362
Amortization of purchased intangibles
and backlog 1,082 1,375
Stock-based compensation 488 632
Future income taxes (1,186) (898)
-------------------------------------------------------------------------
1,408 2,808
Cash effect of changes in:
Accounts receivable (1,060) 1,251
Income tax payable (115) (70)
Inventories 1,462 (1,774)
Prepaid expenses and other current assets 168 297
Accounts payable and accrued liabilities (1,263) (209)
-------------------------------------------------------------------------
600 2,303
Investing activities
Acquisition of capital assets (4,148) (4,985)
Disposal of short term investments 42,379 -
Acquisition of business - (18,528)
-------------------------------------------------------------------------
38,231 (23,513)
Financing activities
Net proceeds on the issue of common shares 250 1,268
Repayment of debt - (650)
-------------------------------------------------------------------------
250 618
Increase (decrease) in cash and cash equivalents 39,081 (20,592)
Cash and cash equivalents, beginning of period 18,340 64,914
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 57,421 $ 44,322
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