Company Continues to Capitalize on Leadership Position in RapidIO(R)
Market
OTTAWA, ON, Nov. 30 /CNW Telbec/ - Tundra Semiconductor Corporation
(TSX:TUN), the leader in System Interconnect, today reported financial results
for the second quarter of fiscal 2006, which ended October 30, 2005.
Q2-2006 RESULTS:
- Q2-2006 revenue of $18.6M (up 2% quarter-over-quarter; down 18%
compared to Q2-2005)
- Pro forma earnings of $2.2M (up from $1.8M in Q1-2006; down from $3.8M
in Q2-2005)
- Pro forma diluted earnings per share were $0.11 (up from $0.09 in
Q1-2006; down from $0.19 in Q2-2005)
- GAAP earnings for Q2-2006 were $1.4M or $0.07 per diluted share (up
from $1.0M or $0.05 per diluted share in Q1-2006)
"Business was strong in the quarter and we're pleased with sequential
revenue growth and solid earnings results as we maintain our investments in
next-generation products," said Jim Roche, President and CEO of Tundra. "Our
leadership position has been strengthened in our target markets with
increasing momentum behind newly launched products and design support tools.
We continue to broaden our product line, offering customers greater
architectural scalability for a wide range of solutions that optimize
performance, power efficiency, and cost - all key product attributes required
for next-generation systems."
"We're pleased to report a second strong quarter of revenue at the high
end of our guidance," said Norm Paquette, Chief Financial Officer of Tundra.
"Our solid earnings are a reflection of a continued balanced approach to
overall financial discipline and margin control, while delivering on our short
term commitments and investing for future growth."
GUIDANCE FOR Q3-2006:
"We anticipate significant growth over the long term from our recently
introduced host bridges for PowerPC(R) and serial RapidIO product lines," said
Jim Roche, President and CEO of Tundra. "In the interim, we expect increased
variability in our quarterly revenues."
- Revenue will be in the range of $17.0M to $19.0M
- Pro forma diluted earnings per share will be in the range of $0.08 to
$0.11
- Gross margins will be in the mid sixties
LEADERSHIP IN RAPIDIO
Tundra continues to lead in the development of the RapidIO standard and
is the first to bring parallel and serial RapidIO switches to market. RapidIO
is the leading serial interconnect standard for embedded systems and is
supported by industry leaders such as: Lucent, Freescale Semiconductor,
Alcatel, AMCC, EMC Corp, and Ericsson. In October the Tsi564A(TM) serial
RapidIO switch was made available for general sampling. Launched in May 2005,
the Tsi564A joins the Tsi568A(TM) as the industry's only available serial
RapidIO switches. The Tsi564A builds on the patent-pending technology of the
Tsi568A, enabling reliable and high performance RapidIO interconnect in a
smaller footprint for cost effective systems.
Tundra's leading role in bringing serial RapidIO to market and the
increase in momentum of the number of serial RapidIO products available in the
marketplace was demonstrated by the recent recognition of the Tsi564A by
EETimes on its quarterly Ultimate Products Top Ten List issued October 3,
2005. Technical editors for the eeProductCenter nominate products named to the
list and finalists are chosen through input solicited from up to 1,000
targeted product users. The Tsi564A received reader endorsement for being a
key addition to the Tundra portfolio of RapidIO switches.
In September, Tundra announced it had signed an agreement with Technology
Partnerships Canada, under which the Company would receive research and
development funding of seven million dollars to accelerate the development of
next-generation RapidIO System Interconnect products. This investment enables
Tundra to build on the proven success of its RapidIO System Interconnect
capability.
DRIVING THE GROWTH STRATEGY
Tundra recently announced the appointment of Mr. Daniel Hoste to the
position of Vice President of Products. One of the semiconductor industry's
leading executives, Mr. Hoste brings more than 30 years of experience to
Tundra, including 16 years with Freescale Semiconductor, Inc. At Freescale,
Mr. Hoste held management positions in all three business groups of the
company, both in Europe and in the United States. More recently Mr. Hoste
contributed to the company's success as Vice President and General Manager of
the company's 8-16 bit Microcontroller division - a billion dollar global
business - successfully growing revenues and profits. Bringing this highly
successful track record and his global executive and management experience to
Tundra, Mr. Hoste will become a key member of the executive team, contributing
to the company's continued growth as the senior executive responsible for
product management and operations.
CONFERENCE CALL DETAILS
Tundra will host a conference call and audio web cast on November 30,
2005 at 5:00 pm (EST) to discuss this earnings update. To listen by phone,
call 416-644-3416. To listen to the web cast, please access
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1314940. An
archive of the web cast will be available 15 minutes after the call. To listen
to the conference call replay, call 416-640-1917 and enter pass code number:
21163830(pound key). Replay of the call will be available two hours following
the call and up until December 9, 2005.
ABOUT TUNDRA
Tundra Semiconductor Corporation (www.tundra.com) is the global leader in
System Interconnect providing world-class support and leading edge
semiconductor solutions 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 ensures market advantage in wireless infrastructure, storage
networking, network access, military, industrial automation, and information
technology applications.
The difference between pro forma and GAAP earnings is due to stock-based
compensation expense, goodwill impairment charges and amortization of
intangibles and other assets associated with Tundra's acquisitions. Tundra
uses pro forma measures internally to evaluate and manage operating
performance as well as to forecast and plan.
Comment respecting any Forward Looking Statement in this release
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 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, product shipping schedules,
product mix, competitive products, 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 (Canada - registration in the United States,
European Union, and People's Republic of China pending). Tsi564A and Tsi568A
are trademarks of Tundra Semiconductor Corporation. The PowerPC name, Power
Architecture name, and the PowerPC logotype are trademarks of International
Business Machines Corporation, used under license therefrom. Other registered
and unregistered trademarks are the property of their respective owners.
(C) Copyright 2005 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 For the two
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
October 30 October 31 October 30 October 31
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 18,625 $ 22,655 $ 36,821 $ 45,296
Cost of revenue 6,183 7,927 12,549 16,033
-------------------------------------------------------------------------
Gross margin 12,442 14,728 24,272 29,263
-------------------------------------------------------------------------
Expenses
Sales and marketing 2,883 2,355 5,649 4,902
General and
administration 1,358 1,325 2,780 2,961
Research and development 5,089 4,778 10,128 9,540
-------------------------------------------------------------------------
9,330 8,458 18,557 17,403
Pro forma earnings from
operations 3,112 6,270 5,715 11,860
Interest and other income
(expense) 304 (417) 529 (94)
-------------------------------------------------------------------------
Pro forma earnings before
income taxes 3,416 5,853 6,244 11,766
Income tax provision (1,181) (2,051) (2,192) (4,213)
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 2,235 $ 3,802 $ 4,052 $ 7,553
-------------------------------------------------------------------------
Pro forma earnings per
share
Basic $ 0.11 $ 0.20 $ 0.21 $ 0.39
Diluted $ 0.11 $ 0.19 $ 0.21 $ 0.38
Weighted average number
of common shares
outstanding
Basic 19,508 19,482 19,505 19,461
Diluted 19,711 19,721 19,684 19,808
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands except per share data)
For the For the two
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
October 30 October 31 October 30 October 31
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 18,625 $ 22,655 $ 36,821 $ 45,296
Cost of revenue 6,183 7,927 12,549 16,033
-------------------------------------------------------------------------
Gross margin 12,442 14,728 24,272 29,263
-------------------------------------------------------------------------
Expenses
Sales and marketing 2,883 2,355 5,649 4,902
General and
administration 1,358 1,325 2,780 2,961
Research and development 5,089 4,778 10,128 9,540
Stock based compensation
expense 493 349 951 676
Amortization of purchased
intangibles and backlog 558 563 1,104 1,187
-------------------------------------------------------------------------
10,381 9,370 20,612 19,266
Earnings from operations 2,061 5,358 3,660 9,997
Interest and other income
(expense) 304 (417) 529 (94)
-------------------------------------------------------------------------
Earnings before income
taxes 2,365 4,941 4,189 9,903
Income tax provision (980) (1,854) (1,795) (3,788)
-------------------------------------------------------------------------
NET EARNINGS 1,385 3,087 2,394 6,115
Deficit, beginning of
period (36,599) (42,072) (37,608) (44,530)
Adjustment for change
in accounting policy
related to stock based
compensation 0 0 0 (570)
Deficit, beginning of
period as restated (36,599) (42,072) (37,608) (45,100)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (35,214) $ (38,985) $ (35,214) $ (38,985)
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.07 $ 0.16 $ 0.12 $ 0.31
Diluted $ 0.07 $ 0.16 $ 0.12 $ 0.31
Weighted average number
of common shares
outstanding
Basic 19,508 19,482 19,505 19,461
Diluted 19,711 19,721 19,684 19,808
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
October 30 April 30
2005 2005
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 6,783 $ 68,190
Short term investments 66,805 7,167
Accounts receivable 6,552 6,076
Inventories 4,235 4,629
Prepaid expenses and other current assets 3,235 4,774
Future income tax asset 1,179 901
-------------------------------------------------------------------------
88,789 91,737
Capital assets 21,701 20,132
Purchased intangibles 2,157 3,249
Goodwill 37,325 37,325
Future income tax asset 3,604 3,287
-------------------------------------------------------------------------
$ 153,576 $ 155,730
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 8,195 $ 11,116
Income tax payable 186 1,452
Note payable 0 1,404
-------------------------------------------------------------------------
8,381 13,972
Shareholders' equity
Share capital 177,504 177,412
Contributed surplus 2,905 1,954
Deficit (35,214) (37,608)
-------------------------------------------------------------------------
145,195 141,758
-------------------------------------------------------------------------
$ 153,576 $ 155,730
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the For the two
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
October 30 October 31 October 30 October 31
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating activities
Net earnings $ 1,385 $ 3,087 $ 2,394 $ 6,115
Items not
affecting cash:
Amortization of
capital assets
and asset
impairments 2,086 3,147 3,016 4,567
Amortization of
purchased
intangibles and
backlog 558 563 1,104 1,187
Stock based
compensation
expense 493 349 951 676
Future income taxes (85) 308 (595) 1,862
-------------------------------------------------------------------------
4,437 7,454 6,870 14,407
Cash effect of changes
in:
Accounts receivable (1,738) (1,003) (476) (276)
Inventories 76 (664) 394 (783)
Prepaid expenses and
other current assets 526 (433) 1,539 (3,268)
Accounts payable and
accrued liabilities (393) (1,046) (2,982) (6,829)
Income taxes payable (115) 671 (1,266) 1,552
-------------------------------------------------------------------------
2,793 4,979 4,079 4,803
Investing Activities
Acquisition of capital
assets (1,790) (1,224) (4,570) (2,103)
Proceeds on disposal
of capital assets 0 0 0 201
Acquisition of short
term investments (19,187) 0 (59,638) (55,983)
Acquisition of
business (1,370) (1,715) (1,370) (5,104)
-------------------------------------------------------------------------
(22,347) (2,939) (65,578) (62,989)
Financing activities
Net proceeds on the
issue of common
shares 46 28 92 1,287
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents (19,508) 2,068 (61,407) (56,899)
Cash and cash
equivalents,
beginning of period 26,291 11,663 68,190 70,630
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 6,783 $ 13,731 $ 6,783 $ 13,731
-------------------------------------------------------------------------
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