OTTAWA, June 8 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN),
the leader in System Interconnect, today reported financial results for the
final quarter of fiscal 2006, which ended April 30, 2006.
Q4-2006 RESULTS:
- Q4-2006 revenue of $19.0M (up 1% quarter-over-quarter; up 10% compared
to Q4-2005)
- Pro forma earnings of $2.6M (up 15% quarter-over-quarter; up 92%
compared to Q4-2005)
- Pro forma diluted earnings per share were $0.13 (up from $0.11 in
Q3-2006; up from $0.07 in Q4-2005)
- GAAP earnings for Q4-2006 were $6.8M or $0.35 per diluted share (up
from $1.5M or $0.08 in Q3-2006; up from $641K or $0.03 in Q4-2005)
FY 2006 RESULTS:
- FY 2006 revenue of $74.5M compared to $79.6M in FY 2005
- FY 2006 pro forma earnings were $8.9M compared to $10.4M in FY 2005
- FY 2006 pro forma diluted earnings per share were $0.45 compared to
$0.53 for FY 2005
- GAAP earnings for FY 2006 were $10.8M or $0.55 per diluted share
compared to $7.5M or $0.38 for FY 2005
"I am pleased with the results we have achieved this quarter. Not only
did we grow the company by building on our market and product leadership, we
also completed three key acquisitions. I can report that our teams are working
well together as we integrate product roadmaps and company operations," said
Jim Roche, President and CEO of Tundra. "Executing against our acquisition
strategy has strengthened our financial position, broadened our System
Interconnect portfolio and increased penetration of our strategic customers."
GUIDANCE FOR Q1-2007:
- Revenue will grow to between $21.0M and $23.5M
- Pro forma diluted earnings per share will be in the range of $0.09 to
$0.15
- Gross margins will be in the mid-to-high sixties
"The fourth quarter was a solid quarter for us. We built profitability
and grew revenue while introducing new products and integrating recent
acquisitions," said Norm Paquette, Chief Financial Officer of Tundra. "Our
disciplined approach, leveraging strong operational controls while building on
our increasingly diverse product portfolio, positions us well for future
growth."
MANAGEMENT CHANGE
Tundra has announced today that Norm Paquette has resigned as Chief
Financial Officer of the Company. Norm will continue in his current role until
the new CFO has been hired and he will assist Tundra in identifying his
successor. After a successful and respected tenure with the Company, Norm has
decided to make a change and pursue other opportunities.
"Since the founding of Tundra in 1995, Norm has been one of the key
contributors to our success. He led the company's successful IPO in 1999 and
has managed our finances through nearly forty quarters of revenue and profit
growth," said Roche. "Norm leaves Tundra in a solid financial position with
growing revenues and profits and a strong financial team. I appreciate his
dedication and his many efforts over the years and wish him well in his future
pursuits."
STRONG EXECUTION AGAINST ACQUSITION STRATEGY
Silicon Logic Engineering, Inc.
On June 1, 2006 Tundra announced that it had acquired Silicon Logic
Engineering, Inc. ("SLE") of Eau Claire, Wisconsin for US$14 million. SLE is a
leader in developing high-performance communications and computer chip
products for some of the world's largest networking and computing customers.
The addition of SLE's highly advanced resources, expertise and intellectual
property strengthens Tundra's leadership in System Interconnect for the
communications and computing markets. Tundra's leadership in delivering world-
class standards-based System Interconnect products combined with SLE's
excellent track record of delivering high-performance chips creates a
formidable product offering well positioned to respond to the growing System
Interconnect outsourcing trend.
Alliance Semiconductor Corporation Systems Solutions Business Unit
On May 8, 2006, Tundra announced it had completed the acquisition of the
Systems Solutions Business Unit of Alliance Semiconductor Corporation
("Alliance SSBU"). Tundra entered into a definitive agreement on April 19,
2006 to acquire the assets of the Alliance SSBU for US$5.8 million in cash.
The acquisition includes intellectual property and several products both in
production and under development. Tundra also has hired over fifty former-
Alliance SSBU employees as a result of the acquisition. In addition to the
immediate benefit of a broader product offering by adding PCI Express(R),
HyperTransport(TM) and PCI bridge products, Tundra gains Alliance SSBU's world-
class intellectual property and two highly experienced and innovative teams in
Santa Clara, California and Hyderabad, India. Tundra's leading portfolio of
System Interconnect products combined with Alliance SSBU's design expertise
uniquely positions Tundra to develop a market-leading PCI Express product
portfolio that will fuel growth for Tundra's communications customers.
Potentia Semiconductor Corporation
On April 7, 2006 Tundra announced the acquisition of Potentia
Semiconductor Corporation ("Potentia Canada") for $1.4 million in cash. The
acquisition included the power controller business of Potentia Canada, which
Tundra continues to operate. The acquisition added five new power controllers
to Tundra's product portfolio. The Tsi205(TM), Tsi206(TM), Tsi248(TM),
Tsi252(TM) and Tsi257(TM) Power Controllers are now available from Tundra's
worldwide sales network. With the addition of the power controller devices to
Tundra's product portfolio, customers can take advantage of Tundra's
leadership in System Interconnect combined with industry-leading power
controller devices.
PRODUCT LEADERSHIP
Tundra continues to strengthen its position as the industry's leading
provider of serial RapidIO(R) switches. In May, Tundra launched the Tsi574(TM)
Serial RapidIO Switch, which expanded Tundra's portfolio of switches to
include an optimal offering for DSP aggregation on line cards. Ideally suited
for a for a wide range of applications such as wireless base stations, media
gateways, video infrastructure and DSP-intensive image processing, the Tsi574
demonstrates Tundra is broadening its RapidIO System Interconnect portfolio to
address the full spectrum of features that customers and partners need to
design successful RapidIO-based systems. With multiple RapidIO switches
launched and in production combined with commercially-available development
platforms and a strong roadmap, Tundra is recognized as the market leader in
RapidIO System Interconnect.
In the quarter, Tundra also strengthened its position as the industry's
leading provider of host bridges for PowerPC(R) with its announcement that the
Tsi109(TM) Host Bridge is in production. Ideal for power sensitive and cost
sensitive applications, the Tsi109 supports PCI-X, DDR2 memory, Gigabit
Ethernet and Flash memory with integrated power management features to address
demanding, low power applications. Well suited as a companion chip for both
Freescale Semiconductor MPC74xx and IBM PPC 750xx PowerPC processors, Tundra's
Tsi109 and complete host bridge portfolio offers designers the benefits of
greater overall system performance, reduced system design complexity, better
integration and superior power efficiency.
CONFERENCE CALL AND WEBCAST
Tundra management will be holding a conference call today, June 8 2006 at
5:00pm EST to discuss additional details regarding this earnings update. You
may access the conference call via any of the following: Teleconference:
416-644-3418 Replay: 416-640-1917, Passcode: 21191050 (pound key) . (Available
up until June 16, 2006) Web Cast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1501060
ABOUT TUNDRA
Tundra Semiconductor Corporation (TSX:TUN) 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. 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 (Canada - registration in the United States,
European Union, and People's Republic of China pending). Tsi109 and Tsi574 are
trademarks of Tundra Semiconductor Corporation. RapidIO is a trademark of the
RapidIO Trade Association, Inc. 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.
Development of the Tundra Tsi574(TM) 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
CONSOLIDATED STATEMENTS OF PRO FORMA EARNINGS
(Canadian dollars, amounts in thousands)
For the For the
fiscal quarter ended year ended
---------------------------- --------------------------
April 30 April 30 April 30 April 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 18,975 $ 17,194 $ 74,523 $ 79,614
Cost of revenue
5,524 6,278 23,965 28,458
-------------------------------------------------------------------------
Gross margin 13,451 10,916 50,558 51,156
-------------------------------------------------------------------------
Expenses
Sales and
marketing 3,227 2,923 11,590 10,404
General and
administration 1,542 1,564 5,666 5,668
Research and
development 5,212 4,847 21,090 19,749
-------------------------------------------------------------------------
9,981 9,334 38,346 35,821
Pro forma earnings
from operations 3,470 1,582 12,212 15,335
Interest and
other income 416 427 1,356 703
-------------------------------------------------------------------------
Pro forma earnings
before income
taxes 3,886 2,009 13,568 16,038
Income tax
provision (1,292) (656) (4,667) (5,670)
-------------------------------------------------------------------------
PRO FORMA
EARNINGS $ 2,594 $ 1,353 $ 8,901 $ 10,368
-------------------------------------------------------------------------
Pro forma earnings
per share
Basic $ 0.13 $ 0.07 $ 0.46 $ 0.53
Diluted $ 0.13 $ 0.07 $ 0.45 $ 0.53
Weighted average
number of common
shares outstanding
Basic 19,533 19,493 19,515 19,475
Diluted 19,805 19,659 19,726 19,745
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands)
For the
fiscal quarter ended For the year ended
--------------------------- ----------------------------
April 30 April 30 April 30 April 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Audited) (Audited)
-------------------------------------------------------------------------
Revenue $ 18,975 $ 17,194 $ 74,523 $ 79,614
Cost of revenue 5,524 6,278 23,965 28,458
-------------------------------------------------------------------------
Gross margin 13,451 10,916 50,558 51,156
-------------------------------------------------------------------------
Expenses
Sales and
marketing 3,227 2,923 11,590 10,404
General and
administration 1,542 1,564 5,666 5,668
Research and
development 5,212 4,847 21,090 19,749
Stock based
compensation
expense 509 355 1,982 1,384
Amortization of
purchased
intangibles 311 549 1,726 2,313
-------------------------------------------------------------------------
10,801 10,238 42,054 39,518
Earnings from
operations 2,650 678 8,504 11,638
Interest and
other income 416 427 1,356 703
-------------------------------------------------------------------------
Earnings before
income taxes and
extraordinary item 3,066 1,105 9,860 12,341
Income tax
provision (1,180) (464) (4,046) (4,849)
-------------------------------------------------------------------------
Earnings before
extraordinary
item 1,886 641 5,814 7,492
Extraordinary gain 4,948 0 4,948 0
-------------------------------------------------------------------------
NET EARNINGS 6,834 641 10,762 7,492
Deficit, beginning
of period (33,680) (38,249) (37,608) (45,100)
-------------------------------------------------------------------------
DEFICIT,
END OF PERIOD $(26,846) $(37,608) $(26,846) $(37,608)
-------------------------------------------------------------------------
Earnings per share
before
extraordinary item
Basic $ 0.10 $ 0.03 $ 0.30 $ 0.38
Diluted $ 0.10 $ 0.03 $ 0.29 $ 0.38
Earnings per share
Basic $ 0.35 $ 0.03 $ 0.55 $ 0.38
Diluted $ 0.35 $ 0.03 $ 0.55 $ 0.38
Weighted average
number of common
shares outstanding
Basic 19,533 19,493 19,515 19,475
Diluted 19,805 19,659 19,726 19,745
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
April 30 April 30
2006 2005
(Audited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 64,914 $ 68,190
Short term investments 11,393 7,167
Accounts receivable 7,759 6,076
Inventories 5,502 4,629
Prepaid expenses and other current assets 3,445 4,774
Future income tax asset 1,433 901
-------------------------------------------------------------------------
94,446 91,737
Long term prepaids 2,155 0
Capital assets 20,541 20,132
Purchased intangibles 1,534 3,249
Goodwill 37,325 37,325
Future income tax asset 10,038 3,287
-------------------------------------------------------------------------
$166,039 $155,730
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 10,140 $ 11,116
Income tax payable 927 1,452
Note payable 0 1,404
-------------------------------------------------------------------------
11,067 13,972
Shareholders' equity
Share capital 177,882 177,412
Contributed surplus 3,936 1,954
Deficit (26,846) (37,608)
-------------------------------------------------------------------------
154,972 141,758
-------------------------------------------------------------------------
$166,039 $155,730
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the
fiscal quarter ended For the year ended
--------------------------- ----------------------------
April 30 April 30 April 30 April 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Audited) (Audited)
Operating activities
Net earnings $ 6,834 $ 641 $ 10,762 $ 7,492
Items not affecting cash:
Extraordinary
gain (4,948) 0 (4,948) 0
Amortization
of capital assets
and asset
impairments 1,942 1,600 6,640 7,268
Amortization of
purchased
intangibles 311 549 1,726 2,313
Stock based
compensation
expense 509 355 1,982 1,384
Future income
taxes (54) (315) (809) 1,297
-------------------------------------------------------------------------
4,594 2,830 15,353 19,754
Cash effect
of changes in:
Accounts
receivable (29) 945 (1,683) 2,181
Inventories (970) 59 (858) (89)
Prepaid expenses
and other
current assets (2,158) (2,321) (826) (3,442)
Accounts payable
and accrued
liabilities 2,134 384 (1,256) (4,614)
Income taxes
payable 103 (66) (525) 1,427
-------------------------------------------------------------------------
3,674 1,831 10,205 15,217
Investing activities
Acquisition of
capital assets (1,625) (1,595) (6,935) (5,670)
Proceeds on
disposal of
capital assets 0 0 0 201
Acquisition
of short term
investments 0 0 (59,638) (55,983)
Proceeds on disposal
of short term
investments 15,086 0 55,412 48,816
Acquisition
of business (1,420) 0 (2,790) (6,436)
-------------------------------------------------------------------------
12,041 (1,595) (13,951) (19,072)
Financing activities
Net proceeds on
the issue of
common shares 289 91 470 1,415
-------------------------------------------------------------------------
Increase (decrease)
in cash and cash
equivalents 16,004 327 (3,276) (2,440)
Cash and cash
equivalents,
beginning of
period 48,910 67,863 68,190 70,630
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 64,914 $ 68,190 $ 64,914 $ 68,190
-------------------------------------------------------------------------
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