Revenue Increases 17% in Fourth Quarter, Year-Over-Year
OTTAWA, June 7 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, today reported financial results for the final quarter of fiscal 2007, which ended April 30, 2007.
Q4-2007 RESULTS:
- Q4 Revenue: $22.2 million
- Q4 Pro forma earnings: $3.4 million
- Q4 Pro forma diluted earnings per share: $0.17
- Q4 GAAP Results: earnings of $1.7 million or $0.08 per diluted share
Revenue for the fourth quarter of fiscal year 2007 was $22.2 million, a 17% increase over the fourth quarter in fiscal year 2006, and a 2% increase from the third quarter of fiscal year 2007. Pro forma earnings of $3.4 million represent a 30% increase compared to the fourth quarter of fiscal year 2006, and an 11% increase over the third quarter of fiscal year 2007. GAAP earnings for the quarter were $1.7 million or $0.08 per diluted share, down from earnings of $6.8 million or $0.35 in the fourth quarter fiscal year 2006, up from $1.3 million or $0.06 per diluted share in the third quarter in fiscal year 2007.
Fiscal Year 2007 RESULTS:
- FY2007 Revenue: $85.3 million
- FY2007 Pro forma earnings: $10.8 million
- FY2007 Pro forma diluted earnings per share: $0.54
- FY2007 GAAP Results: earnings of $2.0 million or $0.10 per diluted
share
Revenue for fiscal year 2007 was $85.3 million, a 14% increase over fiscal
year 2006. Pro forma earnings of $10.8 million represent a 21% increase
compared to $8.9 million in fiscal year 2006. Pro forma diluted earnings per
share of $0.54 represent a 20% increase compared to $0.45 in fiscal year 2006.
GAAP earnings for the fiscal year were $2.0 million or $0.10 per diluted
share, down from earnings of $10.8 million or $0.55 in fiscal year 2006.
"Tundra delivered solid performance in the fourth quarter and throughout
fiscal year 2007," said Daniel Hoste, President and Chief Executive Officer,
Tundra Semiconductor. "Compared to fiscal year 2006, revenues in fiscal year
2007 increased by 14% accompanied by strong profitability and good cash
generation. We will continue to build on our solid financial position and
diversified portfolio of products and services while pursuing a renewed
business strategy targeted to generate sustainable growth."
Management offers the following outlook for the first quarter of fiscal
year 2008:
- Q1 Revenue is expected to be in the range of $19.5 million to
$22.5 million
- Q1 Pro forma diluted earnings per share is expected to be in the range
of $0.09 to $0.13
"Guidance for the first quarter of fiscal 2008 reflects a continued lack
of visibility in some end-markets, coupled with rapid appreciation of the
Canadian dollar," said David Long, Chief Financial Officer, Tundra
Semiconductor.
Q4-2007 Highlights
Product Announcements:
- Tundra recently announced through a partnership with their long time
customer, Ericsson, that they will license Ericsson's Switching Module
of a MicroTCA(TM) Carrier Hub (MCH) card, designed with Tundra's
Tsi578(TM) Serial RapidIO(R) Switch. Tundra will sub-license the
Tsi578 MicroTCA Switching Module (MSM). In addition to being a
preferred supplier, Ericsson selected Tundra as the sub-licenser due to
the original selection of the Tsi578 for the MCH card design, and
because Tundra is recognized as a key ecosystem enabler for RapidIO
technology. RapidIO is a critical element in ATCA(R) and MicroTCA
systems. With Tundra's market presence, both Ericsson and Tundra
anticipate the MSM offering, a ready-made MicroTCA option for
networking OEM customers, to broaden the availability of Serial
RapidIO-based MicroTCA Systems.
- Tundra also recently launched the Tundra Tsi384(TM) four-lane PCI
Express(R) (PCIe) to PCI-X Bridge. Pin compatible with a competing PCIe
bridge product, this Bridge offers superior performance, lower latency,
better throughput and lower power consumption than the competitive
offering. Customers already sampling Tundra's PCIe Bridge confirm that
the product delivers outstanding performance. Customer response to the
addition of PCIe interconnect to Tundra's already broad PCI offering
has been positive and Tundra anticipates good traction in new and
existing designs against the competition.
- In addition to a strong portfolio of industry-leading switches and
first-to-market development platforms, Tundra has expanded its RapidIO
offering to include Endpoint Intellectual Property (IP) for license.
Currently in development, the Tundra Endpoint IP will be made
commercially available through Silicon Logic Engineering (SLE),
Tundra's design services division, to system developers, semiconductor
manufacturers, FPGA and ASIC vendors and their customers. The Endpoint
IP is proven to interoperate with multiple vendor DSPs, FPGAs, and
ASICs and will be used to create custom and standard product functions
that will further enlarge the RapidIO product ecosystem.
- Tundra announced the interoperability of its Tsi578 Serial RapidIO
Switch with Texas Instruments TMS320TCI6487 and TMS320TCI6488 wireless
infrastructure optimized DSPs. Using the Tundra Tsi578 Serial RapidIO
development platform, Tundra and Texas Instruments completed
interoperability testing. Successful tests prove that Tundra's third
generation switch, with multi-cast capability, and Texas Instrument's
3-core, 3GHz DSPs can be deployed to develop DSP clusters, aggregated
with Serial RapidIO switching. This industry-leading switch-DSP
combination is ideal for high data intensive applications such as
WiMAX, 3G, LTE, TD-SCDMA and WiBRO.
- Tundra announced that its low power, asynchronous PCI-to-PCI Bridge,
the Tundra Tsi350(TM) is in production. Communications and network
equipment customers gain a competitive advantage with this high quality
bridge solution with low power consumption. The Tsi350 targets both new
and existing designs requiring 32-bit PCI-to-PCI bridges.
- Jointly with RIOLAB(TM), now a division of Fabric Embedded Tools
Corporation and the world's only independent RapidIO interoperability
testing facility, Tundra announced that its Tsi578 Serial RapidIO
Switch has now been qualified as Device Interoperability Level 3
(DIL-3) having successfully passed DIL-1, DIL-2 and DIL-3 testing
against all other vendor devices in the RIOLAB hardware library.
Corporate Announcements:
- On May 30 the Company announced a restructuring to align the
organization more closely with the new long-term growth strategy.
Rebalancing the Company's resources and expenses was required in order
to ensure Tundra's operational efficiency, both in the short and long
term. 20 positions were eliminated in the workforce reduction
accompanied by a $1.6 million restructuring charge impacting the first
quarter of fiscal 2008. Cost savings expected in fiscal 2008 as a
result of this initiative are expected to be approximately $2 million.
- On March 27, 2007 Tundra announced that the Toronto Stock Exchange
(TSX) had accepted the Company's notice of intention to make a normal
course issuer bid. The Tundra Board of Directors approved a purchase of
up to 1,722,000 common shares (representing approximately 10% of
Tundra's public float). The normal course issuer bid commenced on
March 29, 2007 and will terminate on March 28, 2008. During the brief
trading window prior to the Company's Q4 black-out period,
Tundra repurchased a total of 106,000 shares for cancellation under
the bid.
- Also in the quarter, Tundra appointed Dr. Benny Chang to the position
of Chief Technology Officer (CTO), and promoted Mr. Ed Vopni to Vice
President of Operations. Dr. Chang and Mr. Vopni bring technology
innovation, market-driven focus, and momentum to Tundra's smart
interconnect solutions strategy.
Conference Call and Webcast
Tundra management will hold a conference call today June 7, 2007 at 5:00pm
EST to discuss additional details regarding this earnings update. You can
access the conference call via any of the following:
Teleconference: 1.416-644-3416
Replay: 1.416-640-1917, Passcode: 21233404(number sign).
(Available until June 14, 2007)
Web Cast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1882320 or
www.tundra.com
About Tundra
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with smart System Interconnect
products, intellectual property (IP) 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 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.
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.
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF PRO FORMA EARNINGS
(Canadian dollars, amounts in thousands, except per share data)
For the For the
quarter ended year ended
----------------------- -----------------------
April 30 April 30 April 30 April 30
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue
Product $ 19,144 $ 18,975 $ 75,208 $ 74,523
Service 3,016 - 10,052 -
-------------------------------------------------------------------------
22,160 18,975 85,260 74,523
Cost of revenue
Product 5,192 5,524 22,258 23,965
Service 1,583 - 5,495 -
-------------------------------------------------------------------------
6,775 5,524 27,753 23,965
-------------------------------------------------------------------------
Gross margin 15,385 13,451 57,507 50,558
Expenses
Sales and marketing 3,869 3,227 14,220 11,590
General and
administration 2,457 1,542 9,810 5,666
Research and
development 6,608 5,212 25,742 21,090
-------------------------------------------------------------------------
12,934 9,981 49,772 38,346
Pro forma earnings
from operations 2,451 3,470 7,735 12,212
Interest and other income 39 416 2,256 1,356
-------------------------------------------------------------------------
Pro forma earnings
before income taxes 2,490 3,886 9,991 13,568
Income tax provision
(recovery) (878) 1,292 (776) 4,667
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 3,368 $ 2,594 $ 10,767 $ 8,901
-------------------------------------------------------------------------
Pro forma earnings
per share
Basic $ 0.17 $ 0.13 $ 0.54 $ 0.46
Diluted $ 0.17 $ 0.13 $ 0.54 $ 0.45
Weighted average number
of common shares
outstanding
Basic 19,955 19,533 19,926 19,515
Diluted 19,995 19,805 20,041 19,726
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands, except per share data)
For the For the
quarter ended year ended
----------------------- -----------------------
April 30 April 30 April 30 April 30
2007 2006 2007 2006
(Unaudited) (Unaudited) (Audited) (Audited)
Revenue
Product $ 19,144 $ 18,975 $ 75,208 $ 74,523
Service 3,016 - 10,052 -
-------------------------------------------------------------------------
22,160 18,975 85,260 74,523
Cost of revenue
Product 5,192 5,524 22,258 23,965
Service 1,583 - 5,495 -
-------------------------------------------------------------------------
6,775 5,524 27,753 23,965
-------------------------------------------------------------------------
Gross margin 15,385 13,451 57,507 50,558
-------------------------------------------------------------------------
Expenses
Sales and marketing 3,869 3,227 14,220 11,590
General and
administration 2,457 1,542 9,810 5,666
Research and
development 6,608 5,212 25,742 21,090
Stock based
compensation expense 549 509 3,105 1,982
Amortization of
purchased intangibles 1,166 311 4,982 1,726
-------------------------------------------------------------------------
14,649 10,801 57,859 42,054
Earnings (loss) from
operations 736 2,650 (352) 8,504
Interest and other
income 39 416 2,256 1,356
-------------------------------------------------------------------------
Earnings before income
taxes and extraordinary
item 775 3,066 1,904 9,860
Income tax provision
(recovery) (878) 1,180 (141) 4,046
-------------------------------------------------------------------------
Earnings before
extraordinary item 1,653 1,886 2,045 5,814
Extraordinary gain - 4,948 - 4,948
-------------------------------------------------------------------------
NET EARNINGS 1,653 6,834 2,045 10,762
Deficit, beginning
of period (26,454) (33,680) (26,846) (37,608)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (24,801) $ (26,846) $ (24,801) $ (26,846)
-------------------------------------------------------------------------
Earnings per share before
extraordinary item
Basic $ 0.08 $ 0.10 $ 0.10 $ 0.30
Diluted $ 0.08 $ 0.10 $ 0.10 $ 0.29
Earnings per share
Basic $ 0.08 $ 0.35 $ 0.10 $ 0.55
Diluted $ 0.08 $ 0.35 $ 0.10 $ 0.55
Weighted average number
of common shares
outstanding
Basic 19,955 19,533 19,926 19,515
Diluted 19,995 19,805 20,041 19,726
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
April 30 April 30
2007 2006
(Audited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 18,340 $ 64,914
Short term investments 42,379 11,393
Accounts receivable 7,745 7,759
Inventories 9,282 5,502
Prepaid expenses and other current assets 4,497 3,445
Future income tax asset 2,997 1,433
-------------------------------------------------------------------------
85,240 94,446
Long term prepaids 1,895 2,155
Capital assets 22,343 20,541
Purchased intangibles 5,174 1,534
Goodwill 50,571 37,325
Future income tax asset 11,407 10,038
-------------------------------------------------------------------------
$ 176,630 $ 166,039
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 11,125 $ 10,140
Income tax payable 105 927
-------------------------------------------------------------------------
11,230 11,067
Shareholders' equity
Share capital 183,204 177,882
Contributed surplus 6,997 3,936
Deficit (24,801) (26,846)
-------------------------------------------------------------------------
165,400 154,972
-------------------------------------------------------------------------
$ 176,630 $ 166,039
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the For the
quarter ended year ended
----------------------- -----------------------
April 30 April 30 April 30 April 30
2007 2006 2007 2006
(Unaudited) (Unaudited) (Audited) (Audited)
Operating activities
Net earnings $ 1,653 $ 6,834 $ 2,045 $ 10,762
Items not affecting
cash:
Extraordinary gain - (4,948) - (4,948)
Amortization of
capital assets and
asset impairments 2,187 1,942 9,786 6,640
Amortization of
purchased
intangibles 1,166 311 4,982 1,726
Stock based
compensation
expense 549 509 3,105 1,982
Future income taxes (128) (54) (3,148) (809)
-------------------------------------------------------------------------
5,427 4,594 16,770 15,353
Cash effect of
changes in:
Accounts receivable 1,227 (29) 1,761 (1,683)
Inventories 1,411 (970) (3,127) (858)
Prepaid expenses and
other current assets (1,038) (2,158) (530) (826)
Accounts payable and
accrued liabilities (3,999) 2,134 (627) (1,256)
Income taxes payable (1,104) 103 (822) (525)
-------------------------------------------------------------------------
1,924 3,674 13,425 10,205
Investing activities
Acquisition of
capital assets (1,678) (1,625) (10,441) (6,935)
Acquisition of short
term investments - - (42,379) (59,638)
Proceeds on disposal
of short term
investments - 15,086 11,393 55,412
Acquisition of
business (216) (1,420) (18,744) (2,790)
-------------------------------------------------------------------------
(1,894) 12,041 (60,171) (13,951)
Financing activities
Net proceeds on the
issue of common shares 166 289 1,842 470
Repurchase of
common shares (1,020) - (1,020) -
Repayment of note
payable - - (650) -
-------------------------------------------------------------------------
(854) 289 172 470
Increase (decrease) in
cash and cash
equivalents (824) 16,004 (46,574) (3,276)
Cash and cash
equivalents, beginning
of period 19,164 48,910 64,914 68,190
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 18,340 $ 64,914 $ 18,340 $ 64,914
-------------------------------------------------------------------------
Forward Looking Information
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. The Company assumes no obligation to update or revise any forward-looking statements. Additional information identifying risks and uncertainties is contained in the Company's filings with the various provincial securities commissions which are available online at www.sedar.com.
TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor Corporation in Canada, the European Union and the People's Republic of China (registration is pending in the United States). Design.Connect.Go., Tsi350, Tsi384, Tsi578, and Tsi578 MSM, 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 Tsi578(TM) 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.