Revenue Increases 22% over Third Quarter
OTTAWA, June 5 /CNW Telbec/ - Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX:TUN), a leader in System Interconnect, today reported financial results for the fourth quarter of fiscal 2008, which ended April 30, 2008.
Q4-2008 RESULTS:
- Q4 Revenue: $17.9 million
- Q4 Pro forma earnings: $1.5 million
- Q4 Pro forma diluted earnings per share: $0.07
- Q4 GAAP Results: loss of $3.9 million or $0.20 per diluted share
Revenue for the fourth quarter of fiscal year 2008 was $17.9 million, comprised of $8.6 million in the Communications market segment, $6.4 million in the Computing/Storage market segment, and $2.9 million in Design Services. Quarterly revenue represents a 22% increase from the third quarter of fiscal year 2008 and a 19% decrease over the fourth quarter in fiscal year 2007. Pro forma earnings for the quarter were $1.5 million, compared to earnings of $0.3 million in the third quarter of fiscal year 2008 and compared to $3.4 million in the fourth quarter of fiscal year 2007. GAAP loss for the quarter was $3.9 million or $0.20 per diluted share, compared to a loss of $54.0 million or $2.73 loss per diluted share in the third quarter in fiscal year 2008, and earnings of $1.7 million or $0.08 per diluted share in the fourth quarter fiscal year 2007. The GAAP loss in the fourth quarter of fiscal 2008 was driven by a $4.7 million write down of an intangible asset and the GAAP loss in the third quarter of fiscal 2008 was driven largely by a goodwill impairment charge of $50.6 million.
Fiscal Year 2008 RESULTS:
- FY2008 Revenue: $70.6 million
- FY2008 Pro forma earnings: $4.6 million
- FY2008 Pro forma diluted earnings per share: $0.23
- FY2008 GAAP Results: loss of $59.6 million or $3.00 per diluted share
Revenue for fiscal year 2008 was $70.6 million, a 17% decrease over fiscal year 2007. Pro forma earnings of $4.6 million represent a 57% decrease compared to $10.8 million in fiscal year 2007. Pro forma diluted earnings per share of $0.23 represent a 57% decrease compared to $0.54 in fiscal year 2007. For the fiscal year, GAAP losses were $59.6 million or $3.00 per diluted share, down from earnings of $2.0 million or $0.10 per diluted share in fiscal year 2007.
"We are pleased with the operational financial results in the fourth quarter which were at the high end of the guidance we provided in March. We see several indicators showing that the previously soft telecommunications market is stabilizing and that the inventory correction at some of our key accounts is now behind us and this is having a positive impact on our revenues. Furthermore, our Design Services team, SLE, had a very strong quarter with revenue exceeding our expectations," said Daniel Hoste, President and Chief Executive Officer, Tundra.
"Looking forward to fiscal year 2009, we are expecting much more stability in the telecommunications market and in the currency. We expect that our design wins and leadership products in RapidIO, PCI Express and VME will drive future growth," continued Hoste.
Management offers the following outlook for the first quarter of fiscal year 2009:
- Q1 Revenue is expected to be in the range of $16.5 million to
$18.5 million
- Q1 Pro forma diluted earnings per share is expected to be in the range
of $0.02 to $0.06
"Revenue for the first quarter of fiscal 2009 is expected to be relatively
flat, however our products business is expected to continue its growth trend
at a rate of 2% to 4% in the quarter," said David Long, Chief Financial
Officer, Tundra. "We expect our core products business to increase in revenue
while we expect design services revenue to return to a regular run rate."
Q4-2008 Highlights
Corporate Highlights:
- On June 3, Tundra announced that it had terminated a product
acquisition agreement and a license agreement with IBM. The acquired
product was to be based on an IBM Power Architecture(TM) 90 nm
processor core. IBM recently notified Tundra that the performance of
the core is lower than previously stated. As a result of the decision
to terminate the product acquisition agreement, and based on Tundra's
review of the current IBM performance data for the 65nm core, Tundra
has also made the decision to terminate the license agreement signed in
November 2007. Tundra intends to actively pursue alternative means of
executing against its smart System Interconnect (sSI) strategy to bring
intelligent System Interconnect solutions to broader global markets.
- On April 7, the Toronto Stock Exchange (TSX) accepted the Company's
notice of intention to make a normal course issuer bid. The Tundra
Board of Directors approved Tundra's purchase of up to 983,530 common
shares (representing approximately 5% of the 19,670,613 outstanding
Tundra common shares as of March 31, 2008). The normal course issuer
bid commenced on April 9, 2008 and will terminate on April 8, 2009 or
at such time as Tundra has purchased the maximum number of shares
permitted under the bid. Management and the Board of Directors of
Tundra believe that the market price of Tundra's common shares, from
time to time, may not reflect the inherent value of the Corporation.
- Tundra recently launched a new website, and "MyTundra" customer portal.
The enhanced features and functionality of this new online site and
portal further expand Tundra's world-class customer support offering to
its global customer base. The site enhancements were created with
Tundra's customers in mind, making more options available than ever
before to assist communications and computing/storage customers with
their market-leading designs. New features include a MyTundra portal -
a unique service environment that provides visibility and secure access
to Tundra's comprehensive portfolio of product documentation and
support tools and resources; enhanced search capabilities to obtain
information and obtain technical support quickly; and improved
navigation throughout the website enabling easy access to all areas of
the site.
- Also in the quarter, Tundra appointed Mr. Bob Solberg to the position
of Vice President of Design Services. Mr. Solberg is a co-founder of
Silicon Logic Engineering and has more than 25 years of experience in
leading design services teams and will be a significant asset to the
Tundra Leadership Team. Prior to co-founding SLE, Mr. Solberg worked at
Cray Research where he held multiple engineering management positions,
including management roles for several of Cray's J90 series and T3E
supercomputer projects.
Product Highlights:
- Tundra's Tsi381(TM) PCI Express(R) Bridge was selected by I-View
Communication for its high performance PCI Express DVR video capture
cards for next generation surveillance systems. The I-View PCIe video
capture card combines the high performance ACP-915 PCI One Chip Decoder
from Alogics, and the reliable x1 PCIe bridging capability of Tundra's
Tsi381 PCIe Bridge. I-View evaluated a number of PCIe to PCI bridges
for their design and selected the Tundra Tsi381 for its superior
performance, quality and reliability. I-View was able to easily
integrate the Tsi381 with Alogics ACP-915, enabling it to achieve
significantly better performance than any other solution. This
performance advantage allowed I-View to quickly bring to market a
product that provides its customers the best video quality and frame
rate. The combined ACP-915/Tsi381 solution offered I-View maximum video
throughput performance over the PCIe interface, enabling I-View's video
capture card to produce the highest video quality for its customers.
- Texas Instruments has selected the Tsi574(TM) RapidIO(R) Switch to
cluster its wireless infrastructure optimized DSPs on its new 6484 AMC
evaluation platform. The 1 GHz single core DSP and evaluation module
targets Beyond3G applications including HSPA/HSPA+, LTE and WiMAX
Wave 2. The evaluation module includes the Tsi574 RapidIO Switch to
interconnect TI's processors on the board, leveraging Tundra's high
performance interconnect capability and Tundra's interoperability track
record with TI's suite of wireless DSPs. High bandwidth applications,
such as wireless infrastructure designs, require multiple high
performance DSPs for data processing. Tundra's RapidIO Switch
technology allows multiple DSPs on a single board to pass high
bandwidth data at maximum transfer rates.
- Tundra recently introduced the Tsi572(TM) Serial RapidIO Switch, a
scalable, low power switch, which adds another processor aggregation
solution to Tundra's industry-leading portfolio of RapidIO products.
The Tsi572 is ideal for cost sensitive applications, allowing designers
to take advantage of the powerful functionality of Tundra's RapidIO
Switches, including; scalability, performance, hardware multicast, and
low latency. The new Tsi572 Switch is the lowest power RapidIO Switch
available on the market today, compliant with the RapidIO 1.3
specification. Tundra's new Tsi572 Switch offers designers the
performance and reliability of RapidIO with lower port count and lower
power consumption, at a cost that suits their high volume applications.
Designers can rely on the proven interoperability of the Tsi57x product
line and socket compatibility of the Tsi572 with the Tsi576(TM). The
Tsi572 is ideally suited for a broad spectrum of wireless, wireline,
and imaging/video applications.
- Tundra also announced that VMETRO, a leader in embedded computing
solutions, has selected the Tsi578(TM) Serial RapidIO Switch to enable
high performance processing, for its new Quad-Core Processing Engine
and Single Board Computer. VMETRO recently launched two new 6U VPX-REDI
offerings, which use the Tsi578 for large-scale DSP aggregation and
Tundra's Tsi148(TM) VME Bridge, the highest bandwidth VMEbus bridge
available on the market today. By using Tundra's Tsi578 RapidIO switch,
VMETRO's VPX multi-processor boards provide a system fabric with the
features their customers demand - low latency, low overhead, high
throughput, peer-to-peer communication, reliability, and scalability.
No other fabric offers this complete set of features. Customer's
deploying VMETRO's new MPE730 and SBC731 with RapidIO across the VPX
backplane will get the performance and reliability they need for their
multi-processing applications.
Conference Call and Webcast
Tundra management will hold a conference call today June 5, 2008 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: 21271801(number sign).
(Available until June 14, 2008)
Web Cast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)2285140
or www.tundra.com
About Tundra
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with 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), Power
Architecture(TM), 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 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.
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 assumptions about: stability of the
telecommunications market, appropriate customer inventory levels, minimal
currency fluctuation, the movement of products from design wins to production
within customer products, the Company's ability to bring to market the
products currently under development, as well as stability of customer need
for design services.
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 variable factors such as
customer demand and customer inventory management, customer relationships,
product development, new services offerings, product shipping schedules,
product mix, competitive products and services, pricing pressure, changes in
the Company's target markets, including but not limited to the
telecommunications market, and currency fluctuation . 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 United States, the European Union and the People's
Republic of China. Design.Connect.Go. Tsi148, Tsi381, Tsi572, Tsi576, Tsi574
Tsi578, 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 Tsi57x product line was made possible in part
with the assistance of the Technology Partnerships Canada Program.
(C) Copyright 2008 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
TUNDRA SEMICONDUCTOR CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
For the fiscal quarters ended April 30, 2008 and April 30, 2007
(Canadian dollars, amounts in thousands except per share data)
Three months ended Year ended
------------------------ ------------------------
April 30 April 30 April 30 April 30
2008 2007 2008 2007
(Unaudited) (Unaudited) (Audited) (Audited)
Revenue:
Product $ 15,024 $ 19,144 $ 61,525 $ 75,208
Service 2,888 3,016 9,061 10,052
-------------------------------------------------------------------------
17,912 22,160 70,586 85,260
Cost of revenue:
Product 5,184 5,192 20,027 22,258
Service 1,930 1,583 5,656 5,495
-------------------------------------------------------------------------
7,114 6,775 25,683 27,753
-------------------------------------------------------------------------
Gross margin 10,798 15,385 44,903 57,507
Expenses:
Sales and marketing 2,822 3,869 11,548 14,220
General and
administration 1,745 2,457 8,009 9,810
Research and development 4,891 6,608 21,964 25,742
-------------------------------------------------------------------------
9,458 12,934 41,521 49,772
Pro forma earnings from
operations 1,340 2,451 3,382 7,735
Interest and other income 416 39 2,374 2,256
-------------------------------------------------------------------------
Pro forma earnings before
income taxes 1,756 2,490 5,756 9,991
Income tax provision
(recovery) 280 (878) 1,107 (776)
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 1,476 $ 3,368 $ 4,649 $ 10,767
-------------------------------------------------------------------------
Pro forma earnings per
share
Basic $ 0.07 $ 0.17 $ 0.23 $ 0.54
Diluted $ 0.07 $ 0.17 $ 0.23 $ 0.54
Weighted average number
of common shares
outstanding
Basic 19,694 19,955 19,848 19,926
Diluted 19,694 19,995 19,916 20,041
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME(LOSS)
For the fiscal quarters ended April 30, 2008 and April 30, 2007
(Canadian dollars, amounts in thousands except per share data)
Three months ended Year ended
------------------------ ------------------------
April 30 April 30 April 30 April 30
2008 2007 2008 2007
(Unaudited) (Unaudited) (Audited) (Audited)
Revenue:
Product $ 15,024 $ 19,144 $ 61,525 $ 75,208
Service 2,888 3,016 9,061 10,052
-------------------------------------------------------------------------
17,912 22,160 70,586 85,260
Cost of revenue:
Product 5,184 5,192 20,027 22,258
Service 1,930 1,583 5,656 5,495
-------------------------------------------------------------------------
7,114 6,775 25,683 27,753
-------------------------------------------------------------------------
Gross margin 10,798 15,385 44,903 57,507
Expenses:
Sales and marketing 2,822 3,869 11,548 14,220
General and
administration 1,745 2,457 8,009 9,810
Research and
development 4,891 6,608 21,964 25,742
Stock-based
compensation 592 549 2,274 3,105
Amortization of
acquisition-related
intangible assets 889 1,166 3,876 4,982
Restructuring charges (250) - 3,713 -
-------------------------------------------------------------------------
10,689 14,649 51,384 57,859
Earnings (loss) from
operations 109 736 (6,481) (352)
Interest and other income 416 39 2,374 2,256
Impairment of intangible
assets (4,749) - (4,749) -
Impairment of goodwill 590 - (49,981) -
-------------------------------------------------------------------------
Earnings (loss) before
income taxes (3,634) 775 (58,837) 1,904
Income tax provision
(recovery) 280 (878) 786 (141)
-------------------------------------------------------------------------
NET EARNINGS (LOSS)
AND COMPREHENSIVE
INCOME (LOSS) $ (3,914) $ 1,653 $ (59,623) $ 2,045
-------------------------------------------------------------------------
Earnings (loss) per
share
Basic $ (0.20) $ 0.08 $ (3.00) $ 0.10
Diluted $ (0.20) $ 0.08 $ (3.00) $ 0.10
Weighted average number
of common shares
outstanding
Basic 19,694 19,955 19,848 19,926
Diluted 19,694 19,995 19,848 20,041
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
(Audited)
April April
2008 2007
ASSETS
Current assets
Cash and cash equivalents $ 23,861 $ 18,340
Short-term investments 35,373 42,379
Accounts receivable 7,470 7,745
Inventories 6,226 9,282
Prepaid expenses and other current assets 3,288 4,497
Future income tax asset 2,970 2,997
-------------------------------------------------------------------------
79,188 85,240
Other assets 1,919 1,895
Investment tax credits recoverable 8,976 8,370
Property, plant and equipment 16,272 17,747
Intangible assets 5,720 9,770
Goodwill - 50,571
Future income tax asset 4,638 3,037
-------------------------------------------------------------------------
$ 116,713 $ 176,630
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 9,913 $ 11,125
Income tax payable 131 105
-------------------------------------------------------------------------
10,044 11,230
Shareholders' equity
Share capital 181,006 183,204
Contributed surplus 10,087 6,997
Deficit (84,424) (24,801)
-------------------------------------------------------------------------
106,669 165,400
-------------------------------------------------------------------------
$ 116,713 $ 176,630
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal quarters ended April 30, 2008 and April 30, 2007
(Canadian dollars, amounts in thousands)
Three months ended For the year
------------------------ ------------------------
April 30 April 30 April 30 April 30
2008 2007 2008 2007
(Unaudited) (Unaudited) (Audited) (Audited)
Operating activities:
Earnings (loss) $ (3,914) $ 1,653 $ (59,623) $ 2,045
Items not affecting
cash:
Amortization of
property, plant
and equipment and
asset impairments 2,077 2,187 8,357 9,786
Amortization of
acquisition-related
intangible assets 889 1,166 3,876 4,982
Stock-based
compensation 592 549 2,274 3,105
Investment tax
credit
recoverable 1,325 (250) (606) (2,636)
Future income taxes (1,471) 122 (1,574) (512)
Impairment of
intangible assets 4,749 - 4,749 -
Impairment of
goodwill (590) - 49,981 -
-------------------------------------------------------------------------
3,657 5,427 7,434 16,770
Cash effect of
changes in:
Accounts receivable (617) 1,227 275 1,761
Inventories 1,057 1,411 3,056 (3,127)
Prepaid expenses
and other assets (341) (1,038) 1,162 (530)
Accounts payable
and accrued
liabilities (500) (3,999) (829) (627)
Income taxes payable 205 (1,104) 26 (822)
-------------------------------------------------------------------------
3,461 1,924 11,124 13,425
-------------------------------------------------------------------------
Investing activities:
Acquisition of capital
assets (299) (1,678) (6,685) (10,441)
Acquisition of business - (216) - (18,744)
Purchased intangibles - - (4,749) -
Acquisition of
short-term investments - - (35,373) (42,379)
Proceeds on disposal of
short-term investments - - 42,379 11,393
-------------------------------------------------------------------------
(299) (1,894) (4,428) (60,171)
-------------------------------------------------------------------------
Financing activities:
Net proceeds on the
issue of common shares - 166 426 1,842
Repurchase of shares (200) (1,020) (1,601) (1,020)
Repayment of debt - - - (650)
-------------------------------------------------------------------------
(200) (854) (1,175) 172
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 2,962 (824) 5,521 (46,574)
Cash and cash
equivalents, beginning
of period 20,899 19,164 18,340 64,914
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period 23,861 18,340 23,861 18,340
Short-term investments,
end of period 35,373 42,379 35,373 42,379
-------------------------------------------------------------------------
Cash, cash
equivalents and
short-term investments,
end of period $ 59,234 $ 60,719 $ 59,234 $ 60,719
-------------------------------------------------------------------------