Tundra Reports Revenue and Earnings at High End of Guidance
OTTAWA, Aug. 28 /CNW Telbec/ - Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX:TUN), a leader in System Interconnect, today reported financial results for the first quarter of fiscal 2009, which ended August 3, 2008.
Q1-2009 RESULTS:
- Q1 Revenue: $18.0 million
- Q1 Pro forma earnings: $1.2 million
- Q1 Pro forma diluted earnings per share: $0.06
- Q1 GAAP Results: earnings of $0.4 million or $0.02 per diluted share
- Q1 Product Revenue: up 4% over previous quarter
Revenue for the first quarter of fiscal year 2009 was $18.0 million, comprised of $8.9 million in the Communications market segment, $6.8 million in the Computing/Storage market segment, and $2.3 million in Design Services. Quarterly revenue represents a 1% increase from the fourth quarter of fiscal year 2008 and a 10% decrease compared to the first quarter in fiscal year 2008. Pro forma earnings for the quarter were $1.2 million or $0.06 per share, compared to earnings of $1.5 million or $0.07 per share in the fourth quarter of fiscal year 2008 and compared to $1.9 million or $0.10 per share in the first quarter of fiscal year 2008. GAAP earnings for the quarter were $0.4 million or $0.02 per diluted share, compared to a loss of $3.9 million or $0.20 per diluted share in the fourth quarter of fiscal year 2008, and a loss of $1.0 million or $0.05 per diluted share in the first quarter fiscal year 2008.
"We are pleased with the financial results of the first quarter of fiscal 2009. Revenue and pro forma earnings were at the high end of the guidance we provided at the close of the fourth quarter, and we also achieved more than 4% growth in product revenue as projected. Our cash position remains strong at more than $58 million and our cash generated from operations was once again positive," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "In the first quarter we adapted our growth strategy to focus on maintaining our leadership position in RapidIO and on addressing new, broader, larger markets by expanding our PCI Express portfolio. We are excited about this strategy, setting up Tundra for steady growth from both product lines, while we continue to carefully manage our financial performance," continued Hoste.
Management offers the following outlook for the second quarter of fiscal year 2009:
- Q2 Revenue is expected to be in the range of $16.5 million to
$18.5 million
- Q2 Pro forma diluted earnings per share is expected to be in the range
of $0.03 to $0.07
"Our outlook for the second quarter is expected to be consistent with
first quarter guidance, with a continued focus on delivering solid cash
performance," said David Long, Chief Financial Officer, Tundra Semiconductor.
Q1-2009 Highlights
- Tundra announced that it has been selected by ZTE Corporation, a
leading global provider of telecommunications equipment and network
solutions, to supply Tundra's high performance PCI Express(R) (PCIe)
product for ZTE's Next Generation Platform System Graphics Card. ZTE
selected Tundra's high performance semiconductor to improve overall
performance on its new Graphics Card. Tundra's PCIe interconnect
solution has typical power consumption of 1.3W, and incorporates power
management to minimize power consumption during operation. In addition,
Tundra's PCIe product offers the flexibility, high performance, small
footprint, low power consumption and drop-in compatibility that ZTE
required for its new design.
- In the quarter Tundra introduced an evaluation platform centered on its
Tsi620(TM) multi-standard RapidIO(R) Switch. In addition to the Tundra
Tsi620, the multi-platform evaluation platform works in conjunction
with Texas Instruments (TI) TMS320TCI6487 high performance multi-core
DSP and an Altera(R) Stratix(R) III FPGA to enable prototyping and,
ultimately, cost reduction in applications such as high performance
wireless and video processing, medical imaging and military signal-
processing solutions. The platform will allow customers to use the
RapidIO protocol for DSP or processor aggregation, while leveraging the
Tsi620's hardware bridging to low cost PCI-enabled processors. The
platform offers communication with a variety of cost competitive
PCI-enabled microprocessors through a PMC connector, providing
additional cost saving opportunities. TI's 3GHz embedded DSP delivers
exceptional performance in computationally challenging applications. On
the evaluation platform, the Tsi620 interfaces with Altera's Stratix
III FPGA to leverage RapidIO over XGMII. This results in low latency
while leveraging the RapidIO protocol and allows customers to access
RapidIO processor clusters from an FPGA without SerDes. The complete
solution allows customers to reduce their time-to-market, and the
bill-of-materials (BOM) in end applications by over $100 compared to
other solutions.
Finally, it is with deep regret that we announced in July that Mike Unger,
a long-standing member of the Tundra Board of Directors, passed away after a
short illness. Mike served on Tundra's Board of Directors since 2001, after a
long and successful career at Nortel Networks, his last role there being
President of the Optical Networks Division. As a Director of Tundra's
business, and as Chair of the Board's Human Resources, Corporate Governance
and Nominating Committee, Mike demonstrated grace, balance, wisdom and good
judgment in all that he did, and always had the best interests of Tundra's
Shareholders and Employees in mind. Mike's positive attitude and good nature
will be sorely missed.
Conference Call and Webcast
Tundra management will hold a conference call today August 28, 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: 1.416-644-3414
Replay: 1.416-640-1917, Passcode: 21280986(number sign).
(Available until Sept 4, 2008)
Web Cast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)2389420
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, restructuring charges, 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. and Tsi620 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 Tsi620 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 three months ended August 3, 2008 and July 29, 2007
(Canadian dollars, amounts in thousands except per share data)
(Unaudited)
Three months ended
-------------------------
August 3 July 29
2008 2007
Revenue
Product $ 15,696 $ 18,054
Service 2,315 2,004
-------------------------------------------------------------------------
18,011 20,058
Cost of revenue
Product 5,973 5,608
Service 1,594 1,174
-------------------------------------------------------------------------
7,567 6,782
-------------------------------------------------------------------------
Gross margin 10,444 13,276
Expenses
Sales and marketing 3,099 3,028
General and administration 2,062 2,408
Research and development 4,438 5,962
-------------------------------------------------------------------------
9,599 11,398
Pro forma earnings from operations 845 1,878
Interest and other income 443 686
-------------------------------------------------------------------------
Pro forma earnings before income taxes 1,288 2,564
Income tax provision 95 629
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 1,193 $ 1,935
-------------------------------------------------------------------------
Pro froma earnings per share
Basic $ 0.06 $ 0.10
Diluted $ 0.06 $ 0.10
Weighted average number of common
shares outstanding
Basic 19,625 19,932
Diluted 19,625 19,970
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME
(LOSS)
For the three months ended August 3, 2008 and July 29, 2007
(Canadian dollars, amounts in thousands except per share data)
(Unaudited)
Three months ended
-------------------------
August 3 July 29
2008 2007
Revenue
Product $ 15,696 $ 18,054
Service 2,315 2,004
-------------------------------------------------------------------------
18,011 20,058
Cost of revenue
Product 5,973 5,608
Service 1,594 1,174
-------------------------------------------------------------------------
7,567 6,782
-------------------------------------------------------------------------
Gross margin 10,444 13,276
Expenses
Sales and marketing 3,099 3,028
General and administration 2,062 2,408
Research and development 4,438 5,962
Stock-based compensation 450 488
Amortization of acquisition-related
intangible assets 306 1,082
Restructuring charges - 1,659
-------------------------------------------------------------------------
10,355 14,627
Earnings (loss) from operations 89 (1,351)
Interest and other income 443 686
-------------------------------------------------------------------------
Earnings (loss) before income taxes 532 (665)
Income tax provision 95 308
-------------------------------------------------------------------------
NET EARNINGS (LOSS) AND COMPREHENSIVE
INCOME (LOSS) $ 437 $ (973)
-------------------------------------------------------------------------
Earnings (loss) per share
Basic $ 0.02 $ (0.05)
Diluted $ 0.02 $ (0.05)
Weighted average number of common
shares outstanding
Basic 19,625 19,932
Diluted 19,625 19,932
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
August 3 April 30
2008 2008
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 58,537 $ 23,861
Short-term investments - 35,373
Accounts receivable 8,766 7,470
Inventories 5,998 6,226
Prepaid expenses and other current assets 2,258 3,288
Future income tax asset 2,705 2,970
-------------------------------------------------------------------------
78,264 79,188
Other assets 1,912 1,919
Investment tax credits recoverable 9,116 8,976
Property, plant and equipment 18,399 16,272
Intangible assets 5,399 5,720
Future income tax asset 5,017 4,638
-------------------------------------------------------------------------
$ 118,107 $ 116,713
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 10,769 $ 9,913
Income tax payable 189 131
-------------------------------------------------------------------------
10,958 10,044
Shareholders' equity
Share capital 180,159 181,006
Contributed surplus 10,977 10,087
Deficit (83,987) (84,424)
-------------------------------------------------------------------------
107,149 106,669
-------------------------------------------------------------------------
$ 118,107 $ 116,713
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended August 3, 2008 and July 29, 2007
(Canadian dollars, amounts in thousands)
(Unaudited)
Three months ended
-------------------------
August 3 July 29
2008 2007
Operating activities
Earnings (loss) $ 437 $ (973)
Items not affecting cash
Amortization of property, plant and
equipment and asset impairments 1,810 1,997
Amortization of acquisition-related
intangible assets 306 1,082
Stock-based compensation 450 488
Investment tax credits recoverable (140) (128)
Future income taxes (114) (1,058)
-------------------------------------------------------------------------
2,749 1,408
Cash effect of changes in
Accounts receivable (1,296) (1,060)
Inventories 228 1,462
Prepaid expenses and other assets 1,037 168
Accounts payable and accrued liabilities 814 (1,263)
Income taxes payable 58 (115)
-------------------------------------------------------------------------
3,590 600
-------------------------------------------------------------------------
Investing activities
Acquisition of property, plant and equipment (3,922) (4,148)
Proceeds on disposal of short-term investments 35,373 42,379
-------------------------------------------------------------------------
31,451 38,231
-------------------------------------------------------------------------
Financing activities
Net proceeds on the issue of common shares - 250
Share repurchase (365) -
-------------------------------------------------------------------------
(365) 250
-------------------------------------------------------------------------
Increase in cash and cash equivalents 34,676 39,081
Cash and cash equivalents, beginning of period 23,861 18,340
-------------------------------------------------------------------------
Cash and cash equivalents, end of period 58,537 57,421
Short-term investments, end of period - -
-------------------------------------------------------------------------
Cash, cash equivalents and short-term
investments, end of period $ 58,537 $ 57,421
-------------------------------------------------------------------------