OTTAWA, March 2 /CNW Telbec/ - Tundra Semiconductor Corporation
(TSX:TUN), the leader in System Interconnect, today reported financial results
for the third quarter of fiscal 2006, which ended January 29, 2006.
Q3-2006 RESULTS:
- Q3-2006 revenue of $18.7M (up slightly quarter-over-quarter; up 9%
compared to Q3-2005)
- Pro forma earnings of $2.3M (up slightly quarter-over-quarter; up 54%
compared to Q3-2005)
- Pro forma diluted earnings per share were $0.11 (no change from $0.11
in Q2-2006; up from $0.07 in Q3-2005)
- GAAP earnings for Q3-2006 were $1.5M or $0.08 per diluted share (up
from $1.4M or $0.07 per diluted share in Q2-2006)
"Q3 was another good quarter with continued profitability growth and
positive customer reaction to our recently launched products," said Jim Roche,
President and Chief Executive Officer of Tundra. "We are seeing increased
design win activity across a range of applications in our key markets. Our
product leadership combined with the expansion of our product portfolio is
creating a solid base to achieve our growth targets."
"We're pleased to report a third quarter of strong profitability and
gross margins," said Norm Paquette, Chief Financial Officer of Tundra. "Our
solid earnings are a reflection of our business model which includes a
balanced approach to strategic investment in a discipline framework; allowing
Tundra to build for future growth."
GUIDANCE FOR Q4-2006:
- Revenue will be in the range of $17.5M to $19.5M
- Pro forma diluted earnings per share will be in the range of $0.08 to
$0.12
- Gross margins will be in the mid-to-high sixties
Leadership in RapidIO(R) System Interconnect
Tundra recently announced that the Company has established the world's
first RapidIO Interoperability Lab (RIOLAB(TM)) for interoperability and
specification compliance testing. Leveraging its depth of expertise,
technology leadership and commitment to drive the commercialization of RapidIO
technology, Tundra has served as the test facility for members of the
ecosystem and OEMs alike, resulting in the development of proven test scripts
and making the formalization of the RIOLAB a natural evolution. Operating as
an independent facility, the RIOLAB will produce impartial test results
facilitating seamless integration of multi-vendor components and accelerating
time to market for OEM products. The RIOLAB is expected to be operational by
summer 2006.
"In addition to being a founding member of the RapidIO Trade Association,
our depth of expertise and years of practical lab experience and
interoperability work with leading RapidIO silicon vendors, made the creation
of the RIOLAB a natural choice for Tundra," said Roche. "With the increasing
use of RapidIO in a broad range of applications, the early establishment of
the Lab will meet the needs of the growing RapidIO ecosystem and will
strengthen the overall market opportunity."
In addition to realizing this important ecosystem milestone, Tundra
continues to demonstrate its leadership in the development of RapidIO System
Interconnect products. As the first semiconductor vendor to bring Parallel and
Serial RapidIO switches to market, Tundra recently launched its third-
generation Serial RapidIO switch, the Tsi578(TM). This product sets industry
benchmarks for high-performance and low power consumption through an
innovative feature set ideally suited for ATCA(R) and MicroTCA(TM) backplane
connectivity as well as processor and DSP connectivity. The Tsi578's features
include independent unicast and multicast routing mechanisms, error management
extensions and the ability to route packets to over 64,000 endpoints.
Tundra also announced that the Tsi568A(TM) Serial RapidIO Switch is in
production. Launched in February 2005, the Tsi568A is another high-performance
switch in Tundra's expanding portfolio of Serial RapidIO switches that is
ideally suited for a broad spectrum of wireless, video, and networking
applications. With multiple RapidIO switches in production combined with
commercially-available development platforms and a strong roadmap for
next-generation switches, Tundra is recognized as the market leader in RapidIO
System Interconnect.
Leadership in Host Bridges for PowerPC(R)
Tundra continues to strengthen its position as the industry's leading
provider of host bridges for PowerPC. In the quarter, Tundra launched the
Tsi110(TM) Host Bridge, the industry's highest performing host bridge for
PowerPC. Ideal for power sensitive and cost sensitive applications, the Tsi110
integrates several communications peripherals including two 4-lane PCI-Express
ports, four Gigabit Ethernet ports and one PCI-X port. Following closely after
the launch of the Tsi109(TM), the Tsi110 is optimized for a broad range of
applications for the wireless, networking, storage and embedded computing
markets.
Also in the quarter, Tundra announced that the Tsi108(TM) Host Bridge is
in production and that the Tsi109 Host Bridge with dual processor support is
available for general sampling. Both host bridges have patent-pending
technology that supports PCI-X, DDR2 memory, Gigabit Ethernet and Flash
memory. Both products also have integrated power management features to
address demanding, low power applications. Well suited as companion chips for
both Freescale Semiconductor MPC74xx and IBM PPC 750xx PowerPC processors,
Tundra's host bridge portfolio offers designers with 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, March 2, 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: 416-646-3096
Replay: 416-640-1917, pass code: 21176363 (pound key). (Available up
until March 9, 2006)
Web Broadcast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1369500
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.
ABOUT THE RIOLAB(TM)
The RIOLAB is a state-of-the-art, independent testing facility that
provides device interoperability and specification compliance reports that
meet the growing needs of silicon vendors and OEMs. More information contact:
info(at)rapidiolab.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.
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). Tsi110, Tsi109,
Tsi108, Tsi578, Tsi568A, and Tsi564A are trademarks of Tundra Semiconductor
Corporation. RIOLAB and the RIOLAB logo are marks of the RapidIO
Interoperability Lab. 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 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 three
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
January 29 January 30 January 29 January 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 18,727 $ 17,124 $ 55,548 $ 62,420
Cost of revenue
5,892 6,147 18,441 22,180
-------------------------------------------------------------------------
Gross margin 12,835 10,977 37,107 40,240
-------------------------------------------------------------------------
Expenses
Sales and marketing 2,714 2,579 8,363 7,481
General and
administration 1,344 1,143 4,124 4,104
Research and development 5,750 5,362 15,878 14,902
-------------------------------------------------------------------------
9,808 9,084 28,365 26,487
Pro forma earnings
from operations 3,027 1,893 8,742 13,753
Interest and other income 411 370 940 276
-------------------------------------------------------------------------
Pro forma earnings before
income taxes 3,438 2,263 9,682 14,029
Income tax provision (1,183) (801) (3,375) (5,014)
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 2,255 $ 1,462 $ 6,307 $ 9,015
-------------------------------------------------------------------------
Pro forma earnings
per share
Basic $ 0.12 $ 0.08 $ 0.32 $ 0.46
Diluted $ 0.11 $ 0.07 $ 0.32 $ 0.46
Weighted average number
of common shares
outstanding
Basic 19,517 19,485 19,509 19,469
Diluted 19,737 19,716 19,700 19,775
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands)
For the For the three
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
January 29 January 30 January 29 January 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 18,727 $ 17,124 $ 55,548 $ 62,420
Cost of revenue 5,892 6,147 18,441 22,180
-------------------------------------------------------------------------
Gross margin 12,835 10,977 37,107 40,240
-------------------------------------------------------------------------
Expenses
Sales and marketing 2,714 2,579 8,363 7,481
General and
administration 1,344 1,143 4,124 4,104
Research and development 5,750 5,362 15,878 14,902
Stock based
compensation expense 522 353 1,473 1,029
Amortization of purchased
intangibles and backlog 311 577 1,415 1,764
-------------------------------------------------------------------------
10,641 10,014 31,253 29,280
Earnings from operations 2,194 963 5,854 10,960
Interest and other income 411 370 940 276
-------------------------------------------------------------------------
Earnings before
income taxes 2,605 1,333 6,794 11,236
Income tax provision (1,071) (597) (2,866) (4,385)
-------------------------------------------------------------------------
NET EARNINGS 1,534 736 3,928 6,851
Deficit, beginning
of period (35,214) (38,985) (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 (35,214) (38,985) (37,608) (45,100)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (33,680) $ (38,249) $ (33,680) $ (38,249)
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.08 $ 0.04 $ 0.20 $ 0.35
Diluted $ 0.08 $ 0.04 $ 0.20 $ 0.35
Weighted average number
of common shares
outstanding
Basic 19,517 19,485 19,509 19,469
Diluted 19,737 19,716 19,700 19,775
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
January 29 April 30
2006 2005
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 48,910 $ 68,190
Short term investments 26,479 7,167
Accounts receivable 7,730 6,076
Inventories 4,517 4,629
Prepaid expenses and other current assets 3,442 4,774
Future income tax asset 1,189 901
-------------------------------------------------------------------------
92,267 91,737
Capital assets 20,777 20,132
Purchased intangibles 1,846 3,249
Goodwill 37,325 37,325
Future income tax asset 3,754 3,287
-------------------------------------------------------------------------
$ 155,969 $ 155,730
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 7,805 $ 11,116
Income tax payable 824 1,452
Note payable 0 1,404
-------------------------------------------------------------------------
8,629 13,972
Shareholders' equity
Share capital 177,593 177,412
Contributed surplus 3,427 1,954
Deficit (33,680) (37,608)
-------------------------------------------------------------------------
147,340 141,758
-------------------------------------------------------------------------
$ 155,969 $ 155,730
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars, amounts in thousands)
For the For the three
fiscal quarter ended fiscal quarters ended
----------------------- -------------------------
January 29 January 30 January 29 January 30
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating activities
Net earnings $ 1,534 $ 736 $ 3,928 $ 6,851
Items not affecting cash:
Amortization of
capital assets and
asset impairments 1,682 1,101 4,698 5,668
Amortization of
purchased intangibles
and backlog 311 577 1,415 1,764
Stock based
compensation expense 522 353 1,473 1,029
Future income taxes (160) (250) (755) 1,612
-------------------------------------------------------------------------
3,889 2,517 10,759 16,924
Cash effect of
changes in:
Accounts receivable (1,178) 1,512 (1,654) 1,236
Inventories (282) 635 112 (148)
Prepaid expenses and
other current assets (207) 2,147 1,332 (1,121)
Accounts payable and
accrued liabilities (408) 1,831 (3,390) (4,998)
Income taxes payable 638 (59) (628) 1,493
-------------------------------------------------------------------------
2,452 8,583 6,531 13,386
Investing Activities
Acquisition of
capital assets (740) (1,972) (5,310) (4,075)
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 40,326 48,816 40,326 48,816
Acquisition
of business 0 (1,332) (1,370) (6,436)
-------------------------------------------------------------------------
39,586 45,512 (25,992) (17,477)
Financing activities
Net proceeds on
the issue of
common shares 89 37 181 1,324
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 42,127 54,132 (19,280) (2,767)
Cash and cash
equivalents,
beginning of period 6,783 13,731 68,190 70,630
-------------------------------------------------------------------------
Cash and cash
equivalents,
end of period $ 48,910 $ 67,863 $ 48,910 $ 67,863
-------------------------------------------------------------------------
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