Fourth Quarter Revenue within Guidance, Annual Revenue Down
6% Year-over-Year
OTTAWA, June 3 /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 2009, and for the fiscal year, which ended April 30, 2009.
Q4-2009 RESULTS:
- Q4 Revenue: $15.5 million
- Q4 Pro forma earnings: $0.7 million
- Q4 Pro forma diluted earnings per share: $0.04
- Q4 GAAP results: loss of $5.3 million or $0.27 per diluted share
Revenue for the fourth quarter of fiscal year 2009 was $15.5 million, comprised of $14.5 million in product revenue and $1.0 million in services revenue. Revenue for the Communications market segment was $9.5 million and for the Computing/Storage market segment was $5.0 million in the fourth quarter. Overall quarterly revenue represents a 6% increase from the third quarter of fiscal year 2009 and a 13% decrease compared to the fourth quarter of fiscal year 2008. Pro forma earnings for the quarter were $0.7 million or $0.04 per diluted share, compared to earnings of $0.1 million or $0.00 per diluted share in the third quarter of fiscal year 2009 and compared to $1.5 million or $0.07 per diluted share in the fourth quarter of fiscal year 2008. GAAP loss for the quarter was $5.3 million or $0.27 per diluted share, compared to a loss of $1.1 million or $0.06 per diluted share in the third quarter of fiscal year 2009, and a loss of $3.9 million or $0.20 per diluted share in the fourth quarter of fiscal year 2008. The GAAP loss in the fourth quarter was impacted by a $5.0 million "break fee" paid to Gennum pursuant to the arrangement agreement entered into on March 19th 2009, and the pending acquisition agreement entered into with IDT on April 30, 2009.
Fiscal Year 2009 RESULTS:
- FY2009 Revenue: $66.4 million
- FY2009 Pro forma earnings: $4.3 million
- FY2009 Pro forma diluted earnings per share: $0.22
- FY2009 GAAP Results: loss of $4.2 million or $0.22 per diluted share
Revenue for fiscal year 2009 was $66.4 million, a 6% decrease over fiscal year 2008. Product revenue for the fiscal year was $60.3 million and Services revenue for the year was $6.1 million. The Communications market segment generated $35.5 million in revenue for the fiscal year, and the Computing/Storage market segment generated $24.8 million during fiscal 2009. Pro forma earnings of $4.3 million represent a 7% decrease compared to $4.6 million in fiscal year 2008. Pro forma diluted earnings per share of $0.22 were comparable to $0.23 per share in fiscal year 2008. For the fiscal year, GAAP losses were $4.2 million or $0.22 per diluted share, down from a loss of $59.6 million or $3.00 per diluted share in fiscal year 2008.
Q4-2009 Corporate Highlights
- On March 19, Gennum Corporation (Gennum) entered into a definitive
agreement to acquire Tundra in a transaction valued at approximately
Cdn$86 million. On April 17, Gennum announced that it had increased the
acquisition purchase price and amended the Arrangement Agreement.
Pursuant to the amendment, Gennum increased the aggregate purchase
price for all of the Tundra shares from approximately Cdn$86 million to
approximately Cdn$112 million representing an increase of approximately
31%.
- On April 30, Integrated Device Technology, Inc. (IDT) and Tundra signed
a definitive acquisition agreement pursuant to which IDT will acquire
Tundra for Cdn$6.25 per share, for an aggregate purchase price of
approximately Cdn$120.8 million. The transaction will provide mutual
customers with a broader product portfolio and strengthened roadmap for
innovation. The transaction is subject to approval by a minimum of two-
thirds of the votes cast by Tundra shareholders at a Special Meeting
scheduled for June 15, 2009, and is subject to Canadian court approval
as well as customary closing conditions.
- On May 21, Tundra announced that it had obtained an Interim Order and
mailed an Information Circular for Special Meeting to its shareholders.
At the Special Meeting on June 15, 2009, Tundra shareholders will be
asked to vote on a special resolution to approve a proposed plan of
arrangement pursuant to which 4440471 Canada Inc., a wholly-owned
Canadian acquisition subsidiary of Integrated Device Technology, Inc.
will acquire all of the issued and outstanding shares of Tundra. On
May 15, 2009, the Ontario Superior Court of Justice granted an interim
order providing for the calling and holding of the Special Meeting and
certain other matters related to the Special Meeting and the
Arrangement.
The Special Shareholder Meeting will be held at 11:00 a.m. (EST) on
Monday, June 15, 2009 at The Marshes Golf Club, 320 Terry Fox Drive,
Ottawa, Ontario. Tundra shareholders of record as of 5:00 p.m. (EST) on
May 15, 2009 will be entitled to vote in person or by proxy at the
Special Meeting.
Q4-2009 Product Highlights
- On March 31, Tundra announced its RapidIO Gen2 Program. Tundra's New
RapidIO Gen2 solutions dramatically increase system performance for
next generation wireless, video and military designs. Backwards
compatible with RapidIO Specification Rev 1.3, Tundra's new RapidIO
solutions will offer OEMs increased system performance, reduced power
consumption and lower system costs when designing next generation
systems.
Tundra's RapidIO Gen2 program builds on its industry-leading portfolio
of Rev 1.3 products and tools, in volume production shipments in WiMAX,
HSPA, WCDMA, TD-SCDMA, video and military applications today. Gen2 was
developed by the RapidIO Trade Association to answer the needs of
existing RapidIO customers whose future systems require increased
performance and speed, including; 3G and 4G base stations, HD IPTV or
high-end video conferencing. Tundra's RapidIO Gen2 program includes a
full portfolio of switches, IP and support tools that will offer new
wireless broadband and high bandwidth applications even more system
performance optimization capabilities, and will double the speed of
current RapidIO Rev 1.3 solutions.
- On May 12, Tundra announced its new RapidIO System Modeling Tool(TM),
which offers customers an opportunity to unleash the maximum
performance potential of RapidIO. The new System Modeling Tool allows
wireless, military, imaging, video infrastructure and storage OEMs to
unleash the full performance potential and features of RapidIO
interconnect to enhance system level performance, optimize architecture
and reduce power consumption. Tundra's RapidIO System Modeling Tool
improves end-to-end packet transfers by modeling not only the switch
fabric, but also the behavior of the endpoints in the system, allowing
designers to plan and examine the behavior of end-to-end transactions.
Customers can simulate various traffic flows throughout the system to
uncover the optimal priorities for system traffic flow performance. The
new tool, along with the expertise of Tundra Application Engineers,
allows designers to simulate the performance of multiple systems
reusing a single hardware platform. Modeling more than one end-use
application offers OEMs significant cost saving opportunities as
designers will have performance insight at the design stage of the
project. Re-use of hardware platforms to serve more than one end
application is anticipated to get Tundra's customers to market faster
and with lower bill-of-material cost than their competitors.
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, impairment of goodwill and
intangible assets, amortization of acquisition related intangibles and
termination fee. Tundra uses pro forma measures internally to evaluate and
manage operating performance as well as to forecast and plan. A reconciliation
of the differences between pro forma and GAAP measures is provided in the
tables attached.
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
Certain statements in this news release regarding the proposed transaction
between Tundra and IDT, the expected timetable for completing the transaction
and any other statements regarding Tundra's future expectations, beliefs,
goals or prospects constitute forward-looking information within the meaning
of applicable securities legislation (collectively "forward-looking
statements"). Any statements that are not statements of historical fact
(including statements containing the words "believes," "plans," "anticipates,"
"expects," "estimates" and similar expressions) should also be considered
forward-looking statements. A number of important factors could cause actual
events or results to differ materially from those indicated or implied by such
forward-looking statements, including without limitation: the parties' ability
to consummate the transaction; the conditions to the completion of the
transaction, including that the receipt of shareholder approval or court
approval required for the transaction may not be obtained on the terms
expected or on the anticipated schedule and the parties' ability to meet
expectations regarding the timing, completion and accounting and tax
treatments of the transaction.
Tundra assumes no obligation to update the information in this
communication, except as otherwise required by law. Additional information
identifying risks and uncertainties is contained in the Circular and in
Tundra's filings with the various provincial securities commissions which are
available online at www.sedar.com. Forward looking statements are provided for
the purpose of providing information about the current expectations, beliefs
and plans of the management of Tundra relating to the future. Readers are
cautioned that such statements may not be appropriate for other purposes.
Readers are also cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date hereof.
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. RapidIO is a trademark of the RapidIO Trade Association,
Inc. Other registered and unregistered trademarks are the property of their
respective owners.
(C) Copyright 2009 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
For the fiscal quarters ended April 30, 2009 and April 30, 2008
(Canadian dollars, amounts in thousands except per share data)
Three months ended Year ended
------------------------ -----------------------
April 30 April 30 April 30 April 30
2009 2008 2009 2008
(Unaudited) (Unaudited) (Audited) (Audited)
Revenue:
Product $ 14,469 $ 15,024 $ 60,298 $ 61,626
Service 1,037 2,888 6,100 8,960
-------------------------------------------------------------------------
15,506 17,912 66,398 70,586
Cost of revenue:
Product 4,685 5,184 19,697 20,027
Service 739 1,930 5,568 5,656
-------------------------------------------------------------------------
5,424 7,114 25,265 25,683
-------------------------------------------------------------------------
Gross margin 10,082 10,798 41,133 44,903
Expenses:
Sales and marketing 2,996 2,822 11,817 11,548
General and administration 999 1,745 7,170 8,009
Research and development 6,268 4,891 21,260 21,964
Stock-based compensation 900 592 2,441 2,274
Amortization of
acquisition-related
intangible assets 41 889 621 3,876
Restructuring charges
(reversal) - (250) (30) 3,713
-------------------------------------------------------------------------
11,204 10,689 43,279 51,384
Earnings (loss) from
operations (1,122) 109 (2,146) (6,481)
Interest and other income 519 416 3,037 2,374
Impairment of intangible
assets - (4,749) (515) (4,749)
Impairment of goodwill - 590 - (49,981)
Termination fee (5,000) - (5,000) -
-------------------------------------------------------------------------
Loss before income taxes (5,603) (3,634) (4,624) (58,837)
Income tax provision
(recovery) (341) 280 (420) 786
-------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE
LOSS $ (5,262) $ (3,914) $ (4,204) $(59,623)
-------------------------------------------------------------------------
Loss per share
Basic $ (0.27) $ (0.20) $ (0.22) $ (3.00)
Diluted $ (0.27) $ (0.20) $ (0.22) $ (3.00)
Weighted average number of
common shares outstanding
Basic 19,367 19,694 19,512 19,848
Diluted 19,367 19,694 19,512 19,848
TUNDRA SEMICONDUCTOR CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
For the fiscal quarters ended April 30, 2009 and April 30, 2008
(Canadian dollars, amounts in thousands except per share data)
Three months ended Year ended
------------------------ -----------------------
April 30 April 30 April 30 April 30
2009 2008 2009 2008
(Unaudited) (Unaudited) (Audited) (Audited)
Revenue:
Product $ 14,469 $ 15,024 $ 60,298 $ 61,626
Service 1,037 2,888 6,100 8,960
-------------------------------------------------------------------------
15,506 17,912 66,398 70,586
Cost of revenue:
Product 4,685 5,184 19,697 20,027
Service 739 1,930 5,568 5,656
-------------------------------------------------------------------------
5,424 7,114 25,265 25,683
-------------------------------------------------------------------------
Gross margin 10,082 10,798 41,133 44,903
Expenses:
Sales and marketing 2,996 2,822 11,817 11,548
General and administration 999 1,745 7,170 8,009
Research and development 6,268 4,891 21,260 21,964
-------------------------------------------------------------------------
10,263 9,458 40,247 41,521
Pro forma earnings (loss)
from operations (181) 1,340 886 3,382
Interest and other income 519 416 3,037 2,374
-------------------------------------------------------------------------
Pro forma earnings before
income taxes 338 1,756 3,923 5,756
Income tax provision
(recovery) (341) 280 (420) 1,107
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 679 $ 1,476 $ 4,343 $ 4,649
-------------------------------------------------------------------------
Pro froma earnings per share
Basic $ 0.04 $ 0.07 $ 0.22 $ 0.23
Diluted $ 0.04 $ 0.07 $ 0.22 $ 0.23
Weighted average number of
common shares outstanding
Basic 19,367 19,694 19,512 19,848
Diluted 19,383 19,694 19,514 19,916
TUNDRA SEMICONDUCTOR CORPORATION
RECONCILIATION BETWEEN PRO FORMA AND GAAP MEASURES
For the fiscal quarters ended April 30, 2009 and April 30, 2008
(Canadian dollars, amounts in thousands)
(Unaudited)
The reconciliation below provides a more detailed description of the
amounts excluded from the pro forma results.
Three months ended Year ended
------------------------ -----------------------
April 30 April 30 April 30 April 30
2009 2008 2009 2008
GAAP net loss $ (5,262) $ (3,914) $ (4,204) $(59,623)
Stock-based compensation 900 592 2,441 2,274
Amortization of
acquisition-related
intangible assets 41 889 621 3,876
Restructuring charges
(reversal) - (250) (30) 3,713
Impairment of intangible
assets - 4,749 515 4,749
Impairment of goodwill - (590) - 49,981
Termination fee 5,000 - 5,000 -
Income tax effect - - - (321)
-------------------------------------------------------------------------
Pro forma net earnings $ 679 $ 1,476 $ 4,343 $ 4,649
-------------------------------------------------------------------------
GAAP net loss per share $ (0.27) $ (0.20) $ (0.22) $ (3.00)
Stock-based compensation 0.05 0.03 0.12 0.11
Amortization of
acquisition-related
intangible assets - 0.04 0.03 0.19
Restructuring charges
(reversal) - (0.01) - 0.19
Impairment of intangible
assets - 0.24 0.03 0.24
Impairment of goodwill - (0.03) - 2.52
Termination fee 0.26 - 0.26 -
Income tax effect - - - (0.02)
-------------------------------------------------------------------------
Pro forma net earnings per
diluted share $ 0.04 $ 0.07 $ 0.22 $ 0.23
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Canadian dollars, amounts in thousands)
(Audited)
April April
2009 2008
ASSETS
Current assets
Cash and cash equivalents $ 58,965 $ 23,861
Short-term investments 2,988 35,373
Accounts receivable 5,876 7,470
Inventories 5,115 6,226
Prepaid expenses and other current assets 2,882 3,288
Investment tax credits recoverable 1,805 -
Future income tax asset 1,830 2,970
-------------------------------------------------------------------------
79,461 79,188
Other assets 1,451 1,919
Investment tax credits recoverable 7,200 8,976
Property, plant and equipment 14,129 16,272
Intangible assets 4,492 5,720
Future income tax asset 5,767 4,638
-------------------------------------------------------------------------
$ 112,500 $ 116,713
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 6,668 $ 7,623
Deferred revenue 2,798 2,290
Income taxes payable 90 131
-------------------------------------------------------------------------
9,556 10,044
Shareholders' equity
Share capital 177,835 181,006
Contributed surplus 13,737 10,087
Deficit (88,628) (84,424)
-------------------------------------------------------------------------
102,944 106,669
-------------------------------------------------------------------------
$ 112,500 $ 116,713
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal quarters ended April 30 2009 and April 30, 2008
(Canadian dollars, amounts in thousands)
Three months ended Year ended
------------------------ -----------------------
April 30 April 30 April 30 April 30
2009 2008 2009 2008
(Unaudited) (Unaudited) (Audited) (Audited)
Operating activities:
Loss $ (5,262) $ (3,914) $ (4,204) $(59,623)
Items not affecting cash:
Amortization of property,
plant and equipment and
asset impairments 1,982 2,077 8,015 8,357
Amortization of
acquisition-related
intangible assets 41 889 621 3,876
Stock-based compensation 900 592 2,441 2,274
Investment tax credits
recoverable (32) 1,325 (29) (606)
Future income taxes 405 (1,471) 11 (1,574)
Impairment of intangible
assets - 4,749 515 4,749
Impairment of goodwill - (590) - 49,981
-------------------------------------------------------------------------
(1,966) 3,657 7,370 7,434
Cash effect of changes in:
Accounts receivable 1,478 (617) 1,594 275
Inventories 1,892 1,057 1,111 3,056
Prepaid expenses and
other assets (896) (341) 874 1,162
Accounts payable and
accrued liabilities (1,052) (849) (1,740) (3,119)
Deferred revenue (352) 349 508 2,290
Income taxes payable (150) 205 (41) 26
-------------------------------------------------------------------------
(1,046) 3,461 9,676 11,124
-------------------------------------------------------------------------
Investing activities:
Acquisition of capital
assets (107) (299) (5,585) (6,685)
Purchased intangibles - - (193) (4,749)
Acquisition of short-term
investments - - (43,678) (35,373)
Proceeds on disposal of
short-term investments 15,894 - 76,063 42,379
-------------------------------------------------------------------------
15,787 (299) 26,607 (4,428)
-------------------------------------------------------------------------
Financing activities:
Net proceeds on the
issue of common shares - - - 426
Repurchase of shares (247) (200) (1,179) (1,601)
-------------------------------------------------------------------------
(247) (200) (1,179) (1,175)
-------------------------------------------------------------------------
Increase in cash and cash
equivalents 14,494 2,962 35,104 5,521
Cash and cash equivalents,
beginning of period 44,471 20,899 23,861 18,340
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 58,965 23,861 58,965 23,861
Short-term investments,
end of period 2,988 35,373 2,988 35,373
-------------------------------------------------------------------------
Cash, cash equivalents and
short-term investments,
end of period $ 61,953 $ 59,234 $ 61,953 $ 59,234
-------------------------------------------------------------------------