OTTAWA, March 1 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, today reported financial results for the third quarter of fiscal year 2007, which ended January 28, 2007.
- Q3 Revenue: $21.7 million
- Q3 Pro forma earnings: $3.0 million
- Q3 Pro forma diluted earnings per share: $0.15
- Q3 GAAP Results: earnings of $1.3 million or $0.06 per diluted share
Revenue for the third quarter of fiscal year 2007 was $21.7 million, a 16% increase over the third quarter in fiscal year 2006, and a 1% decrease from the second quarter of fiscal year 2007. Pro forma earnings of $3.0 million represent a 34% increase compared to the third quarter of fiscal year 2006, and a 26% increase over the second quarter of fiscal year 2007. Pro forma diluted earnings per share of $0.15 were at the top of range of the Company's per share earnings guidance for the quarter of $0.11 to $0.15. GAAP earnings for the quarter were $1.3 million or $0.06 per diluted share, down from earnings of $1.5 million or $0.08 in the third quarter fiscal year 2006, up from a loss of $0.2 million or $0.01 per diluted share in the second quarter in fiscal year 2007.
"Tundra delivered exceptional profit growth in the third quarter and revenue continued to gain on a year-over-year basis. Tundra overcame continued volatility in communications infrastructure, one of the key markets that the Company serves. Tundra's core business remains strong with multiple products in the PCI and HyperTransport(TM) product lines moving into production in the quarter and good momentum behind the roll out of new products," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "Today we announced another significant RapidIO(R) achievement and another industry first. Tundra has entered into a partnership with Enea, a leading provider of network software and services, to deliver the first RapidIO-based system level software for the wireless communications infrastructure market. Tundra continues to deliver innovative solutions in response to growing demands from the RapidIO ecosystem."
"Additionally, with engineering samples now ready to ship to lead customers, we are on track for the upcoming launch of our first PCI Express Bridge," added Daniel Hoste.
Tundra's VME bridge business remained strong in the quarter. Tundra's VME customers continue to adopt RapidIO switches to their new VME product designs, as the high performance serial interconnect protocol in the core of their systems. The steady penetration of RapidIO into the existing VME market is increasing the addressable embedded computing market for Tundra's products.
Management offers the following outlook for the fourth quarter of fiscal year 2007:
- Q4 Revenue is expected to be in the range of $20.0 million to
$23.0 million
- Q4 Pro forma diluted earnings per share is expected to be in the range
of $0.11 to $0.15.
Q3 FY2007 Highlights:
Product Announcements:
- Tundra recently announced a partnership with Enea, based in Sweden, to
produce system level software which is RapidIO ready, signaling further
demand and adoption for RapidIO and Tundra products in the wireless
infrastructure market.
- Silicon Logic Engineering, Inc. (SLE), Tundra's Design Services
Division, announced the development of an Interlaken Interconnect
Protocol Intellectual Property (IP) Core. Interlaken is a scalable,
high speed chip-to-chip interconnect protocol developed jointly by
Cisco Systems, Inc. and Cortina Systems. Designed and tested by SLE to
be easily integrated into many ASIC and FPGA technologies, this IP Core
is designed to work with off-the-shelf components from most leading
technology vendors, and will be made commercially available by SLE
later this quarter. The IP Core enables silicon suppliers to scale
their components to 40Gbps and beyond, simplify designs, reduce
development costs and reduce time-to-market.
- In January, the Tundra Tsi110(TM) Host Bridge for PowerPC(R) began
sampling. Further broadening Tundra's Host Bridge portfolio, this
Bridge targets high volume applications such as, home gateways,
video-over-IP, and video surveillance, where cost and power consumption
are of primary concern.
- In January, the Tundra Tsi148(TM) VME Bridge was reduced in price. The
Tsi148 consumes half the power and 68% of the board footprint of the
industry's leading VME Bridge, Tundra's Universe(TM) II.
- In November, Tundra launched a new high quality PCI-to-PCI Bridge, the
Tsi340(TM) which is expected to be in general sampling later this
month. The Bridge targets a wide range of applications such as,
communications and networking equipment, video capture cards, embedded
video recorders, multi-function printers, and network interface cards.
Corporate Announcements:
- Tundra transferred the business and operations of RIOLAB(TM), the
world's first RapidIO interoperability testing facility, to an
independent third party, Fabric Embedded Tools, Inc., in February.
RIOLAB was established by Tundra a year ago as a facility designed to
give commercial semiconductor vendors, FPGA and ASIC developers, and
OEMs, the ability to validate interoperability of their products and
test for specification compliance. With both the establishment and
transfer of RIOLAB, Tundra continues to demonstrate leadership within
the RapidIO ecosystem.
- In January, Daniel Hoste presented the key note address at the VME
industry's annual event, Bus and Boards and said, "RapidIO technology
provides the optimal performance and reliability for next generation
critical embedded systems such as, medical imaging, military and
aerospace applications. It is therefore, the serial interconnect of
choice to complement VME-based designs."
- Terry Nickerson, former Chief Financial Officer of ATI, joined the
Tundra board of directors in November 2006 bringing notable financial
and business background and skills to the group.
Conference Call and Webcast
Management will hold a conference call and webcast on Thursday, March 1,
2007 at 5:00 pm EST. Participants wishing to access the conference call should
dial 1.416.644.3425. The conference call will also be webcast live at
www.tundra.com, and www.newswire.ca, and subsequently archived on Tundra's
website. Replay of the conference call will be available until midnight March
8, 2007. To access the replay, please dial 1.416.640.1917 and enter pass code
21220389(number sign).
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.
About Tundra
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with smart System Interconnect
products 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 PC(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.
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, European Union and People's Republic of China
(registration is pending in the United States). TUNDRA is a registered
trademark of Tundra Semiconductor Corporation (Canada, U.S. and U.K.).
Universe II, Tsi340, Tsi110, Tsi148 and Design.Connect.Go. are trademarks of
Tundra Semiconductor Corporation. RapidIO is a trademark of the RapidIO Trade
Association, Inc. Power PC is a trademark of International Business Machines
Corporation, used under license there from. Other registered and unregistered
trademarks are the property of their respective owners.
(C) Copyright 2007 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
TUNDRA SEMICONDUCTOR CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(Canadian dollars, amounts in thousands except per share data)
(Unaudited)
For the fiscal For the three
quarter ended fiscal quarters ended
----------------------- -----------------------
January 28 January 29 January 28 January 29
2007 2006 2007 2006
Revenue:
Product $ 19,047 $ 18,727 $ 56,064 $ 55,548
Service 2,627 - 7,036 -
-------------------------------------------------------------------------
21,674 18,727 63,100 55,548
Cost of revenue:
Product 5,346 5,892 17,066 18,441
Service 1,472 - 3,912 -
-------------------------------------------------------------------------
6,818 5,892 20,978 18,441
-------------------------------------------------------------------------
Gross margin 14,856 12,835 42,122 37,107
Expenses
Sales and marketing 3,436 2,714 10,351 8,363
General and
administration 2,103 1,344 7,353 4,124
Research and
development 7,206 5,750 19,134 15,878
-------------------------------------------------------------------------
12,745 9,808 36,838 28,365
Pro forma earnings
from operations 2,111 3,027 5,284 8,742
Interest and other income 925 411 2,217 940
-------------------------------------------------------------------------
Pro forma earnings
before income taxes 3,036 3,438 7,501 9,682
Income tax provision 10 1,183 102 3,376
-------------------------------------------------------------------------
PRO FORMA EARNINGS $ 3,026 $ 2,255 $ 7,399 $ 6,306
-------------------------------------------------------------------------
Pro forma earnings
per share
Basic $ 0.15 $ 0.12 $ 0.37 $ 0.32
Diluted $ 0.15 $ 0.11 $ 0.37 $ 0.32
Weighted average number
of common shares
outstanding
Basic 19,994 19,517 19,912 19,509
Diluted 20,047 19,737 20,148 19,700
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENT OF EARNINGS AND DEFICIT
(Canadian dollars, amounts in thousands except per share data)
(Unaudited)
For the fiscal For the three
quarter ended fiscal quarters ended
----------------------- -----------------------
January 28 January 29 January 28 January 29
2007 2006 2007 2006
Revenue:
Product $ 19,047 $ 18,727 $ 56,064 $ 55,548
Service 2,627 - 7,036 -
-------------------------------------------------------------------------
21,674 18,727 63,100 55,548
Cost of revenue:
Product 5,346 5,892 17,066 18,441
Service 1,472 - 3,912 -
-------------------------------------------------------------------------
6,818 5,892 20,978 18,441
-------------------------------------------------------------------------
Gross margin 14,856 12,835 42,122 37,107
Expenses
Sales and marketing 3,436 2,714 10,351 8,363
General and
administration 2,103 1,344 7,353 4,124
Research and
development 7,206 5,750 19,134 15,878
Stock-based
compensation 561 522 2,556 1,473
Amortization of
purchased intangibles
and other assets 1,199 311 3,816 1,415
-------------------------------------------------------------------------
14,505 10,641 43,210 31,253
Earnings (loss) from
operations 351 2,194 (1,088) 5,854
Interest and other income 925 411 2,217 940
-------------------------------------------------------------------------
Earnings before
income taxes 1,276 2,605 1,129 6,794
Income tax provision 10 1,071 737 2,866
-------------------------------------------------------------------------
NET EARNINGS 1,266 1,534 392 3,928
Deficit, beginning
of period (27,720) (35,214) (26,846) (37,608)
-------------------------------------------------------------------------
DEFICIT, END OF PERIOD $ (26,454) $ (33,680) $ (26,454) $ (33,680)
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.06 $ 0.08 $ 0.02 $ 0.20
Diluted $ 0.06 $ 0.08 $ 0.02 $ 0.20
Weighted average number
of common shares
outstanding
Basic 19,994 19,517 19,912 19,509
Diluted 20,047 19,737 20,148 19,700
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Canadian dollars, amounts in thousands)
January 28 April 30
2007 2006
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 19,164 $ 64,914
Short term investments 42,379 11,393
Accounts receivable 8,972 7,759
Inventories 10,693 5,502
Prepaid expenses and other current assets 3,397 3,445
Future income tax asset 2,934 1,433
-------------------------------------------------------------------------
87,539 94,446
Long-term prepaids 1,957 2,155
Capital assets 22,844 20,541
Purchased intangibles and other assets 6,340 1,534
Goodwill 50,355 37,325
Future income tax asset 11,343 10,038
-------------------------------------------------------------------------
$ 180,378 $ 166,039
-------------------------------------------------------------------------
CURRENT LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 15,118 $ 10,140
Income tax payable 1,209 927
-------------------------------------------------------------------------
16,327 11,067
Shareholders' equity
Share capital 184,013 177,882
Contributed surplus 6,492 3,936
Deficit (26,454) (26,846)
-------------------------------------------------------------------------
164,051 154,972
-------------------------------------------------------------------------
$ 180,378 $ 166,039
-------------------------------------------------------------------------
TUNDRA SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
(Canadian dollars, amounts in thousands)
(Unaudited)
For the fiscal For the three
quarter ended fiscal quarters ended
----------------------- -----------------------
January 28 January 29 January 28 January 29
2007 2006 2007 2006
Operating activities
Net earnings $ 1,266 $ 1,534 $ 392 $ 3,928
Items not affecting
cash:
Amortization of
capital assets and
asset impairments 2,905 1,682 7,599 4,698
Amortization of
purchased intangibles
and other assets 1,199 311 3,816 1,415
Stock-based
compensation 561 522 2,556 1,473
Future income taxes (1,102) (160) (3,020) (755)
-------------------------------------------------------------------------
4,829 3,889 11,343 10,759
Cash effect of
changes in:
Accounts receivable (1,119) (1,178) 534 (1,654)
Inventories (864) (282) (4,538) 112
Prepaid expenses and
other current assets (569) (207) 508 1,332
Accounts payable and
accrued liabilities 2,391 (408) 3,372 (3,390)
Income taxes payable - 638 282 (628)
-------------------------------------------------------------------------
4,668 2,452 11,501 6,531
Investing Activities
Acquisition of capital
assets (1,786) (740) (8,763) (5,310)
Acquisition of short
term investments (42,379) - (42,379) (59,638)
Proceeds on disposal
of short term
investments - 40,326 11,393 40,326
Acquisition of
business - - (18,528) (1,370)
-------------------------------------------------------------------------
(44,165) 39,586 (58,277) (25,992)
Financing activities
Net proceeds on the
issue of common
shares 212 89 1,676 181
Repayment of debt - - (650) -
-------------------------------------------------------------------------
212 89 1,026 181
Increase (decrease)
in cash and cash
equivalents (39,285) 42,127 (45,750) (19,280)
Cash and cash
equivalents,
beginning of period 58,449 6,783 64,914 68,190
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 19,164 $ 48,910 $ 19,164 $ 48,910
-------------------------------------------------------------------------