Cambridge, UK -- (MARKET WIRE) -- April 26, 2007 --ARM HOLDINGS PLC REPORTS RESULTS FOR THE FIRST QUARTER ENDED
31 MARCH 2007
Conference calls discussing these results will be audiocast today at
08:30 BST and 13:00 BST at
www.arm.com/ir
CAMBRIDGE, UK, 26 April 2007-ARM Holdings plc ((LSE: ARM);
(Nasdaq:
ARMHY)) announces its unaudited financial results for the
quarter ended 31 March 2007
Highlights (US GAAP unless otherwise stated)
- Q1 dollar revenues up 14% year-on-year
- Processor Division (PD) licensing revenue up 25%
- Physical IP Division (PIPD) licensing revenue up 23%
- PD underlying royalty revenue up 16% to $45m on 724m shipments
- Normalised operating margin increases to 30.3% (Q4 2006: 29.0%)
despite strong currency headwind
- Capital structure update announced - plan to move to net cash
balance of approximately GBP50m by year end (from GBP127m at end
of Q1)
- Propose to step-up dividend in 2007 to 2p per share (from 1p
per share in 2006)
- Share buyback program to be accelerated - more than GBP100m to
be spent on buybacks in FY 2007
Commenting on the results, Warren East, Chief Executive Officer,
said:
"We are pleased that our Q1 results represent another quarter of
robust operational execution and strong cash flow generation against
a backdrop of some softness in the semiconductor industry. In
addition, today's announcement of our intention to double the
dividend in 2007 and to accelerate the share buyback program reflects
our confidence in the long-term growth, earnings and cash generation
potential of the business."
Q1 2007 - Revenue Analysis
______________________________________________________________________
Revenue ($M)*** Revenue (GBPM)
_______________________________________________________
Q1 2007 Q1 2006 % Change Q1 2007 Q1 2006 % Change
______________________________________________________________________
PD
Licensing 37.4 30.0 +25% 19.4 17.3 +12%
Royalties 45.0 40.91 +10% 23.0 23.21 -1%
Total PD 82.4 70.9 +16% 42.4 40.5 +5%
PIPD
Licensing 16.9 13.7 +23% 8.7 7.9 +10%
Royalties 8.42 8.42 0% 4.32 4.92 -12%
Total PIPD 25.3 22.1 +14% 13.0 12.8 +2%
Development
Systems 13.5 13.9 -3% 6.9 7.9 -13%
Services 8.0 6.0 +33% 4.2 3.4 +24%
Total Revenue 129.2 112.9 +14% 66.5 64.6 +3%
______________________________________________________________________
1 Includes catch-up royalties in Q1 2006 of $2.0m (GBP1.1m)
2 Includes catch-up royalties in Q1 2007 of $1.5m (GBP0.8m) and in Q1
2006 of $0.6m (GBP0.4m).
Q1 2007 - Financial Summary
______________________________________________________________________
Normalised* US GAAP
____________________________________ ________________
GBPM Q1 2007 Q1 2006 % Change Q1 2007 Q1 2006
____________________________________________________ ________________
Revenue 66.5(1) 64.6 +3% 66.5 64.6
Income before income tax 21.6 24.7 -13% 12.7 16.1
Operating margin 30.3% 35.6% 16.9% 22.3%
Earnings per share (pence) 1.14 1.27 -10% 0.70 0.84
________________
Net cash generation** 15.6 17.3
Effective fx rate ($/GBP) 1.94 1.75
____________________________________________________
(1) Equivalent to GBP74.0m at Q1 2006 effective $/GBP rate
Current trading and prospects
We are encouraged to have started 2007 by reporting a 14% increase in
our Q1 dollar revenues compared to last year.
We enter the second quarter with a strong order backlog and a healthy
licensing sales opportunity pipeline across the business. With our
reported royalty revenues in Q2 being based on foundry utilisation and
product shipments made in the first calendar quarter, when some
softness in the wider semiconductor industry persisted, we expect
total group dollar revenues in Q2 to be at similar levels to Q1.
Based on our broad product portfolio for licensing and the increasing
usage of ARM® technology across a wide range of end markets, we are
well-placed to benefit from the generally-anticipated improvement in
industry conditions later in the year and therefore we remain
confident of achieving dollar revenues in the second half broadly in
line with expectations.
* Normalised figures are based on US GAAP, adjusted for acquisition-
related charges and share-based remuneration charges. For
reconciliation of GAAP measures to normalised non-GAAP measures
detailed in this document, see notes 6.1 to 6.21.
** Before dividends and share buybacks, net cash flows from share
option exercises and acquisition consideration - see notes 6.12 to
6.15.
*** Dollar revenues are based on the group's actual dollar invoicing,
where applicable, and using the rate of exchange applicable on the
date of the transaction for invoicing in currencies other than
dollars. Approximately 95% of invoicing is in dollars.
**** Each American Depositary Share (ADS) represents three shares.
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