Dialog Semiconductor Plc. / Final Results
04.03.2008
Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Kirchheim/Teck, Germany, 4 March 2008 Dialog Semiconductor plc (FWB:
DLG), a leading provider of power management semiconductor solutions,
announces its results for the fourth quarter and year ended 31 December
2007.
OVERVIEW
Q4 2007 - a return to quarterly profitability and further margin
enhancement:
o Q4 revenues stand at USD 34.5m: an increase of 40% on the prior
quarter and 150% higher than the comparative period in 2006
o Q4 saw Dialog generate positive cashflow from operations and return
to quarterly profitability, posting a quarterly net profit of USD
1.3m or USD 0.03 per share
o Q4 gross margin stands at 41.5%: some 5.1% points higher than the
prior quarter and up from 9.3% in the year-ago quarter
o Revenue mix continues to improve with over 70% of Q4 revenues
derived from new, higher margin product sales
o At the close of Q4, liquid asset balances stood at USD 36.2m: up
USD 9.4m on the prior quarter and Dialog remains debt free
FY 2007 - results demonstrate the benefits of Dialogs new platform for
growth:
o FY 2007 saw Dialog deliver four consecutive quarterly improvements
in revenue, gross margin and net income
o FY 2007 revenues stand at USD 86.8m, approaching the level of FY
2006, in line with our projections (FY 2006: USD 93.9m)
o FY 2007 net losses reduced by 57% to USD 19.0 million (FY 2006: USD
44.0m)
o FY 2007 gross margin improved further at 33.4% (FY 2006: 18.6%), in
line with our aim to deliver gross margins exiting the year of 30%
o New business platform now fully entrenched supported by a
broadened, improved and higher margin product mix
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Information and Explaination of the Issuer to this News:
Commenting on the results Dialog Chief Executive, Dr Jalal Bagherli, said:
'This is an excellent quarterly achievement for Dialog, seeing us deliver a
40% increase in revenues and further enhancements to gross margin over the
prior quarter. This strong Q4 performance comes against the backdrop of
the positive transformations we have made to our business during the year:
transformations which have allowed us to deliver four sequential quarters
of revenue and margin improvement and achieve a return to quarterly
profitability.
'Whilst general economic conditions remain uncertain, we anticipate that H1
2008 revenues will be at similar levels to those of H2 2007. The second
half of 2008 should see a substantial and accelerating growth in revenues
as compared to the first half of 2008 which in turn should deliver positive
operating margins for the full year at similar levels to those just
reported for Q4 2007.
OPERATIONAL HIGHLIGHTS
Financial Year 2007 saw significant transformation at Dialog. A full
fabless business model was implemented by completing the transfer of all
test operations to Asia based specialist partners. At the same time Dialog
continued its best in class delivery and quality performance to customers
worldwide. The fabless model will support Dialogs ambitions for growth by
allowing the Company to scale up its operations without major capital
expenditure requirements in future years.
Dialog continued to invest significant effort during 2007 in diversifying
its revenue stream by broadening the Companys customer base and entering
new higher growth market segments and developing new products. As evidence
of this, revenue in each of the four application areas (Mobile Phone,
Consumer, Automotive and Industrial) contributed 15% or more to total
revenues: a substantial improvement on Dialogs position in 2006.
In the Consumer market, Dialog started to ship advanced power management
products, targeting this markets particular requirement for improved
battery lifespan and board space savings in portable personal devices. In
addition, Dialog has begun a number of Key Customer engagements in this
field and anticipates an increased market penetration in this segment by
2009.
In Mobile Phone market, Dialogs customer base is substantially broader
than at the end of FY 2006 with smart phone customers in Asia as well as
larger top tier customers for our 3G/HSPA range of products joining the
client list. In the Smart Phone area in particular, Dialogs base band and
application processor companion chips started to gain traction in Q4 with
multiple design wins secured in the Greater China and the North America
regions. We expect new production revenue from these products to commence
in H2 2008, complementing the continued revenue growth we expect to see in
H2 2008 from our 3G/HSPA product line.
Dialogs Automotive segment delivered some notable design wins, taking the
Companys intelligent motor control S-O-C products into new applications
for car seat belts and cooling fan motors. In addition, in Q4 Dialog
secured design wins with major European automotive clients in the area of
intelligent battery sensing, necessitating integration of an advanced 32
bit microprocessor. This range of new 32bit products currently under
development will begin sampling in H2 2008 and is expected to qualify for
production in the H2 2009.
Looking ahead, Dialog continues to invest in the development of new, highly
differentiated products for new and emerging always-on, low power display
technologies. In Q407, Dialog completed development of a break-through
technology that extends the life time and lowers the power dissipation of
passive matrix Organic Light Emitting Diode (OLED) by up to 30% compared
with traditional methods. This product will enable customers to develop
hand-held portable devices using lower cost OLEDs with the same quality of
traditional, more expensive LCDs. Our portfolio of display products
including e-paper and MEMS based display drivers will start contributing
revenue in 2008 with OLED customer engagements revenues scheduled to
commence in 2009.
FINANCIAL PERFORMANCE
Q4 2007 Revenues improved to USD 34.5m an increase of 150% on the
comparable quarter in 2006 (Q4 2006: USD 13.8m) due in large part to an
improved performance in our wireless segment. Total revenues for FY 2007
stood at USD 86.8m, in line with our target. (FY 2006: USD 93.9m).
Excluding revenues generated during FY 2006 from discontinued products,
baseline revenues grew 11% in FY 2007: more than recovering the loss of
revenue suffered in FY 2006 as a result of the insolvency of BenQ Mobile
GmbH.
The Company returned to quarterly profitability in Q4 2007 posting a
quarterly net profit of USD 1.34m: representing a swing of USD 6.8m
compared to the prior quarter (Q3 2007: USD Loss 5.5m). Compared with the
comparable quarter in 2006, Q4 2007 gross profit increased by USD 13.1m as
Dialog started to recognise a greater percentage of revenue from new,
higher margin products.
Gross margin also improved for a fourth consecutive quarter in Q4 2007 to
stand at 41.5%. Excluding the effect of one time events such as the spot
sale of previously written off inventories and other one time adjustments,
Q4 2007 gross margin stood at 39.9%. For FY 2007, gross margin reached
33.4% compared to 18.6% at the close of FY 2006, in line with our target to
deliver margins in the region of 30% exiting the year.
Q4 2007 operating expenses stood at USD 14.1m of which USD 10.1m was
allocated to research and development (R&D) and USD 4.0m to selling,
general and administrative expenses (SG&A). Excluding the effect of
one-time events, R&D expenses stood at USD 8.8m or 25.5% of revenue in
line with our strategic growth agenda. In absolute value terms, SG&A
expenses remained flat compared against the prior quarter despite a 40%
increase in revenue, demonstrating our commitment to control costs and
drive efficiencies. In FY 2007, operating expenses amounted to USD 46.3m
of which USD 31.1m or 36% of revenue was allocated to R&D (FY 2006: USD
27.5m or 29% of revenue) and USD 15.2m was allocated to SG&A expenses.
This SG&A allocation represents a 7.5% reduction over FY 2006 (excluding Q3
2006 one time write offs associated to the insolvency of BenQ Mobile GmbH).
Since changing its functional currency from Euro to USD on 1 January 2007,
Dialog posted four consecutive quarters of foreign currency exchange gains
amounting to a total of USD 0.5m compared to a net loss in FY 2006 of USD
2.1m.
The liquid asset balance at the close of Q4 2007 improved to USD 36.2m: an
increase of USD 9.4m (34%) over the prior quarter. Approximately USD 2.6m
(9.7%) of this increase was driven by cash inflows from operating
activities and approximately USD 8.8m through the implementation in August
2007 of a selective receivable discounting programme. Dialog remains debt
free.
OUTLOOK
The strong performance in the final quarter of 2007 gives us a high degree
of confidence in our medium and long term growth prospects based upon a
strong product portfolio and a healthy pipeline of design wins. The
momentum has continued into the first quarter of the new financial year
although this is a traditionally quieter period.
Whilst general economic conditions remain uncertain, we anticipate that H1
2008 revenues will be at similar levels to those of H2 2007. The second
half of 2008 should see a substantial and accelerating growth in revenues
as compared to the first half of 2008 which in turn should deliver positive
operating margins for the full year at similar levels to those just
reported for Q4 2007.
Additional information to this adhoc release (The Companys Consolidated
Income Statement, Consolidated Balance sheet and Consolidated Statements of
Cash Flows) for the period ending 31 December 2007 are available at
http://irpages.equitystory.com/Download/Companies/dialog-semiconductor/
News/tables_adhoc_040308.pdf or on the Companys web
page www.dialog-semiconductor.com under Investor Relations /
Publications and Reports / Other Publications.
Information about Dialog Semiconductor
Dialog Semiconductor develops and supplies power management, audio and
display driver technology, targeting the wireless, automotive and
industrial markets. The companys expertise in mixed signal design, with
products manufactured entirely in CMOS technology, enhances the performance
and features of wireless, hand-held and portable electronic products. Its
technology is also used in intelligent control circuits in automotive and
industrial applications. Dialog Semiconductor plc is headquartered near
Stuttgart, Germany with operating facilities in the UK, the USA, Austria,
Japan and Taiwan. The company is listed on the Frankfurt (FWB: DLG) stock
exchange.
Forward Looking Statements ward Looking Statements
This press release contains 'forward-looking statements' that reflect
managements current views with respect to future events. The words
'anticipate,' 'believe,' 'estimate, 'expect,' 'intend,' 'may,' 'plan,'
'project' and 'should' and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in the semiconductor
and telecommunications markets; changes in currency exchange rates and
interest rates, the timing of customer orders and manufacturing lead times,
insufficient, excess or obsolete inventory, the impact of competing
products and their pricing, political risks in the countries in which we
operate or sale and supply constraints. If any of these or other risks and
uncertainties occur (some of which are described under the heading 'Risk
Factors' in Dialog Semiconductors most recent Annual Report or if the
assumptions underlying any of these statements prove incorrect, then actual
results may be materially different from those expressed or implied by such
statements. We do not intend or assume any obligation to update any
forward-looking statement, which speaks only as of the date on which it is
made.
For further information please contact:
Dialog Semiconductor
Neue Straße 95
D-73230 Kircheim/Teck
Germany
T +49-7021-805-412
F +49-7021-805-200
dialog@fd.com
www.dialog-semiconductor.com
FD - London
Matt Dixon
T +44 7703 330 913
matt.dixon@fd.com
A&B FD - Frankfurt
Claudine Schaetzle
T +49 69 920 37185
c.schaetzle@abfd.de
DGAP 04.03.2008
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Language: English
Issuer: Dialog Semiconductor Plc.
Tower Bridge House, St. Katharine's Way
E1W 1AA London
Großbritannien
Phone: +49 7021 805-412
Fax: +49 7021 805-200
E-mail: birgit.hummel@diasemi.com
Internet: www.diasemi.com
ISIN: GB0059822006
WKN: 927200
Indices: MIDCAP, PRIMEALL, TECHALLSHARE
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Stuttgart, München, Hamburg, Düsseldorf
End of News DGAP News-Service
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DGAP-Adhoc: Dialog Semiconductor reports results for financial year 2007
| Source: EQS Group AG