DGAP-News: Fairchild Semiconductor Reports Results for the First Quarter 2014

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DGAP-News: Fairchild Semiconductor /
Fairchild Semiconductor Reports Results for the First Quarter 2014

17.04.2014 / 13:30

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SAN JOSE, Calif., 2014-04-17 13:30 CEST (GLOBE NEWSWIRE) --
Fairchild Semiconductor (Nasdaq:FCS), a leading global supplier of power
semiconductors, today announced results for the first quarter ended March 30,
2014. Fairchild reported first quarter sales of $344.1 million, up 1 percent
from the prior quarter and slightly higher than the first quarter of 2013. 

Fairchild reported a first quarter net loss of $9.3 million or $0.07 per
diluted share compared to net income of $0.9 million or $0.01 per diluted share
in the prior quarter and a net loss of $0.5 million or $0.00 per diluted share
in the first quarter of 2013. Gross margin was 30.3 percent compared to 30.9
percent in the prior quarter and 26.9 percent in the year-ago quarter. 

Fairchild reported first quarter adjusted gross margin of 30.3 percent, down
100 basis points from the prior quarter but 250 basis points higher than the
first quarter of 2013. Adjusted gross margin in past quarters excluded
accelerated depreciation related to a line closure. Adjusted net income was
$4.9 million or $0.04 per diluted share, compared to adjusted net income of
$13.5 million or $0.11 per diluted share in the prior quarter and an adjusted
net loss of $2.0 million or $0.02 per diluted share in the first quarter of
2013. See the Reconciliation of Net Income to Adjusted Net Income exhibit
included in this press release for more details on the other adjustment items. 

'Demand has been robust all year as Fairchild's focus on improving energy
efficiency in a wide range of industrial, appliance, automotive and mobile
applications accelerates our growth,' said Mark Thompson, Fairchild's chairman
and CEO. 'The strength in orders is broader based than a year ago, especially
in the mobile end market. Our current backlog is up 20% from a quarter ago,
which when coupled with our lean inventory position enables us to guide for
strong sales growth in the second quarter. Demand is very solid for our
products supporting the automotive, industrial and appliance end markets. Sales
of our products into the computing end market were also higher sequentially as
demand recovered from a weak fourth quarter. Mobile demand was flat to the
prior quarter which was better than expected. We benefited from content gains
on a major new phone platform as well as mid-tier Chinese brands. 

First Quarter Financials

'Adjusted gross margin decreased only one point sequentially which was better
than expected due to higher factory loadings in the first quarter and improved
product mix,' said Mark Frey, Fairchild's executive vice president and CFO.
'R&D and SG&A expenses were $96.6 million which were higher than forecast due
to increased legal spending and additional costs associated with our recent
sensor business acquisition. Free cash flow was a negative $5 million for the
first quarter. We ended the first quarter with total cash and securities
exceeding our debt by $118 million which is lower than a quarter ago due to our
recent all cash acquisition of a private sensor company, stock repurchases and
normal annual variable compensation expenses.' 

Forward Guidance

'We expect sales to be in the range of $355 to $375 million for the second
quarter,' said Frey. 'We expect adjusted gross margin to be 31.0 to 32.0
percent due primarily to higher sales and factory loadings as well as improved
product mix which all more than offsets the impact of our merit increase. We
anticipate R&D and SG&A spending to be $97 to $99 million due to higher R&D and
legal spending as well as the impact of the newly acquired sensor business. The
adjusted tax rate is forecast at 15 percent plus or minus 3 percentage points
for the quarter. Consistent with our usual practices, we are not assuming any
obligation to update this information, although we may choose to do so before
we announce second quarter results.' 

Adjusted gross margin, adjusted net income and free cash flow are non-GAAP
financial measures and should not be considered replacements for GAAP results.
See additional information on our non-GAAP financial measures and
reconciliations to the most comparable GAAP measures in the appropriate
reconciliation exhibit included in this press release as well as our SEC
filings related to this announcement. 

Special Note on Forward-Looking Statements:

Some of the paragraphs above, including the one headed 'Forward Guidance,'
contain forward-looking statements that are based on management's assumptions
and expectations and involve risk and uncertainty. Other forward-looking
statements may also be found in this news release. Forward-looking statements
usually, but do not always, contain forward-looking terminology such as 'we
believe,' 'we expect,' or 'we anticipate,' or refer to management's
expectations about Fairchild's future performance. Many factors could cause
actual results to differ materially from those expressed in forward-looking
statements. Among these factors are the following: failure to maintain order
rates at expected levels; failure to achieve expected savings from cost
reduction actions or other adverse results from those actions; changes in
demand for our products; changes in inventories at our customers and
distributors; technological and product development risks, including the risks
of failing to maintain the right to use some technologies or failing to
adequately protect our own intellectual property against misappropriation or
infringement; availability of manufacturing capacity; the risk of production
delays; availability of raw materials at competitive prices; competitors'
actions; loss of key customers, including but not limited to distributors; the
inability to attract and retain key management and other employees; order
cancellations or reduced bookings; changes in manufacturing yields or output;
risks related to warranty and product liability claims; risks inherent in doing
business internationally; changes in tax regulations or the migration of
profits from lower tax jurisdictions to higher tax jurisdictions; regulatory
risks and significant litigation. These and other risk factors are discussed in
the company's quarterly and annual reports filed with the Securities and
Exchange Commission (SEC) and available at the Investor Relations section of
Fairchild Semiconductor's web site at investor.fairchildsemi.com or the SEC's
web site at www.sec.gov. 

About Fairchild Semiconductor:

Fairchild has a rich history as a pioneer in the semiconductor industry and
that pioneering spirit endures today. In an era where diversity can dilute
focus and hamper innovation, we specialize in the development and manufacturing
of a complete portfolio of low- to high-power solutions for the mobile,
industrial, cloud, automotive, lighting, and computing industries. Fairchild is
one of the most reliable partners in the industry, offering the shortest time
from concept to silicon, expert FAEs for customer support, and a flexible,
multi-source supply chain. Our vision is clear - anticipate the power
efficiencies demanded by tomorrow's electronic products and deliver an amazing
design experience. Please contact us on the web at www.fairchildsemi.com 



                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
                     Consolidated Statements of Operations                      
                     (In millions, except per share amounts)                    
                                   (Unaudited)                                  
                                                                                
                                                         Three Months Ended     
                                                   -----------------------------
                                                     March    December   March  
                                                       30,       29,       31,  
                                                      2014      2013      2013  
                                                   -----------------------------
                                                                                
Total revenue                                        $ 344.1   $ 341.1   $ 343.2
Cost of sales (1)                                      239.9     235.6     250.8
                                                   -----------------------------
  Gross margin                                         104.2     105.5      92.4
                                                   -----------------------------
  Gross margin %                                       30.3%     30.9%     26.9%
                                                                                
Operating expenses:                                                             
  Research and development (2)                          41.1      40.2      42.6
  Selling, general and administrative (3)               55.5      49.9      51.6
  Amortization of acquisition-related intangibles        4.2       3.9       3.8
  Restructuring, impairments, and other costs            6.1       7.8       1.2
  Charge for (release of) litigation                     4.4        --    (12.6)
                                                   -----------------------------
     Total operating expenses                          111.3     101.8      86.6
                                                   -----------------------------
                                                                                
Operating income (loss)                                (7.1)       3.7       5.8
Other expense, net                                       1.1       1.6       4.6
                                                   -----------------------------
Income (loss) before income taxes                      (8.2)       2.1       1.2
                                                                                
Provision for income taxes                               1.1       1.2       1.7
                                                   -----------------------------
Net income (loss)                                    $ (9.3)     $ 0.9   $ (0.5)
                                                   =============================
                                                                                
Net income (loss) per common share:                                             
  Basic                                             $ (0.07)    $ 0.01  $ (0.00)
                                                   =============================
  Diluted                                           $ (0.07)    $ 0.01  $ (0.00)
                                                   =============================
Weighted average common shares:                                                 
  Basic                                                125.4     126.6     127.2
                                                   =============================
  Diluted                                              125.4     127.9     127.2
                                                   =============================
                                                                                
                                                                                
(1) Equity compensation expense included in cost       $ 1.0     $ 1.3     $ 1.1
 of sales                                                                       
(2) Equity compensation expense included in            $ 2.0     $ 1.9     $ 1.7
 research and development                                                       
(3) Equity compensation expense included in            $ 4.8     $ 3.4     $ 3.5
 selling, general and administrative                                            
                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
               Reconciliation of Net Income To Adjusted Net Income              
                                 (In millions)                                  
                                   (Unaudited)                                  
                                                                                
                                                         Three Months Ended     
                                                   -----------------------------
                                                     March    December   March  
                                                       30,       29,       31,  
                                                      2014      2013      2013  
                                                   -----------------------------
                                                                                
Net income (loss)                                    $ (9.3)     $ 0.9   $ (0.5)
Adjustments to reconcile net income (loss) to adjusted net                      
 income (loss):                                                                 
 Restructuring, impairments, and other costs             6.1       7.8       1.2
 Write off of equity investments                          --        --       3.0
 Accelerated depreciation on assets related to            --       1.2       2.9
  line closure (1)                                                              
 Charge for (release of) litigation                      4.4        --    (12.6)
 Amortization of acquisition-related intangibles         4.2       3.9       3.8
 Associated net tax effects of the above and other     (0.5)     (0.3)       0.2
  acquisition-related intangibles                                               
                                                   -----------------------------
Adjusted net income (loss)                             $ 4.9    $ 13.5   $ (2.0)
                                                   =============================
                                                                                
Adjusted net income (loss) per common share:                                    
  Basic                                               $ 0.04    $ 0.11  $ (0.02)
                                                   =============================
  Diluted                                             $ 0.04    $ 0.11  $ (0.02)
                                                   =============================
                                                                                
(1) Recorded in cost of sales                                                   
                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
             Reconciliation of Gross Margin To Adjusted Gross Margin            
                                 (In millions)                                  
                                   (Unaudited)                                  
                                                                                
                                                         Three Months Ended     
                                                   -----------------------------
                                                     March    December   March  
                                                       30,       29,       31,  
                                                      2014      2013      2013  
                                                   -----------------------------
                                                                                
Gross margin                                         $ 104.2   $ 105.5    $ 92.4
Adjustments to reconcile gross margin to adjusted gross                         
 margin:                                                                        
 Accelerated depreciation on assets related to            --       1.2       2.9
  line closure                                                                  
                                                   -----------------------------
Adjusted gross margin                                $ 104.2   $ 106.7    $ 95.3
                                                   =============================
                                                                                
Adjusted gross margin %                                30.3%     31.3%     27.8%

                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
                           Consolidated Balance Sheets                          
                                 (In millions)                                  
                                   (Unaudited)                                  
                                                                                
                                                          March 30,   December  
                                                             2014        29,    
                                                                        2013    
                                                         -----------------------
                                                                                
                                     ASSETS                                     
Current assets:                                                                 
  Cash and cash equivalents                                 $ 315.8      $ 417.8
  Short-term marketable securities                              0.2          0.1
  Receivables, net                                            158.7        127.4
  Inventories                                                 221.9        228.1
  Other current assets                                         47.1         51.2
                                                         -----------------------
     Total current assets                                     743.7        824.6
                                                                                
Property, plant and equipment, net                            693.2        707.9
Intangible assets, net                                         45.1         31.7
Goodwill                                                      210.2        169.3
Long-term securities                                            2.1          2.2
Other assets                                                   65.6         60.3
                                                         -----------------------
     Total assets                                         $ 1,759.9    $ 1,796.0
                                                         =======================
                                                                                
             LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY             
Current liabilities:                                                            
  Accounts payable                                          $ 106.1       $ 95.8
  Accrued expenses and other current liabilities               73.0         88.0
                                                         -----------------------
     Total current liabilities                                179.1        183.8
                                                                                
Long-term debt, less current portion                          200.1        200.1
Other liabilities                                              56.6         48.0
                                                         -----------------------
     Total liabilities                                        435.8        431.9
                                                                                
Temporary equity - deferred stock units                         3.9          3.6
Total stockholders' equity                                  1,320.2      1,360.5
                                                         -----------------------
     Total liabilities, temporary equity and              $ 1,759.9    $ 1,796.0
      stockholders' equity                                                      
                                                         =======================

                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
                     Consolidated Statements of Cash Flows                      
                                 (In millions)                                  
                                   (Unaudited)                                  
                                                                                
                                                                  Three Months  
                                                                     Ended      
                                                              ------------------
                                                                March    March  
                                                                 30,       31,  
                                                                2014      2013  
                                                              ------------------
                                                                                
Cash flows from operating activities:                                           
Net income (loss)                                              $ (9.3)   $ (0.5)
  Adjustments to reconcile net income (loss) to cash provided by                
   operating activities:                                                        
  Depreciation and amortization                                   36.0      36.4
  Non-cash stock-based compensation expense                        7.8       6.3
  Non-cash restructuring and impairments expense                   0.6        --
  Deferred income taxes, net                                       3.1       0.8
  Charge for (release of) litigation                               4.4    (12.6)
  Other                                                            0.4       3.3
  Changes in operating assets and liabilities, net of           (34.4)    (37.7)
   acquisitions                                                                 
                                                              ------------------
     Cash provided by (used in) operating activities               8.6     (4.0)
                                                              ------------------
                                                                                
Cash flows from investing activities:                                           
  Capital expenditures                                          (13.7)    (19.9)
  Maturity of marketable securities                                 --       0.1
  Other                                                          (0.5)     (0.4)
  Acquisitions, net of cash acquired                            (59.8)        --
                                                              ------------------
     Cash used in investing activities                          (74.0)    (20.2)
                                                              ------------------
                                                                                
Cash flows from financing activities:                                           
  Proceeds from issuance of common stock and from exercise of      0.2       0.4
   stock options, net                                                           
  Purchase of treasury stock                                    (30.6)     (3.7)
  Shares withheld for employees taxes                            (6.2)     (7.4)
                                                              ------------------
     Cash used in financing activities                          (36.6)    (10.7)
                                                              ------------------
                                                                                
Net change in cash and cash equivalents                        (102.0)    (34.9)
Cash and cash equivalents at beginning of period                 417.8     405.9
                                                              ------------------
Cash and cash equivalents at end of period                     $ 315.8   $ 371.0
                                                              ==================
                                                                                
                                                                                
                   Fairchild Semiconductor International, Inc.                  
 Reconciliation of Cash Provided by (Used in) Operating Activities to Free Cash 
                                      Flow                                      
                                 (In millions)                                  
                                   (Unaudited)                                  
                                                                                
                                                                  Three Months  
                                                                     Ended      
                                                              ------------------
                                                                March    March  
                                                                 30,       31,  
                                                                2014      2013  
                                                              ------------------
                                                                                
Cash provided by (used in) operating activities                  $ 8.6   $ (4.0)
Capital expenditures                                            (13.7)    (19.9)
                                                              ------------------
Free cash flow                                                 $ (5.1)  $ (23.9)
                                                              ==================




         CONTACT: Editorial Contacts
         
         Dianna Fletcher
         Corporate Communications
         (207) 775-8728
         dianna.fletcher@fairchildsemi.com
         
         Dan Janson
         Investor Relations
         (207) 775-8660
         investor@fairchildsemi.com
News Source: NASDAQ OMX


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Language:    English                  
Company:     Fairchild Semiconductor  
 
 
             United States            
ISIN:        US3037261035             
 
 
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263774 17.04.2014