Fairchild Semiconductor Announces 2004 Fourth Quarter and Annual Results

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Fairchild Semiconductor Announces 2004 Fourth Quarter and Annual Results [Copy link]

Fairchild Semiconductor Announces 2004 Fourth Quarter and Annual Results

【Source: smta.org.cn】【Editor: toptouch】【Time: 2005-2-2 8:57:02】【Click: 14743】

Power products business grew 24% in 2004 Annual cash and marketable securities balances hit a record high of $ 692.4 million The repayment and restructuring of some debts is expected to significantly reduce interest expenses Fairchild Semiconductor, a leading global supplier of power semiconductor products, announced its fourth quarter and full year results for 2004 ending December 26, 2004. The company's fourth quarter sales were $ 379.4 million , a 7 % decrease from the previous quarter and a 3% increase from the fourth quarter of 2003 . Fairchild Semiconductor's fourth quarter net income was $ 15.8 million ( or $ 0.13 per diluted share ) , compared with $ 5.3 million ( or $ 0.04 per diluted share ) in the fourth quarter of 2003 and $ 13.4 million ( or $ 0.11 per diluted share ) in the previous quarter . Gross margin for the fourth quarter of 2004 was 25.6% , an increase of 150 basis points over the fourth quarter of 2003 and a decrease of 470 basis points from the previous quarter . Net income in the fourth quarter benefited in part from a reduction in the company's effective tax rate, which was due to the company's shift in its regional revenue structure. Fairchild Semiconductor reported pro forma net income of $ 24.8 million , or $ 0.21 per diluted share , an increase of 42% from $ 17.5 million , or $ 0.14 per diluted share , in the fourth quarter of 2003 and a decrease of 23% from $ 32.0 million , or $ 0.26 per diluted share , in the previous quarter . Pro forma net income excludes amortization of acquisition-related intangible assets, restructuring and impairment charges, and other items. Full-year results for 2004 were $ 1,603.1 million, up 15% from $ 1,395.8 million in 2003 ; net income for 2004 was $ 59.2 million ( or $ 0.48 per diluted share ) , compared with a net loss of $ 81.5 million ( or $ 0.69 per diluted share ) in 2003. Fairchild Semiconductor 's pro forma net income for 2004 was $ 109.9 million ( or $ 0.89 per diluted share ) , compared with pro forma net income of $ 31.3 million ( or $ 0.26 per diluted share ) in 2003 . " In 2004 , our power business grew 24% over the prior year , reflecting our continued market share gains, particularly in analog power products. At the same time, our non-power sales declined 6%, reflecting our continued focus on increasing power sales. This was particularly evident in the fourth quarter, when power sales declined only 6% , while non-power sales declined 11% . Gross margins for power products were approximately 10 percentage points higher than non-power in the fourth quarter , helping to mitigate pricing pressure on our non-power products. We continued to have great success in the power semiconductor market in 2004 as we delivered a greater value product mix to the market, particularly in analog power products, with gross margins declining less than 1% quarter -over-quarter . In 2004 , we made good progress in establishing our image as the ' Power Experts ' - the Fairchild Power Franchise?, and we will continue to build on this success in 2005 as we continue to introduce new, higher value power products, " said Kirk Pond, Fairchild Semiconductor Chairman, President and Chief Executive Officer. Terminal Market Pond explained: " Our order rate has been steadily increasing in the fourth quarter, and we have been able to start to build our order backlog again . The demand growth has continued in the first few weeks of January, which is an encouraging sign for a month that is typically a slow season for orders. I expect orders to continue to increase this quarter and order levels to continue to climb, preparing for the peak season in the second quarter . " " The fourth quarter was dominated by orders from the computer, consumer electronics, power supplies and battery charger end markets, " Pond said . "In the other end markets, order rates were generally higher than in the previous quarter, but well below the unusually high rates seen in the first half of 2004. " Winning designs and new products Mark Thompson, Fairchild Semiconductor's newly appointed Executive Vice President of Manufacturing and Technology , said, " I am very pleased with the progress Fairchild has made in shifting its focus from standard products to higher value power management solutions. To turn a technology business into a profitable growth business, it is necessary to work closely with key customers to develop new high value products. A clear example is our multi-channel motor controllers for the DVD-RW and digital camera end markets. Our latest solutions have up to seven independent control channels, giving customers greater flexibility to control more motors in a single application. Several leading consumer electronics manufacturers have already incorporated our products into their applications, and we expect sales growth for these products to far exceed the average growth rate for this market. Our Smart Power Module (SPM?) family of products is a great example of how analog control and discrete power switch technologies can be used to enable customers to achieve highly integrated, high performance designs, providing customers with a highly integrated, complete power management solution in a single package. Our SPM product sales tripled in 2004 and continue to win designs in the white goods, fan motor and industrial end markets. We expect sales of these products to triple again in 2005. " " The success of these new products has resulted in higher sales and higher gross margins," Thompson said . "We are poised for even greater success in the new year as we continue to work closely with our customers to increase our efforts in developing high-value new products and create more successful products. " Financial results for the fourth quarter and full year 2004 Matt Towse, Fairchild Semiconductor senior vice president and chief financial officer, said: " In the fourth quarter, we effectively managed our business and remained in good financial condition despite ongoing inventory adjustments. The decrease in gross margin from the previous quarter was due to increased pricing pressure on non-power products and low-power switches, as well as lower factory utilization. However, prices for our high-power switches and analog power products remained generally stable. " " In the fourth quarter , we achieved record annual cash on hand and available-for-sale investments of $ 692.4 million, operating cash flow of $ 85.5 million, and we invested $ 45.7 million in capital expenditures to support high-growth power products and to continue to reduce outsourcing costs, " Towse said. Towse continued, " Gross margin for 2004 increased 590 basis points over 2003 as our portfolio of power solutions continued to grow . Cash from operations in 2004 was $ 244.7 million, again demonstrating our ability to generate cash at all stages of the business cycle. In 2004 , Fairchild took a major step toward increasing the percentage of power sales and achieving higher and more stable gross margins. I expect another year of growth as we continue to execute on this strategy in 2005. " Forecast for the first quarter of 2005 Towse stated, " We expect first quarter 2005 earnings to be down 2 to 6 percent and gross margins to be 200 basis points lower than the prior quarter , primarily due to lower off-season demand, pricing pressures, and lower line utilization as we plan to reduce inventory in our distribution channels. We expect the lower gross margins to be offset by lower interest expense as we have announced the early redemption of $ 350 million of our securities (10% Senior Subordinated Notes ) using a combination of cash and additional debt. This restructured debt exercise is expected to reduce our debt by $ 200 million and reduce our annual gross interest expense by approximately $ 33 million, calculated on a LIBOR basis . The net savings in interest expense will equate to $ 0.13 to $ 0.15 per share in annual earnings. Of course, the actual interest savings will depend on prevailing interest rates. We will incur a one-time redemption charge of approximately $ 24 million in the first quarter , as well as a $ 10 million reduction in net interest expense. I believe that with the positive adjustments in the balance sheet and product mix, Fairchild will demonstrate stronger profitability at all stages of the business cycle . ” For more information, please contact Fairchild Semiconductor's Hong Kong office at 852-2722-8338 ; Shenzhen office at 0755-8246-3088 ; Shanghai office at 021-5298-6262 ; Beijing office at 010-8519-2060 or visit the company's website at www.fairchildsemi.com . About Fairchild Semiconductor Fairchild Semiconductor ( NYSE: FCS) is a leading global supplier of high-performance products for multiple markets. The company is committed to providing advanced power and interface circuit solutions to meet the needs of the current and future electronics markets. Fairchild's devices are widely used in computer manufacturing, communications, consumer products, industrial and automotive applications. Fairchild's 9,000 employees are engaged in the design, manufacture and sale of power devices, analog ICs , interface and logic circuits, and optoelectronic products at its headquarters in South Portland, Maine, USA, and other parts of the world . For more information, please visit the website: www.fairchildsemi.com . Forward-Looking Statements This press release includes pro forma statements of operating results ( excluding amortization charges for intangible assets, restructuring, impairment and other items ) , statements of operating matters prepared in accordance with generally accepted accounting principles (GAAP) ( including these charges and other items ) , and reconciliations from pro forma to GAAP results. Pro forma results are not an alternative to GAAP and are provided for informational and comparative purposes only. Fairchild Semiconductor provides pro forma statements of operating results because its management uses them as an additional measure of the company's operating results and management believes that pro forma financial information is useful to investors because it excludes material non-recurring or other unusual transactions and illustrates underlying operating trends. Fairchild Semiconductor's criteria for determining pro forma results may differ from those used by other companies and should not be considered a substitute for the related GAAP measures. [This post has been edited by the author on 2005-2-2 9:00:05] <|||> Fairchild Semiconductor Corporation of the United States<|||> <|||> Fairchild Semiconductor Corporation of the United States<|||> <|||> 2005-2-2