RFMD Has Generated $122.2 Million In Free Cash Flow Fiscal Year-To-Date
GREENSBORO, N.C., Jan 26, 2010 /PRNewswire via COMTEX News Network/
December 2009 Quarterly Highlights:
• Quarterly Revenue Grows Approximately 24% Year-Over-Year
• GAAP Gross Margin Expands To 36.4%, And Non-GAAP Gross Margin Expands To 38.4%
• GAAP Operating Margin Increases Sequentially 390 Basis Points To 13.4%, And Non-GAAP Operating Margin Increases Sequentially 140 Basis Points To 17.8%
• GAAP Diluted EPS Improves To $0.09, And Non-GAAP Diluted EPS Improves To $0.14
• Free Cash Flow Totals $41.9 Million In The December Quarter And $122.2 Million In The First Three Quarters Of Fiscal 2010
• RFMD Purchases And Retires $197 Million Of Convertible Notes Due 2010
RF Micro Devices, Inc. (Nasdaq: RFMD), a global leader in the design and manufacture of high-performance semiconductor components and compound semiconductor technologies, today reported financial results for its fiscal 2010 third quarter ended January 2, 2010. RFMD's December 2009 quarterly revenue increased approximately 24% year-over-year to $250.3 million. GAAP gross margin for the quarter increased sequentially from 35.9% to 36.4%, and non-GAAP gross margin increased sequentially from 38.1% to 38.4%. GAAP operating income was $33.6 million, and non-GAAP operating income was a quarterly record $44.6 million. GAAP net income was $24.9 million, or $0.09 per diluted share, and non-GAAP net income was a quarterly record $38.8 million, or $0.14 per diluted share.
RFMD(R) Product Group Highlights
Cellular Products Group (CPG)
• CPG experienced robust order and design win activity, driven by secular growth trends and new product cycles
• Sales of WCDMA front ends, including the rapidly growing TD-SCDMA segment, increased approximately 80% year-over-year
• Sales into smart phones and 3G devices approached 50% of cellular front end revenue
• Sales to reference design customers in China more than doubled year-over-year
• CPG launched its first fully qualified CMOS-based switch products for cellular handsets
• CPG released 14 new products in the December quarter and is on track to release more than 40 new products in fiscal 2010
Multi-Market Products Group (MPG)
• MPG released its first fully qualified GaN power product and plans to release multiple GaN-based power products in the March quarter
• Defense and Power end market applications grew 17% sequentially, driven by military high-reliability and commercial point-to-point radio applications
• Quarterly sales to MPG's largest CATV customers more than doubled sequentially, with strong CATV order backlog carrying into the March quarter
• Quarterly shipments of WiMAX components increased approximately 22% sequentially
• Shipments of automatic meter reading (AMR)/smart grid components grew by 60% sequentially and are on track to double year-over-year
• MPG released 86 new and derivative products in the December 2009 quarter and has released 255 products year-to-date in fiscal 2010
Business Outlook
RFMD is enjoying strength in CPG, supported by strong calendar 2010 handset unit forecasts, expanded participation across customer programs and increasing adoption of connected devices, including smart phones and 3G devices. In the diversified markets served by MPG, RFMD continues to see positive demand trends supported by increasing customer order activity. RFMD believes the demand environment supports the following expectations:
• In CPG, quarterly revenue is expected to be better than normal seasonality in the March quarter
• In MPG, quarterly revenue is expected to be flat to up sequentially in the March quarter
• Non-GAAP operating margin for the fiscal 2010 full-year period is expected to approach RFMD's annual target of 15%
• RFMD expects strong free cash flow, in-line with recent quarterly performances
RFMD anticipates there will be approximately 278 million outstanding diluted shares of its common stock at the end of its fiscal 2010, using the if-converted method. RFMD's actual quarterly and annual results may differ from these expectations and projections, and such differences may be material.
Comments From Management
Bob Bruggeworth, president and CEO of RFMD, said, "RFMD is capitalizing on major global secular growth trends, such as mobile broadband, smart grid/AMR and green technologies, while entering lucrative new product segments, like switch-based products for smart phones and GaN-based amplifiers for communications and defense systems, which expand our serviceable market, diversify revenue and expand margins.
"As the global demand for data mobility accelerates, the adoption of smart phones, netbooks, data cards and other connected devices is significantly increasing the available RF dollar content for RFMD. Similarly, the increasing demand for AMR/smart grid applications and green technologies is creating new, incremental opportunities to diversify revenue and expand margins by leveraging RFMD's leadership in RF components and compound semiconductor technologies."
Dean Priddy, CFO and vice president of administration of RFMD, said, "RFMD's business model continues to produce strong financial results and superior capital efficiency. RFMD's strategic focus on RF components and compound semiconductors is driving sustainable improvements in gross margin, operating margin and free cash flow. For fiscal 2011, we expect a contribution margin of approximately 60% on each incremental dollar of revenue, and we believe we're on track to deliver continued revenue and earnings growth in fiscal 2011 and beyond."
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