media > press releases
> media item
Zarlink Releases Fourth Quarter and Fiscal 2007 Results
OTTAWA, CANADA, May 23, 2007 – Zarlink Semiconductor Inc.
(NYSE/TSX:ZL) today issued fourth quarter and Fiscal 2007 results for
the year ended March 30, 2007, prepared in accordance with U.S.
Generally Accepted Accounting Principles (GAAP).
Fourth quarter revenue was US$32.0 million. This figure compares with
third quarter revenue of US$34.1 million and US$39.2 million in the
fourth quarter of Fiscal 2006.
Zarlink recorded a fourth quarter net loss of US$0.9 million or US$0.01
per share. This compares with third quarter net income of US$5.6 million
or US$0.04 per share. Included in third quarter results was a gain of
US$4.1 million, reduced by a charge of $0.5 million, related to the sale
of Zarlink’s packet switching product line. These two items resulted in
US$0.03 of earnings in the third quarter. In the Fiscal 2006 fourth
quarter the Company recorded net income of US$3.7 million or US$0.02 per
share.
For Fiscal 2007, Zarlink recorded net income of US$15.8 million, or
US$0.11 per share, on revenue of US$142.6 million. Included in Fiscal
2007 results was a gain of US$4.1 million, reduced by a charge of $0.5
million, related to the sale of Zarlink’s packet switching product line.
In Fiscal 2006, the Company recorded net income of US$48.8 million, or
US$0.36 per share, on revenue of US$144.9 million. Included in Fiscal
2006 results was a gain of US$55.8 million related to the disposition of
the RF Front-End business.
“While year-over-year profitability shows we have been making good
progress in executing against our long-term plan of focusing the Company
on niche market opportunities, results from this quarter and our outlook
for the coming quarter are disappointing,” said Kirk K. Mandy, President
and Chief Executive Officer, Zarlink Semiconductor.
Review of Operations
Gross margin in the fourth quarter was 46% of revenue, compared with 50%
in the previous quarter. A Zarlink foundry customer experienced yield
issues for one of its products, which required the customer to redesign
and impacted our production, resulting in lower gross margin due to
under absorption of fixed overhead costs. Gross margin in the fourth
quarter Fiscal 2006 was 54%.
R&D expenses in the fourth quarter were US$7.8 million or 24% of
revenue, compared with US$7.9 million or 23% of revenue in the previous
quarter. In the Fiscal 2006 fourth quarter R&D expenses were US$9.5
million or 24% of revenue.
S&A expenses in the fourth quarter were US$9.5 million or 30% of
revenue. This figure compares with S&A expenses of US$8.5 million or 25%
of revenue in the previous quarter. Third quarter S&A expenses included
a reduction of a provision for estimated loss contingencies of US$0.8
million. S&A expenses were US$9.3 million or 24% of revenue in the
Fiscal 2006 fourth quarter.
During the fourth quarter, the Company made several important technology
and corporate announcements, including:
On May 23, 2007, Zarlink Semiconductor declared a quarterly dividend of
CDN$0.50 per share on its preferred shares, payable on June 29, 2007, to
preferred shareholders of record as of June 1, 2007.
First quarter Fiscal 2008 guidance
The opening order backlog at the start of the Fiscal 2008 first quarter
was US$19 million, compared to the US$22 million opening backlog in the
fourth quarter of Fiscal 2007. Zarlink is forecasting Fiscal 2008 first
quarter revenues will be between US$30 million and US$32 million. Gross
margins are expected to decline as a result of severance costs in the
Caldicot facility. Total operating expenses are expected to increase to
approximately US$20 million, primarily as a result of lower engineering
cost recoveries and higher material and marketing costs. As a result,
Zarlink expects a first quarter loss of US$0.04 to US$0.05 per share.
About Zarlink Semiconductor
For over 30 years, Zarlink Semiconductor has delivered semiconductor
solutions that drive the capabilities of voice, enterprise, broadband
and wireless communications. The Company’s success is built on its
technology strengths including voice and data networks, optoelectronics
and ultra low-power communications. For more information, visit
www.zarlink.com.
Shareholders and other individuals wishing to receive, free of charge,
copies of the reports filed with the U.S. Securities and Exchange
Commission and Regulatory Authorities, should visit the Company’s web
site at www.zarlink.com or contact
Investor Relations.
Certain statements in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements.
Such risks, uncertainties and assumptions include, among others, the
following: rapid technological developments and changes; our ability to
continue to operate profitably and generate positive cash flows in the
future; our dependence on our foundry suppliers and third-party
subcontractors; order cancellations and deferrals by our customers;
increasing price and product competition; and other factors referenced
in our Annual Report on Form 20-F. Investors are encouraged to consider
the risks detailed in this filing.
- 30 -
Zarlink and the Zarlink Semiconductor logo are trademarks of Zarlink
Semiconductor Inc.
An open conference call for analysts will be held today beginning at 5:00 p.m. EST. Investors, media and other parties are listen-only. Please dial 1-800-733-7571 or 613-287-8027. The replay number is 1-877-289-8525 (passcode 21232116#) or 416-640-1917 (passcode 21232116#). The replay is available until midnight, June 6th, 2007. A live audio webcast will be available through www.newswire.ca (Canada NewsWire) or from the Company’s website at www.zarlink.com.
For further information:
| Ed Goffin | Mike McGinn |
| Media Relations | Investor Relations |
| 613 270-7112 | 613 270-7210 |
| edward.goffin@zarlink.com | mike.mcginn@zarlink.com |
View Financial
Statements
Listen
to the Webcast
| Copyright 2008, Zarlink Semiconductor Inc. All Rights Reserved. | ||||||||||||
|
||||||||||||
LATEST NEWS
LATEST PRODUCTS
