CSR Announces Strong Q1 Results.Business Editors/High-Tech Writers CAMBRIDGE, England--(BUSINESS WIRE)--May 6, 2004 CSR plc CSR (LSE: CSR), or Cambridge Silicon Radio is a company based in Cambridge, England whose main product line is a single-chip implementation of the Bluetooth standard for radio-signal communication between devices. CSR is a fabless semiconductor manufacturer. (LSE LSE - Language Sensitive Editor :CSR (1) (Customer Service Representative) A person who handles a customer's request regarding a bill, account changes or service or merchandise ordered. Agents in call centers are known as CSRs. See call center. ), a wireless solutions provider and a leader in Bluetooth technology, announces its unaudited financial results for the period from 1 January 2004 to 2 April 2004, the first quarter of its financial year. Financial Highlights -- Revenue increased by 38% to $36.8 million ($26.7 million in Q4 2003) -- Gross margin of 48.3% (50.4% in Q4 2003) -- Profits before tax of $7.0 million ($4.0 million in Q4 2003) -- Earnings per share of $0.07 ($0.05 in Q4 2003) -- Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from CSR's flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. of $56.1 million Operational Highlights -- 72 design wins in the quarter -- Seven mobile phone design wins including wins with Nokia and Sharp Commenting on the results, John Hodgson, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said: "Our Q1 results represent a strong start to our life as a listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → . This is our third profitable quarter in a row and our ninth consecutive quarter of revenue growth. We are also pleased with our increasing momentum, as evidenced by our share of design wins of new Bluetooth end products which was at a record level for CSR in the quarter". About CSR CSR (Cambridge Silicon Radio) is a leading provider of single-chip radio devices for Bluetooth wireless communication. CSR offers developed hardware/software packages based around BlueCore, a fully integrated 2.4 GHz radio, baseband and microcontroller A single chip that contains the processor (the CPU), non-volatile memory for the program (ROM or flash), volatile memory for input and output (RAM), a clock and an I/O control unit. . BlueCore features in over 60 percent of all qualified Bluetooth v1.1and v1.2 enabled products and modules with international names such as Microsoft Corp, Nokia, Dell, Panasonic, BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. , IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Apple, NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. , Toshiba and Sony already using BlueCore in their range of Bluetooth products. In June 2003, CSR launched its third generation BlueCore devices with full support for the v1.2 Bluetooth specification. CSR is headquartered in Cambridge, UK, with offices in Richardson, Texas Richardson is a suburb in Dallas County and Collin County, Texas. As of the 2000 census, the city had a total population of 91,803, while according to a 2006 estimate, the population had grown to 99,200. , USA; Tokyo, Japan; Seoul, Korea; Taipei, Taiwan and Aalborg, Denmark. More information can be found at www.csr.com and the partner web site www.btdesigner.com More information about Bluetooth can be found on the SIG web site at www.bluetooth.com Financial review Revenues Revenues for Q1 2004 amounted to $36.8 million, representing a 38% increase from $26.7 million in Q4 2003, and a 243% increase from $10.7 million for Q1 2003. Revenue was predominantly made up of chip and development product shipments. Royalty income in the quarter was negligible. CSR's Q1 2004 performance was stronger than expected fuelled by an increase in revenue resulting from end market demand for the high growth applications including mobile phones and headsets, PCs and PC peripherals. The increase in mobile phone revenue resulted partly from the first significant shipments to Nokia. Average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. (ASPs) for CSR's products declined slightly during the quarter by just over 2%. Gross Profit Gross profit for the quarter was $17.8 million, up 32% from $13.5 million for Q4 2003 and up 315% from $4.3 million for Q1 2003. Q1 2004 gross margins were 48.3% of revenue, compared to 50.4% for Q4 2003 and 40.0% for Q1 2003. Gross margin declined as a result of a product mix to lower margin products. Product cost reductions in the quarter served to offset the effect of the ASP reduction referred to above. Individual product margins were therefore maintained at Q4 2003 levels. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Research and development (R&D) expenses were $5.3 million in Q1 2004 compared to $4.8 million in Q4 2003. The increase is due in large part to increased spending on engineering development, payroll related costs and CAD software maintenance costs. Further significant growth in R&D expenditure is expected as CSR addresses its next generation wireless communication solutions. Selling, general and administrative (SG&A) expenses were $5.8 million for Q1 2004 compared to $5.0 million in Q4 2003. SG&A expenses in Q1 2004 included a non-recurring, non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $0.4 million resulting from the sale of shares to the newly appointed non-executive directors A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. prior to the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. (see note 5). Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. Operating profit for Q1 2004 was $6.7 million, 87% above the $3.6 million achieved in Q4 2003. This compares to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.7 million in Q1 2003. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 18.2% in Q1 2004 and 13.4% in Q4 2003. Balance Sheet Closing accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying were $15.5 million compared to $8.6 million for Q4 2003 and $3.4 million for Q1 2003. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) were 35 days compared to 27 days at the close of Q4 2003 and 30 days at the close Q1 2003. The increase in DSO at the close of Q1 2004 resulted from a higher proportion of Q1 revenue with direct customers on longer credit terms Credit Terms The conditions under which credit will be extended to a customer. The components of credit terms are: cash discount, credit period, net period. . Closing inventory was $10.7 million compared to $6.9 million at 31 December 2003 and $3.2 million at 30 March 2003. Inventory has increased as a result of increased levels of business in Q1 2004 and in anticipation of customer demand in Q2 2004. Cash Flow Cash and cash equivalents were $85.2 million at 2 April 2004. Cash generated in Q1 2004 from operating activities was $2.0 million. During the quarter, CSR listed on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. raising $67.3 million net of expenses. Following the flotation, CSR redeemed its redeemable preference shares for $11.2 million. Operating review Market Conditions Earlier estimates of the number of Bluetooth ICs shipped in 2003 were approximately 52 million. IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. (an independent market research company) has revised its estimate of the number of Bluetooth ICs shipped in 2003 to 64 million from 52 million and has also increased the 2004 estimated range to between 140 million and 160 million from 102 million. CSR expects that during 2004 attach rates for Bluetooth in mobile phones will increase and that the production of Bluetooth enabled headsets will also increase. CSR's Design Wins and Operational Status CSR's design wins (qualified end products and modules notified on the Bluetooth Special Interest Group The Bluetooth Special Interest Group (SIG) is the body that oversees the development of Bluetooth standards and the licensing of the Bluetooth technologies and trademarks to manufacturers. website - www.bluetooth.com) remained at high levels, with 72 new products, including mobile phones, headsets, laptops, PDAs, PC peripherals and consumer electronics from 53 different customers incorporating CSR's solutions. This figure represents over 60% of all Bluetooth product qualifications listed on the Bluetooth website in the quarter. CSR won 7 of the 9 mobile phone design wins in the quarter, namely the Nokia 6230, 6230a, 6810 & and 6820b, Sharp GX30, BenQ P30 Smart phone and a Pantech Pantech can be:-
CSR's third generation IC, Bluecore3 ROM, started shipping in March 2004. Like Bluecore2 ROM, Bluecore3 ROM is optimised for use in mobile phones but is smaller and has other improved features including lower power consumption. Wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. Fab, Assembly and Test Supply CSR has commitments from its suppliers to deliver its estimated second and third quarter capacity requirements and is currently in negotiation for the fourth quarter of 2004. CSR is confident these requirements will be met, although potentially at a slightly higher average wafer cost. CSR remains comfortable with its targeted full year gross margin of 42% to 45%. Headcount Headcount increased from 198 at the end of Q4 2003 to 210 at the end of Q1 2004. As a result of increased business levels and new R&D projects, CSR expects to add headcount throughout the remainder of 2004 principally in R&D, sales and applications engineering. Outlook The Bluetooth market is gathering momentum. CSR believes that attach rates in the major applications - mobile phones and headsets, PCs, PDAs and peripherals, consumer electronics and automotive - will increase from the current low levels. Consequently CSR is confident in continuing growth but precise short term demand forecasting is difficult. For Q2 2004, CSR expects to exceed the rate of growth experienced in the first quarter. CSR currently expects that the annual growth in both units shipped and revenue for 2004 will be at a higher rate than was achieved in 2003 although the growth rate during the second half of 2004 is unlikely to be as high as in the first half of 2004. Forward looking statements With the exception of historical information, the matters set forth in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. A number of important factors could cause actual results to differ materially from those implied by the forward-looking statements. These factors include consumer and market acceptance of the Company's products and the products that use the Company's products; decreases in the demand for the Company's products; excess inventory levels at the Company's customers; declines in average selling prices of the Company's products; cancellation of existing orders or the failure to secure new orders; the Company's failure to introduce new products and to implement new technologies on a timely basis; the Company's failure to anticipate changing customer product requirements; fluctuations in manufacturing and assembly and test yields; the Company's failure to deliver products to its customers on a timely basis; disruption in the supply of wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. or assembly or testing services; the timing of significant orders; increased expenses associated with new product introductions, masks, or process changes; the commencement of, or developments with respect to, any future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; the cyclicality of the semiconductor industry; and overall economic conditions. Consolidated Profit and Loss Account
Period from Period from Period from
1 January 29 September 1 January
2004 to 2 2003 to 31 2003
April 2004 December2003 to 30
March 2003
(unaudited) (audited) (unaudited)
$'000 $'000 $'000
Turnover 36,812 26,693 10,732
Cost of sales (19,020) (13,240) (6,444)
Gross profit 17,792 13,453 4,288
Research and development (5,269) (4,844) (3,270)
Sales and marketing (3,831) (3,645) (2,921)
Administrative expenses (1,992) (1,389) (806)
Operating profit (loss) 6,700 3,575 (2,709)
Finance income (expense) (net) 315 419 (178)
Profit (loss) on ordinary
activities before taxation 7,015 3,994 (2,887)
Tax on profit (loss) on ordinary
activities 114 699 464
Profit (loss) on ordinary
activities after taxation, being
retained profit (loss) for the
financial period 7,129 4,693 (2,423)
Earnings (loss) per share $ $ $
Basic 0.07 0.05 (0.03)
Diluted 0.06 0.04 (0.03)
Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm.
2 April 31 30 March
2004 December 2003
2003
(unaudited) (audited) (unaudited)
$'000 $'000 $'000
Fixed assets
Tangible assets 10,404 8,603 6,849
Current assets
Stocks 10,652 6,880 3,171
Debtors 20,476 14,395 5,757
Short term investments 82,319 24,263 22,736
Cash at bank and in hand 2,897 1,686 979
116,344 47,224 32,643
Creditors: Amounts falling due within
one year (26,249) (19,678) (9,907)
Net current assets 90,095 27,546 22,736
Total assets less current liabilities 100,499 36,149 29,585
Creditors: Amounts falling due after
more than one year - - (101)
Provisions for liabilities and
charges (872) (756) (358)
Net assets 99,627 35,393 29,126
Capital and reserves
Called-up share capital 215 1,000 998
Share premium account 76,619 20,107 19,192
Capital redemption reserve 950 - -
Other reserve - 325 325
Merger reserve 61,574 61,574 61,574
Profit and loss account (39,731) (47,613) (52,963)
Shareholders' funds 99,627 35,393 29,126
Consolidated Cash Flow Statement
Period from Period from 29 Period from
1 January September 1 January
2004 to 2 2003 to 31 2003 to 30
April 2004 December 2003 March 2003
(unaudited) (audited) (unaudited)
$'000 $'000 $'000
Net cash inflow (outflow)
from operating activities 1,952 3,903 (674)
Returns on investments and
servicing of finance 83 (13) (98)
Taxation 595 1,519 (169)
Capital expenditure and
financial investment (1,577) (1,449) (969)
Cash inflow (outflow) before
management of liquid
resources and financing 1,053 3,960 (1,910)
Management of liquid
resources (58,056) (4,723) 1,693
Financing 57,990 265 (1,372)
Increase (decrease) in cash
in the period before
exchange movement 987 (498) (1,589)
Notes 1. Accounting policies The financial information has been prepared in accordance with the policies set out in the statutory financial statements for the year ended 31 December 2003. 2. Earnings (loss) per ordinary share The calculation of earnings (loss) per share is based upon the profit (loss) for the period after taxation and the weighted average number of shares in issue during the period. For basic earnings (loss) per share, this is 104,664,135 (31 December 2003 - 96,687,644, 30 March 2003 - 93,162,523) and for diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings (loss) per share, this is 113,859,715 (31 December 2003 - 105,131,007, 30 March 2003 - 93,162,523). Due to CSR's loss for quarter one 2003, share options are anti-dilutive and thus the diluted loss per share equals the basic loss per share for that period. 3. Comparative figures These financial statements do not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. The results for Q4 2003 have been extracted from the Accountant's Report featured in the listing particulars, upon which the auditors reported without qualification. 4. CSR's Calendar CSR operates a thirteen week quarter with 4 weeks in the first 2 months and 5 weeks (35 days) in the final month of each quarter. The calculation of DSO therefore compares closing accounts receivable with revenue in the preceding 5 week month. 5. Share Related Charge The board approved, and shareholders ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. at an EGM EGM Electronic Gaming Machine EGM Electronic Gaming Monthly EGM Extraordinary General Meeting EGM Expert Group Meeting EGM Estudio General de Medios (Spanish: General Means Study) EGM Emergency General Meeting before the IPO, that John Whybrow, David Tucker and Dr Yutaka Kuwahara (the non-executive President of CSR's Japanese subsidiary) buy 100,000, 60,000 and 40,000 ordinary shares respectively at the share price paid by private investors at the last round of funding in Q4 2002. The price paid on allotment was at an undervalue to the subsequent IPO price of 200p and therefore resulted in a profit and loss charge for allotting shares at a deemed undervalue. |
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