Conexant First Fiscal Quarter Revenues Grow 4 Percent Sequentially, Broadband Segment Returns to Profitability.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers NEWPORT BEACH Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif.--(BUSINESS WIRE)--Jan. 23, 2003 Company Receives $215 Million in Debt Repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan from Skyworks Solutions Conexant Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. Remove this template after wikifying. This article has been tagged since September 2007. Systems, Inc. (Nasdaq:CNXT) today announced revenues of $164.5 million for the first quarter of fiscal 2003, which ended Dec. 27, 2002. Revenues increased 4 percent from the $157.9 million reported in the prior quarter. Conexant's Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Communications segment increased revenues 8 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and achieved operating profitability, primarily driven by continued revenue growth and market share gains in its set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. and home network processor initiatives. The company also significantly improved its cash position, exiting the quarter with nearly $400 million in cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. "In an environment that continues to be challenging, Conexant's first fiscal quarter revenues of $164 million increased 4 percent sequentially, representing our fourth consecutive quarter of revenue growth," said Dwight Dwight , Timothy 1752-1817. American clergyman, author, and educator who was a leading supporter of Federalism and served as president of Yale University (1795-1817). His grandson Timothy (1828-1916) was also president of Yale (1886-1899). W. Decker, Conexant chairman and chief executive officer. "Broadband Communications segment revenues of $144 million were up 8 percent sequentially and 14 percent on a year-over-year basis, driven by seasonally strong demand and continuing market share gains in a number of key product areas including satellite set-top box solutions, home network processors, and broadcast video products. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , our Broadband Communications business achieved, on schedule, its goal of a return to profitability. "Our Mindspeed Technologies segment delivered revenues of $20 million, level with last quarter's run-rate performance and roughly in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with expectations set at the beginning of the quarter, reflecting steady demand across the business's key Metro/Access product families," Decker continued. "Throughout the quarter, Mindspeed continued with its strategic restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities, including consolidation of multiple design centers, elimination of selected R&D investments and headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. reductions across all business support functions. As a result, our Mindspeed business is on track to deliver this quarter on our previous commitment to reduce operating costs operating costs npl → gastos mpl operacionales by 35 percent from the level of six months ago. "Conexant overall improved its 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. by 29 percent sequentially on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, better than the 20 percent we anticipated at the beginning of the quarter and better than the 24 percent sequential One after the other in some consecutive order such as by name or number. improvement we delivered last quarter. "From a balance sheet perspective, we successfully restructured our financing agreements Financing Agreements In the context of project financing, the documents which provide the project financing and sponsor support for the project as defined in the project contracts. with Skyworks Solutions  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , which resulted in the early cash repayment of $170 million, the receipt of $45 million in liquid securities and the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of their credit facility with us. "As a result, we significantly improved our balance sheet liquidity, exiting the quarter with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $400 million in cash, cash equivalents and short-term investments. This provides us with additional flexibility as we continue to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on our strategic initiatives, most particularly the separation of our Mindspeed business." The Conexant pro forma operating loss for the first fiscal quarter was $28.6 million, an improvement of 29 percent, or $11.7 million, over the pro forma operating loss of the prior quarter. These pro forma results are a supplement to financial statements based on generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Conexant uses pro forma information to evaluate its segment operating performance and believes this presentation provides investors with additional insight into its underlying operating results. A full reconciliation between the pro forma and GAAP results from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the is included in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial data. Presented on a GAAP basis, the net loss for the first quarter of fiscal 2003 was $52.2 million, compared with a net loss of $176.2 million in the fourth quarter of fiscal 2002. Second Quarter Fiscal 2003 Outlook "The March quarter is a seasonally weak period for the markets served by our Broadband Communications business," Decker said. "However, we expect new product ramps and continuing market share gains to partially offset this seasonality. As a result, Broadband Communications revenues are expected to be flat to down approximately 5 percent. "With a current quarterly revenue break-even level of approximately $140 million, our Broadband segment will remain profitable above the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of this revenue guidance range. Customer demand in Mindspeed's end markets remains weak, and visibility continues to be poor. Given this customer environment, we expect revenues from Mindspeed's continuing product lines to decline approximately 5 percent sequentially. Despite this decline, continuing cost reductions this quarter are expected to result in a slight further improvement in the level of Mindspeed's pro forma operating loss. "In the aggregate, we anticipate that Conexant's second fiscal quarter revenues will be flat to down 5 percent. "From an operations perspective, we expect to maintain overall gross margin in the 47 percent range and reduce total quarterly 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. by approximately $3 million, which will enable us to deliver an additional 5 percent sequential improvement in pro forma operating loss at the midpoint of our revenue guidance range. With the recent receipt of funds from Skyworks, net interest costs will return to historical levels, resulting in a pro forma net loss that we expect to be relatively flat with last quarter's performance," Decker concluded. Note to Editors, Analysts and Investors The Conexant first fiscal quarter 2003 conference call will take place on Thursday Thursday: see week. , Jan. 23, at 2 p.m. PDT/5 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To listen to the conference call via telephone, call 800/680-9685 (domestic) or 334/323-9854 (international); security code: Conexant. To listen via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , visit the investor relations Investor relations The process by which the corporation communicates with its investors. section of Conexant's Web site at www.conexant.com/ir. Playback Playback could mean:
About Conexant Conexant Systems, Inc., a worldwide leader in semiconductor system solutions for communications applications, leverages its expertise in mixed-signal processing to deliver integrated systems and semiconductor products through two separate businesses. The Broadband Communications business develops and delivers integrated solutions that enable digital entertainment and information networks for the home and small office. Mindspeed Technologies(TM), the company's Internet infrastructure business, designs, develops and sells a complete portfolio of semiconductor networking solutions that facilitate the aggregation, transmission and switching of data, video and voice from the edge of the Internet to linked metropolitan area networks. Conexant is headquartered in Newport Beach, Calif. To learn more, visit us at www.conexant.com or www.mindspeed.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This news release contains statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future results of Conexant (including certain projections and business trends) that 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. " as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the semiconductor industry and the markets addressed by the company's and its customers' products; demand for and market acceptance of new and existing products; successful development of new products; the timing of new product introductions; the availability of manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; the ability to develop and implement new technologies and to obtain protection for the related intellectual property; the successful implementation of the company's expense reduction and restructuring initiatives; the successful separation of the company's Broadband Communications and Mindspeed Technologies(TM) businesses; the ability to attract and retain qualified personnel; and the uncertainties of 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. , as well as other risks and uncertainties, including those detailed from time to time in the company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Note to Editors: Conexant and Mindspeed are trademarks of Conexant Systems, Inc. Other brands and names contained in this release are the property of their respective owners.
CONEXANT SYSTEMS, INC.
Pro Forma Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
Three months ended
Dec. 31, Sept. 30, June 30, Dec. 31,
2002 2002 2002 2001
Net revenues $164,456 $157,944 $153,957 $141,115
Cost of goods sold 87,599 82,572 81,266 93,274
Gross margin 76,857 75,372 72,691 47,841
Operating expenses:
Research and development 70,920 78,695 83,680 77,898
Selling, general and
administrative 34,519 36,932 42,237 44,526
Total operating
expenses 105,439 115,627 125,917 122,424
Pro forma operating loss (28,582) (40,255) (53,226) (74,583)
Other expense, net (1,964) (1,657) (5,156) (5,282)
Pro forma loss before
income taxes (30,546) (41,912) (58,382) (79,865)
Provision (benefit) for
income taxes 436 870 137 (2,549)
Pro forma loss from
continuing operations $ (30,982) $ (42,782) $(58,519) $ (77,316)
Pro forma loss per share
from
continuing operations,
basic and diluted $(0.12) $(0.16) $(0.22) $(0.30)
Number of shares used in
per share
computation 265,714 265,085 260,414 254,362
Continuing operations exclude the results of the company's
discontinued wireless communications business and its Mexicali
assembly and test operations which the company spun off in June 2002.
Pro forma operating loss, pro forma loss from continuing
operations, and pro forma loss per share from continuing operations
exclude the amortization of intangible assets, special charges, stock
compensation and certain non-operating gains and losses. The company
believes these measures of earnings provide a better understanding of
its underlying operating results and the company uses these measures
internally to evaluate its underlying operating performance. These
measures of earnings are not in accordance with, or an alternative
for, generally accepted accounting principles and may be different
from pro forma measures used by other companies.
A reconciliation of pro forma loss from continuing operations
presented above with the company's loss from continuing operations as
determined under generally accepted accounting principles is presented
in the following table.
Conexant Systems, Inc.
Reconciliation of Pro Forma Loss from
Continuing Operations to Reported Results
(Unaudited, in Thousands, Except Per Share Amounts)
Three months ended
Dec. 31, Sept. 30, June 30, Dec. 31,
2002 2002 2002 2001
Pro forma loss from
continuing operations $ (30,982) $ (42,782) $ (58,519) $ (77,316)
Amortization of intangible
assets
and special items:
Amortization of
intangible assets (a) 14,999 75,845 84,570 85,522
Special charges (b) 10,605 43,599 133,447 1,000
Stock compensation 935 (540) (2,285) 2,041
Debt conversion costs -- -- 10,435 --
Equity in losses
(earnings) of
equity method
investees (1,303) 958 (113) 749
Unrealized gain on
notes
receivable from
Skyworks (4,029) -- -- --
Gains on sales of
certain
investments and
assets -- -- -- (2,537)
Write-down of
investments -- 13,532 -- 5,675
Loss from continuing
operations $(52,189) $(176,176) $(284,573) $(169,766)
Loss per share, basic and
diluted:
Pro forma loss from
continuing
operations $ (0.12) $ (0.16) $ (0.22) $ (0.30)
Amortization of
intangible assets
and special items (0.08) (0.50) (0.87) (0.37)
Loss from continuing
operations $(0.20) $(0.66) $(1.09) $(0.67)
(a) The decrease in amortization of intangible assets resulted
from the company's adoption of Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" as of the
beginning of fiscal 2003. Under this new accounting rule, goodwill is
no longer amortized into results of operations, but instead must be
tested at least annually for impairment and written down when
impaired. Impairment tests may result in significant write-downs of
the value of goodwill.
(b) Special charges consist of asset impairments, restructuring
charges, separation costs and losses on the disposal of certain
assets.
CONEXANT SYSTEMS, INC.
Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share amounts)
Three months ended
Dec. 31, Sept. 30, June 30, Dec. 31,
2002 2002 2002 2001
Net revenues $164,456 $157,944 $153,957 $141,115
Cost of goods sold 87,599 82,572 81,266 93,274
Gross margin 76,857 75,372 72,691 47,841
Operating expenses:
Research and development 71,467 78,460 82,669 79,413
Selling, general and
administrative 34,907 36,627 40,963 45,052
Amortization of intangible
assets 14,999 75,845 84,570 85,522
Special charges 10,605 43,599 133,447 1,000
Total operating
expenses 131,978 234,531 341,649 210,987
Operating loss (55,121) (159,159) (268,958) (163,146)
Debt conversion costs -- -- (10,435) --
Other income (expense), net 3,368 (16,147) (5,043) (9,169)
Loss before income taxes (51,753) (175,306) (284,436) (172,315)
Provision (benefit) for income
taxes 436 870 137 (2,549)
Loss from continuing operations (52,189) (176,176) (284,573) (169,766)
Discontinued operations -- -- (14,826) (34,724)
Net loss $(52,189)$(176,176)$(299,399)$(204,490)
Loss per share, basic and
diluted:
Continuing operations $(0.20) $(0.66) $(1.09) $(0.67)
Discontinued operations -- -- (0.06) (0.13)
Net loss $(0.20) $(0.66) $(1.15) $(0.80)
Number of shares used in per
share computation 265,714 265,085 260,414 254,362
CONEXANT SYSTEMS, INC.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
Dec. 31, Sept. 30,
2002 2002
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments (c) $397,105 $267,823
Receivables, net 75,252 73,552
Notes receivable from Skyworks -- 180,000
Inventories 70,830 57,330
Deferred income taxes 32,258 32,233
Other current assets 41,083 52,695
Total current assets 616,528 663,633
Property, plant and equipment, net 82,761 93,994
Goodwill and intangible assets, net 760,214 773,202
Deferred income taxes 224,445 224,168
Other assets 159,995 156,038
Total assets $1,843,943 $1,911,035
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $88,916 $101,342
Deferred revenue 7,744 10,420
Accrued compensation and benefits 36,208 38,929
Other current liabilities 71,115 71,738
Total current liabilities 203,983 222,429
Convertible subordinated notes 681,825 681,825
Other liabilities 54,864 58,954
Total liabilities 940,672 963,208
Shareholders' equity 903,271 947,827
Total liabilities and shareholders'
equity $1,843,943 $1,911,035
(c) Cash, cash equivalents and short-term investments as of
Dec. 31, 2002 includes the $49.2 million fair value of the 15%
convertible notes receivable from Skyworks.
CONEXANT SYSTEMS, INC.
Segment and Corporate Data
(unaudited, in thousands)
Three months ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2002 2002 2002 2002 2001
Broadband Communications
Segment:
Revenues $144,201 $133,062 $131,999 $129,728 $126,937
Cost of goods sold 81,462 74,893 74,191 82,473 86,364
Gross margin 62,739 58,169 57,808 47,255 40,573
Gross margin % 44% 44% 44% 36% 32%
Research and
development 39,769 41,441 41,528 37,825 36,151
Selling, general
and administrative 22,434 22,846 25,440 25,586 23,377
Segment
operating
expenses 62,203 64,287 66,968 63,411 59,528
Segment
operating
income (loss) $536 $(6,118) $(9,160) $(16,156) $(18,955)
Mindspeed
Technologies
Segment:
Revenues $20,255 $24,882 $21,958 $19,018 $14,178
Cost of goods sold 6,137 7,679 7,075 7,746 6,910
Gross margin 14,118 17,203 14,883 11,272 7,268
Gross margin % 70% 69% 68% 59% 51%
Research and
development 31,151 37,254 42,152 45,002 41,747
Selling, general
and administrative 12,085 14,086 16,797 16,874 21,149
Segment
operating
expenses 43,236 51,340 58,949 61,876 62,896
Segment
operating
loss $(29,118) $(34,137) $(44,066) $(50,604) $(55,628)
Reconciliation of Segment Operating Loss to GAAP
Operating Loss:
Total segment
operating loss $(28,582) $(40,255) $(53,226) $(66,760) $(74,583)
Amortization of
intangible assets 14,999 75,845 84,570 85,940 85,522
Special charges 10,605 43,599 133,447 21,319 1,000
Stock compensation 935 (540) (2,285) 590 2,041
Operating
loss $(55,121)$(159,159)$(268,958)$(174,609)$(163,146)
Selected Data -- Conexant Continuing
Operations (d):
Depreciation (e) $9,680 $10,757 $11,885 $14,234 $14,170
Capital expenditures 4,795 1,205 9,503 4,004 6,517
Revenues by Region:
Americas $31,538 $35,322 $36,722 $32,169 $25,376
Europe 14,731 14,015 13,907 27,286 16,377
Japan 11,075 12,189 9,625 12,114 13,267
Asia Pacific 107,112 96,418 93,703 77,177 86,095
$164,456 $157,944 $153,957 $148,746 $141,115
(d) Conexant's continuing operations exclude the discontinued
wireless communications business and Mexicali assembly and test
operations.
(e) Does not include amortization of goodwill and intangible
assets.
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