Skyworks Reports Third Fiscal Quarter 2006 Results; Delivers $197.1 Million in Revenue with a More Than 50 Percent Sequential Improvement in Pro Forma Operating Income and $0.05 of Pro Forma Diluted EPS.WOBURN Woburn, village, England Woburn (w  `bərn), village, Bedfordshire, S central England. , Mass. -- 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 . , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SWKS), an industry leader in radio solutions and precision analog semiconductors, today announced revenue of $197.1 million for the third fiscal quarter ended June June: see month. 30, 2006, up 6 percent sequentially when compared to $185.2 million in the prior quarter and versus $191.5 million in the same period a year ago. Excluding the company's baseband Electronic data prior to any modification. It refers to analog or digital data before they are merged with other signals (multiplexed) or intermixed into a carrier wave (modulated). See multiplexing and modulation. product area and legacy assembly and test services operation, revenue for the quarter was up 14 percent year over year. 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, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $10.1 million in the third fiscal quarter, up 51 percent sequentially and yielding pro forma net income of $8.0 million, or $0.05 of pro forma diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , in line with previous guidance. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). operating income for the third fiscal quarter was $5.9 million and includes a $3.7 million charge related to the expensing of equity-based compensation in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 123R, resulting in net income of $3.0 million or $0.02 in diluted earnings per share. Pro forma results, which are a supplement to financial results based on GAAP, exclude certain charges including equity-based compensation, amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and non-recurring items. The company believes these non-GAAP financial measures provide useful information to both management and investors by excluding certain charges and non-recurring items that may not be indicative of Skyworks' ongoing operations and economic performance. "Skyworks' solid third fiscal quarter results reflect the ramp of several next-generation products supporting tier-one handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. OEMs including Samsung, Sony Ericsson For an arrangement of Sony Ericsson products, see list of Sony Ericsson products Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. , Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. and LG. In particular, our Intera(TM) front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. modules and Helios(TM) radios are increasingly powering some of the world's most popular EDGE, WEDGE and WCDMA (Wideband CDMA) A 3G high-speed digital data service provided by cellular carriers that use the TDMA or GSM technology worldwide, including AT&T (formerly Cingular) and T-Mobile in the U.S. handsets," said David J David J. Haskins (b. April 24, 1957, in Northampton, England) is a British alternative rock musician. He was the bassist for the seminal gothic rock band Bauhaus. Life and work . Aldrich Aldrich may refer to: Places:
Third Fiscal Quarter Highlights --Supported Samsung's aggressive migration to EDGE with Helios(TM) radios across nearly 20 new models, including the SGH-E770 with MP3 functionality, the SGH-E900 fashion handset, the ultra slim SGH-X820 model, and the SGH-S400i slider A block of material that holds the read/write head of a magnetic disk. See flying head. --Supplied Motorola compact and highly efficient power amplifiers Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. for their ultra-thin, EVDO-compliant Q multimedia platform --Powered a suite of Sony Ericsson handsets, including the popular Walkman A brand of portable audio players and recorders from Sony. In 1979, Sony introduced the first Walkman, an audio cassette device that created a revolution. The tape-based Walkman was the progenitor of the portable CD player and the MP3 player. See audio cassette and Stereobelt. (R) music phone and the Cyber-shot(TM) digital camera models, with front-end modules spanning GSM/GPRS, EDGE and WCDMA air interfaces --Ramped complete radio solutions for LG's "Chocolate" CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. and GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. series of handsets, a best seller in Korea and the winner of Europe's 2006 Reddot and iF Design Awards --Captured a strategic design win with proprietary front-end modules for 802.11n wireless LAN A local area network that transmits over the air typically in the 2.4 GHz or 5 GHz unlicensed frequency band. It does not require line of sight between sender and receiver. Wireless base stations (access points) are wired to an Ethernet network and transmit a radio frequency over an area applications, enabling data rates of up to 200 Mbps Business Outlook "Our RF solutions continue to gain momentum among leading handset OEMs, highlighted by ramps at Samsung and Sony Ericsson. At the same time, our linear products portfolio is at record backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. with design wins transitioning into production. However, while handset demand remains robust, we experienced isolated forecast changes that reduced our demand signal for the fourth fiscal quarter," said Allan M. Kline, Skyworks' vice president and chief financial officer. "Accordingly, we are forecasting September quarterly revenue in the range of $197 to $200 million with pro forma operating income of between $10 and $11 million." Pro forma operating income excludes an estimated $4 million of FASB Statement No. 123R-related expense. Skyworks will discuss its business outlook in more detail on its conference call to be held with investors and analysts today at 5:00 p.m. eastern time (ET). Skyworks' Third Fiscal Quarter 2006 Conference Call Skyworks will host a conference call at 5:00 p.m. ET today to discuss results for the third fiscal quarter of 2006 and current business prospects. To listen to the conference call 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 , please visit the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Skyworks' Web site at www.skyworksinc.com. To listen to the conference call via telephone, please call 866-550-6338 (domestic) or 347-284-6930 (international), security code: Skyworks. Playback Playback could mean:
About Skyworks Skyworks Solutions, Inc. is an industry leader in radio solutions and precision analog semiconductors servicing a diversified diversified (di·verˑ·s set of mobile communications applications. The company's power amplifiers, front-end modules and direct conversion transceivers are at the heart of many of today's leading-edge multimedia handsets, cellular base stations and wireless networking See wireless network. platforms. Skyworks also offers a portfolio of highly innovative linear products, supporting a diverse set of automotive, 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). , industrial and medical customers. Headquartered in Woburn, Mass., Skyworks is worldwide with engineering, manufacturing, sales and service facilities throughout Asia, Europe and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . For more information, please visit Skyworks' Web site at: www.skyworksinc.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 includes "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. " intended to qualify for the safe harbor from liability established by 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. These forward-looking statements include information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future results of Skyworks (including certain projections and business trends). Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "believes," "plans," "may," "will," "continue," similar expressions, and variations or negatives of these words. All such statements are subject to certain risks and uncertainties that could cause actual results to differ materially and adversely from those projected, and may affect our future operating results, financial position and cash flows. These risks and uncertainties include, but are not limited to: global economic and market conditions, such as 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; the ability to develop, manufacture and market innovative products in a rapidly changing technological environment; the ability to compete with products and prices in an intensely competitive industry; 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. ; losses or curtailments of purchases or payments from key customers, or the timing of customer inventory adjustments; the timing of new product introductions; the availability and extent of utilization of raw materials, critical manufacturing equipment and manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; fluctuations in manufacturing yields; the ability to continue to grow and maintain an intellectual property portfolio and obtain needed licenses from third parties; the ability to attract and retain qualified personnel; labor relations of the company, its customers and suppliers; economic, social and political conditions in the countries in which Skyworks, its customers or its suppliers operate, including security and health risks, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; 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 but not limited to those detailed from time to time in the company's filings with the Securities and Exchange Commission. 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: Skyworks, Skyworks Solutions, Helios and Intera are trademarks or registered trademarks of Skyworks Solutions, Inc. or its subsidiaries in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in other countries. All other brands and names listed are trademarks of their respective companies.
SKYWORKS SOLUTIONS, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENT OF OPERATIONS
------------------- -------------------
Three Months Ended Nine Months Ended
------------------- -------------------
(in thousands, except per June 30, July 1, June 30, July 1,
share amounts) 2006 2005 2006 2005
--------- --------- --------- ---------
Net revenues $197,058 $191,532 $580,617 $602,197
Cost of goods sold 123,711 113,658 363,197 363,705
--------- --------- --------- ---------
Gross profit 73,347 77,874 217,420 238,492
Operating expenses:
Research and development 40,619 39,823 123,606 115,612
Selling, general and
administrative 26,333 25,745 75,296 78,027
Amortization of intangibles 536 536 1,608 1,818
--------- --------- --------- ---------
Total operating expenses 67,488 66,104 200,510 195,457
Operating income 5,859 11,770 16,910 43,035
Interest expense (3,231) (3,683) (11,489) (10,851)
Other income, net 1,822 1,536 6,571 3,724
--------- --------- --------- ---------
Income before income taxes 4,450 9,623 11,992 35,908
Provision for income taxes 1,445 2,234 3,774 13,358
--------- --------- --------- ---------
Net income $3,005 $7,389 $8,218 $22,550
========= ========= ========= =========
Earnings per share:
Basic $0.02 $0.05 $0.05 $0.14
Diluted $0.02 $0.05 $0.05 $0.14
Weighted average shares:
Basic 159,708 157,809 159,122 157,161
Diluted 160,885 158,682 159,742 158,621
SKYWORKS SOLUTIONS, INC.
UNAUDITED RECONCILIATION OF PRO FORMA NON-GAAP MEASURES
------------------ -----------------
Three Months Ended Nine Months Ended
------------------ -----------------
June 30, July 1, June 30, July 1,
(in thousands) 2006 2005 2006 2005
--------- -------- -------- --------
GAAP operating income $5,859 $11,770 $16,910 $43,035
Stock-based compensation
expense (a) 3,670 - 10,289 -
Restructuring charges (b) - - 1,796 -
Lease and leasehold
improvements (c) - - - 886
Amortization of intangible
assets 536 536 1,608 1,818
--------- -------- -------- --------
Pro forma operating income $10,065 $12,306 $30,603 $45,739
========= ======== ======== ========
------------------ -----------------
Three Months Ended Nine Months Ended
------------------ -----------------
June 30, July 1, June 30, July 1,
(in thousands) 2006 2005 2006 2005
--------- -------- -------- --------
GAAP net income $3,005 $7,389 $8,218 $22,550
Stock-based compensation
expense (a) 3,670 - 10,289 -
Restructuring charges (b) - - 1,796 -
Lease and leasehold
improvements (c) - - - 886
Amortization of intangible
assets 536 536 1,608 1,818
Deferred financing expense
adjustment (d) - - 572 -
Tax adjustments (e) 793 1,511 972 10,700
--------- -------- -------- --------
Pro forma net income $8,004 $9,436 $23,455 $35,954
========= ======== ======== ========
------------------ -----------------
Three Months Ended Nine Months Ended
------------------ -----------------
June 30, July 1, June 30, July 1,
2006 2005 2006 2005
--------- -------- -------- --------
GAAP net income per share,
diluted $0.02 $0.05 $0.05 $0.14
Stock-based compensation
expense (a) 0.02 - 0.06 -
Restructuring charges (b) - - 0.01 -
Lease and leasehold
improvements (c) - - - 0.01
Amortization of intangible
assets - - 0.01 0.01
Deferred financing expense
adjustment (d) - - 0.01 -
Tax adjustments (e) 0.01 0.01 0.01 0.07
--------- -------- -------- --------
Pro forma net income per share,
diluted $0.05 $0.06 $0.15 $0.23
========= ======== ======== ========
(a) These charges represent expense recognized in accordance with FASB
Statement No. 123R, Share-Based Payment. Approximately $0.6
million, $1.5 million and $1.6 million were included in cost of
goods sold, research and development expense and selling, general
and administrative expense, respectively, for the three months
ended June 30, 2006. Approximately $1.5 million, $4.5 million and
$4.3 million were included in cost of goods sold, research and
development expense and selling, general and administrative
expense, respectively, for the nine months ended June 30, 2006.
(b) The charges recorded during the first quarter of fiscal 2006
primarily related to a continued reduction in the level of
activity within the Company's cellular baseband product area.
Approximately $0.4 million, $1.2 million and $0.2 million were
included in cost of goods sold, research and development expense
and selling, general and administrative expense, respectively.
(c) These charges represent an aggregate adjustment for the correction
of an error in the manner in which the Company accounted for
scheduled rent increases and amortization of leasehold
improvements.
(d) This charge represents a reduction in deferred financing costs
associated with the redemption of $50.7 million of the Company's
4.75% convertible subordinated notes.
(e) During the three months and nine months ended June 30, 2006, this
adjustment primarily relates to foreign exchange translation
associated with the Company's foreign deferred tax assets. During
the three months ended July 1, 2005, this charge represents a
non-cash tax charge related to the utilization of pre-merger
deferred tax assets. During the nine months ended July 1, 2005,
these charges primarily represent non-cash charges related to the
utilization of pre-merger deferred tax assets and a reduction in
the expected benefit of foreign deferred tax assets resulting from
a change in regulated foreign tax rates.
The above pro forma non-GAAP measures are based upon our unaudited
consolidated statements of operations for the periods shown. These
non-GAAP financial measures are provided to enhance the user's overall
understanding of our current financial performance and our prospects
for the future. Specifically, we believe the non-GAAP financial
measures provide useful information to both management and investors
by excluding certain charges and non-recurring items that we believe
are not indicative of our ongoing operations and economic performance.
Additionally, since we have historically reported non- GAAP results to
the investment community, the inclusion of non-GAAP financial measures
provides consistency in our financial reporting. Further, these
non-GAAP financial measures are one of the primary indicators
management uses for planning and forecasting in future periods. The
presentation of this additional information should not be considered
in isolation or as a substitute for results prepared in accordance
with accounting principles generally accepted in the United States.
SKYWORKS SOLUTIONS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
June 30, Sept. 30,
(in thousands) 2006 2005
----------- -----------
Assets
Current assets:
Cash and cash equivalents $98,505 $122,535
Short-term investments 56,005 113,325
Accounts receivable, net 204,257 171,454
Inventories 101,962 77,400
Prepaid expenses and other current assets 9,964 11,268
Property, plant and equipment, net 159,232 150,838
Goodwill and intangible assets, net 508,094 511,119
Other assets 28,743 29,904
----------- -----------
Total assets $1,166,762 $1,187,843
=========== ===========
Liabilities and Equity
Current liabilities:
Short-term debt $50,000 $50,000
Accounts payable 75,804 72,276
Accrued liabilities and other current
liabilities 35,877 35,959
Long-term debt 179,335 230,000
Other long-term liabilities 7,214 7,044
Stockholders' equity 818,532 792,564
----------- -----------
Total liabilities and equity $1,166,762 $1,187,843
=========== ===========
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