Exar Corporation Announces Second Quarter Fiscal 2014 Results

FREMONT, Calif., Oct. 29, 2013 /PRNewswire/ -- Exar Corporation (NYSE: EXAR), a leading supplier of high performance analog mixed-signal components and data management solutions, today announced financial results for the Company's second quarter of fiscal year 2014, ended September 29, 2013.  Revenue for the quarter was $34.0 million, an increase of 4% sequentially and 11% from the same quarter a year ago.

On a non-GAAP basis gross margin was 52% and non-GAAP net income was $5.1 million, or $0.10 per fully diluted share. On a GAAP basis gross margin was 41%, net income was $6.5 million and earnings per fully diluted share were $0.13. GAAP results reflect an income tax benefit recorded as a result of the acquisition of Cadeka Microcircuits on July 5, 2013.

Louis DiNardo, the Company's President and CEO, commented, "We are pleased with our performance in the second quarter of fiscal year 2014 as revenue grew nicely both sequentially and year-over-year.  During the quarter we absorbed the acquisition of Cadeka Microcircuits and delivered solid non-GAAP net income growth of 7% sequentially and 80% versus the same quarter a year ago.

"As we focus on the second half of fiscal 2014 we expect to expand our account base in the networking market and achieve deeper account penetration with our current industrial customers.  The second quarter marks a turning point for us as we are now well positioned to drive growth from new products," continued Mr. DiNardo. "In Data Management we began shipping evaluation boards of our next-generation coprocessor. The XR9200 ASIC and the DX2000 Series of PCIe Gen 3 cards deliver unparalleled performance for compression and security and our new AltraHD (Hadoop) platform solution, which leverages our existing DX1840 Series PCIe Cards, paves the way for our effort in the unstructured Big Data environment.  In our components businesses new product introductions in High Performance Analog and Connectivity are leading the way to robust design win traction in the industrial sector."

Mr. DiNardo concluded, "While we have demonstrated revenue growth for the past six quarters, we are sensitive to the short-term challenges faced by our existing customers in Big Data.  Accordingly, we see a temporary depression this quarter from revenue in the networking area as our OEM customers and subcontractors consume their inventory.  Meanwhile, our new design wins are expected to ramp to production in the New Year, positioning us well for growth in all of our target markets based on revenue from new products."

For the third quarter of fiscal year 2014 the Company expects total revenue to be in the range of $30.5 to $33.5 million and gross margin to be in the range of 50% to 52%.

Fiscal Year 2014 Second Quarter Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company's financial results for the second quarter of fiscal year 2014, today, Tuesday, October 29, 2013 at 1:45 p.m. PDT (4:45 p.m. EDT).  To access the conference call, please dial (888) 846-5003 or (480) 629-9856.  In addition, a live webcast will be available. 

An archive of the conference call webcast will be available on Exar's Investor webpage after the conference call's conclusion. 

About Exar

Exar Corporation designs, develops and markets high-performance, analog mixed-signal integrated circuits and advanced sub-system solutions for the Networking & Storage, Industrial & Embedded Systems, and Communications Infrastructure markets.  Exar's product portfolio includes power management and connectivity components, high-performance analog and mixed-signal products, communications products, and network security and storage optimization solutions.  Exar has locations worldwide providing real-time customer support.  For more information about Exar, visit http://www.exar.com.

Forward-Looking Statements                     

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.  The forward-looking statements contained in this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events.  These statements are not guarantees of any event or future performance, involve risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate.  Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which the Company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis at the time expressed, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished and the Company disclaims any duty to update such statements.  The Company urges investors to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended March 31, 2013 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP.  Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.exar.com or the SEC's website at: http://www.sec.gov.  In this press release and in related comments by management, we are disclosing non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income or loss, non-GAAP net income or loss, and non-GAAP basic and diluted net income or loss per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets and inventory step-up, restructuring charges and exit costs, provisions for dispute resolutions, certain income tax benefits and credits, certain warranty charges, net change in the fair value of contingent consideration, and related income tax effects on certain excluded items.  We are also disclosing the non-GAAP measure of free cash flow, which is derived from our net cash provided (used) by operations, less purchases of fixed assets and IP, plus proceeds from the sale of IP. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods.  The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provides relevant and useful information to analysts, investors, management and other interested parties.  For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company's future periods.  These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies.  In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.  The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP.  These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.  A reconciliation of the non-GAAP numbers to the most comparable GAAP numbers is provided in the tables included with this press release.

-Tables follow-

SOURCE Exar Corporation

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