Exar Corporation Reports Fiscal 2011 Fourth Quarter Results

News provided by

Exar Corporation

May 05, 2011, 04:05 ET

FREMONT, Calif., May 5, 2011 /PRNewswire/ -- Exar Corporation (Nasdaq: EXAR) today reported financial results for its fiscal 2011 fourth quarter ended March 27, 2011.

Net sales for the fourth quarter of fiscal 2011 were $33.8 million compared to net sales of $35.4 million for the prior quarter and $38.5 million for the fourth quarter of fiscal 2010.  

The GAAP gross margin for the fourth quarter of fiscal 2011 was 35.0% compared to 45.5% for the prior quarter and 50.4% in the fourth quarter of fiscal 2010.

On a non-GAAP basis, the gross margin for the fourth quarter of fiscal 2011 was 46.1% compared to 50.0% for the prior quarter and 54.0% in the fourth quarter of fiscal 2010.

The GAAP net loss for the fourth quarter of fiscal 2011 was $18.8 million, or $0.42 net loss per share, compared to a net loss of $5.0 million, or $0.11 net loss per share in the prior quarter, and a net loss of $3.3 million, or $0.08 net loss per share, for the fourth quarter of fiscal 2010.

On a non-GAAP basis, the net loss was $4.6 million for the fourth quarter of fiscal 2011 or $0.10 net loss per share, compared to net loss of $1.9 million, or $0.04 net loss per share in the previous quarter, and the net income of $1.5 million, or $0.03 earnings per share, in the fourth quarter of fiscal 2010.

The Company ended the fourth quarter of fiscal 2011 with cash, cash equivalents and short-term marketable securities of $201 million.

"We completed fiscal 2011 with revenue growth of 8.2% year over year.  As the fourth quarter progressed we saw momentum in new orders and shipments," said Pete Rodriguez, the Company's president and chief executive officer.  "During the period we exited the 10 Gigabit Ethernet Network Interface Card market as announced on March 4, 2011.  We reduced our quarterly operating expenses by approximately $3 million, thereby significantly reducing our revenue breakeven point."

For the first quarter of fiscal 2012 ending July 3, 2011, the Company projects that net sales will be between $34 million and $36 million. The non-GAAP gross margin is expected to be between 47% and 49%. Operating expenses are expected to be between $18 million and $19 million on a non-GAAP basis.

The Company's statements about its future financial performance or operating plans are based on current information and expectations and the Company undertakes no duty to update such statements. These statements are forward-looking and actual results could differ materially due to various risks and uncertainties, some of which are described herein.

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 fourth quarter of fiscal 2011, today, Thursday, May 5, 2011 at 1:30 p.m. PDT. To access the conference call, please dial (800) 230-1085 by 1:20 p.m. PDT and use conference ID number 201781. In addition, a live webcast will also be available.

To access the webcast, please go to the Company's Investor Relations Homepage at: http://www.exar.com. A replay of the call will be available starting at 3:00 p.m. PDT on May 5, 2011 until 11:59 p.m. PDT on May 12, 2011. To access the replay, please dial (800) 475-6701 and use conference ID number 201781.

Product Line Highlights:

Power Management

http://www.exar.com/Common/Content/News.aspx?id=8366

Datacom and Storage

http://www.exar.com/Common/Content/News.aspx?id=8342

http://www.exar.com/Common/Content/News.aspx?id=8390

Interface

http://www.exar.com/Common/Content/News.aspx?id=8364

http://www.exar.com/Common/Content/News.aspx?id=8398

Safe Harbor Statement

The Company's statements about its future financial performance, changes in gross margins, net sales and operating expenses, resource allocation and its impact on future performance and product development initiatives, design win conversion, distribution and OEM trends, supply chain issues among others, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as customer and distributor relationships; limited visibility associated with customer or distributor demand for the Company's products; the possible loss of, or decrease in orders from, an important customer; vendor capacity, quality or throughput constraints; successful integration of acquired businesses; possible disruption in commercial activities as a consequence of terrorist activity, natural disasters, armed conflict or health issues; successful development, market acceptance and demand for the Company's products, including those for which the Company has achieved design wins; competitive factors, such as pricing or competing solutions; customer ordering patterns; accounting considerations related to impairment analyses or acquisition related issues; the level of inventories maintained at the Company's OEMs and distributors; and the Company's successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company's SEC reports, including the Annual Report on Form 10-K for the year ended March 28, 2010 and the Quarterly Reports on Form 10-Q for the periods ended June 27, 2010, September 26, 2010 and December 26, 2010.

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. For the periods presented, we are disclosing non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, exit costs, separation costs of executive officers, acceleration of depreciation on abandoned equipment, impairment of purchased intangible assets, impairment charges on investments, and income tax effects. 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, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. 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.

About Exar

Exar Corporation delivers highly differentiated silicon, software and subsystem solutions for industrial, datacom and storage applications. For over 40 years, Exar's comprehensive knowledge of end-user markets along with the underlying analog, mixed signal and digital technology has enabled innovative solutions that meet the needs of the evolving connected world. Exar's product portfolio includes power management and interface components, communications products, storage optimization solutions, network security and applied service processors. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit: http://www.exar.com.

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS  

(In thousands, except share amounts)

(Unaudited)







MARCH 27,


MARCH 28,


2011

2010

ASSETS








Current assets:



Cash and cash equivalents

$                   15,039

$                   25,486

Short-term marketable securities

185,960

186,598

Accounts receivable (net of allowances of $1,165 and $831)

9,776

13,461

Accounts receivable, related party (net of allowances of $358 and $605)

3,194

4,323

Inventories

21,962

15,000

Other current assets

3,562

5,106

Total current assets

239,493

249,974





Property, plant and equipment, net

38,009

42,941

Goodwill

3,184

3,085

Intangible assets, net

15,390

31,957

Other non-current assets

2,139

5,357





Total assets

$                 298,215

$                 333,314





LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:





Accounts payable

$                     8,794

$                     9,828

Accrued compensation and related benefits

6,069

6,619

Deferred income and allowances on sales to distributors

4,632

4,227

Deferred income and allowances on sales to distributors, related party

10,680

10,650

Other accrued expenses

7,062

10,598

            Total current liabilities

37,237

41,922





Long-term lease financing obligations

12,558

13,454

Other non-current obligations


3,841

3,806





Total liabilities

53,636

59,182





Total stockholders' equity





Preferred stock, $.0001 par value; 2,250,000 shares authorized;



    no shares outstanding

-

-

Common stock, $.0001 par value; 100,000,000 shares authorized;  



   44,519,663 and 43,839,514 shares issued and outstanding





   at March 27, 2011 and March 28, 2010, respectively



   (net of treasury shares)

4

4

Additional paid-in capital

728,139

720,455

Accumulated other comprehensive income (loss)

(287)

1,282

Treasury stock at cost, 19,924,369 shares at March 27, 2011



   and March 28, 2010

(248,983)

(248,983)

Accumulated deficit

(234,294)

(198,626)

Total stockholders' equity

244,579

274,132

Total liabilities and stockholders' equity

$                 298,215

$                 333,314










Note: Certain amounts previously reported above have been reclassified to conform to the current period presentation.

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)













THREE MONTHS ENDED

TWELVE MONTHS ENDED


MARCH 27,

DECEMBER 26,

MARCH 28,

MARCH 27,

MARCH 28,


2011

2010

2010

2011

2010

































Net sales

$                   22,579

$                   24,892

$                   26,990

$                 101,721

$                   97,676

Net sales, related party

11,192

10,473

11,507

44,284

37,202

              Total net sales

33,771

35,365

38,497

146,005

134,878











Cost of sales:









 Cost of sales

14,966

12,742

12,723

54,992

48,728

 Cost of sales, related party

5,555

5,007

5,200

20,972

17,581

 Amortization of purchased









  intangible assets

1,443

1,533

1,172

6,044

5,187

              Total cost of sales

21,964

19,282

19,095

82,008

71,496

Gross profit

11,807

16,083

19,402

63,997

63,382











Operating expenses:









 Research and









  development


12,744

12,071

12,255

51,098

48,511

 Selling, general and









  administrative


11,094

10,298

11,686

45,432

48,861

 Impairment of purchased









  intangible assets

7,485

-

-

7,485

-

              Total operating









                 expenses

31,323

22,369

23,941

104,015

97,372

Loss from operations

(19,516)

(6,286)

(4,539)

(40,018)

(33,990)











Other income and











 expense, net:









  Interest income and









    other, net

1,157

1,577

1,741

5,925

7,030

  Interest expense

(311)

(313)

(323)

(1,258)

(1,296)

  Impairment charges











   on investments

-

-

-

(62)

(317)

             Total other income











               and  expense, net

846

1,264

1,418

4,605

5,417











Loss before income taxes

(18,670)

(5,022)

(3,121)

(35,413)

(28,573)

Provision for (benefit from)









 income taxes

166

(63)

189

255

(463)











Net loss

$                  (18,836)

$                    (4,959)

$                    (3,310)

$                  (35,668)

$                  (28,110)






















Loss per share:









 Basic loss per share

$                      (0.42)

$                      (0.11)

$                      (0.08)

$                      (0.81)

$                      (0.64)











 Diluted loss per share

$                      (0.42)

$                      (0.11)

$                      (0.08)

$                      (0.81)

$                      (0.64)











Shares used in the computation









   of  loss per share:




















 Basic

44,503

44,300

43,822

44,218

43,584

 Diluted

44,503

44,300

43,822

44,218

43,584






















Note: Certain amounts previously reported above have been reclassified to conform to the current period presentation.

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(Unaudited)











THREE MONTHS ENDED

TWELVE MONTHS ENDED

MARCH 27,


DECEMBER 26,


MARCH 28,


MARCH 27,


MARCH 28,


2011

2010

2010

2011

2010










Net Sales

$       33,771

$             35,365

$       38,497

$     146,005

$     134,878










GAAP gross profit

$       11,807

$             16,083

$       19,402

$       63,997

$       63,382

GAAP gross margin

35.0%

45.5%

50.4%

43.8%

47.0%

  Stock-based compensation

93

78

144

489

528

  Amortization of acquired intangible assets

1,443

1,533

1,172

6,044

5,187

  Fair value adjustment of acquired inventories

-

-

72

42

2,398

  Acquisition-related costs

-

-

-

-

24

  Exit costs

2,212

-

-

2,212

-

Non-GAAP gross profit

15,555

17,694

20,790

72,784

71,519

Non-GAAP gross margin

46.1%

50.0%

54.0%

49.9%

53.0%










GAAP research and development expenses

$       12,744

$             12,071

$       12,255

$       51,098

$       48,511

  Stock-based compensation

375

645

624

3,241

2,325

  Amortization of acquired intangible assets

72

72

927

2,292

2,785

  Acquisition-related costs

-

-

10

-

887

  Exit costs

1,210

-

-

1,210

-

Non-GAAP research and development expenses

$       11,087

$             11,354

$       10,694

$       44,355

$       42,514










GAAP selling, general and








 administrative expenses

$       11,094

$             10,298

$       11,686

$       45,432

$       48,861

  Stock-based compensation

769

585

887

3,651

3,112

  Amortization of acquired intangible assets

254

294

198

1,143

697

  Acquisition-related costs

-

-

542

328

5,385

  Exit costs

165

-

-

165

-

  Separation costs of executive officers

-

-

-

-

162

  Acceleration of depreciation on








    abandoned equipment

-

-

50

-

50

Non-GAAP selling, general and








 administrative expenses

$         9,906

$               9,419

$       10,009

$       40,145

$       39,455










GAAP operating expenses

$       31,323

$             22,369

$       23,941

$     104,015

$       97,372

  Stock-based compensation

1,144

1,230

1,511

6,892

5,437

  Amortization of acquired intangible assets

326

366

1,125

3,435

3,482

  Acquisition-related costs

-

-

552

328

6,272

  Exit costs

1,375

-

-

1,375

-

  Separation costs of executive officers

-

-

-

-

162

  Acceleration of depreciation on abandoned








    equipment

-

-

50

-

50

  Impairment of purchased intangible assets

7,485

-

-

7,485

-

Non-GAAP operating expenses

$       20,993

$             20,773

$       20,703

$       84,500

$       81,969










GAAP operating loss

$      (19,516)

$             (6,286)

$        (4,539)

$      (40,018)

$      (33,990)

  Stock-based compensation

1,237

1,308

1,655

7,381

5,965

  Amortization of acquired intangible assets

1,769

1,899

2,297

9,479

8,669

  Fair value adjustment of acquired inventories

-

-

72

42

2,398

  Acquisition-related costs

-

-

552

328

6,296

  Exit costs

3,587

-

-

3,587

-

  Separation costs of executive officers

-

-

-

-

162

  Acceleration of depreciation on abandoned








    equipment

-

-

50

-

50

  Impairment of purchased intangible assets

7,485

-

-

7,485

-

Non-GAAP operating income (loss)

$        (5,438)

$             (3,079)

$              87

$      (11,716)

$      (10,450)










GAAP net loss

$      (18,836)

$             (4,959)

$        (3,310)

$      (35,668)

$      (28,110)

  Stock-based compensation

1,237

1,308

1,655

7,381

5,965

  Amortization of acquired intangible assets

1,769

1,899

2,297

9,479

8,669

  Fair value adjustment of acquired inventories

-

-

72

42

2,398

  Acquisition-related costs

-

-

552

328

6,296

  Exit costs

3,587

-

-

3,587

-

  Separation costs of executive officers

-

-

-

-

162

  Acceleration of depreciation on abandoned








    equipment

-

-

50

-

50

  Impairment of purchased intangible assets

7,485

-

-

7,485

-

  Impairment charges on investments

-

-

-

62

317

  Income tax effects

129

(118)

141

76

(40)

Non-GAAP net income (loss)

$        (4,629)

$             (1,870)

$         1,457

$        (7,228)

$        (4,293)










GAAP loss per share

$          (0.42)

$               (0.11)

$          (0.08)

$          (0.81)

$          (0.64)

  Stock-based compensation

0.03

0.03

0.04

0.17

0.14

  Amortization of acquired intangible assets

0.04

0.04

0.05

0.21

0.20

  Fair value adjustment of acquired inventories

-

-

0.00

0.00

0.06

  Acquisition-related costs

-

-

0.01

0.01

0.14

  Exit costs

0.08

-

-

0.08

-

  Separation costs of executive officers

-

-

-

-

0.00

  Acceleration of depreciation on abandoned








    equipment

-

-

0.00

-

0.00

  Impairment of purchased intangible assets

0.17

-

-

0.17

-

  Impairment charges on investments

-

-

-

0.00

0.01

  Income tax effects

0.00

(0.00)

0.00

0.00

(0.00)

Non-GAAP diluted earnings (loss) per share

$          (0.10)

$               (0.04)

$           0.03

$          (0.16)

$          (0.10)










Shares used in earnings (loss) per








 share --- GAAP

44,503

44,300

43,822

44,218

43,584

  The effect of dilutive potential common shares








     due to reporting Non-GAAP net








     income

-

-

262

-

-

  The effect of removing stock-based








     compensation expense under SFAS 123R for








     Non-GAAP presentation purpose

-

-

(28)

-

-

Shares used in diluted earnings per








 share ---  Non-GAAP

44,503

44,300

44,056

44,218

43,584




















Notes:  Exit costs are primarily excess inventory and severance charges in connection with exiting the 10GbE virtualization market.

          Certain amounts may not total due to rounding.

SOURCE Exar Corporation

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED