Conexant Reports Financial Results for the First Quarter of Fiscal 2008Thursday, January 24th, 2008
Company Exceeds Expectations for Financial Performance
NEWPORT BEACH, Calif. — Conexant Systems, Inc. (NASDAQ: CNXT) today announced financial results for the first quarter of fiscal 2008 that exceeded expectations established by the company at the beginning of the quarter. The company also said it achieved breakeven financial performance on a core operating basis in the first fiscal quarter.
Conexant presents financial results based on accounting principles generally accepted in the United States of America (GAAP) as well as selected non-GAAP financial measures intended to reflect its core results of operations. The company believes these core financial measures provide investors with additional insight into its underlying operating results. Core financial measures exclude non-cash and other noncore items as fully described in the GAAP to non-GAAP reconciliation in the accompanying financial data.
Revenues for the first quarter of fiscal 2008 were $197.0 million, and core gross margins were 50.5 percent of revenues. Core operating expenses were $80.3 million. Core operating income was $19.1 million, and the core net income was $9.4 million, or $0.02 per diluted share.
As was previously communicated, Conexant’s first quarter fiscal 2008 financial results were positively affected by the inclusion of $14.7 million of non-recurring revenue that resulted from the buyout of a future royalty stream. Excluding the impact of the royalty payment, revenues for the first fiscal quarter were $182.3 million, gross margins were 46.5 percent of revenues, and core operating income was $4.4 million.
On a GAAP basis, gross margins for the first quarter of fiscal 2008 were 50.4 percent of revenues. GAAP operating expenses were $94.2 million. GAAP operating income was $5.1 million, and the GAAP net loss was $9.2 million, or $0.02 per share. The company ended the quarter with $232.1 million in cash and cash equivalents.
“The Conexant team delivered first fiscal quarter performance that exceeded our expectations entering the quarter,” said Dan Artusi, Conexant president and chief executive officer. “Even without the impact of the one-time royalty payment, we delivered breakeven financial performance on a core operating basis, which had been our highest company priority.
“For the past six months, we have been concentrating on reducing expenses, narrowing our product-development focus, and improving our financial performance,” Artusi said. “We have made significant progress, but we still have more work to do in these areas.
“For semiconductor companies such as Conexant that address consumer electronics markets, the March quarter is traditionally weaker on a sequential basis, but our team is committed to building a track record of consistently delivering improved profitability over the next several quarters,” Artusi said. “We will also continue to focus on the actions necessary to deliver profitable growth. We look forward to providing more detail on these plans at the appropriate time.”
Conexant expects revenues for the second quarter of fiscal 2008 to be in a range between $165 and $170 million.