Fairchild Semiconductor Reports Results for the Second Quarter of 2009
News Release from:
20 July 2009
Fairchild Semiconductor has announced results of $277.9 million, up 25 percent from the prior quarter and 34 percent lower than the second quarter of 2008. Fairchild reported a second quarter net loss of $24.9 million or $0.20 per share compared to a net loss of $51.1 million or $0.41 per share in the prior quarter and net income of $6.9 million or $0.05 per diluted share in the second quarter of 2008. Gross margin was 23.2 percent compared to 15.2 percent in the prior quarter and 28.6 percent in the year ago quarter. Included in these results is an $11.3 million charge for restructuring and impairments, a net $2.1 million impairment of equity investments, a $0.8 million gain associated with debt buyback as well as $3.7 million of accelerated depreciation and a $0.6 million inventory write-off related to previously announced fab closures.
Fairchild reported a second quarter adjusted net loss of $3.5 million or $0.03 per share, compared to an adjusted net loss of $40.1 million or $0.32 per share in the prior quarter and adjusted net income of $21.5 million or $0.17 per diluted share in the second quarter of 2008. Adjusted gross margin was 24.8 percent, up nearly 10 percentage points sequentially and 4 percentage points lower than in the second quarter of 2008. Adjusted gross margin excludes accelerated depreciation and inventory write-offs related to fab closures. Adjusted net income and loss excludes amortization of acquisition-related intangibles, restructuring and impairments, gain on the sale of equity investments, impairment of equity investments, gain associated with debt buyback, costs associated with the redemption of convertible debt, accelerated depreciation and inventory write-offs related to fab closures, associated net tax effects of these items and other acquisition-related intangibles, and tax effects from finalized tax filings and positions.
“We delivered strong sequential sales and margin growth even as we further improved our inventory position in the second quarter,” said Mark Thompson, Fairchild’s president and CEO. “Distribution sell-through was better than expected which helped us to again reduce channel inventory while still posting sales higher than our original expectations entering the quarter. We estimate consumption demand, which consists of distributor sell through plus direct sales, was approximately $300 million in the second quarter and believe the stronger order rates and higher starting backlog position for Q3 indicates that end market demand will increase again this quarter. Fairchild is focused on disciplined cost management to deliver solid earnings leverage and greater cash flow on incremental sales. Our lower capital spending needs and effective inventory and working capital management enabled us to deliver $46.9 million in free cash flow. Despite the difficult macro-economic environment, we delivered the highest first-half free cash flow since 2000.”