Ramtron Reports 2Q2011 Financial Results

21st July 2011
ES Admin
U.S. semiconductor maker Ramtron International Corporation (Nasdaq: RMTR), a leading developer and supplier of ferroelectric-based low-power memory and integrated semiconductor products, today reported results for the second quarter ended June 30, 2011.
2011 Second-Quarter Financial Highlights

Revenue of $16.8 million increased 58% sequentially, compared to $10.6 million in the first quarter of 2011

The sequential revenue increase was due to increased support from the Company’s Texas wafer source and assembly and test subcontractors, which allowed Ramtron to begin shipping in greater volume

Product gross margin declined slightly to 47%, compared to a margin of 48% in the first quarter of 2011

First half revenue of $27.4 million exceeded the Company’s first half revenue guidance of $25 million

2011 Second-Quarter Corporate Highlights

Ramtron customers began sampling the first pre-qualification ferroelectric random access memory (F-RAM) devices built at the company’s new wafer source at IBM Corporation

Upgrades were announced to Ramtron’s family of Processor Companion products targeted at the high-volume, processor-based electronics system market

Taiwan-based King Yuan Electronics Co., LTD (KYEC) was selected to expand the test capacity for Ramtron’s line of F-RAM products

Mark R. Kent was named chief financial officer, bringing nearly 30 years of finance experience with a strong track record of financial leadership in semiconductor companies

“Ramtron’s second quarter performance clearly reflects the unparalleled support from our Texas wafer source and the progress we have made in strengthening our supply chain, which allowed us to better meet our customers’ needs,” said Eric Balzer, Ramtron’s chief executive officer. “As a result of these improvements and our customer-centric mindset, we were able to fulfill more of our customers’ orders and clear more backlog than initially anticipated. Ramtron now has a clear roadmap and timetable for fully resolving any remaining supply constraints before the end of 2011. Additionally, the company has already implemented a comprehensive ongoing program of process review and improvements designed to attain and maintain operational excellence across the company.

Looking forward, Ramtron’s focus is to capture market share for its existing product set, to introduce innovative product platforms to meet its current customers’ evolving needs and, over the longer term, to penetrate new markets with leading-edge mixed-signal system solutions. We also expect our new manufacturing line in Burlington to be in full production in the first quarter of 2012.”

The Company reported total revenue of $16.8 million for the second quarter of 2011, compared with $18.3 million for the same quarter last year, and a 58% sequential increase compared to first-quarter 2011 revenue of $10.6 million. The sequential increase in revenue was due to the support from the Company’s Texas wafer source and related capacity expansion, which allowed the Company to ship product in greater volume. Product gross margin for the second quarter of 2011 was 47%, compared with 49% for the second quarter of 2010, down slightly compared to the 2011 first quarter margin of 48%. The product gross margin decline is primarily due to new products, which at this stage have lower yields and increased test costs. Over the next few quarters, as test times decrease, manufacturing processes are optimized, and the IBM manufacturing line in Burlington reaches full production, the Company expects product gross margin to improve toward historical high levels.

The Company reported a net loss for the second quarter of 2011 of $683,000, or ($0.02) per share, compared with net income of $357,000, or $0.01 per share for the second quarter of 2010. Second-quarter 2011 results included stock-based compensation expense of $441,000 and an income tax benefit of $270,000. As anticipated, the Company’s research and development expenses continue to be historically high in connection with engineering wafers at the Company’s new wafer source. The combination of higher expenses and lower gross margin is the primary reason for the net loss in the second quarter of 2011. At June 30, 2011, the Company’s cash and cash equivalents totaled $3.3 million.

2011 Full Year Outlook

“With the continued support from our Texas wafer source, as well as the product manufacturing and test capacity relationships already in place, we anticipate that our second half revenue will exceed that of the first half of 2011 by a minimum of 40%. We believe this and our strong backlog will drive full-year revenue of between $65 million and $70 million, reflecting a full recovery from our forced foundry transition,” said Mark Kent, Ramtron’s chief financial officer. “During the second half of the year, we also plan to invest in engineering to support our continued capacity ramp and accelerate new product launches. Additionally, we are focused on building a world-class sales organization and we expect to announce a new head of worldwide sales this quarter. As a result, we are adjusting our earnings outlook and now expect to report a GAAP net loss of up to ($0.04) per share for the second half of 2011.”

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