(Logo: http://www.newscom.com/cgi-bin/prnh/20020822/XLNXLOGO )
The tax provision for the third quarter of fiscal 2006 includes a $25.3 million charge related to the planned repatriation of $500 million in foreign earnings pursuant to the provisions of the American Jobs Creation Act of 2004. In addition, the Company recorded a tax benefit of $9.5 million primarily related to the ability to use certain credits that were previously accounted for as unusable. The net impact of these items added $15.8 million to the Company's third quarter tax provision.
Xilinx also announced that its Board of Directors declared a quarterly cash dividend of $0.07 per outstanding share of common stock, payable on March 1, 2006, to all stockholders of record at the close of business on February 8, 2006.
Additional third quarter comparisons are represented in the chart below.
Quarterly Information
(In millions, except EPS)
Growth Rates
Q3 FY 2006 Q2 FY 2006 Q3 FY 2005 Q-T-Q Y-T-Y
Net revenues $449.6 $398.9 $355.4 13% 27%
Operating income $119.8 $82.3 $69.3 46% 73%
Net income $81.0 $85.6 $64.1 -5% 26%
Diluted earnings per share $0.23 $0.24 $0.18 -4% 28%
December quarter sales were better than expected as a result of broad based product and end market strength. Sales from each of Xilinx's Virtex(TM) products were strong during the quarter contributing to strength in both the New and Mainstream product categories. From an end market perspective, sales from the Industrial and Other category were particularly strong, fueled by applications in defense and test and measurement.
"Xilinx's New Product sales were strong in the third quarter," said Wim Roelandts, Chief Executive Officer and Chairman of the Board. "Sales from these products increased 24% sequentially driven by strong sales of Xilinx's Virtex-4(TM), Virtex-II Pro(TM), Spartan-3(TM) and CoolRunner(TM)-II families. New Products currently represent 33% of total sales, up from 30% last quarter and up from 20% in the same quarter a year ago. I am also pleased with our continued manufacturing efficiencies and solid financial management which contributed to improved gross and operating margins. Gross margin in the quarter increased to 63%, up from 61% in the prior quarter and operating margin increased to 27%, up from 21% in the prior quarter."
Business Review -- December Quarter FY06
-- Total inventory days at Xilinx and distribution were 144 days, down
from 146 days last quarter.
-- Accounts receivable days sales outstanding were 29, down from 44 in the
prior quarter.
-- Capital expenditures and depreciation were $14 million and $13 million,
respectively.
Net revenues by Geography:
Percentages Growth Rates
Q3 Q2 Q3
FY 2006 FY 2006 FY 2005 Q-T-Q Y-T-Y
North America 43% 41% 42% 18% 28%
Europe 20% 20% 21% 14% 24%
Japan 14% 16% 14% -4% 25%
Asia Pacific/ROW 23% 23% 23% 14% 27%
Net revenues by End Market:
Percentages Growth Rates
Q3 Q2 Q3
FY 2006 FY 2006 FY 2005 Q-T-Q Y-T-Y
Communications 48% 48% 47% 11% 13%
Storage & Servers 11% 13% 16% -4% -16%
Consumer & Automotive 14% 15% 15% 9% 18%
Industrial & Other 27% 24% 22% 26% 56%
Net revenues by Product*:
Percentages Growth Rates
Q3 Q2 Q3
FY 2006 FY 2006 FY 2005 Q-T-Q Y-T-Y
New 33% 30% 20% 24% 112%
Mainstream 47% 48% 57% 11% 5%
Base 14% 16% 17% -1% 4%
Support 6% 6% 6% 8% 9%
*Products are classified as follows:
New products: Virtex-4, Virtex-II Pro, Spartan(TM)-IIE, Spartan-3, Spartan-3E, Easypath(TM) and CoolRunner-II products
Mainstream products: Virtex-II, Spartan-II, SpartanXL, CoolRunner, Virtex- E and Virtex products
Base products: XC3000, XC3100, XC4000, XC4000XL, XC4000XLA, XC4000XV, XC4000E, XC4000EX, XC5200, XC9500, XC9500XL, XC9500XV and Spartan products
Support products: Configuration solutions, HardWire, Software & Support/Services
Highlights -- December Quarter FY06:
-- Xilinx shipped a record 10 million 90nm devices during the quarter and
now has four product families in production on 90nm. Just nine months
after introduction, Xilinx completed the roll-out of its newest Spartan
family, Spartan-3E. The logic-intensive Spartan-3E family complements
the I/O intensive Spartan-3 family and enables Xilinx to address a
wider spectrum of applications in the areas of consumer and low cost
networking.
-- Xilinx entered into strategic agreements with both Toshiba Corporation
and UMC to include technology development at 65nm and beyond. Research
and development efforts at both foundries have resulted in 65nm
prototype wafers, including actual programmable circuitry.
-- During the quarter, Xilinx announced the release of applications-
optimized XtremeDSP(TM) solutions that accelerate development of
multimedia, video and imaging (MVI) systems. The easy-to-use MVI-
tailored solutions include an integrated design environment with robust
tools and easy-to-use pre-packaged development kits. Additionally,
Xilinx recently announced the acquisition of Accelchip, a provider of
DSP design tools. This acquisition strengthens Xilinx's commitment to
evolving the programming model for FPGA-based DSP system design.
-- Xilinx announced the 8.1i release of its popular Integrated Software
Environment (ISE(TM)) design tools, featuring IS Fmax Technology with
enhanced physical synthesis capabilities to improve performance and
timing closure for both the Virtex-4 and Spartan-3 architectures.
Using ISE 8.1i software, designers can boost performance by an average
of 10% to 37% as compared to previous ISE releases and up to 70% over
competing solutions using Virtex-4 FPGAs.
-- On November 15, 2005, Xilinx announced a $40 million investment in a
new building in Singapore, our Asia regional headquarters. The new
building will quadruple the existing capacity of its on-site
manufacturing facility, triple the in-house process development
resources and provide increased infrastructure support for the 13
offices across the Asia Pacific region.
Business Outlook -- March Quarter FY06
-- Revenues expected to be up 1% - 5% sequentially.
-- Gross margin expected to be approximately 63%.
-- Operating expenses expected to increase approximately 7% sequentially,
inclusive of the impact of the acquisition of Accelchip.
-- Other income expected to be approximately $10 million.
-- Tax rate expected to be approximately 23% plus or minus one percentage
point.
-- Fully diluted share count expected to decrease to approximately 351
million shares.
Business Update -- March Quarter FY06
A fourth quarter business update will be issued in the form of a press release after the market closes on Monday, March 6, 2006. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com.
This release contains forward-looking statements and projections. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including the general health of global economies as well as of the semiconductor industry, the health of our end markets and our customers' customers, our ability to forecast end customer demand, customer acceptance of our new products, the ability of our customers to manage their inventories, a high dependence on turns business, higher-than-anticipated product delinquencies, more customer volume discounts than expected, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to secure meaningful wafer capacity from our suppliers, our ability to secure adequate test, packaging and assembly capacity from our suppliers, our ability to successfully manage production at multiple foundries, currency fluctuations and their respective impact to customer purchasing power, variability in wafer pricing, and other risk factors listed in our most recent Form 10-K.
About Xilinx
Xilinx, Inc. is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com.
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XILINX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
Dec. 31, Jan. 01, Oct. 1, Dec. 31, Jan. 01,
2005 2005 2005 2005 2005
Net revenues $449,605 $355,396 $398,929 $1,253,913 $1,182,256
Cost of revenues 166,476 135,096 153,968 478,926 424,283
Gross margin 283,129 220,300 244,961 774,987 757,973
Operating expenses:
Research and
development 81,073 77,356 79,953 239,730 227,414
Selling, general
and administrative 80,683 71,856 77,744 234,414 229,532
Amortization of
acquisition-related
intangibles 1,536 1,759 1,755 5,047 4,918
Litigation
settlements and
contingencies -- -- 3,165 3,165 --
Write-off of
acquired in-process
research and
development -- -- -- -- 7,198
Total operating
expenses 163,292 150,971 162,617 482,356 469,062
Operating income 119,837 69,329 82,344 292,631 288,911
Impairment loss on
investments -- (3,099) -- -- (3,099)
Interest income and
other, net 10,943 8,811 15,910 36,196 21,975
Income before income
taxes 130,780 75,041 98,254 328,827 307,787
Provision for income
taxes 49,811 10,984 12,656 85,419 62,269
Net income $80,969 $64,057 $85,598 $243,408 $245,518
Basic net income per
common share $0.23 $0.18 $0.25 $0.70 $0.71
Diluted net income
per common share $0.23 $0.18 $0.24 $0.68 $0.68
Cash dividends
declared per common
share $0.07 $0.05 $0.07 $0.21 $0.15
Common and equivalent
shares used in
computing net income
per share amounts:
Basic 348,203 348,441 349,254 349,674 347,555
Diluted 353,237 358,211 356,360 355,881 358,551
XILINX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 31, Apr. 2,
2005 2005
(Unaudited) (1)
ASSETS
Current assets
Cash, cash equivalents and short-term investments $888,320 $861,558
Investment in United Microelectronics Corporation,
current portion 32,685 --
Accounts receivable, net 142,271 213,459
Inventories 211,882 185,722
Deferred tax assets and other current assets 203,196 205,625
Total current assets 1,478,354 1,466,364
Net property, plant and equipment 349,895 344,516
Long-term investments 784,344 766,596
Investment in United Microelectronics Corporation,
net of current portion 209,698 246,110
Other assets 289,846 215,610
Total Assets $3,112,137 $3,039,196
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $265,191 $195,883
Deferred income on shipments to distributors 111,717 102,511
Total current liabilities 376,908 298,394
Deferred tax liabilities 35,551 67,294
Other long-term liabilities 7,485 --
Stockholders' equity 2,692,193 2,673,508
Total Liabilities and Stockholders' Equity $3,112,137 $3,039,196
(1) Derived from audited financial statements
CONTACT: Investor Relations: Lori Owen of Xilinx, Inc., +1-408-879-6911 or
Email Contact
Web site: http://www.xilinx.com/