- Q3 revenue of $54.4 million exceeds guidance, margins improve to 52% of revenue and cash increases by 11% to $61.9 million
- Company guides for Q4 revenue growth driven by increasing customer demand for network timing and line circuit products
Zarlink Semiconductor (
Third quarter financial highlights include:
- Revenue of $54.4 million, exceeding the Company's guidance range of $52 million to $54 million;
- Gross margin of 52% of revenue, up from 50% of revenue in the previous quarter;
- Generated $6.2 million of cash, ending Q3 with cash and short-term investments totaling $61.9 million
"Revenue for the quarter exceeded guidance, gross margin improved significantly, and the business continues to generate solid operating cash flow," said Kirk Mandy, President and CEO, Zarlink Semiconductor. "Fourth quarter guidance highlights signs of recovery across core areas of our business. Most notably, there is growing demand for our timing products as carriers evolve their wireless networks to more efficiently support higher-bandwidth smartphone services, as well as increasing customer design activity for our line circuit products. This communications market strength, coupled with the long-term opportunity for our medical products as the new devices integrate wireless technology to support advanced applications and therapies, provides a solid foundation for further growth and increased profitability in the coming quarters."
Third Quarter Financial Results
Third quarter revenue was $54.4 million, compared with second quarter revenue of $53.6 million and $53.7 million in Q3 Fiscal 2009. Gross margin in Q3 Fiscal 2010 increased to 52% of revenue, which included $0.6 million in supply chain harmonization costs. In comparison, gross margin in Q2 Fiscal 2010 was 50% of revenue, which included $0.9 million in supply chain harmonization costs. Gross margin in Q3 Fiscal 2009 was 49%, which included integration costs of $0.5 million.
R&D expenses in Q3 Fiscal 2010 were $10.9 million, or 20% of revenue, compared with Q2 Fiscal 2010 R&D expenses of $10.6 million, or 20% of revenue. S&A expenses in Q3 Fiscal 2010 were $11.2 million, or 21% of revenue, compared with Q2 Fiscal 2010 S&A expenses of $10.1 million, or 19% of revenue. Increased S&A expenses in the quarter reflect a weakening U.S. dollar, as many of the Company's S&A expenses are incurred in other currencies, and restructuring costs related to management team changes announced in the quarter.
Third quarter Fiscal 2010 operating income was $4.5 million, compared with Q2 Fiscal 2010 operating income of $5.2 million and a Q3 Fiscal 2009 operating loss of $1.0 million. Net income in Q3 Fiscal 2010 was $0.6 million or break-even per share, which included a non-cash foreign exchange loss of $2.7 million related primarily to Zarlink's Canadian dollar denominated debenture. Excluding the impact of foreign exchange, earnings per share were inline with Q3 guidance of $0.01 to $0.03 per share. In Q2 Fiscal 2010 Zarlink recorded net income of $0.7 million, or break-even per share, which included a non-cash foreign exchange loss of $3 million. In Q3 Fiscal 2009 Zarlink recorded net income of $12.1 million, or $0.09 per basic share and $0.08 per diluted share, which included a non-cash foreign exchange gain of $10.3 million.
As a supplement to Zarlink's consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company provides additional non-GAAP measures for operating income, net income (loss), and basis and diluted net income (loss) per share. For full reconciliation of GAAP to non-GAAP measures, refer to the schedule included with this press release.
Non-GAAP operating income for Q3 Fiscal 2010 was $7.3 million, compared with Q2 Fiscal 2010 non-GAAP operating income of $7.4 million and Q3 Fiscal 2009 non-GAAP operating income of $6.4 million. Non-GAAP net income in Q3 Fiscal 2010 was $6.1 million, or $0.05 per basic share and $0.04 per diluted share. For Q2 Fiscal 2010 non-GAAP net income was $6.3 million, or $0.05 per basic share and $0.04 per diluted share. For Q3 Fiscal 2009 non-GAAP net income was $5.6 million, or $0.04 per basic and diluted share.
Cash and short-term investments increased by $6.2 million to $61.9 million at the end of Q3 Fiscal 2010, compared with $55.7 million at the end of the Q2 Fiscal 2010 and $45.5 million at the end of Q3 Fiscal 2009.
On January 28, 2010 Zarlink declared a quarterly dividend of CDN$0.50 per share on its preferred shares (
Business Summary
Third quarter revenue from Zarlink's Communication Products Group was $33.8 million, compared with $34.2 million in Q2 Fiscal 2010 and $33.7 million in Q3 Fiscal 2009. Revenue in the quarter was impacted by expected seasonality for communications products for the residential gateway market, but the Company is seeing increasing customer design activity for its line circuit and network timing products.
In the quarter, Zarlink added new design wins for timing products required by carriers as they transform their wireless networks to more efficiently and cost-effectively support high-bandwidth smartphone applications. Zarlink is also expanding the market opportunity for its timing products, with leading processor vendors incorporating the Company's Timing over Packet software to provide a complete synchronization solution for femtocells. Carriers are deploying femtocells, which are small basestations for residential and enterprise environments, to extend wireless coverage and improve voice and data services. To date, more than one million network ports are synchronized by the Company's packet network timing products.
For the Company's Medical Products Group, Q3 Fiscal 2010 revenue was $7.9 million, compared with Q2 Fiscal 2010 revenue of $7.8 million and Q3 Fiscal 2009 revenue of $8.2 million. Short-term revenue for Zarlink's Medical products was impacted by general market softness for end-customers as hospitals slowed spending for heart rhythm devices, as well as extended FDA qualification approvals for a customer-specific platform. The long-term opportunity for Zarlink's medical telemetry products remains strong as equipment manufacturers integrate wireless technologies into advanced devices.
In the quarter, Zarlink announced an expanded relationship with Given Imaging. Zarlink's custom RF (radio frequency) radio chip is now in use in Given Imaging's new PillCam COLON 2 camera capsule for wireless examination of the colon. Zarlink's RF technology is also used in Given Imaging's camera capsules for visualizing the small bowel. In addition, Zarlink announced that the Self-Energizing Implantable Medical Microsystem (SIMM) microgenerator, which converts energy from the heartbeat into power for implanted medical devices, was named winner of the Emerging Technology Award at the Institution of Engineering and Technology's (IET) Innovation Awards.
Optical Products revenue in Q3 Fiscal 2010 was $4.5 million, compared with revenue of $3.8 million in Q2 Fiscal 2010, as the product group saw some recovery in its module and IC businesses. In Q3 Fiscal 2009 Optical Products revenue was $5.4 million. Custom and Other revenue in Q3 Fiscal 2010 was $8.2 million, compared with $7.8 million in Q2 Fiscal 2010 and $6.4 million in Q3 Fiscal 2009.
Fourth Quarter Fiscal 2010 Guidance
The opening backlog at the start of Q4 Fiscal 2010 was approximately $56 million, compared with an opening backlog of $45 million at the start of Q3 Fiscal 2010.
For Q4 Fiscal 2010, Zarlink is forecasting:
- Revenue between $56 million and $58 million;
- Gross margins between 52% and 53%, excluding supply chain harmonization costs of approximately $0.7 million;
- Operating expenses between $22 million and $23 million, excluding amortization of intangibles;
- Excluding any potential impact of foreign exchange gains/losses related to the Company's Canadian dollar denominated debenture, Zarlink expects Q4 earnings of $0.02 to $0.04 per share.
Analyst Conference Call
An open conference call for analysts will be held on January 28, 2010 beginning at 5:00 p.m. EST. Access the call by dialing 1-800-814-4860. Investors, media and other parties are listen-only. For a replay, call 1-877-289-8525, Access Code 4201481# or 416-640-1917, Access Code 4201481#. The replay is available until midnight on February 11th, 2010. A live audio webcast will be available through http://www.marketwire.com/ (Marketwire) or from the Company's website at www.zarlink.com/
About Zarlink Semiconductor
For over 30 years, Zarlink Semiconductor has delivered semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. The Company's success is built on its technology strengths including voice and data networks, optoelectronics and ultra low-power communications. For more information, visit www.zarlink.com.
Shareholders and other individuals wishing to receive, free of charge, copies of the reports filed with the U.S. Securities and Exchange Commission and Canadian Securities Regulatory Authorities, should visit the Company's web site at www.zarlink.com or contact Investor Relations.
Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, among others, the following: our dependence on the successful development and market introduction of new products; our ability to integrate any business, technologies, product lines or services that we have or will acquire; our dependence on revenue generation from our legacy products in order to fund development of our new products; current market conditions, including the lack of liquidity in the markets and economic slowdown, may increase our operating costs or reduce our revenue, thereby negatively impacting our operating results; our ability to operate profitably and generate positive cash flows in the future; the impact of the current economic crisis on our suppliers and customers and our ability to transfer parts to other suppliers; our dependence on our foundry suppliers and third-party subcontractors; order cancellations and deferrals by our customers; our substantial indebtedness could adversely affect our financial position; the cost and accounting implications of compliance with new accounting standards; and other factors referenced in our Annual Report on Form 20-F. Investors are encouraged to consider the risks detailed in this filing.
Zarlink and the Zarlink Semiconductor logo are trademarks of Zarlink Semiconductor Inc.
Zarlink Semiconductor Inc.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA
(in thousands of U.S dollars, except per share amounts, U.S. GAAP)
(Unaudited)
Three Months Ended
------------------------------------
Dec. 25, Sept. 25, Dec. 26,
2009 2009 2008
------------------------------------
Revenue $ 54,425 $ 53,596 $ 53,726
Cost of revenue 26,074 26,665 27,215
------------------------------------
Gross margin 28,351 26,931 26,511
------------------------------------
Expenses:
Research and development 10,930 10,601 10,402
Selling and administrative 11,219 10,124 10,877
Amortization of intangible assets 1,803 1,803 1,846
Contract impairment (recovery) (94) - 142
Impairment (recovery) of current
asset - (768) 3,000
Impairment of asset held for sale - - 1,200
Gain on sale of assets - - -
------------------------------------
23,858 21,760 27,467
------------------------------------
Operating income (loss) 4,493 5,171 (956)
Gain (loss) on repurchase of
convertible debentures - (316) 3,593
Interest income 69 43 392
Interest expense (985) (973) (978)
Amortization of debt issue costs (161) (160) (161)
Foreign exchange gain (loss) (2,719) (2,999) 10,302
------------------------------------
Net income before income taxes 697 766 12,192
Income tax recovery (expense) (66) (46) (92)
------------------------------------
Net income $ 631 $ 720 $ 12,100
------------------------------------
Net income (loss) attributable to
common shareholders $ 112 $ 135 $ 11,642
------------------------------------
------------------------------------
Net income (loss) per common share:
Basic $ 0.00 $ 0.00 $ 0.09
------------------------------------
------------------------------------
Diluted $ 0.00 $ 0.00 $ 0.08
------------------------------------
------------------------------------
Weighted average number of common
shares outstanding (thousands):
Basic 122,293 122,426 123,942
Diluted 123,652 123,510 154,297
Percentage of revenue:
Gross margin 52% 50% 49%
Research and development 20% 20% 19%
Selling and administrative 21% 19% 20%
Nine Months Ended
-----------------------------
Dec. 25, Dec. 26,
2009 2008
-----------------------------
Revenue $ 161,629 $ 176,064
Cost of revenue 79,484 91,386
-----------------------------
Gross margin 82,145 84,678
-----------------------------
Expenses:
Research and development 31,067 33,560
Selling and administrative 31,636 36,960
Amortization of intangible assets 5,431 5,538
Contract impairment (recovery) 715 142
Impairment (recovery) of current
asset (768) 3,000
Impairment of asset held for sale - 1,200
Gain on sale of assets - (936)
-----------------------------
68,081 79,464
-----------------------------
Operating income (loss) 14,064 5,214
Gain (loss) on repurchase of
convertible debentures (316) 3,593
Interest income 157 1,108
Interest expense (2,861) (3,293)
Amortization of debt issue costs (481) (529)
Foreign exchange gain (loss) (9,598) 11,920
-----------------------------
Net income before income taxes 965 18,013
Income tax recovery (expense) (130) 2,419
-----------------------------
Net income $ 835 $ 20,432
-----------------------------
Net income (loss) attributable to
common shareholders $ (758) $ 18,587
-----------------------------
-----------------------------
Net income (loss) per common share:
Basic $ (0.01) $ 0.15
-----------------------------
-----------------------------
Diluted $ (0.01) $ 0.13
-----------------------------
-----------------------------
Weighted average number of common
shares outstanding (thousands):
Basic 122,381 125,589
Diluted 122,381 157,136
Percentage of revenue:
Gross margin 51% 48%
Research and development 19% 19%
Selling and administrative 20% 21%
Zarlink Semiconductor Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS DATA
(in thousands of U.S. dollars, U.S. GAAP)
(Unaudited)
Three Months Ended
------------------------------------
Dec. 25, Sept. 25, Dec. 26,
2009 2009 2008
------------------------------------
CASH PROVIDED BY (USED IN)
--------------------------------------
Operating activities:
Net income $ 631 $ 720 $ 12,100
Depreciation of fixed assets 939 949 1,205
Amortization of other assets 1,964 1,963 2,007
Stock compensation expense 475 325 575
Other non-cash changes in operating
activities 2,802 2,665 (9,153)
Deferred income taxes 162 (71) 1,248
Decrease (increase) in working
capital:
Trade accounts and other
receivables (6,615) 2,692 8,836
Inventories 3,809 (878) (383)
Prepaid expenses and other 951 (247) 2,175
Payables and other accrued
liabilities 1,671 (796) (11,492)
Deferred revenue 1,770 1,898 (1,084)
------------------------------------
Total 8,559 9,220 6,034
------------------------------------
Investing activities:
Expenditures for fixed assets (998) (411) (806)
Proceeds from disposal of fixed
assets - - -
------------------------------------
Total (998) (411) (806)
------------------------------------
Financing activities:
Repurchase of convertible debentures - (13) (2,594)
Payment of dividends on preferred
shares (474) (466) (437)
Repurchase of preferred shares (144) (433) (290)
Repurchase of common shares (642) - (887)
------------------------------------
Total (1,260) (912) (4,208)
------------------------------------
Effect of currency translation on cash (102) 672 (1,613)
------------------------------------
Increase (decrease) in cash and cash
equivalents 6,199 8,569 (593)
Cash and cash equivalents, beginning
of period 55,706 47,137 45,872
------------------------------------
Cash and cash equivalents, end of
period $ 61,905 $ 55,706 $ 45,279
------------------------------------
------------------------------------
Nine Months Ended
------------------------
Dec. 25, Dec. 26,
2009 2008
------------------------
CASH PROVIDED BY (USED IN)
--------------------------------------
Operating activities:
Net income $ 835 $ 20,432
Depreciation of fixed assets 2,864 3,588
Amortization of other assets 5,912 6,067
Stock compensation expense 1,163 1,575
Other non-cash changes in operating
activities 9,857 (10,789)
Deferred income taxes 245 2,181
Decrease (increase) in working
capital:
Trade accounts and other
receivables (5,536) 3,091
Inventories 1,286 685
Prepaid expenses and other 634 3,744
Payables and other accrued
liabilities (208) (16,270)
Deferred revenue 3,685 857
------------------------
Total 20,737 15,161
------------------------
Investing activities:
Expenditures for fixed assets (1,984) (3,070)
Proceeds from disposal of fixed
assets - 984
------------------------
Total (1,984) (2,086)
------------------------
Financing activities:
Repurchase of convertible debentures (13) (2,594)
Payment of dividends on preferred
shares (1,417) (1,522)
Repurchase of preferred shares (849) (1,180)
Repurchase of common shares (642) (2,707)
------------------------
Total (2,921) (8,003)
------------------------
Effect of currency translation on cash 1,067 (2,154)
------------------------
Increase (decrease) in cash and cash
equivalents 16,899 2,918
Cash and cash equivalents, beginning
of period 45,006 42,361
------------------------
Cash and cash equivalents, end of
period $ 61,905 $ 45,279
------------------------
------------------------
Zarlink Semiconductor Inc.
CONSOLIDATED BALANCE SHEETS DATA
(in thousands of U.S. dollars, U.S. GAAP)
(Unaudited)
Dec. 25, Sept. 25, March 27,
2009 2009 2009
---------------- ---------------- ----------------
ASSETS
Current assets:
Cash and cash
equivalents $ 61,905 $ 55,706 $ 45,006
Restricted cash and
cash equivalents 14,704 15,455 13,145
Trade accounts
receivable - net 30,352 23,209 24,556
Other accounts
receivable - net 3,987 4,568 4,300
Inventories - net 26,535 30,344 27,821
Prepaid expenses and
other 2,048 2,998 2,681
Current assets held
for sale 1,935 1,935 1,935
---------------- ---------------- ----------------
141,466 134,215 119,444
Fixed assets - net 11,528 11,803 12,530
Deferred income tax
assets - net 5,561 5,723 5,800
Intangible assets - net 43,674 45,477 49,106
Other assets 2,081 2,283 2,655
---------------- ---------------- ----------------
$ 204,310 $ 199,501 $ 189,535
---------------- ---------------- ----------------
---------------- ---------------- ----------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 11,885 $ 12,513 $ 12,018
Employee-related
payables 10,269 8,918 9,478
Income and other taxes
payable 746 657 482
Current portion of
provisions for exit
activities 1,574 1,826 3,645
Other accrued
liabilities 8,332 6,972 6,454
Deferred revenue 4,546 2,776 861
Deferred income tax
liabilities - current
portion 31 31 28
---------------- ---------------- ----------------
37,383 33,693 32,966
Long-term debt -
convertible debentures 67,567 64,923 57,203
Long-term portion of
provisions for exit
activities 323 558 200
Pension liabilities 16,208 17,075 14,690
Deferred income tax
liabilities - long-term
portion 31 31 28
Long-term accrued income
taxes 2,192 2,350 2,408
Other long-term
liabilities 545 833 830
---------------- ---------------- ----------------
124,249 119,463 108,325
---------------- ---------------- ----------------
Redeemable preferred
shares, unlimited
shares authorized;
1,006,600 shares issued
and outstanding as at
December 25, 2009 12,884 12,984 13,558
---------------- ---------------- ----------------
Shareholders' equity:
Common shares, unlimited
shares authorized; no
par value; 121,683,182
shares issued and
outstanding as at
December 25, 2009 734,337 738,818 738,818
Additional paid-in
capital 38,795 34,526 33,969
Deficit (670,454) (670,611) (669,872)
Accumulated other
comprehensive loss (35,501) (35,679) (35,263)
---------------- ---------------- ----------------
67,177 67,054 67,652
---------------- ---------------- ----------------
$ 204,310 $ 199,501 $ 189,535
---------------- ---------------- ----------------
---------------- ---------------- ----------------
Zarlink Semiconductor Inc.
SUPPLEMENTARY SCHEDULES
(in thousands of U.S. dollars, U.S. GAAP)
(Unaudited) Geographic Information:
Revenue, based on the geographic location of Zarlink's customers, was
distributed as follows:
Three Three Three
Months Months Months
Ended Ended Ended
Dec. 25, % of Sept. 25, % of Dec. 26, % of
2009 Total 2009 Total 2008 Total
---------- -------- ---------- -------- ---------- --------
Asia -
Pacific $ 26,487 49% $ 29,143 54% $ 26,925 50%
Europe 16,617 31 13,379 25 14,482 27
Americas 11,321 20 11,074 21 12,319 23
---------- -------- ---------- -------- ---------- --------
$ $
54,425 100% 53,596 100% $ 53,726 100%
---------- -------- ---------- -------- ---------- --------
---------- -------- ---------- -------- ---------- --------
Nine Nine
Months Months
Ended Ended
Dec. 25, % of Dec. 26, % of
2009 Total 2008 Total
---------- -------- ---------- --------
Asia - Pacific
$ 84,059 52% $ 89,225 51%
Europe 44,302 27 46,617 26
Americas 33,268 21 40,222 23
---------- -------- ---------- --------
$161,629 100% $176,064 100%
---------- -------- ---------- --------
---------- -------- ---------- --------
Product Group Information:
Revenue, based on product group, was distributed as follows:
Three Three Three
Months Months Months
Ended Ended Ended
Dec. 25, % of Sept. 25, % of Dec. 26, % of
2009 Total 2009 Total 2008 Total
----------- -------- ----------- -------- ----------- -------
Communication
Products $ 33,818 62% $ 34,196 64% $ 33,682 63%
Medical
Products 7,937 15 7,799 15 8,217 15
Optical
Products 4,463 8 3,830 7 5,443 10
Custom &
Other 8,207 15 7,771 14 6,384 12
----------- -------- ----------- -------- ----------- -------
$ 54,425 100% $ 53,596 100% $ 53,726 100%
----------- -------- ----------- -------- ----------- -------
----------- -------- ----------- -------- ----------- -------
Nine Months Nine Months
Ended Ended
Dec. 25, % of Dec. 26, % of
2009 Total 2008 Total
----------- -------- ----------- -------
Communication Products $ 100,662 62% $ 112,464 64%
Medical Products 24,720 15 25,195 14
Optical Products 12,246 8 18,491 11
Custom & Other 24,001 15 19,914 11
----------- -------- ----------- -------
$ 161,629 100% $ 176,064 100%
----------- -------- ----------- -------
----------- -------- ----------- -------
Non-GAAP Measures
As a supplement to Zarlink's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company provides additional non-GAAP measures for operating income, net income (loss), and basic and diluted net income (loss) per share.
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Company believes that the additional non-GAAP measures are useful to investors for the purpose of financial analysis. Management uses these measures internally to evaluate the Company's in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company's core operating results. These non-GAAP financial measures should assist investors in understanding how management views our core results of operations on an on-going basis, as well as enhance comparisons of our core results of operations with historical periods. In addition, the measures are used for planning and forecasting of the Company's future periods. Investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures do not reflect all costs associated with our operations as determined in accordance with GAAP. Other companies may exclude or include different items in a particular non-GAAP financial measure, or provide different non-GAAP financial measures to those provided by Zarlink. Therefore, our non-GAAP financial measures are unlikely to be comparable to those presented by other companies.
Reconciliations of historical presentations of non-GAAP measures to their most directly comparable GAAP financial measures are provided in the following table. The Company is unable to reconcile these non-GAAP measures on a forward-looking basis primarily because it is impractical to project certain events, such as the impact of foreign exchange gains/losses.
Zarlink Semiconductor Inc.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
------------------------------
Dec. 25, Sept. 25, Dec. 26,
2009 2009 2008
------------------------------
GAAP net income $ 631 $ 720 $ 12,100
Amortization of intangible assets 1,803 1,803 1,846
Contract impairment (recovery) (94) - 142
Foreign exchange loss (gain) 2,719 2,999 (10,302)
Restructuring and supply chain
harmonization 592 889 604
Impairment of asset held for sale - - 1,200
Impairment (recovery) of current asset - (768) 3,000
Stock compensation expense 475 325 575
Gain on sale of assets - - -
Loss (gain) on repurchase of convertible
debentures - 316 (3,593)
------------------------------
Non-GAAP net income $ 6,126 $ 6,284 $ 5,572
GAAP operating income (loss) $ 4,493 $ 5,171 $ (956)
Amortization of intangible assets 1,803 1,803 1,846
Contract impairment (recovery) (94) - 142
Restructuring and supply chain
harmonization 592 889 604
Impairment of asset held for sale - - 1,200
Impairment (recovery) of current asset - (768) 3,000
Stock compensation expense 475 325 575
Gain on sale of assets - - -
------------------------------
Non-GAAP operating income $ 7,269 $ 7,420 $ 6,411
GAAP net income (loss) per common share -
basic $ 0.00 $ 0.00 $ 0.09
Amortization of intangible assets 0.01 0.01 0.01
Contract impairment (recovery) (0.00) - 0.00
Foreign exchange loss (gain) 0.02 0.02 (0.08)
Restructuring and supply chain
harmonization 0.00 0.01 0.00
Impairment of asset held for sale - - 0.01
Impairment (recovery) of current asset - (0.01) 0.02
Stock compensation expense 0.00 0.00 0.00
Gain on sale of assets - - -
Loss (gain) on repurchase of convertible
debentures - 0.00 (0.03)
------------------------------
Non-GAAP net income per common share -
basic(i) $ 0.05 $ 0.05 $ 0.04
GAAP net income (loss) per common share -
diluted $ 0.00 $ 0.00 $ 0.08
Amortization of intangible assets 0.01 0.01 0.01
Contract impairment (recovery) (0.00) - 0.00
Foreign exchange loss (gain) 0.02 0.02 (0.07)
Restructuring and supply chain
harmonization 0.00 0.01 0.00
Impairment of asset held for sale - - 0.01
Impairment (recovery) of current asset - (0.01) 0.02
Stock compensation expense 0.00 0.00 0.00
Gain on sale of assets - - -
Loss (gain) on repurchase of convertible
debentures - 0.00 (0.02)
Effect of dilutive potential common shares 0.00 0.00 -
------------------------------
Non-GAAP net income per common share -
diluted(i) $ 0.04 $ 0.04 $ 0.04
Shares used to calculate non-GAAP net income
per common share - basic 122,293 122,426 123,942
Shares used to calculate non-GAAP net income
per common share - diluted 152,576 152,436 154,297
Nine Months Ended
--------------------
Dec. 25, Dec. 26,
2009 2008
--------------------
GAAP net income
$ 835 $ 20,432
Amortization of intangible assets 5,431 5,538
Contract impairment (recovery) 715 142
Foreign exchange loss (gain) 9,598 (11,920)
Restructuring and supply chain
harmonization 2,573 3,884
Impairment of asset held for sale - 1,200
Impairment (recovery) of current asset (768) 3,000
Stock compensation expense 1,163 1,575
Gain on sale of assets - (936)
Loss (gain) on repurchase of convertible
debentures 316 (3,593)
--------------------
Non-GAAP net income $ 19,863 $ 19,322
GAAP operating income (loss)
$ 14,064 $ 5,214
Amortization of intangible assets 5,431 5,538
Contract impairment (recovery) 715 142
Restructuring and supply chain
harmonization 2,573 3,884
Impairment of asset held for sale - 1,200
Impairment (recovery) of current asset (768) 3,000
Stock compensation expense 1,163 1,575
Gain on sale of assets - (936)
--------------------
Non-GAAP operating income $ 23,178 $ 19,617
GAAP net income (loss) per common share -
basic $ (0.01) $ 0.15
Amortization of intangible assets 0.04 0.04
Contract impairment (recovery) 0.01 0.00
Foreign exchange loss (gain) 0.08 (0.10)
Restructuring and supply chain
harmonization 0.02 0.03
Impairment of asset held for sale - 0.01
Impairment (recovery) of current asset (0.01) 0.02
Stock compensation expense 0.01 0.01
Gain on sale of assets - (0.01)
Loss (gain) on repurchase of convertible
debentures 0.00 (0.03)
--------------------
Non-GAAP net income per common share -
basic(i) $ 0.15 $ 0.14
GAAP net income (loss) per common share -
diluted $ (0.01) $ 0.13
Amortization of intangible assets 0.04 0.04
Contract impairment (recovery) 0.00 0.00
Foreign exchange loss (gain) 0.06 (0.08)
Restructuring and supply chain
harmonization 0.02 0.02
Impairment of asset held for sale - 0.01
Impairment (recovery) of current asset (0.01) 0.02
Stock compensation expense 0.01 0.01
Gain on sale of assets - (0.01)
Loss (gain) on repurchase of convertible
debentures 0.00 (0.02)
Effect of dilutive potential common shares 0.02 -
--------------------
Non-GAAP net income per common share -
diluted(i) $ 0.13 $ 0.13
Shares used to calculate non-GAAP net income
per common share - basic 122,381 125,589
Shares used to calculate non-GAAP net income
per common share - diluted 152,321 157,136
(i) Amounts may not add due to rounding.
Contacts: Zarlink Semiconductor Inc. Ed Goffin Media Relations and Investor Relations 613 270-7112 Email Contact