Agere Systems Reports First Full Year of GAAP Profitability

ALLENTOWN, Pa., Oct. 31 /PRNewswire-FirstCall/ -- Agere Systems (NYSE: AGR) today reported GAAP net income of $20 million, or $0.12 per share, for the fiscal year ended September 30, 2006, compared to a GAAP net loss of $8 million, or $0.04 per share, for fiscal 2005. The results represent the first fiscal year that Agere has been profitable on a GAAP basis.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040618/AGERELOGO )

Richard Clemmer, President and CEO of Agere, said, "Our results for fiscal 2006 mark Agere's first full-year profit as a public company. This milestone in financial performance demonstrates that we are executing on our turnaround strategy. With our first profitable year behind us, we have established a firm foundation for Agere's future growth."

For the fourth quarter ended September 30, 2006, Agere reported GAAP net income of $13 million, or $0.08 per share, nearly double the net income of $7 million, or $0.04 per share, in the same period of 2005.

For the full fiscal year of 2006, Agere's non-GAAP* net income was $121 million, or $0.69 per share, compared to $72 million, or $0.41 per share, for fiscal 2005. On a non-GAAP basis, Agere's fourth quarter of fiscal 2006 net income was $51 million, or $0.30 per share, versus $38 million, or $0.21 per share, in the year ago period.

The following chart shows quarterly and annual revenue, including revenue from the licensing of intellectual property, by business segment:


    ($ in millions)              Quarter Ended
                       Sep 30       Jun 30       Sep 30          Fiscal Year
                        2006         2006         2005        2006        2005
    Storage             $146         $135         $158       $ 625       $ 620
    Mobility             104          105          106         394         430
    Consumer segment     250          240          264       1,019       1,050
    Networking segment   138          142          152         551         626
    Total               $388         $382         $416      $1,570      $1,676


    Product and Customer Highlights
     Recent company highlights include:
     * Agere launched TrueNTRY(TM) X125 EDGE platform enabling entry-level
       cell phones to deliver CD-quality music.

     * Amoi Electronics announced shipments of six next-generation feature
       phones using Agere's X115 EDGE platform.

     * Preamplifier revenue for the year increased 140 percent from fiscal
       2005.

     * Samsung announced a new flash-HDD hybrid disk drive based on Agere's
       read channel technology.  This combination drive will reduce overall
       boot time, increase reliability and reduce power consumption, improving
       the end user experience.

     * Agere continues to make progress with TrueONE(TM) networking solutions,
       as a number of designs are ramping into production.

    Outlook

In the December quarter, the company expects to report revenues in the range of $365 million to $390 million. The company expects GAAP net income to be in the range of $0.08 to $0.13 per share. Non-GAAP net income* is expected to be in the range of $0.18 to $0.23 per share.

Earnings Webcast

Agere Systems will host a conference call today at 8:30 a.m. EST to discuss its financial results and outlook. To listen to the conference call via the Internet, visit http://www.agere.com/webcast . Subsequent to the conference call, a replay will be available at the same web address.

About Agere Systems

Agere Systems is a global leader in semiconductors and software solutions for storage, mobility and networking markets. The company's products enable a broad range of services and capabilities, from cell phones, PCs and hard disk drives to the world's most sophisticated wireless and wireline networks. Agere's customers include top manufacturers of consumer electronics and communications and computing equipment. Agere works to transform the performance of networks and consumer electronics by integrating systems knowledge and leading technology that enable people to stay connected -- perfecting the connected lifestyle.

About Non-GAAP Financial Measures

* Non-GAAP financial measures exclude gain or loss from the sale of, and income or loss from, discontinued operations; restructuring-related charges included in costs; primarily increased depreciation; certain other non-cash charges including equity compensation; net restructuring and other charges; purchased in-process research and development charges, amortization of acquired intangible assets, net gain or loss from the sale of operating assets, certain tax adjustments, cumulative effect of accounting changes, and certain nonrecurring charges. Reconciliations of non-GAAP financial measures used in this press release to corresponding GAAP amounts are attached.

Agere, Agere Systems, and the Agere Systems logo are registered trademarks and TrueNTRY and TrueONE are trademarks of Agere Systems Inc.

This release contains forward-looking statements based on information currently available to Agere. Agere's actual results could differ materially from the results stated or implied by those forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, our reliance on major customers and suppliers, our ability to keep pace with technological change, our dependence on new product development, price and product competition, availability of manufacturing capacity, customer demand for our products and services, and general industry and market conditions. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2005, and our quarterly report on Form 10-Q for the quarter ended June 30, 2006. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



                              Agere Systems Inc.
          Unaudited Condensed Consolidated Statements of Operations
                (Dollars in millions except per share amounts)

                                             Quarter Ended       Year Ended
                                                                                 Sep  30  Jun  30  Sep  30    Sep  30    Sep  30
                                                                                      2006      2006      2005        2006        2005

        Revenue                                                                $388      $382      $416    $1,570    $1,676
        Costs                                                                      202        188        227          808      1,012
        Gross  profit  -  $                                                186        194        189          762          664
        Gross  profit  -  %                                            47.9%    50.8%    45.4%      48.5%      39.6%
        Operating  Expenses
        Selling,  general  and  administrative            48          56          54          225          234
        Research  and  development                                101        107        111          445          462
        Amortization  of  acquired  intangible
          assets                                                                      1            2            1              5              6
        Purchased  in-process  research  and
          development                                                            -            -            -              -            55
        Restructuring  and  other  charges  -  net        22            6            5            87            24
        Gain  on  sale  of  operating  assets  -
          net                                                                            -          (2)        (1)          (6)          (9)
        Total  operating  expenses                                172        169        170          756          772
        Operating  Income  (Loss)                                    14          25          19              6        (108)
        Other  income    -  net                                              7            5            2            24              7
        Interest  expense                                                    6            6            7            25            29
        Income  (Loss)  before  income  taxes                15          24          14              5        (130)
        Provision  (benefit)  for  income  taxes            1        (23)          7          (12)      (122)
        Income  (Loss)  from  continuing
          operations                                                            14          47            7            17            (8)
        Income  from  operations  of
          discontinued  business                                        -            -            -              4              -
        Cumulative  effect  of  accounting
          change  (net  of  tax)                                          (1)          -            -            (1)            -
        Net  Income  (Loss)                                              $13        $47          $7          $20          $(8)

        Basic  income  (loss)  per  share
          information
        Income  (loss)  from  continuing
          operations                                                      $0.08    $0.28    $0.04      $0.10    $(0.04)
        Income  from  discontinued  operations              -            -            -        0.02              -
        Net  income  (loss)                                          $0.08    $0.28    $0.04      $0.12    $(0.04)
        Weighted  average  shares  outstanding
          --  (in  millions)                                              169        171        182          175          178

        Diluted  income  (loss)  per  share
          information
        Income  (loss)  from  continuing
          operations                                                      $0.08    $0.27    $0.04      $0.10    $(0.04)
        Income  from  discontinued  operations              -            -            -        0.02              -
        Net  income  (loss)                                          $0.08    $0.27    $0.04      $0.12    $(0.04)
        Weighted  average  shares  outstanding
          --  (in  millions)                                              170        172        182          175          178



                                                            Agere  Systems  Inc.
                        Reconciliation  of  Non-GAAP  to  Unaudited  GAAP  Measures
                                (Dollars  in  millions  except  per  share  amounts)

                                                                                          Quarter  Ended              Year  Ended
                                                                                  Sep  30  Jun  30  Sep  30    Sep  30    Sep  30
                                                                                    2006      2006      2005        2006        2005

        Reconciliation  of  Non-GAAP
          Net  Income  to  Net  Income  (Loss)
        Non-GAAP  Net  Income                                      $  51      $  37      $  38        $121      $  72
        Restructuring  related  charges,
          including  increased  depreciation              (1)        (2)      (26)          (5)    (139)
        Stock-based  compensation  expenses
          (excludes  $2  included  in
          restructuring  and  other  charges  -
          net  in  Q1  2006)                                              (10)      (10)          -          (38)          -
        Amortization  of  acquired
          intangible  assets                                            (1)        (2)        (1)          (5)        (6)
        Purchased  in-process  research
          and  development                                                  -            -            -              -        (55)
        Restructuring  and  other  charges  -  net    (22)        (6)        (5)        (87)      (24)
        Expenses  related  to  reverse  split
          and  loss  on  guarantee                                      -            1            -              1          (7)
        Gain  on  sale  of  operating  assets  -  net      -            2            1              6            9
        Taxes  excluded  from  Non-GAAP                        (3)        27            -            24        142
        Income  from  operations  of
          discontinued  business                                      -            -            -              4            -
        Cumulative  effect  of  accounting  change
          (net  of  taxes)                                                  (1)          -            -            (1)          -
        Net  Income  (Loss)                                          $  13      $  47          $7        $  20        $(8)

        Reconciliation  of  Non-GAAP  Net
          Income  Per  Share  to  Net  Income
          (Loss)  Per  Share
        Non-GAAP  Net  Income  per  share
          -  diluted                                                      $0.30    $0.22    $0.21      $0.69    $0.41
        Restructuring  related  charges,
          including  increased  depreciation      (0.01)    (0.01)  (0.14)    (0.03)  (0.78)
        Stock-based  compensation  expenses
          (excludes  $0.01  included  in
          restructuring  and  other  charges
          -  net  in  Q1  2006)                                    (0.06)    (0.06)          -      (0.22)          -
        Amortization  of  acquired
          intangible  assets                                    (0.00)    (0.01)  (0.00)    (0.03)  (0.03)
        Purchased  in-process  research
          and  development                                                -              -            -              -    (0.31)
        Restructuring  and  other  charges
          -  net                                                            (0.13)    (0.04)  (0.03)    (0.50)  (0.14)
        Expenses  related  to  reverse  split
          and  loss  on  guarantee                                    -              -            -        0.01    (0.04)
        Gain  on  sale  of  operating  assets
          -  net                                                                    -        0.01      0.00        0.04      0.05
        Taxes  excluded  from  Non-GAAP                (0.02)      0.16            -        0.14      0.80
        Income  from  operations  of
          discontinued  business                                    -              -            -        0.02            -

        Cumulative  effect  of  accounting
          change  (net  of  taxes)                            (0.00)            -            -      (0.00)          -
        Net  Income  (Loss)  per  share
          -  diluted                                                    $0.08      $0.27    $0.04      $0.12  $(0.04)



                                                                Agere  Systems  Inc.
                                  Unaudited  Condensed  Consolidated  Balance  Sheets
                                                            (Dollars  in  Millions)

                                                                                                            Sep  30                        Jun  30
                                                                                                              2006                            2006
        ASSETS
        CURRENT  ASSETS
                  Cash  and  cash  equivalents                                          $406                            $490
                  Accounts  receivable                                                        243                              215
                  Inventories                                                                        116                              135
                  Other  current  assets                                                        33                                24
                            TOTAL  CURRENT  ASSETS                                            798                              864
        Property,  plant  and  equipment  -  net                                  402                              421
        Goodwill                                                                                        196                              196
        Acquired  intangible  assets  -  net                                          10                                11
        Other  assets                                                                                  91                                91
                            TOTAL  ASSETS                                                      $1,497                        $1,583

        LIABILITIES  AND  STOCKHOLDERS'  EQUITY
        CURRENT  LIABILITIES
                  Accounts  payable                                                            $152                            $171
                  Other  current  liabilities                                            223                              235
                            TOTAL  CURRENT  LIABILITIES                                  375                              406
        Long-term  debt                                                                            362                              362
        Other  liabilities                                                                      458                              471
                            TOTAL  LIABILITIES                                              1,195                          1,239

        STOCKHOLDERS'  EQUITY                                                                302                              344
        TOTAL  LIABILITIES  AND  STOCKHOLDERS'
          EQUITY                                                                                    $1,497                        $1,583



                                                              Agere  Systems  Inc.
                        Unaudited  Condensed  Consolidated  Statements  of  Cash  Flows
                                                            (Dollars  in  Millions)

                                                                                                                Three  Months  Ended
                                                                                                          Sep  30                        Jun  30
                                                                                                            2006                            2006

                      OPERATING  ACTIVITIES
          Net  income                                                                                $13                              $47
          Less:    Cumulative  effect  of
            accounting  change                                                                  (1)                                -
          Income  (Loss)  from  Continuing
            Operations                                                                                14                                47

          Adjustments  to  reconcile  net  income
            to  net  cash  used  by  operating
            activities:

          Restructuring  and  other  charges  -
            net  of  cash  payments                                                              5                              (22)
          Depreciation  and  amortization                                            29                                28
          Pension  plan  contributions                                                (31)                            (35)
          (Increase)  decrease  in  receivables                                (28)                              12
          Decrease  (increase)  in  inventories                                  17                                (6)
          Decrease  in  accounts  payable                                            (18)                            (17)
          Other  operating  activities  -  net                                    (14)                            (19)
          NET  CASH  USED  BY  OPERATING
            ACTIVITIES                                                                              (26)                            (12)

                      INVESTING  ACTIVITIES
          Capital  expenditures                                                              (7)                            (22)
          Other  investing  activities                                                    -                                  6
          NET  CASH  USED  BY  INVESTING
            ACTIVITIES                                                                                (7)                            (16)

                      FINANCING  ACTIVITIES
          Purchase  of  treasury  stock                                                (55)                          (100)
          Principal  repayments  of  long-term
            debt                                                                                              -                              (10)
          Other  financing  -  net                                                              4                                  8
          NET  CASH  USED  BY    FINANCING
            ACTIVITIES                                                                              (51)                          (102)

          Net  decrease  in  cash  and  cash
            equivalents                                                                            (84)                          (130)

          Cash  and  cash  equivalents  at
            beginning  of  period                                                            490                              620

          Cash  and  cash  equivalents  at  end  of
            period                                                                                    $406                            $490



                                                                Agere  Systems  Inc.
                                    Unaudited  Net  Income  (Loss)  Per  Share  Guidance

                                                                                                                    Quarter  Ending
                                                                                                                            Dec  31
                                                                                                                                2006

        Non-GAAP  Net  Income    (High  End  of  Range)                                      $0.23
        Non-GAAP  Net  Income    (Low  End  of  Range)                                        $0.18

        Less:    Restructuring  and  related  costs                                            0.03
        Stock-based  compensation  expenses                                                      0.07
        Amortization  of  acquired  intangible  assets                                          -
                                                                                                                                0.10

        Net  Income    (High  End  of  Range)                                                        $0.13
        Net  Income    (Low  End  of  Range)                                                          $0.08

 


1 | 2  Next Page »



Review Article Be the first to review this article
Downstreamtech.com

Synopsys: Custom Compiler

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
ESDA Market Timing: I’ve got the horse right here
More Editorial  
Jobs
Electronics Firmware / Digital DesignEngineer 2 for Northrop Grumman at Rolling Meadows,, IL
Manager, Field Applications Engineering for Real Intent at Sunnyvale, CA
Upcoming Events
Photonic Integration Conference at High Tech Campus Eindhoven Noord Brabant Netherlands - Sep 27, 2016
2016 GreenBuild International Conference and Expo at Los Angeles Convention Center Los Angeles CA - Oct 5 - 6, 2016
DASIP 2016 at Rennes France - Oct 12 - 14, 2016
CST Webinar Series
S2C: FPGA Base prototyping- Download white paper



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy