(***) Free Cash Flow in Q1 2016 is defined as net income of US$142.9 million (Q1 2015:US$38.8 million), plus amortisation and depreciation (Q1 2016:US$14.5 million, Q1 2015:US$12.8 million), plus net interest expense (Q1 2016:US$1.6 million, Q1 2015:US$2.9 million), plus change in working capital (Q1 2016:(US$35.2 million), Q1 2015:US$57.8 million) and minus capital expenditure (Q1 2016:US$13.9 million, Q1 2015:US$14.3 million).
Our proven success with leading smartphone customers for custom power management IC's (PMICs) continued through Q1 2016 with new design wins.
During the quarter we brought power conversion innovation into the market and strengthened our leadership position in the mobile adapter rapid charge market. Working closely with Qualcomm, and their Quick Charge(TM) standard, we have developed a new benchmark for system efficiency, performance, size and cost. The new chipset started volume production and is allowing our leading smartphone customers to upgrade quickly to this latest rapid charge specification. It builds upon Dialog's estimated 70% market share of the rapid charging adapter market for smartphones, tablets and other mobile devices.
Our growing range of Bluetooth(R) Smart products made progress in capturing the high-growth opportunity within IoT. SmartBondTM market-leading power efficiency and performance secured another major design win in the fast-growing wearables market with the Misfit Shine 2, a powerful new wearable device in Misfit's fitness tracking offering. Misfit merged with Fossil Group, a global design, marketing, and distribution company specializing in consumer lifestyle and fashion accessories in December 2015. According to analyst IHS, the market for wearables will be worth $32 billion by 20191 when 230 million of them will be sold.
The Bluetooth(R) Smart segment continues to gain traction in a number of growing market segments including smart watches and fitness bands, smart home applications, advanced TV remote controls and wireless gaming accessories.
As part of the on-going initiatives to expand our business footprint in Asia, our sub-PMIC partnership with MediaTek performed well during the quarter. In Q2 2016, the next generation sub-PMIC has started shipping to end customers who entered production status with their MediaTek based SoC solutions.
The expansion into the smart TV and set-top box (STB) market continues to gather momentum with a number of leading customers evaluating our recently released integrated power management IC (PMIC) for volume production in Q4 2016 and Q1 2017.
Additionally, we have an increasing number of application-specific IC (ASIC) and application-specific standard products (ASSP) opportunities for our core power, charging and audio technologies with multiple Tier 1 customers. These opportunities will support revenue growth in 2017 across a number of high-volume markets, such as computing systems, USB headsets and mid-market smartphones and phablets.
Innovation was also brought into the LED segment with two new driver controllers for high power commercial LED lighting applications up to 90W. In these applications flicker-free operation is essential to avoid eye stress, particularly where there is long-term exposure to the light source. Dialog patented Flickerless(TM) technology virtually eliminates flicker through digital control that achieves near-zero line frequency ripple. The iW3629 (non-dimmable) and iW3631 (dimmable) digital power controllers simplify the design of LED power supplies by replacing up to 45 discrete components.
1 IHS Technology: A Guide to the $32bn Wearables Market, estimated market size in 2019
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Dialog Semiconductor invites you today at 09.30 am (London) / 10:30 am (Frankfurt) to take part in a live conference call and to listen to management's discussion of the Company's Q1 2016 performance, as well as guidance for Q2 2016. Participants will need to register using the link below labelled 'Online Registration'. A full list of dial-in numbers will also be available.
To register for the webcast and receive dial in numbers, the conference PIN and a unique User ID please click on the link below:
http://members.meetingzone.com/selfregistration/registration.aspx?booking= Rf1xrNlsiHW9N8QpnZPlhEsGIVFBE167GRbJqqzBcUk=&b=d58ae4ab-80e5-47f2-8295-e04 d92bbba83
In parallel to the call, the analyst presentation will be webcasted on our website at http://webcast.openbriefing.com/semiconductor_q1_results_040516/
A replay will be posted on the Dialog website four hours after the conclusion of the presentation and will be available at http://www.dialog-semiconductor.com/investor-relations
Full release including the Company's condensed consolidated income statement, consolidated balance sheet, consolidated statements of cash flows and selected notes for the quarter ended 1 April 2016 is available under the investor relations section of the Company's website at: http://www.dialog-semiconductor.com/investor-relations