Results for the December quarter were impacted by four unusual items:
During the December quarter the Company’s cash and short-term investments balance decreased by $121.7 million to $900.2 million, net of spending approximately $179.0 million to purchase $200.0 million face value of its 3.125% Convertible Senior Notes.
The Company also is increasing its quarterly dividend from $0.21 per share to $0.22 per share. The Company has raised its dividend every year since it began paying dividends in 1992. The Company believes that raising its dividend is an important way to return value to its shareholders. This cash dividend will be paid on February 25, 2009 to stockholders of record on February 13, 2009.
According to Lothar Maier, CEO, “Entering the quarter there was greater than usual uncertainty in our revenue guidance in light of the global credit crisis. We continued to see further weakness in our bookings throughout the quarter and as a result, our revenue declined to the low end of our guidance. We reacted to this weakness by reducing labor and related costs through headcount reductions, weekly plant closures and otherwise limiting operating expenditures where possible. In addition, we took advantage of depressed market prices on our outstanding debt and repurchased $200 million of our convertible bonds resulting in a gain of approximately $21 million. Partially offsetting the favorable impact on earnings from these items is the effect of severance costs and the acceleration of employee stock options that are significantly underwater. Despite the significant reduction in revenues, we were able to continue to deliver pre-tax profits in excess of 40% during such a difficult period.
“Looking ahead to the March quarter, we believe we have not yet seen the bottom from the economic fallout of the global credit crisis as our bookings continue to be weak in the early part of this quarter. At this time it is difficult to forecast when we will see some stabilization and subsequent recovery. Our current estimate anticipates that our third fiscal quarter revenues will be down in the 15% to 20% range from the second quarter. In order to meet these expectations, turnable bookings in February and March will need to exceed the depressed December and January run rate. Nevertheless, we will continue to control costs where possible and make adjustments to our operations as necessary to mitigate the effect of declining revenues. However, pre-tax profits are likely to fall into the low to mid thirties range as a percentage of net sales and around 40% of net sales on a non-GAAP basis, excluding the impact of stock-based compensation. We anticipate having industry leading profitability as we successfully navigate through this difficult period.”
Except for historical information contained herein, the matters set
forth in this press release are forward-looking statements. In
particular, the statements regarding the demand for our products, our
customers’ ordering patterns and the anticipated trends in our sales and
profits are forward-looking statements. The forward-looking statements
are dependent on certain risks and uncertainties, including such
factors, among others, as the timing, volume and pricing of new orders
received and shipped, the timely introduction of new processes and
products, general conditions in the world economy and financial markets
and other factors described in our 10-K for the fiscal year ended June