Tundra Semiconductor Reports Q3 FY09 Financial Results

Results within Guidance, Continuing to Generate Cash

OTTAWA, March 4 /PRNewswire-FirstCall/ - Tundra Semiconductor Corporation (Tundra, or "the Company") (TSX: TUN), a leader in System Interconnect, today reported financial results for the third quarter of fiscal 2009, which ended February 1, 2009.

Q3-2009 RESULTS:

- Q3 Revenue: $14.6 million

- Q3 Pro forma earnings: $0.1 million

- Q3 Pro forma diluted earnings per share: $0.00

- Q3 GAAP results: loss of $1.1 million or $0.06 per diluted share

Revenue for the third quarter of fiscal year 2009 was $14.6 million, comprised of $14.1 million in product revenue and $0.5 million in services revenue. The Communications market segment generated $8.0 million in the third quarter and the Computing/Storage market segment generated $6.1 million. Overall, the products business performed beyond our expectations in the quarter and was positively impacted by foreign exchange. Design Services revenue was significantly lower than expected as a result of the cancellation of a large project during the quarter. Overall quarterly revenue represents a 20% decrease from the second quarter of fiscal year 2009 and a 1% decrease compared to the third quarter of fiscal year 2008. Pro forma earnings for the quarter were $0.1 million or $0.00 per diluted share, compared to earnings of $2.4 million or $0.12 per diluted share in the second quarter of fiscal year 2009 and compared to $0.3 million or $0.02 per diluted share in the third quarter of fiscal year 2008. GAAP loss for the quarter was $1.1 million or $0.06 per diluted share, compared to earnings of $1.7 million or $0.09 per diluted share in the second quarter of fiscal year 2009, and a loss of $54.0 million or $2.73 per diluted share in the third quarter of fiscal year 2008.

"Third quarter results were within the guidance we provided at the close of the second quarter. Quarter over quarter, our cash position increased by more than $1 million and we generated more than $2 million in cash from operations during the quarter. Our cash position at the close of the quarter was more than $63 million and we remain debt free," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "Considering the current global economic environment we are satisfied with, but not complacent about, the results of the products business during the quarter," continued Hoste.

    Management offers the following outlook for the fourth quarter of fiscal
    year 2009:

    - Q4 Revenue is expected to be in the range of $13.0 million to
      $15.5 million
    - Q4 Pro forma diluted earnings per share is expected to be in the range
      of a loss of $0.04 to earnings of $0.01

    "Although we expect revenue to be flat to slightly down quarter over
quarter, we expect to add to our cash balance during the quarter," said David
Long, Chief Financial Officer.

    Q3-2009 Highlights

    - In February, RMI Corporation and Tundra announced interoperability of
      Tundra's Tsi578(TM) RapidIO(R) Switch with RMI's high performance XLS
      multi-core multi-threaded processor. The combined switch-processor
      solution enables high performance 3G and 4G wireless infrastructure
      systems. By using Tundra's Serial RapidIO Development Platform, that
      includes the Tsi578 RapidIO Switch, with RMI's XLS Processor(R)
      evaluation platform, Tundra and RMI successfully completed testing for
      interoperability between their two products. The comprehensive testing
      validates that the Tsi578, with multi-cast capability, and RMI's multi-
      core and multi-threaded XLS Processor are interoperable and can be
      quickly deployed as a turnkey solution in wireless infrastructure
      applications such as WiMAX, WCDMA, TD-SCDMA, and LTE.

    - Tundra was recently presented with a supplier excellence award from
      Huawei, in recognition of Tundra's outstanding support for delivering
      technology excellence, world-class customer service and support, and
      on-time delivery rates. Tundra's global teams: Sales, Research and
      Development, Supply Chain Management and Field Applications Engineers,
      adhere to Tundra's customer-first-commitment by constantly providing an
      outstanding level of service to customers around the world. Tundra
      has been a supplier to Huawei for many years, delivering System
      Interconnect solutions that enable Huawei's next generation production
      systems. Huawei's supplier excellence award is given only when a
      supplier meets a strict set of guidelines by which Huawei measures
      supplier performance throughout the year.

    - Tundra recently announced that its PCI Express(R) (PCIe) products have
      been selected by Axiomtek, EFI and Nortel for their latest designs,
      based on the high quality and performance which the PCIe bridges offer.

      AXIOMTEK selected Tundra's Tsi381(TM) Bridge because the product was
      the best solution for their network appliance platform design.
      "Tundra's PCIe bridges offer the best performance in the networking
      vertical appliance and their expert technical team delivers a new,
      higher standard of customer service and support to our engineers,"
      said, Philip Wei, Product Management, AXIOMTEK.

      Noam Rabin, Senior Engineering Manager at EFI said, "EFI selected the
      Tundra Tsi384(TM) for our print solutions, because of its proven,
      industry-leading performance. The Tsi384 offered us the high quality,
      reliable performance required to help deliver cutting-edge digital
      printing solutions to our customers."

      Nortel's Senior Design Engineer, Karl Reinke said, "customers continue
      to rely on Nortel's longstanding commitment to quality and reliability.
      The new Nortel Passport switch/routers take advantage of the proven
      reliability of the Tundra Tsi381(TM), which offers the highest
      performance connection between PCI and PCI Express."

    - MUSILAND, China's well known computer sound card manufacturer, recently
      announced that it selected Tundra's PCIe bridge to be used in its
      X-SWORDS II High Definition Audio System. Musiland selected the Tsi382
      for its high performance and support of a single lane configuration
      providing 2.5 Gbps throughput capacity. The PCI port of the device
      works at frequencies as high as 66 MHz and supports three types of
      addressing modes; transparent, opaque and non-transparent providing the
      designer with excellent flexibility. The Tsi382 has a highly efficient
      buffering mechanism and provides low latency and high throughput

    - Tundra recently signed a representative agreement with StarBridge Inc.,
      a leading provider of design services and integration of switch fabric
      technology for embedded system OEMs in Japan. This agreement will bring
      new opportunities for customers to take advantage of Tundra's Serial
      RapidIO and PCI Express products in the Japanese market.

      StarBridge's existing partnerships with OEMs in the embedded industry,
      and their long standing expertise and experience in system integration
      and design services of switch fabric technology, will offer Tundra's
      customers another level of world-class support and service. "This
      partnership is important for StarBridge's new and existing customers,
      as we can now offer the proven results of Tundra's industry-leading
      RapidIO and PCI Express products through our extensive network in
      Japan," said Akira Sato, President and Chief Executive Officer,

    Conference Call and Webcast

    Tundra management  will  hold  a  conference  call  today  March  4,  2009  at  5:30
pm  EST  to  discuss  additional  details  regarding  this  earnings  update.  You  can
access  the  conference  call  via  any  of  the  following:

        Teleconference:  1.416.644.3422
        Replay:  1.416.640.1917,  Passcode:  21287849#.  (Available  until
                        March  11,  2009)
        Web  Cast:  http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2482920

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