Highlights for the second quarter include:
“We continue to make solid progress in the transformation of Freescale,” said Rich Beyer, Chairman & CEO. “Our second quarter results demonstrate that we are reducing costs, improving profitability and positioning the company for long-term growth.”
Net sales for the second quarter of 2009 were $824 million, compared to $840 million in the first quarter of 2009 and $1.47 billion last year. The year-over-year sales decline was attributable primarily to the company’s decision in 2008 to exit its cellular handset business, as well as a decline in sales associated with the company’s automotive businesses.
Adjusted gross margins for the second quarter of 2009 were 31% compared to 28% in the first quarter of 2009 and 47% last year. The reported loss from operations for the three months ending July 3, 2009 was $345 million, inclusive of $82 million of reorganization costs, compared to a loss of $351 million in the first quarter of 2009 and a loss of $137 million in the second quarter of 2008. The adjusted operating loss (defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release) for the three months ending July 3, 2009 was $75 million, compared to a loss of $140 million in the first quarter of 2009 and earnings of $234 million in the same quarter last year.
A description of adjusted gross margin, Adjusted EBITDA and adjusted operating earnings/loss and the reconciliations to our GAAP results are included in the tables and notes attached to this press release.
The company’s net sales figures for the second quarter of 2009 are as follows:
During the second quarter, the company recorded $82 million of reorganizations costs related primarily to our ongoing restructuring program and an accrual for severance costs associated with our previously announced decision to exit our manufacturing facility in Sendai, Japan.
Cash, cash equivalents and short-term investments were $1.31 billion on July 3, 2009, compared to $1.42 billion on April 3, 2009.
Conference Call and Webcast
Freescale's quarterly earnings call is scheduled to begin at 4 p.m. Central Daylight Time on July 23, 2009. The company will offer a live webcast of the conference call over the Internet at www.freescale.com/investor.
Caution Regarding Forward-Looking Statements
This press release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to our business strategy, goals and expectations
concerning our market position, future operations, margins,
profitability, liquidity and capital resources. Although we believe the
assumptions upon which these forward-looking statements are based are
reasonable, any of these assumptions could prove to be inaccurate and
the forward-looking statements based on these assumptions could be
incorrect. Our operations involve risks and uncertainties, many of which
are outside our control, and any one of which, or a combination of
which, could materially affect our results of operations and whether the
forward-looking statements ultimately prove to be correct. Actual
results and trends in the future may differ materially from those
suggested or implied by the forward-looking statements depending on a
variety of factors. Some of the factors that we believe could affect our
results include our substantial indebtedness; our ability to service our
outstanding indebtedness and the impact such indebtedness may have on
the way we operate our business; the loss of one or more of our
significant customers or strategic relationships; general economic and
business conditions and any downturns in the cyclical industry in which
we operate; our competitive environment and our ability to make
technological advances; interruptions in our production or manufacturing
capacity and our ability to obtain supplies; economic conditions in the
industries in which our products are sold; maintenance and protection of
our intellectual property; political and economic conditions in the
countries where we conduct business; integration of future acquisitions
into our business; the costs of environmental compliance and/or the
imposition of liabilities under environmental laws and regulations;
potential product liability claims; inability to make necessary capital
expenditures; loss of key personnel; and our ability to achieve cost
savings as well as other matters described under "Risk Factors" in our
Annual Report on Form 10-K and other filings with the SEC. We undertake
no obligation to update any information contained in this press release.