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Freescale Semiconductor Announces Second Quarter 2009 Results
Highlights for the second quarter include:
- Net sales of $824 million;
- Trailing 12 month Adjusted EBITDA of $668 million;
- Cash, cash equivalents and short-term investments of $1.31 billion at July 3, 2009.
"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:
- Microcontroller net sales were $238 million in the second quarter of 2009, compared to $246 million in the first quarter of 2009 and $460 million in the second quarter of 2008.
- RF, Analog and Sensor net sales were $201 million in the second quarter of 2009, compared to $184 million in the first quarter of 2009 and $280 million in the second quarter of 2008.
- Networking and Multimedia net sales were $216 million in the second quarter of 2009, compared to $228 million in the first quarter of 2009 and $312 million in the second quarter of 2008.
- Cellular net sales were $138 million in the second quarter of 2009, compared to $95 million in the first quarter of 2009 and $337 million in the second quarter of 2008.
- Other net sales were $31 million in the second quarter of 2009, compared to $87 million in the first quarter of 2009 and $83 million in the second quarter of 2008.
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.
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.
Non-GAAP Financial Measures
Included within this press release and the accompanying tables and notes are non-GAAP financial measures that supplement the company's consolidated financial information prepared under GAAP. The company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release. The company's management believes that these non-GAAP measures provide a more meaningful representation of the company's ongoing financial performance. In addition, the company uses Adjusted EBITDA to measure compliance with certain of its debt covenants. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP. You should consider them together with the consolidated financial information located in the tables attached to this press release.
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