Xilinx Announces Third Quarter Fiscal 2009 Results

Operating margin of 26.1% is highest reported in three years - Virtex-5(R) sales post strong growth

SAN JOSE, Calif., Jan 14, 2009  -- Xilinx, Inc. today announced net revenues of $458.4 million in the third quarter of fiscal 2009, down 5% sequentially from the prior quarter and down 3% compared to the same quarter a year ago. Third quarter net income was $139.4 million, or $0.51 per diluted share, including an $89.7 million pre-tax gain on the early extinguishment of convertible debentures and a $19.5 million pre-tax impairment charge on investments. Collectively, these income and expense items represented approximately $0.19 per diluted share after tax.

The Xilinx Board of Directors declared a quarterly cash dividend of $0.14 per outstanding share of common stock, payable on February 25, 2009 to all stockholders of record at the close of business on February 4, 2009.

Additional third quarter comparisons are represented in the charts below:

GAAP Results (In millions, except EPS)

	Q3 FY 2009	Q2 FY 2009	Q3 FY 2008	Growth Rates
				Q-T-Q	Y-T-Y
Net revenues	$458.4	$483.5	$474.8	-5%	-3%
Operating income	$119.6	$124.6	$115.3	-4%	4%
Net income	$139.4	$81.8	$103.6	70%	35%
Diluted earnings per share	$0.51	$0.29	$0.35	76%	46%

Sales in the month of December were particularly weak as the current economic recessionary environment began impacting customers in most Xilinx end markets. With the exception of sales to Industrial and Other which were flat, sales to other end markets declined sequentially in the December quarter.

Continued cost reduction efforts contributed to improved gross and operating margins during the quarter. Operating margin of 26.1% was up from 24.3% in the same quarter of the prior year and the highest reported in over three years. Gross margin of 63.9% was up from 63.3% in the same quarter of the prior year and the highest reported in over four years.

"Sales from the Company's flagship Virtex-5 family posted exceptionally strong growth in the December quarter increasing 35% sequentially and representing 15% of total sales, up from 10% in the prior quarter," said Moshe Gavrielov, Xilinx President and Chief Executive Officer. "The success of this product family in today's challenging economic environment underscores a growing affinity for programmable solutions versus ASIC alternatives. Programmable solutions provide customers with lower risk, greater flexibility and, in many cases, lower total overall cost."

Net Revenues by Geography:

	Percentages			Growth Rates
	Q3 FY 2009	Q2 FY 2009	Q3  FY 2008	Q-T-Q	Y-T-Y
North America	34%	34%	41%	-4%	-20%
Asia Pacific	33%	32%	27%	-1%	20%
Europe	22%	23%	22%	-12%	-4%
Japan	11%	11%	10%	-4%	1%

Net Revenues by End Market:

	Percentages			Growth Rates
	Q3 FY 2009	Q2 FY 2009	Q3  FY 2008	Q-T-Q	Y-T-Y
Communications	44%	43%	41%	-3%	4%
Industrial & Other	33%	32%	33%	0%	-2%
Consumer & Automotive	16%	17%	17%	-12%	-11%
Data Processing	7%	8%	9%	-21%	-27%

Net Revenues by Product*:

	Percentages			Growth Rates
	Q3 FY 2009	Q2 FY 2009	Q3  FY 2008	Q-T-Q	Y-T-Y
New	48%	45%	35%	2%	34%
Mainstream	36%	38%	45%	-9%	-22%
Base	11%	12%	14%	-17%	-29%
Support	5%	5%	6%	-11%	-19%

* Products are classified as follows:

• New Products: Virtex-5, Virtex-4, Spartan(R)-3, and CoolRunner(TM)-II products
• Mainstream Products: Virtex-II, Spartan-II, CoolRunner and Virtex-E products
• Base Products: Virtex, Spartan, XC4000 and XC9500 products
• Support Products: Configuration solutions, HardWire, Software & Support/Services

Highlights - December Quarter Fiscal 2009

• For the second consecutive quarter, sales to customers in wireless communications were particularly strong, increasing over 10% sequentially. Most of this growth was attributable to the next generation rollout of wireless technologies in China. Xilinx FPGA solutions, most notably Virtex-5 FPGAs, are key beneficiaries of this next generation wireless technology rollout due to their high performance, functionality and system integration capabilities.

• Xilinx continues to have one of the most stable and resilient business models in the technology industry in terms of profitability and cash flow generation. In the December quarter, Xilinx generated $128.5 million in operating cash flow and paid $146.3 million in cash to repurchase $241.1 million (principal amount) of convertible debentures and $38.4 million in cash dividends. Xilinx currently has among the highest dividend yields in the technology industry.

Key Statistics:

	Q3 FY 2009	Q2 FY 2009	Q3FY 2008
Annual Return on Equity (%)*	24	21	21
Operating Cash Flow (millions)	$128	$95	$208
Depreciation Expense (millions)	$13	$13	$13
Capital Expenditures (millions)	$11	$12	$11
Combined Inventory Days	99	93	91
Revenue Turns (%)	54	59	59

*Return on equity calculation: Annualized net income/average stockholders' equity

Business Outlook - March Quarter Fiscal 2009

• Sales are expected to be down 15% to 25% sequentially.
• Gross margin is expected to be in the range of 61% to 63%.
• Operating expenses are expected to be flat to slightly down sequentially from the December quarter.
• Interest and other is expected to be a net expense of $3 million.
• Fully diluted share count is expected to be approximately 275 million shares.
• March quarter tax rate is expected to be approximately 21%.
  

Financial Tables

Click here to read financial tables

Conference Call

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the March quarter. The webcast and subsequent replay will be available in the investor relations section of the company's web site at http://www.investor.xilinx.com. A telephonic replay of the call may be accessed later in the day by calling (800) 642-1687 and referencing confirmation code 76849026. The telephonic replay will be available for two weeks following the live call.

Business Update -- March Quarter Fiscal 2009

The Company expects to issue a fourth quarter business update press release before the market opens on Tuesday, March 3, 2009. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com.

About Xilinx

Xilinx, Inc. (NASDAQ: XLNX) is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com.