Burlington, Ontario -- March 25, 2009 -- Gennum Corporation (TSX: GND) today reported unaudited financial results for the first quarter of fiscal 2009.
(in millions of U.S. dollars except per share amounts)
| ||2009 ||2008 |
|First quarter || || |
|Revenue ||19.4 || 30.1 |
|Gross margin ||14.3 ||22.9 |
|Gross margin as a percentage of revenue || 73.6 || 75.9 |
|Operating income (loss) || (0.3) ||6.5 |
|EBITDA ||2.0 ||9.1 |
| || || |
|Net earnings (loss) - continuing ||(0.8) ||4.6 |
|Net earnings per share - continuing || $(0.02) || $0.13 |
|Net earnings (loss) - discontinued ||--- || 8.7 |
|Net earnings per share - discontinued ||--- ||0.24 |
Overall consolidated revenue in the first quarter of 2009 was $19.4 million, lower by $10.7 million or almost 36% compared to the first quarter of 2008 due to the global economic downturn. However, operations performed at a virtual breakeven level and produced positive EBITDA*, despite the severe economic conditions. The primary difference between the breakeven operating performance and our net loss from continuing operations was other expense of $1.3 million. Included in other expense was $1.9 million of losses realized on foreign currency hedging contracts. Net loss from continuing operations was $0.8 million, or earnings per share of $(0.02), compared to net earnings from continuing operations of $4.6 million, or earnings per share of $0.13, for the same period in 2008.
“As with many of our peers in the semiconductor industry, our first quarter results were impacted as a result of weaker customer demand and corrective inventory actions companies have taken due to the downturn in the global economy,” said Dr. Franz Fink, President and CEO of Gennum Corporation. “We continue to aggressively manage our operating expenses and with the sale of the BST business we will be able to further improve our overall cost structure. Looking ahead, we are seeing early signs of our target markets beginning to stabilize and show less volatile swings in demand. We remain absolutely committed to our growth strategy of expanding our market presence and funding R&D projects to deliver more new products. Our recent announcement of signing a definitive agreement to acquire Tundra Semiconductor only underscores this commitment. Furthermore, our continued solid financial position allows us to be flexible in our investments to drive future growth. I am confident that we have the resources to continue to invest in key projects that offer the greatest opportunity to deliver value to our customers and shareholders.”
* “EBITDA” is a non-GAAP financial measure which does not have any standardized meaning under Canadian generally accepted accounting principles (“GAAP”) and is therefore unlikely to be comparable to similar measures presented by other issuers. We define EBITDA as earnings before interest, taxes, depreciation and amortization (related to intangible assets and stock-based compensation). Further information regarding this term, a description of why management believes it is a useful measure, and a quantitative reconciliation to the most directly comparable measure calculated in accordance with GAAP is set forth under the heading “Non-GAAP Reporting” in our MD&A for the quarter ended February 28, 2009.
New product introductions and business developments
In the first quarter of 2009, Gennum launched several new products to further expand its CDR, PCI Express and IP portfolio. Gennum also introduced a new HD interface and products for professional and industrial applications. In early March, Gennum closed the sale of its barium strontium titanate (BST) group and assets to Paratek Microwave. Gennum took a significant step in the advancement of its growth strategy by announcing that it signed a definitive agreement to acquire Tundra Semiconductor.
Gennum Signs Definitive Agreement to Acquire Tundra Semiconductor - On March 19, Gennum and Tundra Semiconductor Corporation (TSX: TUN) announced they had entered into a definitive agreement providing for the acquisition by Gennum of all of the issued and outstanding shares of Tundra. This transaction, which combines two of Canada’s leading high-tech companies, is valued at approximately Canadian $86 million. Assuming the completion of the transaction, which is subject to the satisfaction of a number of conditions, Gennum will have the ability to add new digital switch and bridge products and functionality to its portfolio, which is expected to build on Gennum’s growth strategy of extending its high-speed signal integrity expertise and solutions to a broader set of markets.
DVIGear Introduces HDMI Long Reach Coaxial Extender Based on Gennum’s ActiveConnect™ Technology - DVIGear, a leading manufacturer of digital connectivity products, deployed a new high-definition multimedia interface (HDMI) coaxial extender based on Gennum’s ActiveConnect™ technology. This new product is the ideal solution for all residential, commercial and industrial applications that require long distance routing of digital HDMI (and DVI) signals. The coax extender supports data rates of up to 10.2 gigabits per second (Gb/s) at distances up to 100 meters (330 feet) with no loss of audio or video quality.
Gennum Delivers Industry’s Highest Performance SFP+ Solutions - Enabling rapid time-tomarket of next-generation SFP+ copper and optical modules, Gennum introduced two new CDRbased reference design kits that facilitate the rapid development of high-performance Fibre Channel and Ethernet modules. The CDR-based reference design kits enable savings up to 1W and $40 per port in SFP+ systems.
Gennum Pioneers First HD Video-over-Coax Interface for Surveillance, Industrial Imaging Applications - Gennum developed a new audio video (A/V) interface for professional and industrial applications, such as advanced video security and surveillance systems. Aviia™ (Advanced Video Interface for Industrial Applications) is a robust interface for high definition (HD) video over coaxial cable lengths up to 100 meters. Camera, DVR and monitor manufacturers can now develop low-cost, high-performance HD solutions, enabling customers to experience full bandwidth HD over their existing coaxial cables.
Gennum Broadens Offerings for PCI Express Gen-1/2/3-based Embedded Applications - Expanding its high-performance PCI Express (PCIe) solutions and design platforms, Gennum unveiled two new PCIe products aimed at enabling high-speed embedded applications. The new PCIe re-driver, bridge solutions deliver up to 2X performance over existing solutions providing more options as this high-performance interconnect increasingly migrates to embedded communications for servers, storage, broadcast video, industrial control, medical and commercial off-the-shelf (COTS) applications.
Gennum’s Snowbush IP Group Delivers Industry’s First Available USB 3.0 Integrated PHY and Controller IP - The IP group unveiled the industry’s first USB 3.0 SuperSpeed PHY and controller solution which can be licensed immediately by system-on-a-chip (SoC) and system companies. According to research firm In-Stat, SuperSpeed USB products should begin to hit the market in the next 12 to 18 months, with growth rates exceeding 100 percent annually between 2009 and 2012.
Gennum’s Snowbush IP Group Enables Proliferation of PCI Express Gen 2 Products with Industry’s First 9-port Switch IP Block - The fully PCI Gen2-compliant IP gives designers a low-risk, cost-effective way to rapidly deploy products that are compatible with the PCIe Gen 2 standard and begin taking instant advantage of the higher 5 Gb/s data rates.
Gennum Sells BST Technology Group to Paratek Microwave - The compensation to Gennum from the sale transaction includes a payment of approximately U.S. $1.4 million for tangible assets, which amount was paid at closing, and additional technology transfer fees payable within the three year period following the closing. In addition, Gennum is entitled to be paid a royalty based on a percentage of Paratek’s BST-related revenue over a fixed period.
Gennum’s Board of Directors has declared a regular cash dividend of 3.5 cents per share Canadian to be paid on April 22, 2009 to shareholders of record on April 8, 2009.
Management will hold a conference call to discuss first quarter results on Thursday, March 26, 2009 at 9:00a.m. (ET). To access the call, participants should dial 1-800-731-6941. The conference call will also be Webcast live at www.gennum.com or www.newswire.ca/en/webcast and subsequently archived on the Gennum site. A rebroadcast of the call will be available until midnight on April 27, 2009. To access the rebroadcast, dial 416-640-1917 and enter the passcode 21299184#.
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About Gennum Corporation
Gennum Corporation (TSX: GND) designs innovative semiconductor solutions and intellectual property (IP) cores for the world’s most advanced consumer connectivity, enterprise, video broadcast and data communications products. Leveraging the company’s proven optical, analog and mixed-signal products and IP, Gennum enables multimedia and data communications products to send and receive information without compromising the signal integrity. Recognized as an award winner for advances in high definition (HD) broadcasting, Gennum is headquartered in Burlington, Canada, and has global design, research and development and sales offices in Canada, Mexico, Japan, Korea, Germany, United States, Taiwan, India and the United Kingdom. www.gennum.com