Company: Gennum CorpStock Name: GNDAmount: CAD 0.035
Announcement Date: 21/09/2011
Record Date: 03/10/2011
Dividend Detail:
Revenue Growth of 7% and Adjusted EPS* of $0.14
BURLINGTON, ON, Sept. 21, 2011 /CNW/ - Gennum Corporation (TSX: GND)
today reported unaudited financial results for the third quarter of
fiscal 2011. Third quarter revenue of $36.7 million, a record,
increased 7% over each of the third quarter of 2010 and the second
quarter of 2011. Diluted earnings per share was $0.10 compared to $0.15
in 2010 and $0.10 in the second quarter of 2011. Net earnings per share
adjusted for non-recurring items after tax, was $0.14.
Third Quarter
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(in millions of U.S. dollars except per share amounts)
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August 31, 2011
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August 31, 2010
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Revenue
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36.7
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34.4
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Gross margin
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26.0
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25.1
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Gross margin as a percentage of revenue
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70.9%
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72.9%
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Restructuring charge
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1.5
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---
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Operating income
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5.0
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7.6
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Net earnings
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3.3
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5.3
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Net earnings per share (basic and diluted)
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$0.10
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$0.15
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Net earnings per share adjusted for non-recurring
items after tax (basic and diluted)
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$0.14
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$0.15
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"We achieved solid results, delivering record quarterly revenue with 7%
sequential and year-over-year growth and net earnings adjusted for
non-recurring items after tax of $0.14 per share. We also generated
over $6 million in cash during the quarter," said Dr. Franz Fink,
President and CEO. "Looking forward, our fourth quarter order book is
at this time in a range between the second and third quarter order
books at a similar point. While there is more near-term economic
uncertainty than usual in the semiconductor market, I remain confident
in our strategy and ability to capitalize on our solid position in
broadcast, data communications and consumer markets."
Today, in a separate news release, the Company announced its intention
to commence a normal course issuer bid to acquire common shares of the
Company. The normal course issuer bid is subject to the acceptance of
the Toronto Stock Exchange.
Financial Results
Gennum recorded revenue of $36.7 million in the third quarter of 2011
compared to $34.4 million in the third quarter of 2010. Net earnings in
the third quarter of 2011 was $3.3 million or $0.10 per share compared
to $5.3 million or $0.15 per share in the third quarter of 2010. Year
to date, net earnings was $11.5 million or diluted earnings per share
of $0.33 compared to $13.4 million or $0.39 per share for the first
nine months of 2010.
Third quarter net earnings adjusted for non-recurring items after tax*,
which excludes restructuring charges and short term purchase accounting
adjustments related to the Nanotech acquisition, was $4.9 million or
$0.14 per share. Year to date, net earnings adjusted for non-recurring
items after tax was $13.9 million or $0.40 per share. Please refer to
"Non-GAAP Reporting" in our management's discussion and analysis for
our third quarter ended August 31, 2011 as filed on SEDAR at www.sedar.com, for further information describing net earnings adjusted for
non-recurring items after tax, Nanotech acquisition charges and
restructuring charges.
The $1.5 million restructuring charge in the quarter relates to the plan
announced in June to outsource the Company's test and logistics
capabilities. The plan is expected to be completed over the next year
and is expected to enable Gennum to improve its production capacity,
customer lead times, logistical support, and to remain cost competitive
in its marketplace.
Cash and cash equivalents increased $6.6 million to $20.8 million as of
August 31, 2011 compared to May 31, 2011.
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* "Adjusted EPS" or "net earnings per share adjusted for non-recurring
items after tax", and "net earnings adjusted for non-recurring items
after tax" are non-GAAP financial measures that do not have any
standardized meanings under GAAP and are therefore unlikely to be
comparable to similar measures presented by other issuers. Adjusted EPS
and net earnings per share adjusted for non-recurring items after tax
are the same measure. An explanation of these terms, a description of
why we believe them to be useful measures, and a quantitative
reconciliation to the most directly comparable measures calculated in
accordance with GAAP are set forth under the heading "Non-GAAP
Reporting" in our management's discussion and analysis for our third
quarter ended August 31, 2011 as filed on SEDAR at www.sedar.com and on our web site at www.gennum.com.
Outlook
Despite the current uncertain economic environment, our new product
design-in activities remain strong across all regions and our current
fourth quarter order book is between order levels experienced to this
point in our second and third quarters of this year.
During the quarter, we have made good progress on our previously
announced manufacturing outsourcing project. We are now expecting
restructuring charges, during the life of the project, to be between
$2.5 million and $3.0 million, of which $1.5 has been accrued to date.
This is a reduction in the expected level of restructuring charges of
approximately $0.8 million from our previous preliminary estimate. We
continue to expect to incur between $0.5 million and $0.8 million of
incremental operating expenses over the life of the project, which is
unchanged from our prior expectations.
We expect that the manufacturing outsourcing project will achieve an
annual cost savings of between $4.0 and $5.0 million when fully
implemented, strengthen our operational capability, and maintain our
financial competitiveness in the face of expected pressure on prices
and margins.
We continue to evolve our Company, leveraging the strong foundation we
have put in place. The investments we have made are strengthening our
core market position and expanding our capability to address faster
growing data communication and consumer connectivity markets.
Business Developments
During the quarter, Gennum announced the following product related
developments:
Advanced 3Gb/s cable drivers for the broadcast video market. These
next-generation 3Gb/s cable drivers feature industry-first signal
pre-emphasis on non-inverted outputs which helps further extend the
reach offered by our long reach equalizers introduced at NAB 2011.
Third generation of silicon-proven Multi-Standard PHY IP Platform on
TSMC 28nm which is capable of supporting a number of different
high-speed serial standards up to 12.5 Gb/s.
Hitachi Ltd., Information & Telecommunication Systems Company-Micro
Device Division selected Gennum's PCI Express ® 3.0 PHY IP and the
Inventure Z-core PCI Express 3.0 Controller for its next generation
chips.
Dividend
Gennum's Board of Directors has declared a regular cash dividend of 3.5
cents per share Canadian to be paid on October 19, 2011 to shareholders
of record on October 5, 2011.
Our interim financial statements for the third quarter of 2011 and
related management's discussion and analysis have been filed and may be
viewed on our website www.gennum.com and on SEDAR at www.sedar.com.
Download the complete financial results (PDF)
http://www.gennum.com/extranet/file/q3fy11-financials.pdf
Gennum will hold a conference call to discuss 2011 third quarter results
on Wednesday, September 21, 2011 at 5:30 pm (ET). To access the call,
participants should dial 1-800-814-4860. The conference call will also
be webcast live at www.gennum.com or www.newswire.ca and subsequently archived on the Gennum site. A rebroadcast of the call
will be available until October 21, 2011. To access the rebroadcast,
dial 1-877-289-8525 and enter the passcode 4471537#. Download a slide
presentation to accompany the discussion: http://www.gennum.com/q3fy11-downloads.
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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, Germany, United States,
Taiwan, India and the United Kingdom. www.gennum.com
Caution Regarding Forward-Looking Statements
This document contains statements which constitute forward-looking
statements. These forward-looking statements are not descriptive of
historical matters and may refer to management's expectations or plans.
These statements include but are not limited to statements concerning:
Gennum's business objectives and plans including Gennum's corporate
strategy and strategic priorities; Gennum's future financial
performance and prospects including revenues, gross margins and
earnings, and ability to achieve operating earnings, cash flow and
other business model targets, as well as expected cost savings and
reductions in operating expenses; the expected results and benefits of
Gennum's acquisition of Nanotech (including the expected impact of the
acquisition on Gennum's revenues, earnings, business and market
position); future trends in the semiconductor products and intellectual
property licensing industries and, in particular, market trends for
analog and mixed-signal products, optical products and intellectual
property products and licensing; Gennum's expectations for sales and
licensing of its products in these markets including anticipated costs
and fees, sales, product prices, size, duration, growth or decline of
market opportunities and competitive and pricing pressures in these
markets; Gennum's product roadmap and the speed at which Gennum is able
to introduce new products; the adoption of new standards in the markets
in which Gennum competes and the ability of Gennum to anticipate these
changes and successfully address new opportunities; sales and capital
spending plans and estimates, shipment levels and operating expenses;
the anticipating savings from, and the anticipated costs and related
charges and operating expenses associated with, the planned outsourcing
of test and logistics operations; exchange rate fluctuations in, and
the relative values of, the Canadian dollar, the U.S. dollar and the
Japanese yen; Gennum's ability to finance its growth plans and make
necessary investments; and litigation in which Gennum is involved.
Inherent in forward-looking statements are risks and uncertainties
beyond Gennum's ability to predict or control including, but not
limited to, risks associated with: competitive and pricing pressures in
the increasingly competitive environment in which Gennum operates;
changes in the mix of products sold which, due to associated margins,
can impact Gennum's financial results; the successful integration of
and realization of benefits from acquisitions, including the
acquisition of Nanotech; economic cycles in the semiconductor industry
including downturns which can result from adverse general economic
conditions; the effects of the recent earthquake and tsunami in Japan and the
resultant impact upon Gennum's sales in Japan, which comprise
approximately 25% of Gennum's revenues; our ability to anticipate needs
for future products and successfully execute our product roadmap,
including the possibility of the emergence of disruptive technologies
which negatively impact our positioning in the marketplace; the risk
that unforeseen factors may arise that result in us not being able to
achieve our operating income, cash flow and other business model
targets, or to achieve expected cost savings and reductions in
operating expenses; possible impairments of assets which could be
required in the future; fluctuations in foreign exchange rates and
their potential adverse impact upon our financial results; our reliance
on external foundries and suppliers and the potential adverse effects
of disruptions in any of these arrangements; our ability to attract and
retain key personnel necessary for our business; our ability to
successfully protect our intellectual property rights; and the
initiation and outcome of legal proceedings. Readers should also refer
to the sections entitled "Risks and Uncertainties" in our 2010
management's discussion and analysis and "Risk Factors" in our most
recent annual information form, each as filed on SEDAR at
www.sedar.com.
Actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained in this document. Such statements are based on a
number of assumptions which may prove to be incorrect including, but
not limited to, the following assumptions: there is no material
deterioration in the business and economic conditions in the
marketplace for Gennum's products; Gennum is able to successfully
integrate acquisitions (including the acquisition of Nanotech) and the
results of such acquisitions are not materially different from those
anticipated by Gennum; the effects of the recent earthquake and tsunami
in Japan will not have a material adverse impact upon Gennum's
revenues; Gennum's expectations regarding market trends for analog and
mixed-signal products, optical products and intellectual property
products and licensing are not materially incorrect; Gennum is able to
execute its product roadmap without delays or disruptions having a
material impact on Gennum; Gennum's expectations relating to the needs
and direction of the marketplace for its products are within reasonable
bounds of accuracy and Gennum is able to introduce products and
capitalize on new opportunities generally as expected; Gennum's
expectations relating to its future operating expenses and its
anticipated cost savings in connection with its manufacturing
outsourcing and other projects, as well as the capital required to
conduct its business in the future, are not materially incorrect;
significant impairments of assets will not arise; material disruptions
in the manufacture and supply of products and services to Gennum by
foundries and suppliers will not materialize; Gennum's expectations
relating to competitive pressures, including pricing pressures, as well
as Gennum's expectations relating to the mix of products to be sold by
it, are not materially incorrect; the actual savings from, and costs
and related charges and operating expenses associated with, the planned
outsourcing of test and logistics operations are not materially
different from those anticipated by Gennum; significant fluctuations in
foreign exchange rates which materially adversely affect Gennum's
financial results do not arise; customer demand for Gennum's products
remains generally as anticipated; and Gennum is able to continue to
retain and attract technical and other key employees.
Readers are cautioned that the foregoing list of important factors and
assumptions is not exhaustive. Forward-looking statements are not
guarantees of future performance. Events or circumstances could cause
Gennum's actual results to differ materially from those estimated or
projected and expressed in, or implied by, these forward-looking
statements. Consequently, readers should not place any undue reliance
on these forward-looking statements. Forward-looking statements are
provided for the purpose of providing information about management's
current expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes. In addition, these forward-looking statements relate to the
date on which they are made. We disclaim any intention or obligation to
update or revise any forward-looking statements or the foregoing list
of factors, whether as a result of new information, future events or
otherwise, except to the extent required by law.
