Exar Corporation Reports Fiscal 2011 First Quarter Results

Exar Corporation Reports Fiscal 2011 First Quarter Results

Quarterly revenue of $39.6M - highest level achieved in over a decade

PR Newswire -- July 29, 2010





FREMONT, Calif., July 29 /PRNewswire-FirstCall/ -- Exar Corporation (Nasdaq: EXAR), today reported financial results for its fiscal 2011 first quarter ended June 27, 2010.



Net sales for the first quarter of fiscal 2011 were $39.6 million compared to net sales of $38.5 million for the prior quarter and $30.9 million for the first quarter of fiscal 2010.



The GAAP gross margin for the first quarter of fiscal 2011 was 47.5% compared to 50.4% for the prior quarter and 41.6% in the first quarter of fiscal 2010.



On a non-GAAP basis, the gross margin for the first quarter of fiscal 2011 was 52.1% compared to 54.0% for the prior quarter and 52.1% in the first quarter of fiscal 2010.



The GAAP net loss for the first quarter of fiscal 2011 was $7.4 million, or $0.17 net loss per share, compared to a net loss of $3.3 million, or $0.08 net loss per share in the prior quarter, and a net loss of $12.9 million, or $0.30 net loss per share, for the first quarter of fiscal 2010.



On a non-GAAP basis, the net loss was $0.8 million for the first quarter of fiscal 2011 or $0.02 net loss per share, compared to net income of $1.5 million in the prior quarter, or $0.03 diluted earnings per share, and a net loss of $3.1 million, or $0.07 net loss per share, in the first quarter of fiscal 2010.



The Company ended the first quarter of fiscal 2011 with cash, cash equivalents and short-term marketable securities of $208.2 million.



"We achieved the highest quarterly revenue in more than 15 years and a Company record of more than 100 million units shipped during the first fiscal quarter of 2011," said Pete Rodriguez, the Company's president and chief executive officer. "During the quarter, we exited the low margin Optical business and made solid progress in reducing operating expenses. Our overall bookings remain strong and we will drive to attain non-GAAP operating profitability in the current quarter."



For the second quarter of fiscal 2011 ending September 26, 2010, the Company projects that net sales will be between $40 million and $42 million. The non-GAAP gross margin is currently expected to be between 52.5% and 54.5%. Operating expenses are currently expected to be between $21.0 million and $22.0 million on a non-GAAP basis.



The Company's statements about its future financial performance or operating plans are based on current information and expectations and the Company undertakes no duty to update such statements. These statements are forward-looking and actual results could differ materially due to various risks and uncertainties, some of which are described herein.



Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company's financial results for the first quarter of fiscal 2011, today, Thursday, July 29, 2010 at 1:30 p.m. PDT. To access the conference call, please dial (800) 230-1085 by 1:20 p.m. PDT and use conference ID number 165055. In addition, a live webcast will also be available.



To access the webcast, please go to the Company's Investor Relations Homepage at: http://www.exar.com. A replay of the call will be available starting at 3:00 p.m. PDT on July 29, 2010 until 11:59 p.m. PDT on August 5, 2010. To access the replay, please dial (800) 475-6701 and use conference ID number 165055.



Product Line Highlights:



DataCom and Storage

http://www.exar.com/Common/Content/News.aspx?id=7888



http://www.exar.com/Common/Content/News.aspx?id=7886



http://www.exar.com/Common/Content/News.aspx?id=7792



Power Management

http://www.exar.com/Common/Content/News.aspx?id=7466



Safe Harbor Statement

The Company's statements about its future financial performance, changes in gross margins, net sales and operating expenses, resource allocation and its impact on future performance and product development initiatives, design win conversion, distribution and OEM trends, supply chain issues among others, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as customer and distributor relationships; limited visibility associated with customer or distributor demand for the Company's products; the possible loss of, or decrease in orders from, an important customer; cash balances; vendor capacity, quality or throughput constraints; successful integration of acquired businesses; possible disruption in commercial activities as a consequence of terrorist activity, natural disasters, armed conflict or health issues; successful development, market acceptance and demand for the Company's products, including those for which the Company has achieved design wins; competitive factors, such as pricing or competing solutions; customer ordering patterns; accounting considerations related to impairment analyses or acquisition related issues; the level of inventories maintained at the Company's OEMs and distributors; and the Company's successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company's SEC reports, including the Annual Report on Form 10-K for the year ended March 28, 2010.



Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.exar.com or the SEC's website at: http://www.sec.gov. For the periods presented, we are disclosing non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, separation costs of executive officers, acceleration of depreciation on abandoned equipment, impairment charges on investments, and income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company's future periods. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.



About Exar

Exar Corporation delivers highly differentiated silicon, software and subsystem solutions for industrial, consumer, and enterprise applications. For nearly 40 years, Exar's comprehensive knowledge of end-user markets along with the underlying analog/mixed signal and digital technologies has enabled innovative solutions that meet the needs of the evolving connected world. Exar's technology portfolio includes solutions for power management, serial interfaces, packet-based and TDM wireline communications, enterprise storage optimization, and data security. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit: www.exar.com.





EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) (Unaudited)



JUNE 27, MARCH 28, 2010 2010