Press Releases

First quarter results to 1 April 2012: Outlook in line with market expectations - on track for strong second half

Wolfson Microelectronics plc (“Wolfson” or “the Company”), a leading supplier of mixed-signal semiconductors for consumer electronic products, announces its financial results for the first quarter ended 1 April 2012.

Financial summary:

• Revenues of $30.3m (Q1 2011: $41.1m) in line with previous guidance
• Gross margin of 49.0% (Q1 2011: 47.1%)
• Underlying* operating loss of $6.4m (Q1 2011: $0.9m loss)
• Operating loss of $8.4m (Q1 2011: $3.4m loss)
• Net cash inflow from operating activities of $2.7m (Q1 2011: $24.5m outflow)
• Cash and short term deposits of $53.5m (unchanged from 2011 closing position), with no debt

Operational summary:

• Record quarterly design-in value from a combination of existing and new customers
• The three new top tier mobile phone manufacturer customers announced in the Company’s full year 2011 results are on track to add incremental revenue in 2012
• Six new products launched including a High Definition (HD) Audio System-on-a-Chip (SoC) and multiple micro-electro-mechanical systems (MEMS) microphones
• Increased design-ins for MEMS microphones as Wolfson benefits from its leading technology position and the microphone market transition to MEMS
• Increased market penetration with Fujitsu, LG, Motorola, RIM, Samsung and Sony, all launching mobile devices that featured Wolfson products inside
• Notable design-ins with new customers in the quarter included:
  • A major Chinese computer and telecommunications enterprise selecting a Wolfson audio solution for its range of mobile phones
  • A Japanese multinational corporation selecting Wolfson’s Audio Hubs for a selection of its new mobile phone platforms
  • A large consumer electronics manufacturer selecting Wolfson’s Audio Digital Signal Processor (DSP) and Audio Hub for its latest media player

Outlook:

• Q2 2012 revenue is expected to be in the range of $36m - $42m. The sequential revenue growth is expected to be driven by new and existing smartphone and tablet computer customers ramping to volume manufacturing
• Gross margin in Q2 2012 is expected to be around 48% - 49% dependant on product mix
• As previously reported, as 2012 progresses and as design-ins translate into volume production, the Company expects a step up in revenues and a return to sustainable growth and underlying profitability
• The Company remains comfortable with current market consensus for the full year

Commenting on the results, Mike Hickey, CEO of Wolfson, said: “Revenue for the first quarter of 2012 was in line with previous guidance and reflected normal seasonality. The underlying fundamentals of the business have continued to improve as consumers demand better audio from their electronics products, such as smartphones, tablet computers and gaming devices. This is driving some quite disruptive technology trends that favour Wolfson products – resulting in a record design-in performance in the first quarter."

“These favourable technology trends, strong customer adoption and with record design-ins transitioning to revenue in line with our expectations, position the Company well for a step up in revenues and a return to underlying profitability as 2012 progresses.”

*Underlying results exclude: charges for the amortisation of acquired intangible assets (Q1 2012: $0.7m; Q1 2011: $1.3m) and share-based compensation charges, including associated payroll taxes (Q1 2012: $1.3m; Q1 2011: $1.2m). The term "underlying" is not defined in IFRS and therefore may not be comparable with similarly titled measures reported by other companies. Underlying measures are not intended as a substitute for, or a superior measure to, IFRS measures. 

Enquiries:

Mike Hickey, CEO, and Mark Cubitt, CFO, will be hosting a conference call to investors and analysts at 10.00 BST today: UK Dial-in 0800 634 5205; US Dial-in 1 866 629 2704. Replay of conference call will be available from 11.30 BST today on: +44 207 769 6425 or +1 630 652 3111, Access Pin 7180194#

This document contains certain statements that are not historical facts, including statements about Wolfson’s expectations and beliefs and statements with respect to its business plan, operations and financial performance and condition and other objectives.  Such statements are forward-looking statements.  These statements typically contain words such as “intends”, “expects” “anticipates”, “estimates”, “aims”, “believes”, “assumes”, “should”, and words of similar import, which are predictions of or indicate future events and future trends.  Undue reliance should not be placed on such statements, which are based on Wolfson’s current plans, estimates, projections and assumptions.  By their nature, forward-looking statements involve known and unknown risk and uncertainty because they relate to events and depend on circumstances which may occur in the future and which in some cases are beyond Wolfson’s control.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.  These factors include, but are not limited, to future revenues being lower than expected; increasing competitive pressures within the industry; general economic conditions or conditions affecting the relevant industries, both domestically and internationally, being less favourable than expected.