Press Releases

Third quarter results to 30 September 2012

Date:
Tuesday, October 30, 2012

Wolfson Microelectronics plc (“Wolfson” or “the Company”), a leading supplier of mixed-signal semiconductors for consumer electronic products, announces its financial results for the third quarter ended 30 September 2012.

Q3 revenues up 32% and return to profitability

 Financial summary:

  • Revenues increased 32% sequentially and 31% year-on-year to $53.0m (Q2 2012: $40.3m; Q3 2011: $40.4m)
  • Gross margin of 47.5% (Q2 2012: 48.5%; Q3 2011: 49.7%)
  • Underlying* operating profit improved to $3.4m (Q2 2012: $1.3m loss; Q3 2011: $0.7m loss)
  • Operating profit improved to $1.6m (Q2 2012: $3.0m loss; Q3 2011: $10.0m loss)
  • Cash and short-term deposits increased to $49.2m (Q2 2012: $48.7m; Q3 2011: $48.2m), no debt

 Operational summary:

  • Very strong sales growth in Mobile Audio Hubs, which increased 53% year-on-year
  • Sales into mobile phones grew by 71% and tablet computers by 88% year-on-year. Overall strong Company growth was slightly moderated by reduced sales in gaming and home entertainment
  • Notable new customer products shipping with Wolfson devices inside during Q3 2012 included:
    • A new  leading consumer electronics customer in a smartphone accessory
    • Samsung’s GALAXY S III LTE smartphone, GALAXY Note II  and GALAXY Note 10.1 tablet device
    • Microsoft’s  new Surface tablet computer
    • A Tier 1 customer for its new range of high volume smartphones
    • Nokia’s Reaction Bluetooth® Headset
    • A large consumer electronics company’s range of  tablet computers
  • Micro-electro-mechanical-systems (MEMS) microphones are shipping to three major mobile device manufacturers and to multiple other customers in a wide range of consumer products, including a top of the range Japanese SLR digital camera
  • Design-in value continued to increase year-on-year driven by increasing adoption of Wolfson’s Audio Hub and MEMS microphone products at both existing and new customers
  • Product development performance maintained in Q3 2012 with the launch of six new products
  • Gross profit increased by 29% sequentially and 25% year-on-year supporting a return to operating profitability
  • Gross margin reduced sequentially from 48.5% to 47.5% being impacted by  product mix, a high volume product reaching volume price breaks quicker than anticipated and ahead of planned product cost reductions and costs associated with the volume production ramp of MEMS microphones


Outlook:

Near term

  • Strong revenue momentum is anticipated to continue into Q4 2012 and the Company expects revenues to be in the range of  $50m to $60m dependent on customer new product ramps and end product sell through 
  • Gross margin will continue to be impacted over the next couple of quarters as product mix is expected to shift to higher margin products, product cost reductions on a high volume product are realised and the MEMS volume production ramp period is completed. Gross margin is expected to be around 45% in Q4 2012 and around 47.5% for the full year 2012

Longer term

  • Wolfson’s strong revenue and design-in momentum positions the Company well for further strong revenue growth in 2013
  • Gross margin percentage is expected to return to traditional levels during 2013 

Commenting on the results, Mike Hickey, CEO of Wolfson, said:  “We are delighted to report that strong revenue growth has continued in the third quarter with revenues up over 30%, delivering the anticipated return to profitability. This growth is being driven by the increasing adoption of our industry-leading Audio Hubs and MEMS microphone products by brand-leading mobile phone and tablet computer manufacturers. 

“We expect this trend to continue into the fourth quarter, with incremental revenue from product adoptions supporting growth in full-year revenue and profit despite persistent macro-economic headwinds.”

*Underlying results exclude: charges for the amortisation of acquired intangible assets (Q3 2012: $0.3m; Q2 2012: $0.3m; Q3 2011: $1.3m) and share-based compensation charges (Q3 2012: $1.5m; Q2 2012: $1.4m; Q3 2011: $1.0m). Also in Q3 2011, exceptional charges of $7.0m are excluded. For earnings per share purposes, this is calculated by adding back to net profit/loss such items net of the estimated tax impact and dividing by the number of dilutive shares in issue. 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:

Wolfson Microelectronics

 

Mike Hickey, Chief Executive Officer

Mark Cubitt, Chief Financial Officer

0131 272 7000

 

 

Luther Pendragon

 

Harry Chathli, Claire Norbury

020 7618 9100

Mike Hickey, CEO, and Mark Cubitt, CFO, will be hosting a conference call to investors and analysts at 0900 GMT today. There is a dial-in facility: UK freephone: 0800 634 5205; US freephone: +1 866 629 2704; International: +44 (0)208 817 9301.  Replay of the conference call will be available from 1000 GMT today:

UK: +44 (0)207 769 6425, US: + 1630 652 3111 Passcode: 8924206#

An audio webcast of the call can be heard LIVE from 0900 GMT today via: http://www.wolfsonmicro.com/investor

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.

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Press Contacts

Technology PR

Chris King
EML Wildfire
wolfson@emlwildfire.com
+44 (0) 208 408 8000

Company Contacts

Derek Milne
Communications Director
Wolfson Microelectronics plc
derek.milne@wolfsonmicro.com
+44 (0) 131 272 7000

Laura Moore
PR Manager
Wolfson Microelectronics
laura.moore@wolfsonmicro.com
+44 (0)131 272 7137