Wolfson Microelectronics plc: News : Third quarter results to 4 October 2009

Further information

Third quarter results to 4 October 2009

Wednesday, October 28, 2009

Strong new product development and customer design-in momentum achieved in tandem with prudent cost and cash management

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 4 October 2009, in-line with previous guidance.

Third quarter financial highlights:

Revenues up 6.5% sequentially to $35.4m (Q3 2008: $60.5m)
Gross margin of 51.0% (Q3 2008: 50.1%)
Underlying* operating expenses reduced to $17.6m (Q3 2008: $20.4m)
Underlying* operating profit of $0.4m (Q3 2008: $9.9m)
Operating loss of $2.3m (Q3 2008: $5.0m profit)
Cash balance at 4 October 2009 $100.3m (28 September 2008: $88.8m) with no debt

Third quarter operational highlights:

Continue to deliver on 2009 plan, including:
On target to double the number of new products introduced in 2009 over 2008
No cash burn expected for full year as a result of strict cost control
Latest audio hub products have been selected for another 15 high volume consumer electronics products including multiple Tier 1 mobile phones
Further design-in success with our Ambient Noise Cancellation (ANC) products for handsets, headsets and headphones. During the quarter our WM2000 device has been selected for a Tier 1 customer handset and a Tier 2 customer handset. In headsets and headphones we have secured another two major brand design–ins
Continued progress with Power Management products, including portable media player design wins with Microsoft Zune HD and Samsung M1. In addition, IREX Technologies has selected our WM8352 power management device for its new touch-screen eReader, the DR800SG
New family of digital still camera (DSC) products introduced and gaining traction
Continued to build momentum for silicon microphones with major customer design-ins, with delivery of quarter on quarter revenue growth

Outlook

No change to poor overall visibility of end customer demand, with very short lead times and volatile ordering patterns
Backlog for Q4 2009 is currently $22.5m compared to $26m at the equivalent point in Q3 2009. Traditionally Wolfson backlog for the fourth quarter builds at an earlier stage than for the other calendar quarters
Q4 2009 gross margin expected to be around 51%

Commenting on the results, Mike Hickey, CEO of Wolfson said: “We continue to execute to our 2009 plan of refreshing our product portfolio whilst conserving cash. Operating costs have been managed tightly and our financial position remains healthy. Current trading remains challenging as the full impact of previously announced design losses works through. We are confident of the material positive effect that our new product design wins will have on revenues as we progress through 2010. We continue to introduce a record number of new products and customer response to these products has been very encouraging. This is evidenced by our selection for many new end products by our existing customers and also by several new customers across the applications we serve, including a new Tier 1 mobile phone customer. We have some great parts in some exciting products and are building a solid foundation for an accelerating recovery as these end products are launched through 2010.”

Enquiries:

Wolfson Microelectronics
Mike Hickey, Chief Executive
Mark Cubitt, Finance Director 0131 272 7000

Corfin Communications
Harry Chathli, Neil Thapar 020 7977 0020

Mike Hickey, CEO and Mark Cubitt, Finance Director, will be hosting a conference call to investors and analysts at 0900 GMT today. There is a dial-in facility: UK Dial-in +44 (0) 20 3023 4494; US Dial-in +1 866 966 5335. Replay of the conference call will be available from 1000 GMT today on: +44 (0) 20 8196 1998 or +1 866 583 1035 Access Pin 606587#

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

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.

Full Press Release

Third quarter results to 4 October 2009 (551k)

CONTACTS FOR PRESS RELEASE SUPPORT MATERIALS

CORPORATE

Allan Hughes
VP Product & Solutions Marketing
Wolfson Microelectronics plc
allan.hughes@wolfsonmicro.com
+44 (0) 131 272 7000

US

Al Haun
Precision Communications
al_haun@comcast.net
+1 (508) 876 9400

EUROPE

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

JAPAN

David Huerta
Jspin Communications
david@jspin.co.jp
+81 352 691 038

CHINA

Sunray Liu
Beijing New Synergy Consulting
sunray@1and7.com
+86 10 8811 3067

SOUTH KOREA

Terry Kim
Shout Korea Communications
wolfson@shoutkorea.com
+82 255 89890

TAIWAN

Thomas Chou
Access PR
wolfson@accesspr.com.tw
+ 888 2 8773 4277

ROW