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Fourth Quarter and Full Year Results to 3 January 2010

Tuesday, February 09, 2010

Wolfson Microelectronics plc (“Wolfson” or “the Company”), a leading supplier of mixed-signal semiconductors for consumer electronic products, announces fourth quarter and audited full year results for 2009.

Mike Ruettgers, Chairman of Wolfson Microelectronics, said:

“2009 was a difficult year across the consumer electronics industry. Wolfson battened down the hatches, achieved its objectives and successfully expanded the product base. Current traction from the portfolio refresh underscores our confidence of returning to significant growth in the second half of 2010.”

Key financials for full year 2009:

  • Revenue of $121.3m (2008: $198.2m)
  • Gross margin of 50.7% (2008: 50.9% before exceptional charge)
  • Underlying* operating expenses reduced to $69.2m (2008: $77.9m)
  • Underlying* operating loss of $7.7m (2008: $22.9m profit)
  • Operating loss of $15.3m, before exceptional charge (2008: $14.7m profit before exceptional charges)
  • Underlying* diluted loss per share of 3.8 cents (2008: 15.4 cents earnings)
  • Diluted loss per share of 8.9 cents (2008: 6.5 cents earnings)
  • Net cash inflow from operating activities of $11.8m (2008: $16.0m)
  • Cash and short term deposits balance at 3 January 2010 of $97.8m (28 December 2008: $92.2m) and no debt
     

Key financials for fourth quarter 2009:

  • Revenue of $27.5m (Q4 2008: $37.4m)
  • Gross margin of 50.9% (Q4 2008: 49.5% before exceptional charge)
  • Underlying* operating loss of $4.3m (Q4 2008: $0.8m profit)
  • Operating loss of $5.9m (Q4 2008: $1.1m profit before exceptional charge)
     

Full year 2009 operational highlights:

  • More than double the product development output compared with 2008, launching 34 new products, whilst holding R&D expenditure broadly flat
  • Wolfson AudioPlus™ Power Management, MEMS Microphones and Noise Cancellation technologies, all now shipping and starting to generate revenue
  • More than 250 design-ins with existing and new customers, including many Tier 1s. Around one-third are in volume production and the balance is expected to ramp during 2010
  • New product developments increase Wolfson’s serviceable addressable market (SAM) from $1.0bn in 2009 to $3.0bn in 2010 and this is expected to grow to $5.0bn by 2012
     

Post Period Developments:

  • Extension of Wolfson’s audio hubs family, which is primarily targeted at mobile phones, with the addition of the WM8995, the world’s first digital audio hub solution
  • Introduction of the WM9010 and the WM9090 audio amplifiers, targeted at high volume, mass market mobile phones, enabling Wolfson to compete across all handset tiers
  • Introduction of the WM182, Wolfson’s first stereo ear-bud noise cancelling headset reference solution
     

Outlook:

  • Revenue visibility is improving with order lead times lengthening, but is highly dependent on customers new product introduction ramps
  • Backlog for Q1 2010 is currently $23.0m compared to $24.1m at the equivalent point in Q4 2009
  • Q1 2010 gross margin expected to remain in the range of 50% - 51%
  • Encouraging design-in traction with new customer product releases improves confidence of significant revenue growth as Wolfson progresses through 2010
     

Commenting on the results, Mike Hickey, CEO of Wolfson Microelectronics, said:

“We expected 2009 to be a tough year due to poor market conditions, a portfolio in transition and well documented design losses at a major customer, and this proved to be the case. Given the challenging conditions that we faced at the beginning of 2009, we set ourselves the objectives of aggressively renewing our product portfolio whilst remaining financially prudent and conserving our healthy cash position.

“I am pleased to report that we successfully delivered on all those objectives and in doing so, have built solid foundations for growth. We introduced twice as many new products in 2009 as we did in 2008 and have significantly enhanced our portfolio across all product lines. All our new Wolfson AudioPlus™ products are now shipping and are starting to generate revenues. At the same time, we reduced our operating expenses by over 10% and increased our cash reserves.

“Looking forward, two-thirds of the 250 plus design-ins we secured in 2009 are expected to ramp into volume production during 2010, and this should increasingly benefit us as we progress through the year ahead. Meanwhile, our addressable market continues to grow as we further extend our portfolio. Given the improvements in our product competitiveness, evidenced by growing traction with customers, including many Tier 1 brands, and the increasing size of our addressable market, we believe we are well positioned to return to growth and sustainable profitability.”

Enquiries:

Wolfson Microelectronics
Mike Hickey, CEO
Mark Cubitt, CFO
020 7977 0020 On the day
0131 272 7000 Thereafter

Corfin Communications
Harry Chathli, Neil Thapar
020 7977 0020

Mike Hickey, CEO, and Mark Cubitt, CFO, will be hosting a presentation to investors and analysts at 09.30 GMT at JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. An audio webcast of the Wolfson Microelectronics plc Full Year Results and presentation can be heard LIVE from 09.30 GMT via http://www.wolfsonmicro.com/investor or www.streetevents.com

Additionally, there is a dial in facility: UK Dial-in +44 (0)20 3023 4494; US Dial-in +1 866 966 5335. A replay of the conference call is available from 10.30 GMT on: +44 (0)20 8196 1998 or +1 866 583 1035, Access Pin 606587#

*Underlying results exclude: charges for the amortisation of acquired intangible assets (2009: $5.0m; 2008: $5.0m) and share-based compensation charges (2009: $2.6m; 2008: $3.2m). Also, in 2009 and 2008 exceptional charges of $0.5m and $6.4m respectively are excluded. 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.

 
 
CONTACTS FOR PRESS RELEASE SUPPORT MATERIALS
CORPORATE

Allan Hughes
VP 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

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