Wolfson Microelectronics plc ("Wolfson" or "the Company"), a leading supplier of mixed-signal semiconductors and audio solutions for consumer electronic products, announces its financial results for the first quarter ended 31 March 2013.

Financial summary:

• Revenues up 59% year-on-year to $48.1m (Q1 2012: $30.3m)
• Gross margin reduced to 40.3% due to product mix as previously guided (Q1 2012: 49.0%), and is anticipated to improve during 2013 as product mix moves towards higher margin products
• Underlying* operating loss of $2.8m excluding restructuring and exceptional charges of $2.1m (Q1 2012: $6.4m loss)
• Operating loss of $6.3m (Q1 2012: $8.4m loss)

Operational summary:

• On 11 April 2013, Samsung and Wolfson signed a multi-year IP License and a Component Supply Agreement, which establishes Wolfson as a primary Samsung audio partner. As a result of this agreement, Wolfson expects to be a major audio component supplier for Samsung's GALAXY smartphones and tablets, including the Samsung GALAXY S4, in 2013
• Revenues from Mobile Audio Hubs grew over 100% year-on-year to 85% of Q1 2013 sales
• Micro-electro-mechanical systems (MEMS) microphones grew year-on-year, with further strong growth expected as 2013 progresses
• An existing North American smartphone customer has included Wolfson's Audio Hub in one of its recently announced flagship products
• Lenovo selected Wolfson audio products with integrated transmit path (Tx) and receive-path (Rx) noise reduction, and Ambient Noise Cancelling (ANC) technology, alongside an Intel® Atom Clover Trail+ processor, for its flagship IdeaPhone K900
• Continued expansion in China, shipping to three new smartphone customers, including Lenovo who were number two in smartphone share in China in 2012
• Two leading-brand manufacturers included Wolfson's audio solutions in their new gaming products

Outlook:

• Q2 2013 revenue is dependent on multiple customer new product launches and associated product ramps. Given normal variability in the timing of these, and some pre-shipments in Q1 2013 to support Q2 launches, Q2 2013 revenue is expected to be in the range of $44m - $54m, supporting strong year-on-year first half sales growth of between 33% and 44%
• Gross margin in Q2 2013 is expected to increase to around 43%, in line with a more favourable product mix, and is anticipated to improve further in the second half of 2013
• Based on continuing revenue and customer momentum, the Company remains well-positioned for a further step up in revenues in the second half of 2013 and strong full year revenue growth

Commenting on the results, Mike Hickey, CEO of Wolfson, said: "The growth momentum we built up last year has continued into the first quarter, with record first quarter sales up close to 60% year-on-year. This growth is being driven by our class-leading HD Audio solutions for smart mobile devices. We continue to build closer relationships with market leaders in smartphone and tablet applications and, encouragingly, we are also expanding our position in the fast-growing smartphone market in China and other emerging markets.

"With lots of exciting product launches by our customers, continued strong customer adoption and design-ins transitioning to revenue in line with our expectations, the Company remains well-positioned for another year of strong revenue growth in 2013."

*Underlying results exclude: charges for the amortisation of acquired intangible assets (Q1 2013: $0.4m; Q1 2012: $0.7m); share-based compensation charges, including associated payroll taxes (Q1 2013: $1.0m; Q1 2012: $1.3m); and, in Q1 2013, severance costs of $1.5m (Q1 2012: $nil) and an exceptional charge of $0.6m (Q1 2012: $nil). 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, CEO
Mark Cubitt, CFO
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 09.00 BST today: UK dial-in 0808 237 0030; US dial-in 1 866 928 7517; International dial-in +44 (0)203 139 4830. A replay of the conference call will be available from 11.30 BST today: UK 0808 237 0026; US 1 866 535 8030; International on: +44 (0)203 426 2807; Access Pin 638406#

Wolfson’s Ez2 control™ integrates Sensory’s TrulyHandsfree™ Voice Control speech recognition solution with Wolfson’s hardware solutions to deliver ‘always on’ voice control for smartphones and other devices at ultra-low power, removing the need for physical button-push activation, as required in current voice control applications. This solution is fully compatible with the Android Operating System to ensure there is no loss of functionality while working at ultra-low power. Ez2 control™ supports over 40 country languages, and could be adopted, along with Sensory’s TrulyHandsfree™ solution, by any original equipment manufacturer (OEM) looking to integrate sophisticated voice control features into devices. Crucially, it could prove far quicker and easier to integrate than a button-activated system, such as voice-activated controls in vehicles.

Traditionally, power consumption has been a barrier to complete hands-free voice control applications because ‘always on’ solutions were unfeasible, due to the high current drain from the battery by the application processor. However, Wolfson’s Ez2 control™ requires five times less power to run than existing market solutions. This makes it suitable to keep running in the background, always listening and waiting for a pre-programmed trigger word that will launch the full application and enable complete voice control functionality without any physical interaction.

Wolfson’s Ez2 hear™ Rx ANC delivers class-leading receive path (Rx) Ambient Noise Cancellation (ANC) to mobile applications, providing up to 20dB of noise reduction during mobile phone calls. Ez2 hear™ Rx ANC detects any background noise around the caller and creates an equal and opposite signal that neutralises the background noise, so that only the voice on the other end of the line is heard, resulting in crisp and clear voice calls, even in the noisiest environments, as well as less chance of those in conversation terminating the call as a result of background noise which can make communication difficult.

When integrated into a smartphone or tablet with the WM5110 HD Audio SoC, Ez2 hear™ Rx ANC removes the need for expensive noise cancelling headsets, since the noise cancelling technology is already built into the device. Low-cost ear bud headsets with one additional micro-electro-mechanical systems (MEMS) microphones built in to each bud will provide a real cost-effective in-box noise cancellation headset solution for smartphone and tablet OEMs.

Stephen Evans, VP of Software at Wolfson Microelectronics commented: “Voice is a natural and convenient way to interact, but having to activate it through touch detracts from its ease-of-use in real-world situations. Our Ez2 control™ technology is a crucial breakthrough that, alongside Sensory’s TrulyHandsfree™ solution, will elevate voice control beyond a novelty smartphone feature to fulfil its potential as the primary interaction interface in all sorts of future products such as televisions, washing machines and refrigerators.

“Additionally, consumers are increasingly demanding better quality voice calls, and our Ez2 hear™ Rx ANC is the perfect solution, enabling remarkably improved voice call quality regardless of whether you are in a noisy bar, busy train station or airport. Having noise cancellation technology built into the mobile device can, with the addition of a MEMS microphone in each ear bud, elevate a low-cost ear bud headset into a cost-effective in-box noise cancellation headset solution for smartphones and tablets.”

From Wolfson’s software suite, Ez2 control™ and Ez2 hear™ Rx ANC are the first of many software features to support the four HD Audio solutions categories: HD Audio Voice, HD Audio Playback, HD Audio Capture and HD Audio Share, which uniquely combine to provide a complete ‘mouth-to-ear’ audio experience.

HD Audio Voice features advanced noise cancelling techniques, such as Ez2 hear™ Rx ANC, to enable exceptionally crisp and clear voice calls in any environment; HD Audio Playback includes many sound enhancement features, for example, 5.1 Virtual Surround Sound, base and treble boost to allow music to be enjoyed at the highest quality in any environment; HD Audio Capture enables voice and gesture control of smart devices using Ez2 control™ and hi-fi audio recording on mobile devices in all environments, for example, at home, outside and even in a noisy venue like a club or concert; and HD Audio Share enables mobile phones, tablet computers, personal computers or televisions to be used in speaker mode for ultra-high quality mobile or internet conference calls,  both “near field” for  individual face-to-face calls, or “far field” for calls in a large conference room or living room with multiple people.

Wolfson Press Contacts:

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

Laura Moore
Wolfson Microelectronics plc
Tel: +44 (0)131 272 7000
Email: laura.moore@wolfsonmicro.com

The WM8997 high performance HD Audio Hub delivers an outstanding 102dB signal-to-noise ratio (SNR) at 6.5mW DAC to headphone playback power consumption, resulting in clear and crisp voice calls, as well as wonderfully sharp audio recordings and music playback. Its simultaneous SLIMbus^® and I2S functionality provides OEMs with platform architecture flexibility enabling standalone audio digital signal processors (DSPs) and ensures that the same audio solution can be re-used across any platform irrespective of the audio interface, saving development costs and time, and delivering an easily-integrated, future-proof solution.

The WM8997 digital core combines fixed-function signal processing blocks, including filters, equalisers, dynamic processors and sample rate converters, with a fully-flexible, all-digital audio mixing and routing engine for outstanding use case flexibility. It also enables the use of voice and gesture control, as well as a digital stylus. The WM8997 supports up to four microphone inputs, each either analogue or pulse density modulation (PDM) digital.

John Forsyth, VP Product Management, Audio Solutions at Wolfson, said: “The WM8997 is the latest addition to Wolfson’s award-winning Audio Hub family, and represents a highly flexible, cost-effective solution for mobile devices, while delivering the ultimate HD Audio performance - whether it is for voice calls, recording audio, or listening to music on a mobile device - helping OEMs to further differentiate their products in the market.”

Availability

The WM8997 is available for sampling now in limited quantities in a W-CSP package.

The WM5102 HD Audio SoC with voice processor DSP, combined with the WM2000 earpiece driver with ANC, helps smartphone manufacturers such as Lenovo deliver clearer, more natural-sounding voice calls, even in the noisiest environments. Featuring integrated transmit-path (Tx) noise reduction, echo cancellation and receive-path (Rx) noise reduction, the WM5102 enables intelligible, natural-sounding conversation and reduces background noise transmitted via voice calls by up to 90%, regardless of whether the caller is travelling through a busy train station, socialising in a bar or relaxing at home. Providing 113dB signal-to-noise ratio (SNR) and low power, high performance audio DSP, the WM5102 offers an outstanding HD Audio experience with minimal power consumption which OEMs can use across all smartphone application processor platforms, delivering a truly platform agnostic experience.

The WM2000 low power, high quality earpiece driver, with Wolfson’s Rx ANC technology built-in, uses a feed-forward system to provide up to 20dB of noise cancellation during a call, enabling users to effortlessly hear what is being said in noisy environments, and resulting in less chance of calls being terminated as a result of background noise which can make communication difficult.

The Lenovo IdeaPhone K900 runs on an Intel^® Atom processor, and will be available in China, the world’s largest smartphone market, imminently and selected other markets soon thereafter.

John Forsyth, VP Product Management, Audio Solutions at Wolfson, said: “Consumers are increasingly demanding outstanding audio experiences from their smartphones in even the noisiest environments, and we are delighted to work with Lenovo to help deliver exceptional audio to their flagship smartphone. Lenovo selecting our audio solutions for the IdeaPhone K900 is testament to our technology and expertise in providing differentiated audio experiences to many of the world’s leading consumer electronics applications.”

Edward Chang, Vice President and General Manager, Mobile Internet and Digital Home (MIDH) Mobile Business Unit, Research and Development, Lenovo, said: “Audio has become a key differentiator for consumers and an important aspect for our smartphone design. We selected Wolfson’s audio solutions for the IdeaPhone K900 as we recognized the unparalleled performance they deliver. Integrating Wolfson’s solutions into our IdeaPhone K900 will ensure our Lenovo consumers have an ultimate audio experience.”

About Wolfson Microelectronics plc

Wolfson Microelectronics plc is a global leader in the supply of high performance, mixed-signal semiconductor devices and audio solutions to the consumer electronics market. In the home, in the office and on the move, Wolfson’s innovative technology can be found at the heart of many of the world’s leading digital consumer goods, including premier hi-fi equipment, mobile phones, tablet computers, MP3 players, flat panel TVs, digital still cameras and portable navigation devices. 

The company’s headquarters is located in Edinburgh, UK. Wolfson’s customers are located worldwide, and so is Wolfson, with design centres, sales offices, applications teams and engineering expertise across Europe, the US, Australia and Asia.

Wolfson Microelectronics plc is listed on the London Stock Exchange (LSE: WLF.L).

For more information about Wolfson Microelectronics, please visit: http://www.wolfsonmicro.com

About Lenovo

Lenovo is a US$30 billion personal technology company, the second largest PC maker worldwide and an emerging PC Plus leader.

Serving customers in more than 160 countries, Lenovo’s business is built on product innovation, a highly-efficient global supply chain and strong strategic execution. Its product lines include a full range of commercial and consumer PCs, servers and workstations, and a family of mobile internet devices including smartphones and tablets.

A global Fortune 500 company, Lenovo taps into global expertise with major research centers at the Yamato lab in Japan; Beijing, Shanghai and Shenzhen in China; and Raleigh, NC in the U.S.

Approximately 27,000 employees worldwide.

Shares of Lenovo are listed in the Stock Exchange of Hong Kong (HKSE stock code:0992), and available in the form of ADR shares (ADR:LNVGY).

For more information about Lenovo, please visit: http://www.lenovo.com

This announcement builds on Wolfson and Samsung’s existing relationship, where Wolfson has provided outstanding audio performance for Samsung devices including its best-selling GALAXY S III, as well as its GALAXY Note II and GALAXY Note 10.1.

Mike Hickey, CEO of Wolfson, said: “This is a significant milestone for Wolfson, and we are delighted to be making this announcement. Having worked closely with Samsung over recent years on their GALAXY range of tablets and smartphones, this agreement is a testament to our strong IP portfolio and our growing partnership, and we very much look forward to working closely together to continue to deliver exceptional audio in Samsung’s smartphones and tablets.”

Notes to Editors

About Samsung Electronics Co., Ltd.

Samsung Electronics Co., Ltd. is a global leader in technology, opening new possibilities for people everywhere. Through relentless innovation and discovery, Samsung Electronics is transforming the worlds of televisions, smartphones, personal computers, printers, cameras, home appliances, LTE systems, medical devices, semiconductors and LED solutions. Samsung Electronics employs 236,000 people across 79 countries with annual sales of US$187.8 billion. To discover more, please visit www.samsung.com.

Samsung Press Contacts:

The Red Consultancy

samsungteam@redconsultancy.com 

About Wolfson Microelectronics plc 

Wolfson Microelectronics plc is a global leader in the supply of high performance, mixed-signal semiconductor devices and audio solutions to the consumer electronics market. In the home, in the office and on the move, Wolfson’s innovative technology can be found at the heart of many of the world’s leading digital consumer goods, including premier hi-fi equipment, mobile phones, tablet computers, MP3 players, flat panel TVs, digital still cameras and portable navigation devices. 

The company’s headquarters is located in Edinburgh, UK. Wolfson’s customers are located worldwide, and so is Wolfson, with design centres, sales offices, applications teams and engineering expertise across Europe, the US, Australia and Asia.

Wolfson Microelectronics plc is listed on the London Stock Exchange (LSE: WLF.L).

For more information about Wolfson Microelectronics, please visit: http://www.wolfsonmicro.com

Wolfson Microelectronics plc ("Wolfson" or "the Company"), a world leader in Audio Solutions for consumer electronic products, announces fourth quarter and audited full year results for 2012.

Fourth quarter 2012 summary:

• Revenue up 52% to $56.1m (Q4 2011: $36.9m)
• Gross margin of 43.9% (Q4 2011: 49.9%, before exceptional charges)
• Underlying* operating profit of $1.5m (Q4 2011: $2.9m loss)
• Operating profit of $0.5m** (Q4 2011: $7.2m loss)

Full year financial summary:

• Revenue up 15% to $179.7m (2011: $156.9m)
• Gross margin of 46.9% (2011: 48.5%, before exceptional charges)
• Underlying* operating loss of $2.9m (2011: $7.5m loss)
• Operating loss of $9.3m** (2011: $24.2m loss)
• Underlying* diluted loss per share of 1.0 cents (2011: 4.9 cents loss)
• Diluted loss per share of 5.2 cents (2011: 15.4 cents loss)
• Cash and short-term deposits at 30 December 2012 of $48.0m (1 Jan 2012: $53.4m), no debt

Full year 2012 operational summary:

• Built strong revenue momentum as 2012 progressed with year-on-year sales growing 52% in Q4 and 15% for the full year supporting a return to profitability in the second half of 2012
• Sales to mobile phones and tablet computer applications grew 60% year-on-year
• Strong performance from Audio Hubs and Micro-Electro-Mechanical Systems (MEMS) microphone product lines with Audio Hubs growing 27% overall, Mobile Audio Hubs growing by around 60% and MEMS microphones growing to 6% of Q4 2012 revenues
• Launched 21 new products, including the world's first quad core HD Audio System-on-a-Chip (SoC) and the world's first high performance integrated MEMS microphone
• Record estimated revenue value for new design-ins set in 2012 with Q4 2012 the best ever quarter for design-in value. The majority of the value of design-ins is for Audio Hubs with around 10% for MEMS microphones

Outlook:

In Q1 2013, given normal seasonality, the Company anticipates:

• Continuing revenue momentum with year-on-year revenue growth in the range of 40% - 60% ($42m to $48m) dependent on timing of customers' new product ramps
• Gross margin to be around 41% driven by near-term product mix

Looking further ahead:

• Gross margins are expected to improve strongly towards traditional levels as 2013 progresses primarily due to mix shifting to more value-added products and MEMS production reaching economic scale
• Strong end-markets in smartphones and tablet computers, the shift to higher added value products and design-in value at record levels in 2012, means the Company is well positioned for further strong growth in revenues and profitability during 2013

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

"By penetrating the most dynamic and fast-growing segments of the consumer electronics market, we have established strong revenue momentum, growing more than 50% year-on-year in the fourth quarter and, as anticipated, returned to profit in the second half of the year.

"We are increasing our market presence in smartphones and tablet computers, and are now shipping to most of the world's brand-leading mobile phone and tablet computer manufacturers. This, combined with our class-leading portfolio of audio products delivering another record year for new design-ins, positions the Company well for further strong growth in 2013."

*Underlying full year results exclude: charges for the amortisation of acquired intangible assets (2012: $1.7m; 2011: $5.5m) and share-based compensation charges, including associated payroll taxes (2012: $3.3m; 2011: $3.6m). Also, in 2012, an exceptional charge of $1.4m is excluded (2011: net exceptional charges of $7.6m 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.

** After exceptional charge for 2012 of $1.4m (2011: after net exceptional charges $7.6m) of which $1.4m was in Q4 2012 (Q4 2011: $2.4m charge).

Enquiries:

Wolfson Microelectronics
Mike Hickey, CEO
Mark Cubitt, CFO
020 7618 9100 On the day
0131 272 7000 Thereafter

Luther Pendragon
Harry Chathli
Claire Norbury
020 7618 9100

Download the Fourth Quarter and Full Year Results Presentation 2012 (PDF)

Mike Hickey, CEO, and Mark Cubitt, CFO, will be hosting a presentation to investors and analysts at 0900 GMT at JP Morgan, Holborn Bars, 138-142 Holborn, London EC1N 2NQ. An audio webcast of the Wolfson Microelectronics plc Full Year Results presentation can be heard LIVE from 0900 GMT via: http://www.wolfsonmicro.com/investor/

Additionally, there is a dial-in facility: UK freephone 0800 634 5205; US freephone +1 866 629 2704; International +44 (0)208 817 9301. A replay of the conference call is available from 1130 GMT on +44 (0)207 769 6425 or US +1 630 652 3111, Access Pin 9819393#

The Astell&Kern provides 24-bit 192kHz high resolution lossless sound in a portable digital music player, capable of playing Mastering Quality Sound (MQS) files as well as many other lossless audio file formats including Ogg, FlAC, WAV, WMA, APE and MP3 files. MQS files are used during the mastering process in recording studios and contain more than 6 times more information than compact discs (CDs) resulting in a more original, precise and enhanced sound.

As one of the world’s highest performing DACs, the WM8740 ensures that the audio quality of the Astell&Kern is as rich and warm as possible and that music is heard how the producer intended, while the WM8804 audio transceiver helps suppress any timing issues on the audio signal and removes any unwanted audio distortion at frequencies above 100Hz.

Mike Hickey, CEO of Wolfson, said: “The WM8740 typically features in premier hi-fi equipment and home theatre systems, and we are delighted that our high performing DAC has now been integrated into iriver’s Astell&Kern Portable Audio System, alongside our high performance WM8804 S/PDIF audio transceiver, to provide consumers with an outstanding hi-fi audio experience in a small portable device.”

Henry Park, CEO of iriver, said: “We adopted Wolfson’s WM8740 DAC for the Astell&Kern as we recognised its reputation for featuring in some of the world’s best high-end audio equipment. Its high signal-to-noise ratio (SNR) and low total harmonic distortion (THD), combined with the benefits of Wolfson’s WM8804 audio transceiver, ensures that the Astell&Kern provides the best possible audio clarity that cannot be heard through a standard CD.”

In addition to providing an outstanding hi-fi audio experience, the Astell&Kern can offer up to 96GB of total memory, a unique user interface with a combination of an integrated 2.4 inch touchscreen and control buttons, and a hand-crafted aluminium body.

*The S/PDIF (Sony/Philips Digital Interface Format) is a digital audio transfer system used in many consumer electronics applications worldwide.

About iriver

Iriver Ltd. is the global digital A/V product powerhouse with the world-famous iriver brand. Since its founding in 1999, iriver has become renowned for its award-winning product innovation and track record of market leadership. The Company’s ever expanding digital product lines include: Multimedia Devices (MP3, MP4, PMP, Mobile TV), Network Devices (Home Media Center, Wi-Fi Network, Navigation products) and Content Devices (E-Dictionary, E-Book). iriver’s products have been recognized and honored repeatedly by the world’s leading publications.

For more information about the Astell&Kern AK100, please visit http://www.astellnkern.com

For more information about iriver, please visit http://www.iriver.com

Wolfson Press Contacts:

Chris King/Ellie Dobson
EML Wildfire
Tel: +44 (0) 208 408 8000
Email: wolfson@emlwildfire.com

Laura Moore
Wolfson Microelectronics plc
Tel: +44 (0)131 272 7000
Email: laura.moore@wolfsonmicro.com

The Product Excellence Award recognises new and innovative thinking and demonstrable success; understanding the quality and reliability requirements of a given market sector; and delivery of the product to the market to the expected quality levels including a plan to tackle yield, quality or reliability issues.

As one of Wolfson’s most successful Audio Hubs to date, the WM1811 ultra-low power solution delivers outstanding voice call quality and audio playback to portable consumer electronic applications including smartphones and tablet computers. The WM1811 provides exceptional audio for leading consumer electronic applications including Samsung’s flagship smartphone, the GALAXY S III, as well as its GALAXY Note 10.1 tablet device, and its GALAXY Note II smartphone.

Rash Sahota, VP of Audio Solutions at Wolfson, said: “We are delighted to receive this award from NMI. Our Audio Hub technology is leading the way in the consumer electronics industry and it’s a great honour that the WM1811 is being recognised for its innovation and success in delivering excellent audio quality to world-leading consumer electronics applications.”

Speaking at the event, Derek Boyd, CEO of UK electronics trade organisation NMI, said: “The UK provides a lot of world beating innovation and products that enable exciting capabilities within the tight constraints of market opportunities. It was therefore difficult for the judges. The WM1811 is top quality product, with a high level of integration and we were delighted to award this to Wolfson.”

Press image details: Rash Sahota, VP of Audio Solutions at Wolfson Microelectronics (centre) receives the Product Excellence Award from Derek Boyd, CEO of NMI (left); and Kees Revenberg, Operations Manager of Maser Engineering, award category sponsor (right).

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:

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.

Wolfson Microelectronics plc has today announced the introduction of the WM7121 and WM7132, Wolfson’s first high performance top and bottom port silicon analogue micro-electro-mechanical systems (MEMS) microphones with matching frequency responses, designed to deliver outstanding audio quality to a wide range of consumer electronics applications.

High Definition (HD) video is now expected as standard in most portable consumer electronic devices, and with 70% of under-18 year olds capturing video on their mobile phones every week*, the need for High Definition (HD) Audio to match the HD Video in their devices has never been greater. With a high signal-to-noise ratio (SNR) of 65dB, ultra-low distortion and matching responses across the frequency band from 10Hz to 20kHz, the WM7121 and the WM7132 deliver superior HD Audio quality and highly authentic audio recordings for a wide variety of portable applications including mobile phones, Bluetooth^® headsets, navigation devices, gaming consoles and both digital still and digital video cameras.

As well their matching frequency responses, the WM7121 and WM7132 microphones also feature matching phase responses and matching sensitivity, making them ideal for stereo recording and much easier for designers to integrate into their systems.  Both devices are also available with market-leading sensitivity tolerance of ±1dB.

Eadaoin Doherty, Wolfson’s Product Line Manager for MEMS Microphones, said: “The WM7121 and WM7132 are among the first microphones in the industry to offer matching frequency responses. This feature, as well as their matching phase responses and sensitivity, ensures that these microphones are easy to integrate and result in truly authentic audio recordings and crystal-clear audio playback.”

The WM7121 and WM7132 both incorporate Wolfson’s proprietary CMOS / MEMS membrane technology, offering high reliability and high performance in a miniature, low profile package. Both parts are designed to withstand the high temperatures associated with automated flow solder assembly processes, which can often damage conventional microphones, making them ideal for high volume manufacturing.

* Data sourced from a GSM Arena online survey

Availability

The WM7121 top port package and the WM7132 bottom port package are both available for sampling now.

Wolfson Press Contacts:

Chris King/Ellen Sinclair
EML Wildfire
Tel: +44 (0) 208 408 8000
Email: wolfson@emlwildfire.com

Laura Moore
Wolfson Microelectronics plc
Tel: +44 (0)131 272 7000
Email: laura.moore@wolfsonmicro.com