Wolfson Microelectronics plc (“Wolfson” or “the Company”), a leading supplier of mixed-signal semiconductors for consumer electronic products, announces its financial results for the second quarter and half year ended 29 June 2008.

Second quarter highlights: 

• Revenue up 9% to $53.9m (Q2 2007: $49.5m), in line with guidance
• Gross margin of 51.7% (Q2 2007: 52.8%) (Q1 2008: 52.0%) 
• Adjusted operating profit* of $6.7m (Q2 2007: $7.1m)
• Operating profit of $5.5m (Q2 2007: $7.1m)
• Adjusted diluted earnings per share* of 4.4 cents (Q2 2007: 5.0 cents)
• Diluted earnings per share of 3.7 cents (Q2 2007: 5.0 cents)

First half financial highlights:

• Revenue up 12% to $100.3m (H1 2007: $89.6m)
• Gross margin of 51.8% (H1 2007: 52.8%)
• Adjusted operating profit* of $10.4m (H1 2007: $10.4m) 
• Operating profit of $7.9m (H1 2007: $10.2m)
• Like for like adjusted operating profit** up 25% to $13.6m (H1 2007: $10.9m)
• Adjusted diluted earnings per share* of 7.0 cents (H1 2007: 7.7 cents)
• Diluted earnings per share of cents of 5.5 cents (H1 2007: 7.6 cents)
• Like for like adjusted diluted earnings per share** up 16% to 9.4 cents (H1 2007: 8.1 cents)
• Net cash balance at 29 June 2008 of $84.8m

Operating highlights

• Mobile handset revenue up 50% on H1 2007, representing 25% of total Company revenue, demonstrating Wolfson’s momentum in the smart phones market
• Strong revenue growth from digital still cameras, gaming, automotive and headsets, more than offsetting declines in Portable Media Players (PMP)
• Continue to broaden and balance customer base; top 10 customers represented 59% of revenues with top two accounting for 10% each
• Excellent design win momentum across a broad range of Tier 1 and Tier 2 customers
• Continuing strong product innovation and implementation of Wolfson AudioPlus™ products and technologies
  - Launched the WM8903, the next generation ultra low power device further extending playback times
  - Wolfson’s integrated audio and power management products gain momentum with a number of new design wins, anticipated to contribute to revenue in 2009
  - First active noise cancellation chip for mobile phones being sampled by handset manufacturers. This product enables greater call intelligibility for the recipient in noisy environments
  - First chip implementing MEMS technology for silicon microphone products now being sampled with certain key customers, with initial revenues anticipated in Q4 2008

Outlook 

• Third quarter revenues forecast to be in the range of $56m - $62m
• Gross margins anticipated to be around 52%
• Uncertain macro environment impacting customer demand patterns
• Active programme to review non R&D cost base
• Board approves purchase of up to 10% of the outstanding shares in issue

Commenting on the results Dave Shrigley, Chief Executive Officer of Wolfson, said: “We delivered to our plan in the first half of 2008. The established business grew while we continued the investment phase of our AudioPlus™ strategy to enable an expansion of our product offering and addressable markets for the future. While we expect a third quarter seasonal uptick in trading, the weaker macro environment is impacting our customer order patterns leading us to be cautious in our guidance today. Looking ahead, our investments are on track and we are pleased with their progress. Our design win momentum, customer base and longer term prospects continue to be excellent and position us to benefit when market conditions improve.”

*Adjusted means after adding back amortisation of acquired intangible assets. For earnings per share purposes, this is calculated by adding back to net profit such cost net of the estimated tax impact and dividing by the number of dilutive shares in issue
** For illustrative purposes like for like adjusted means after adding back the costs incurred by the 2007 acquired businesses (deducting any revenues generated) and adding back amortisation of acquired intangible assets. For earnings per share purposes, this is calculated by adding back to net profit such costs net of the estimated tax impact of such costs and dividing by the number of dilutive shares in issue.
Enquiries:

Wolfson Microelectronics
Dave Shrigley, Chief Executive
Mark Cubitt, Finance Director 0131 272 7000

Corfin Communications
Harry Chathli, Neil Thapar 020 7977 0020 

WEBCAST
Dave Shrigley, CEO and Mark Cubitt, Finance Director, will be hosting a conference call for investors and analysts at 0815 BST. UK Dial-in +44 20 3023 4494; US Dial-in +1 866 966 5335. The conference call can also be heard LIVE from 0815 BST via http://www.wolfsonmicro.com/investor 
Replay of the conference call is available from 1030 BST: on +44 (0)20 8196 1998 or +1866 583 1035 Access Pin 606587#.

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.