Press Releases

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 1 July 2012.

Strong sequential revenue growth and expected return to profitability in second half of 2012

Key financials for the second quarter 2012:

• Revenue of $40.3m, up 33% sequentially and 5% year-on-year (Q2 2011: $38.6m; Q1 2012: $30.3m)
• Gross margin of 48.5% (Q2 2011: 47.4%; Q1 2012: 49.0%)
• Underlying* operating loss improved to $1.3m (Q2 2011: $2.9m loss; Q1 2012: $6.4m loss)
• Operating loss improved to $3.0m (Q2 2011: $3.5m loss; Q1 2012: $8.4m loss)
• Cash and short-term deposits of $48.7m, with no debt

Key financials for the first half 2012:

• Revenue of $70.6m (H1 2011: $79.7m)
• Gross margin increased by 140 basis points to 48.7% (H1 2011: 47.3%)
• Underlying* operating loss of $7.7m (H1 2011: $3.9m loss)
• Operating loss of $11.4m (H1 2011: $6.9m loss)
• Net cash inflow from operating activities of $0.3m (H1 2011: $33.7m cash outflow)

Operational highlights for the first half 2012:

• Sales in mobile phones grew 30% year-on-year, driven in particular by smartphones
• Design-in value increased year-on-year to record levels driven by the adoption of Wolfson’s Audio Hub and micro-electro-mechanical systems (MEMS) microphone products by existing and new customers mainly for smartphones, tablet computers and other smart devices
• Launched ten new products, including the world’s first quad-core Audio SoC and the world’s first high performance integrated MEMS microphone
• Three Tier 1 manufacturers have selected Wolfson MEMS microphones for next generation products due to launch in the second half of 2012
• Market penetration has increased with new products launched during the first half of 2012 with Wolfson solutions inside that include:
  • Samsung selecting a Wolfson High Definition (HD) Audio Hub for inclusion in its new smartphone, the GALAXY SIII, launched in May 2012
  • Fujitsu, LG, Motorola, RIM, Samsung and Sony all launching mobile devices that feature Wolfson audio solutions
• Significant new design-ins in Q2 2012 include:
  • Two Tier 1 manufacturers selecting multiple products (Audio Hubs and MEMS microphones) for their new tablet computers
  • A leading mobile phone manufacturer selecting Wolfson’s Ambient Noise Cancellation (ANC) technology for inclusion in their next generation phone platforms
  • Two leading mobile phone manufacturers selecting Wolfson’s MEMS microphones for their next generation platforms
    

Outlook:

• Q3 2012 revenues are expected to be in the range of $46m to $54m, depending on customer new product ramps
• Q3 2012 gross margin is expected to remain around 48% to 49%, depending on product mix
• In contrast to a loss making first half of 2012, the Company expects to return to underlying profitability in the second half of 2012
• As previously announced, Wolfson continues to expect five new smartphone customers to add incremental revenue during full year 2012
• Despite the macro-economic environment continuing to be challenging, the Company remains comfortable with consensus for full year 2012

Commenting on the results, Mike Hickey, CEO of Wolfson, said: “Despite consumer market headwinds persisting, our first half results are in line with previous guidance and we have achieved considerable revenue momentum. Our Audio Hubs and MEMS microphones continue to be adopted at record levels by brand-leading companies, particularly in smartphones and tablet computers. Consumer demand for great audio in smart devices is driving this product adoption success.

“Customer new product launches, mainly smartphones with Wolfson devices inside, enabled strong sequential revenue growth of 33% in the second quarter. This momentum, coupled with further customer new product launches expected this year, positions the Company well to achieve a further step up in revenue and an anticipated return to underlying profitability in the second half of 2012.” 

*Underlying means after adding back amortisation of acquired intangible assets, share-based compensation charges and, in H1 2011 and in Q2 2011, the curtailment gain on the defined benefit pension plan. For loss per share purposes, this is calculated by adding back to net 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.

Download the 2012 2nd Quarter and Interim Results Presentation (PDF)

Enquiries:

Mike Hickey, CEO, and Mark Cubitt, CFO, will be hosting an audio webcast of the Wolfson Microelectronics plc 2012 Interim Results and presentation from 09.00 BST via http://www.wolfsonmicro.com/investor

Additionally, there is a dial in facility: UK freephone: 0800 634 5205; US toll free: 1 866 629 2704; International: +44 208 817 9301. Replay of conference call available from 11.30 BST on: +44 (0) 207 769 6425 or 00 3531 436 4267; Access Pin 7808730#

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.