EX-99.1 2 d342271dex991.htm PRESS RELEASE PRESS RELEASE

Exhibit 99.1

Press Release

Contact:

 

Kevin S. Bauer

Sr. Vice President and CFO

510-668-7119

       For Release May 3, 2012 4:05 p.m. EDT

Exar Corporation Reports Fiscal 2012 Fourth Quarter Results

Fiscal Year End 2012 Results and Completion of Planned Restructuring

Fremont, California, May 3, 2012 – Exar Corporation (Nasdaq: EXAR) today reported financial results for the Company’s fourth quarter and fiscal year 2012 ended April 1, 2012. The Company reported revenue of $27.8 million for the fourth quarter of fiscal year 2012 and $130.6 million for fiscal year 2012.

Company president and CEO Louis DiNardo commented, “During the fourth quarter of fiscal year 2012, we executed a strategy to reduce our workforce and align resources with our market, product and financial plans. The gross impact of these actions represents over $22 million in annual expense savings and will be reflected in our financial performance in the coming year. Additionally, we strengthened our marketing, design, test and operations organizations during the quarter and established a focused plan to achieve profitability in fiscal year 2013.”

“This quarter our Power Management product sales grew over 12% and our Connectivity product sales grew 3%. This growth was offset by continued weakness in the Communications market and inventory adjustments at our major customers in the Networking market. Our book-to-bill for the quarter was greater than one-to-one and we expect growth in all of our product areas in the first quarter of fiscal year 2013,” added Mr. DiNardo.

For the first quarter of fiscal year 2013 ending July 1, 2012, the Company projects that net sales will grow between 5% and 10%. The non-GAAP gross margin is currently expected to be between 46% and 48%. Non-GAAP operating expenses are expected to be between $13 million and $14 million and earnings per share are expected to be between $0.01 and 0.03 per fully diluted share on a non-GAAP basis.

The following non-GAAP financial information excludes stock-based compensation, amortization of acquired intangible assets, restructuring and exit charges, separation costs, provision for dispute resolution, impairment of purchased intangible assets, and related tax effects. See “Generally Accepted Accounting Principles” below for further description.

NON-GAAP FINANCIAL COMPARISON

(In millions, except per share amounts)

(Unaudited)

 

                                
     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
     APRIL 1,     JANUARY 1,     MARCH 27,     APRIL 1,     MARCH 27,  
     2012     2012     2011     2012     2011  

Net sales

    $ 27.8      $ 29.7      $ 33.8      $ 130.6      $ 146.0   

Gross margin

      40.0 %      48.4 %      46.1 %      46.8 %      49.9 % 

Loss from operations

    $ (5.4 )    $ (2.4 )    $ (5.4 )    $ (6.9 )    $ (11.7 ) 

Net loss

    $ (4.6 )    $ (1.9 )    $ (4.6 )    $ (4.5 )    $ (7.2 ) 

Basic loss per share

    $ (0.10 )    $ (0.04 )    $ (0.10 )    $ (0.10 )    $ (0.16 ) 

GAAP FINANCIAL COMPARISON

(In millions, except per share amounts)

(Unaudited)

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
     APRIL 1,     JANUARY 1,     MARCH 27,     APRIL 1,     MARCH 27,  
     2012     2012     2011     2012     2011  

Net sales

    $ 27.8      $ 29.7      $ 33.8      $ 130.6      $ 146.0   

Gross margin

      32.4 %      45.0 %      35.0 %      42.8 %      43.8 % 

Loss from operations

    $ (22.3 )    $ (5.4 )    $ (19.5 )    $ (31.3 )    $ (40.0 ) 

Net loss

    $ (21.6 )    $ (4.7 )    $ (18.8 )    $ (28.8 )    $ (35.7 ) 

Basic loss per share

    $ (0.48 )    $ (0.11 )    $ (0.42 )    $ (0.64 )    $ (0.81 ) 

Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company’s financial results for the fourth quarter and fiscal year 2012, today, Thursday, May 3 at 1:30 p.m. PDT. To access the conference call, please dial (800) 288-8960 by 1:20 p.m. PDT and use conference ID number 245707. In addition, a live webcast will also be available.

To access the webcast, please go to the Company’s Investors’ Relations Homepage at: http://www.exar.com/news/investornews.aspx. A replay of the call will be available starting at 3:00 p.m. PDT on May 3, 2012 until 11:59 p.m. PDT on May 10, 2012. To access the replay, please dial (800) 475-6701 and use conference ID number 245707.

About Exar

Exar Corporation designs, develops and markets high performance analog mixed-signal integrated circuits and advanced sub-system solutions for data communication, networking, storage, consumer and industrial applications. Exar’s product portfolio includes power management and connectivity components, communications products, network security and storage optimization solutions. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit http://www.exar.com.

Safe Harbor Statement

The Company’s statements about its future financial or business performance, changes in gross margins, net sales and operating expenses are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as vendor capacity, quality or throughput constraints; possible disruption in commercial activities; successful development, market acceptance and demand for the Company’s products; accounting considerations; and the level of inventories maintained at the Company’s OEMs and distributors, as well as the other risks detailed from time to time in the Company’s SEC reports, including the Annual Report on Form 10-K for the year ended March 27, 2011 and the Quarterly Reports on Form 10-Q for the periods ended July 3, 2011, October 2, 2011 and January 1, 2012.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company’s website: http://www.exar.com or the SEC’s website at: http://www.sec.gov. For the periods presented, we are disclosing non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss, and non-GAAP loss per share, which are adjusted to exclude from our GAAP results all stock-based compensation, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, separation costs, provision for dispute resolution, impairment of acquired intangible assets, restructuring charges and exit costs, impairment charges on investments, and income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company’s historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company’s future periods. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures.

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
     APRIL 1,     JANUARY 1,     MARCH 27,     APRIL 1,     MARCH 27,  
     2012     2012     2011     2012     2011  

Net sales

    $ 18,256      $ 20,749      $ 22,579      $ 89,988      $ 101,721   

Net sales, related party

      9,533        8,930        11,192        40,578        44,284   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total net sales

      27,789        29,679        33,771        130,566        146,005   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales:

           

Cost of sales

      11,721        11,130        12,754        49,849        52,780   

Cost of sales, related party

      5,021        4,299        5,555        19,888        20,972   

Amortization of acquired intangible assets

      888        905        1,443        3,603        6,044   

Restructuring charges and exit costs

      1,160        —          2,212        1,312        2,212   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total cost of sales

      18,790        16,334        21,964        74,652        82,008   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      8,999        13,345        11,807        55,914        63,997   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating expenses:

           

Research and development

      8,486        8,871        11,534        35,475        49,888   

Selling, general and administrative

      10,036        9,909        10,929        38,860        45,267   

Impairment of acquired intangible assets

      —          —          7,485        —          7,485   

Restructuring charges and exit costs

      12,740        —          1,375        12,913        1,375   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      31,262        18,780        31,323        87,248        104,015   

Loss from operations

      (22,263 )      (5,435 )      (19,516 )      (31,334 )      (40,018 ) 

Other income and expense, net:

           

Interest income and other, net

      784        593        1,157        2,803        5,925   

Interest expense

      (34 )      (60 )      (311 )      (215 )      (1,258 ) 

Impairment charges on investments

      —          —          —          —          (62 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other income and expense, net

      750        533        846        2,588        4,605   

Loss before income taxes

      (21,513 )      (4,902 )      (18,670 )      (28,746 )      (35,413 ) 

Provision for (benefit from) income taxes

      48        (169 )      166        51        255   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loss

    $ (21,561 )    $ (4,733 )    $ (18,836 )    $ (28,797 )    $ (35,668 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loss per share:

           

Basic loss per share

    $ (0.48 )    $ (0.11 )    $ (0.42 )    $ (0.64 )    $ (0.81 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted loss per share

    $ (0.48 )    $ (0.11 )    $ (0.42 )    $ (0.64 )    $ (0.81 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares used in the computation of loss per share:

           

Basic

      45,012        44,830        44,503        44,796        44,218   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

      45,012        44,830        44,503        44,796        44,218   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Note: Certain amounts previously reported above have been reclassified to conform to the current period presentation.

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(Unaudited)

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
     APRIL 1,     JANUARY 1,     MARCH 27,     APRIL 1,     MARCH 27,  
     2012     2012     2011     2012     2011  

Net Sales

    $ 27,789      $ 29,679      $ 33,771      $ 130,566      $ 146,005   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP gross profit

    $ 8,999      $ 13,345      $ 11,807      $ 55,914      $ 63,997   

GAAP gross margin

      32.4 %      45.0 %      35.0 %      42.8 %      43.8 % 

Stock-based compensation

      79        104        93        311        489   

Amortization of acquired intangible assets

      888        905        1,443        3,603        6,044   

Fair value adjustment of acquired inventories

      —          —          —          —          42   

Restructuring charges and exit costs

      1,160        —          2,212        1,312        2,212   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP gross profit

    $ 11,126      $ 14,354      $ 15,555      $ 61,140      $ 72,784   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP gross margin

      40.0 %      48.4 %      46.1 %      46.8 %      49.9 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP research and development expenses

    $ 8,486      $ 8,871      $ 11,534      $ 35,475      $ 49,888   

Stock-based compensation

      342        576        375        1,708        3,241   

Amortization of acquired intangible assets

      —          —          72        —          2,292   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP research and development expenses

    $ 8,144      $ 8,295      $ 11,087      $ 33,767      $ 44,355   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP selling, general and administrative expenses

    $ 10,036      $ 9,909      $ 10,929      $ 38,860      $ 45,267   

Stock-based compensation

      676        653        769        2,472        3,651   

Amortization of acquired intangible assets

      174        174        254        696        1,143   

Acquisition-related costs

      —          —          —          —          328   

Separation costs

      —          575        —          575        —     

Provision for dispute resolution

      820        —          —          820        —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP selling, general and administrative expenses

    $ 8,366      $ 8,507      $ 9,906      $ 34,297      $ 40,145   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP operating expenses

    $ 31,262      $ 18,780      $ 31,323      $ 87,248      $ 104,015   

Stock-based compensation

      1,018        1,229        1,144        4,180        6,892   

Amortization of acquired intangible assets

      174        174        326        696        3,435   

Acquisition-related costs

      —          —          —          —          328   

Separation costs

      —          575        —          575        —     

Provision for dispute resolution

      820        —          —          820        —     

Impairment of acquired intangible assets

      —          —          7,485        —          7,485   

Restructuring charges and exit costs

      12,740        —          1,375        12,913        1,375   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP operating expenses

    $ 16,510      $ 16,802      $ 20,993      $ 68,064      $ 84,500   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP operating loss

    $ (22,263 )    $ (5,435 )    $ (19,516 )    $ (31,334 )    $ (40,018 ) 

Stock-based compensation

      1,097        1,333        1,237        4,491        7,381   

Amortization of acquired intangible assets

      1,062        1,079        1,769        4,299        9,479   

Fair value adjustment of acquired inventories

      —          —          —          —          42   

Acquisition-related costs

      —          —          —          —          328   

Separation costs

      —          575        —          575        —     

Provision for dispute resolution

      820        —          —          820        —     

Impairment of acquired intangible assets

      —          —          7,485        —          7,485   

Restructuring charges and exit costs

      13,900        —          3,587        14,225        3,587   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP operating loss

    $ (5,384 )    $ (2,448 )    $ (5,438 )    $ (6,924 )    $ (11,716 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP net loss

    $ (21,561 )    $ (4,733 )    $ (18,836 )    $ (28,797 )    $ (35,668 ) 

Stock-based compensation

      1,097        1,333        1,237        4,491        7,381   

Amortization of acquired intangible assets

      1,062        1,079        1,769        4,299        9,479   

Fair value adjustment of acquired inventories

      —          —          —          —          42   

Acquisition-related costs

      —          —          —          —          328   

Separation costs

      —          575        —          575        —     

Provision for dispute resolution

      820        —          —          820        —     

Impairment of acquired intangible assets

      —          —          7,485        —          7,485   

Restructuring charges and exit costs

      13,900        —          3,587        14,225        3,587   

Impairment charges on investments

      —          —          —          —          62   

Income tax effects

      44        (194 )      129        (71 )      76   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP net loss

    $ (4,638 )    $ (1,940 )    $ (4,629 )    $ (4,458 )    $ (7,228 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP loss per share

    $ (0.48 )    $ (0.11 )    $ (0.42 )    $ (0.64 )    $ (0.81 ) 

Stock-based compensation

      0.02        0.03        0.03        0.10        0.17   

Amortization of acquired intangible assets

      0.02        0.02        0.04        0.10        0.21   

Fair value adjustment of acquired inventories

      —          —          —          —          0.00   

Acquisition-related costs

      —          —          —          —          0.01   

Separation costs

      —          0.01        —          0.01        —     

Provision for dispute resolution

      0.02        —          —          0.02        —     

Impairment of purchased intangible assets

      —          —          0.17        —          0.17   

Restructuring charges and exit costs

      0.31        —          0.08        0.32        0.08   

Impairment charges on investments

      —          —          —          —          0.00   

Income tax effects

      0.00        (0.00 )      0.00        (0.00 )      0.00   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-GAAP loss per share

    $ (0.10 )    $ (0.04 )    $ (0.10 )    $ (0.10 )    $ (0.16 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares used in the computation of loss per share—GAAP

      45,012        44,830        44,503        44,796        44,218   

The effect of dilutive potential common shares due to reporting Non-GAAP net income

      —          —          —          —          —     

The effect of removing stock-based compensation expense under ASC 718 for Non-GAAP presentation purpose

      —          —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares used in the computation of loss per share—Non-GAAP

      45,012        44,830        44,503        44,796        44,218   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Note: Certain amounts previously reported above have been reclassified to conform to the current period presentation.

Certain amounts may not total due to rounding.

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

 

     APRIL 1,     MARCH 27,  
     2012     2011  

ASSETS

     

Current assets:

     

Cash and cash equivalents

    $ 8,714      $ 15,039   

Short-term marketable securities

      187,668        185,960   

Accounts receivable (net of allowances of $781 and $1,165)

      8,454        9,776   

Accounts receivable, related party (net of allowances of $815 and $358)

      2,918        3,194   

Inventories

      18,374        21,962   

Other current assets

      3,124        3,562   
  

 

 

    

 

 

  

Total current assets

      229,252        239,493   

Property, plant and equipment, net

      27,793        38,009   

Goodwill

      3,184        3,184   

Intangible assets, net

      9,755        15,390   

Other non-current assets

      1,668        2,139   
  

 

 

    

 

 

  

Total assets

    $ 271,652      $ 298,215   
  

 

 

    

 

 

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

    $ 7,823      $ 8,794   

Accrued compensation and related benefits

      3,918        6,069   

Deferred income and allowances on sales to distributors

      3,410        4,632   

Deferred income and allowances on sales to distributors, related party

      9,608        10,680   

Other accrued expenses

      13,615        7,062   
  

 

 

    

 

 

  

Total current liabilities

      38,374        37,237   

Long-term lease financing obligations

      3,771        12,558   

Other non-current obligations

      6,215        3,841   
  

 

 

    

 

 

  

Total liabilities

      48,360        53,636   
  

 

 

    

 

 

  

Total stockholders’ equity

     

Preferred stock, $.0001 par value; 2,250,000 shares authorized; no shares outstanding

      —          —     

Common stock, $.0001 par value; 100,000,000 shares authorized; 45,245,233 and 44,519,663 shares issued and outstanding at April 1, 2012 and March 27, 2011, respectively (net of treasury shares)

      5        4   

Additional paid-in capital

      735,562        728,139   

Accumulated other comprehensive loss

      (201 )      (287 ) 

Treasury stock at cost, 19,924,369 shares at April 1, 2012 and March 27, 2011

      (248,983 )      (248,983 ) 

Accumulated deficit

      (263,091 )      (234,294 ) 
  

 

 

    

 

 

  

Total stockholders’ equity

      223,292        244,579   
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 271,652      $ 298,215   
  

 

 

    

 

 

  

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL NET SALES INFORMATION

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
By Product Line    APRIL 1,
2012		     JANUARY 1,
2012		     MARCH 27,
2011		     APRIL 1,
2012		     MARCH 27,
2011		  

Communications

      9 %      12 %      17 %      13 %      16 % 

Datacom and storage

      7 %      14 %      10 %      12 %      11 % 

Connectivity

      57 %      52 %      53 %      53 %      53 % 

Power management

      27 %      22 %      20 %      22 %      20 % 

 

     THREE MONTHS ENDED     TWELVE MONTHS ENDED  
By Geography    APRIL 1,
2012		     JANUARY 1,
2012		     MARCH 27,
2011		     APRIL 1,
2012		     MARCH 27,
2011		  

Americas

      22 %      31 %      23 %      26 %      23 % 

Asia

      61 %      57 %      59 %      59 %      61 % 

EMEA

      17 %      12 %      18 %      15 %      16 % 

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

(In millions)

 

     GUIDANCE FOR THE QUARTER ENDING JULY 1, 2012  
            ADJUSTMENTS         
     NON-GAAP      STOCK-BASED
COMPENSATION		      AMORTIZATION
OF ACQUIRED
INTANGIBLE
ASSETS		      GAAP  

Net Sales

      +5% to +10%               +5% to +10%   

Gross Margin

      46% - 48%         ~$0.1 million         ~$0.9 million         42.5% - 44.5%   

GAAP operating expenses

      $13 - $14 million         ~$1.0 million         ~$0.2 million         $14 - $15 million   

Earnings (loss) per share

      $0.01 - $0.03         ~$1.1 million         ~$1.1 million         ($0.04) - ($0.02)