VTSS News Release. Vitesse Semiconductor Corporation Reiterates Guidance
Tuesday October 1, 12:30 pm ET
CAMARILLO, Calif.--(BUSINESS WIRE)--Oct. 1, 2002--Vitesse Semiconductor Corporation (Nasdaq:VTSS - News; "Vitesse" or the "Company") announced today that it expects revenue for the fourth quarter of fiscal 2002 ending September 30 to be approximately $38 million, which is within the range provided during the last earnings conference call on July 18, 2002.
Lou Tomasetta, President and CEO, said, "Normally we do not comment on analyst reports. However, in recent weeks a number of analyst and media reports have contained errors and misunderstandings that must be clarified for our shareholders.
"First, over 80% of our revenue in the last two quarters has been from storage, enterprise and metro applications. Analysts have left the impression that we remain heavily dependent on the core transport market. While this was true several years ago, it has not been the case lately. We have discussed our strategy to expand our focus to applications outside the core on numerous occasions and have reported revenue trends to support this transition in each quarter over the last year. While there are no areas in the communication IC space that are growing at robust rates, these applications in the storage, enterprise and metro areas are showing significantly better opportunities for growth compared to core transport.
"Second, operating expenses (R&D and SG&A) for the December 2002 quarter are expected to be approximately $39 million, down substantially from the $51 million reported for the June quarter, as a result of cost reductions and the restructuring discussed in the July earnings conference call. Additional cost reductions are expected in subsequent quarters as a result of the already announced restructurings. Some analysts continue to project future expenses at the June quarter levels.
"Third, net cash (cash minus convertible debt) has been positive for all of fiscal 2002. On our balance sheet total cash is shown on three line items: cash and cash equivalents, consisting of cash and fixed income securities with maturities under 90 days; short term investments consisting of fixed-income securities with maturities between 90 and 365 days; and long-term investments, consisting of fixed-income securities with maturities greater than 365 days. At June 30, 2002, this balance was $472 million. While we have explained this in detail, some reports have left the impression that today we have less cash than convertible debt. We expect to utilize cash in operations at a substantially lower rate over the next few quarters and we anticipate ending fiscal 2002 and 2003 with positive net cash.
"Additional details will be provided during our quarterly earnings conference call scheduled for the week of October 21, 2002. While our normal practice is not to comment on analyst reports and we do not undertake any obligation to do so in the future, we felt that it was important in this case to correct misleading information that we believe has led to confusion in the market."
Vitesse Semiconductor Corporation is a leading designer and supplier of innovative, high-performance integrated circuits (ICs) and optical modules used in next generation networking and optical communications equipment. The Company's products address the needs of Enterprise, Access, Metro, Core, and Optical Transport network equipment manufacturers who demand a robust combination of high-speed, high-service delivery and low-power dissipation in their products. In concert with its broad communications product portfolio, Vitesse also develops ICs for storage area networking and enclosure management. Vitesse is headquartered in Camarillo, California. Company and product information can be found on the web at www.vitesse.com or is available by calling 1-800-VITESSE.
