RF Micro Devices, Inc. (RFMD)

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RFMD® Announces December Quarterly Results
Press Release: RF Micro Devices, Inc. – 12 minutes ago.. .
http://finance.yahoo.com/news/RFMD-Announces-December-prnews-3553231454.html?x=0

GREENSBORO, N.C., Jan. 24, 2012 /PRNewswire/ --

Quarterly Highlights:
•Quarterly Revenue Totals $225.4 Million
•Sales Of 3G/4G Components Increase Sequentially, Outpacing Smartphone Market Growth
•GAAP Operating Loss Is ($2.2) Million, And GAAP Diluted LPS Is ($0.03)
•Non-GAAP Operating Income Is $8.8 Million, And Non-GAAP Diluted EPS Is $0.02
•Quarterly Shipments Of Switch And Signal Conditioning Products Exceed $25 Million


RF Micro Devices, Inc. (Nasdaq GS: RFMD), a global leader in the design and manufacture of high-performance radio frequency components and compound semiconductor technologies, today reported financial results for its fiscal 2012 third quarter ended December 31, 2011.

RFMD's third quarter revenue was $225.4 million, a decrease of approximately 8% sequentially versus $243.8 million in the September 2011 quarter, highlighted by market share gains in smartphones, offset by below-forecast sales to manufacturers of cellular handsets in China. On a GAAP basis, gross margin equaled 28.2%, quarterly operating loss totaled ($2.2) million, and quarterly net loss was ($9.4) million, or ($0.03) per diluted share. On a non-GAAP basis, gross margin equaled 30.2%, quarterly operating income totaled $8.8 million, and quarterly net income was $5.1 million, or $0.02 per diluted share.

During the December quarter, RFMD generated approximately $46.2 million in cash flow from operations and $37.5 million in free cash flow. RFMD repurchased approximately 2.3 million shares of common stock during the quarter and purchased and retired $6.0 million principal amount of convertible debt.

Strategic Highlights
•RFMD continued to diversify its customer base, with approximately 100% year-over-year revenue growth during the quarter at Foxconn, HTC, Huawei, Motorola, and Research In Motion
•Shipments of switch and signal conditioning products surpassed $25 million in quarterly revenue, in support of Foxconn, HTC, Samsung, LG, Research In Motion, and others
•CPG continued to ramp its ultra-high efficiency 3G/4G PAs across a broad range of leading smartphone manufacturers
•CPG ramped PowerSmart® with an additional baseband supplier and is engaged with leading LTE baseband suppliers to deliver PowerSmart LTE to their customers
•CPG secured a major PA design win on a reference design for the 3G entry market
•MPG released a broad range of new products during the quarter, including 15 new high frequency MMICs operating from 6 to 27 GHz for microwave backhaul
•RFMD secured major GaN-based design wins and commenced volume shipments of GaN-based components to a major defense contractor


Financial Outlook and Business Commentary

For the March quarter, RFMD anticipates share gains in smartphones and projects 3G/4G products will represent approximately two-thirds of total cellular revenue. The Company currently forecasts a greater-than-seasonal decline in sales to cellular handset manufacturers in China, primarily as a result of the impact of lunar new year on order visibility and the projected impact of channel inventory.

RFMD currently believes the demand environment in its end markets supports the following expectations and projections for the March 2012 quarter:
•RFMD expects March quarter revenue of approximately $185 million
•RFMD expects gross margin to improve 200-300 basis points
•RFMD expects non-GAAP per share results of breakeven to ($.02)
•RFMD expects to reduce inventory levels and generate positive free cash flow


RFMD's actual quarterly results may differ from these expectations and projections, and such differences may be material.

Comments From Management

Bob Bruggeworth, president and chief executive officer of RFMD, said, “Although RFMD’s December quarter clearly did not live up to our expectations, RFMD’s growth drivers are very much intact, led by industry-leading new products and the release of exciting new product categories, like RFMD’s antenna control solutions. In the March 2012 quarter, we anticipate sales of 3G/4G components will continue to increase as a percentage of CPG revenue, and we expect MPG will outperform its underlying markets. We have begun to see signs of stabilization in customer order activity, and we believe RFMD will return to growth in the June 2012 quarter.”

Dean Priddy, CFO and vice president of administration of RFMD, said, “During the December quarter, RFMD’s market share gains in smartphones were offset by less than forecasted demand from manufacturers of handsets in China. Despite this, RFMD was able to generate cash flow from operations of approximately $46 million and free cash flow of approximately $38 million. In the March 2012 quarter, we currently expect sequential improvement in gross margin, and we anticipate RFMD’s gross margin will return to historical levels as revenue growth resumes.”