Business News
RFMD(R) Updates December 2008 Quarterly Financial Guidance and Announces Cost Reductions
Friday 05. December 2008 - RF Micro Devices (NASDAQ:RFMD), a global leader in the design and manufacture of high-performance semiconductor components, today updated its quarterly financial guidance to reflect broad-based, reduced demand in its end markets.
RFMD(R) currently expects December 2008 quarterly revenue to be approximately 15-20% below the low-end of the guidance originally provided on October 28, 2008. Despite the projected reduction in revenue, RFMD continues to expect gross margin to improve sequentially during the quarter and continues to expect to achieve positive diluted earnings per share (EPS) on a non-GAAP basis. RFMD’s original December quarterly financial guidance forecasted revenue between $253 and $271 million, GAAP diluted EPS in the range of $0.00 – $0.02 and non-GAAP diluted EPS in the range of $0.05 to $0.07.
RFMD expects to strengthen its balance sheet and improve its capital structure during the December 2008 quarter. Quarterly cash flow from operations is expected to increase significantly, versus the September 2008 quarter, with minimal capital expenditures anticipated. Additionally, RFMD has purchased approximately $23 million par value, or 10%, of its 2010 convertible debt and continues to have approximately $50 million available and authorized for common stock repurchases under its existing share repurchase program. RFMD may make additional purchases of its convertible debt or common stock from time to time in the open market in accordance with applicable regulations.
Bob Bruggeworth, president and CEO of RFMD, said, “In light of the reduced demand environment, we have taken decisive and immediate actions to maximize cash flow by reducing costs, working capital and capital expenditures. These cost-cutting measures have begun to take effect, and we expect to derive the full benefit of these measures during the March 2009 quarter. We are sizing our operating model to match our revenue expectations, and we continue to anticipate approximately $80 million to $120 million in free cash flow (cash flow from operations less capital expenditures) in fiscal 2010.”