Gennum Reports Fourth Quarter and Year EndResults
2/10/2010 4:39 PM - Canada NewsWire
BURLINGTON,ON, Feb. 10, 2010 (Canada NewsWire via COMTEX News Network) --
17%Sequential Revenue Growth in Q4 and Positive Q1 Outlook.....
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“Through 2009, Gennumremained focused on its business strategy. We made difficult decisionsto reduce spending while we continued to focus on technology innovationand bringing new products to market,”said Dr. FranzFink, President and Chief Executive Officer of Gennum. “A broadeningcustomer base that is eager for solutions to address the ever expandingrequirements for bandwidth has resulted in an increase in our businessmomentum.
“We were particularly pleased with our results thisquarter,” continued Dr. Fink. “Sequential improvement in the top line,significant improvement in gross margin through volume ramps, as well astight controls on operating expenses puts us in a very good position tobuild shareholder value in our business in 2010.”
In the fourthquarter, customer orders continued to increase resulting in consolidatedrevenue growing 17% quarter over quarter. The increased revenue allowedGennum to deliver positive operating income before restructuringcharges of $3.4 million compared to
.3 million in the third quarter,and compared to $5.1 million in the fourth quarter of 2008. Grossmargins for the quarter were up to 73%, compared to 69% in the thirdquarter.
The fourth quarter resulted in positive cash flow of$4.7 million from operating activities, compared to a use of
.3million of cash in the third quarter. Net earnings from continuingoperations for the fourth quarter of 2009 were $3.6 million or
.10 pershare compared to a loss of $4.3 million or
.12 per share in thethird quarter of 2009. This compares to earnings of $2.4 million or
.07 per share for the fourth quarter in 2008. The relative strengthin earnings despite a reduction in annual revenue was a result of thequick and decisive actions to contain operating expenses in response tothe global recession. Gennum recorded a net loss from continuingoperations for the fiscal year 2009 of $2.6 million, or
.07 per sharecompared to earnings of $19.3 million, and
.54 in 2008. Gennum endedthe year in a solid financial position with cash and cash equivalents of$37.0 million.
Outlook
Our fourth quarter was a periodin which we saw customer demand continue to strengthen. It was thesecond consecutive quarter of double-digit growth in revenue. Our orderbook for the first quarter to date is approximately 10% up over thesame point in the fourth quarter, indicating another quarter of solidsequential growth.
We are encouraged by thecontinued positive demand in our business which is coming from multipleproducts, customers, and regions. We are also encouraged by the positiveimpact of new products released over the past two years on our top-linegrowth. As a result, we are optimistic for continued positive businessperformance through the year and expect to grow faster than the currentindustry forecast of 10% to 20% for 2010.
The trend to high datarates is already benefiting Gennum, due to the continued build out ofthe global 3 Gb/s video broadcast infrastructure and the migration todata rates at and above 10 Gb/s in data centre, enterprise and storageapplications. We expect these market trends to continue to drive thedemand for Gennum products throughout fiscal 2010.
The fourthquarter also brought a return to operating ratios which are much closerto our business model targets. This occurred due to several factors,including higher volumes and actions taken to control costs. Lookingahead to 2010, we expect to see our operating ratios continue to improvein line with our 2008 performance and, as a result, we continue totarget greater than 20% operating earnings for the year. We remainconfident in our strategy and will work to continue to deliver more newproducts, capitalize on new customer opportunities and grow ourleadership in our target markets.
Our interim financialstatements for the fourth quarter of 2009, and our audited consolidatedfinancial statements for our year ended November 30, 2009 and therelated management discussion and analysis have been filed and may beviewed on our website (www.gennum.com)and on SEDAR (www.sedar.com).
Newproduct introductions and business developments
In the fourthquarter of 2009, Gennum launched two new products further expanding itsportfolio of signal integrity solutions.
- In October, Gennum announced the industry's first single-chip 10G EPON transceiver with integrated CDR. This solution offers customers a high performance single-chip solution that will help reduce power and cost while enhancing ONU (optical network unit) performance.
- Also in October, Gennum announced a new HD transmitter/receiver combination that delivers seamless upgrade to HD over coax cabling. The Aviia™ receiver (Advanced Video Interface for Industrial Applications) is a robust interface for high definition (HD) video over coaxial cable lengths up to and beyond 100 metres. The complete transmitter/receiver combination now allows customers to upgrade existing analog video over coax applications to full HD video.
Dividend
Gennum’s Board of Directors has declared a regular cash dividend of3.5 cents per share Canadian to be paid on March 10, 2010 toshareholders of record on February 24, 2010.
Downloadthe complete Q4FY09 financial results (PDF)
Downloadthe complete Fiscal 2009 financial results (PDF)
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Management will hold a conference call to discuss fourth quarter and year end results on Wednesday, February 10 at 6:30 p.m. (ET). To access the call, participants should dial 1-877-974-0445. The conference call will also be Webcast live at www.gennum.com or www.newswire.ca/en/webcast and subsequently archived on the Gennum site. A rebroadcast of the call will be available until midnight on March 10, 2010. To access the rebroadcast, dial 1-877-289-8525 and enter the passcode 4200049#. Download a slide presentation to accompany the discussion at: www.gennum.com/q4fy09-downloads
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AboutGennum Corporation
Gennum Corporation (TSX: GND)designs innovative semiconductor solutions and intellectual property(IP) cores for the world’s most advanced consumer connectivity,enterprise, video broadcast and data communications products. Leveragingthe company’s proven optical, analog and mixed-signal products and IP,Gennum enables multimedia and data communications products to send andreceive information without compromising the signal integrity.Recognized as an award winner for advances in high definition (HD)broadcasting, Gennum is headquartered in Burlington, Canada, and hasglobal design, research and development and sales offices in Canada,Mexico, Japan, Germany, United States, Taiwan, India and the UnitedKingdom. www.gennum.com
Note1 “EBITDA” and “Adjusted EBITDA” are non-GAAP financialmeasures which do not have standardized meanings under Canadiangenerally accepted accounting principles (“GAAP”) and are thereforeunlikely to be comparable to similar measures presented by otherissuers. We define EBITDA as earnings before interest, taxes,depreciation and amortization (related to intangible assets andstock-based compensation). Adjusted EBITDA relates to EBITDA beforerestructuring charge and deferred development impairment. Furtherinformation regarding these terms, a description of why managementbelieves they are useful measures, and a quantitative reconciliation tothe most directly comparable measures calculated in accordance with GAAPis set forth under the heading “Non-GAAP Reporting” in our MD&A forthe year ended November 30, 2009.
Caution RegardingForward-Looking Information
This document containsstatements which constitute forward-looking statements. Theseforward-looking statements are not descriptive of historical matters andmay refer to management’s expectations or plans. These statementsinclude but are not limited to statements concerning: Gennum’s businessobjectives and plans including Gennum’s corporate strategy and strategicpriorities; Gennum’s future financial performance and prospectsincluding revenues, gross margins and earnings; future trends in thesemiconductor and intellectual property licensing industries and, inparticular, market trends for analog and mixed-signal products, opticalproducts and intellectual property products and licensing; Gennum’sexpectations for sales and licensing of its products in these marketsincluding anticipated costs, sales, size, duration, growth or decline ofmarket opportunities and competitive and pricing pressures in thesemarkets; Gennum’s product roadmap and the speed at which Gennum is ableto introduce new products; the adoption of new standards in the marketsin which Gennum competes and the ability of Gennum to anticipate thesechanges and successfully address new opportunities; sales and capitalspending plans and estimates, shipment levels and operating expenses;exchange rate fluctuations in, and the relative values of, the Canadiandollar, the U.S. dollar and the Japanese yen; Gennum’s ability tofinance its growth plans and make necessary investment; and litigationin which Gennum is involved.
Inherent in forward-lookingstatements are risks and uncertainties beyond Gennum’s ability topredict or control including, but not limited to, risks associated with:competitive and pricing pressures in the increasingly competitiveenvironment in which Gennum operates; economic cycles in thesemiconductor industry including downturns which can result from adversegeneral economic conditions; our ability to anticipate needs for futureproducts and successfully execute our product roadmap, including thepossibility of the emergence of disruptive technologies which negativelyimpact our positioning in the marketplace; fluctuations in foreignexchange rates and their potential adverse impact upon our financialresults; our reliance on external foundries and suppliers and thepotential adverse effects of disruptions in any of these arrangements;the successful integration of acquisitionsand the ability toachieve expected synergies and operating efficiencies within expectedtime-frames (or at all); our ability to attract and retain key personnelnecessary for our business; our ability to successfully protect ourintellectual property rights; and the initiation and outcome of legalproceedings. Readers should also refer to the sections entitled “Risksand Uncertainties” in our 2009 annual report and “Risk Factors” in ourmost recent annual information form.
Actual results anddevelopments are likely to differ, and may differ materially, from thoseexpressed or implied by the forward-looking statements contained inthis document. Such statements are based on a number of assumptionswhich may prove to be incorrect including, but not limited to, thefollowing assumptions: there is no material deterioration in thebusiness and economic conditions in the marketplace for Gennum’sproducts; Gennum’s expectations regarding market trends for analog andmixed-signal products, optical products and intellectual propertyproducts and licensing are not materially incorrect; Gennum is able toexecute its product roadmap without delays or disruptions having amaterial impact on Gennum; Gennum’s expectations relating to the needsand direction of the marketplace for its products are within reasonablebounds of accuracy and Gennum is able to introduce products andcapitalize on new opportunities generally as expected; materialdisruptions in the manufacture and supply of products and services toGennum by foundries and suppliers will not materialize; Gennum’sexpectations relating to competitive pressures, including pricingpressures, are not materially incorrect; significant fluctuations inforeign exchange rates which materially adversely affect Gennum’sfinancial results do not arise; customer demand for Gennum’s productsremains generally as anticipated; Gennum is able to successfullyintegrate acquisitionsand to achieve synergies generally asanticipated; and Gennum is able to continue to retain and attracttechnical and other key employees.
Readers are cautionedthat the foregoing list of important factors and assumptions is notexhaustive. Forward-looking statements are not guarantees of futureperformance. Events or circumstances could cause Gennum’s actual resultsto differ materially from those estimated or projected and expressedin, or implied by, these forward-looking statements. Consequently,readers should not place any undue reliance on these forward-lookingstatements. Forward-looking statements are provided for the purpose ofproviding information about management’s current expectations and plansrelating to the future. Readers are cautioned that such information maynot be appropriate for other purposes. In addition, theseforward-looking statements relate to the date on which they are made. Wedisclaim any intention or obligation to update or revise anyforward-looking statements or the foregoing list of factors, whether as aresult of new information, future events or otherwise, except to theextent required by law. All financial results referenced areunaudited, in United States currency and, unless otherwise indicated,are determined in accordance with Canadian generally accepted accountingprinciples (GAAP).
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Gennum Media Contact
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Gennum Investor Relations Contact
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| Keri Fraser |
Gordon Currie |
| Director of Corporate Communications |
Senior VP Finance & Administration and CFO |
| Gennum Corporation |
Gennum Corporation |
Tel: 613-697-6788
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Tel: 905-632-2999 ext. 3060 |
E-mail: keri.fraser@gennum.com
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E-mail: gord.currie@gennum.com |