At RFMD(R)		At The Financial Relations Board
Doug DeLieto	Dean Priddy	Joe Calabrese
VP, Investor Relations	CFO	Vice President
336-678-5322	336-678-7975	212-827-3772

 

FOR IMMEDIATE RELEASE

April 26, 2011

 

 

 RFMD^® ANNOUNCES MARCH QUARTERLY FINANCIAL RESULTS

 

 

GREENSBORO, N.C., April 26, 2011

 

 

Company Highlights: 

• Quarterly Revenue Totals $213.3 Million

• GAAP Operating Income Is $13.2 Million, And GAAP Diluted EPS Is $0.08

• Non-GAAP Operating Income Equals $23.7 Million, Or 11.1% Of Revenue

• Non-GAAP Diluted EPS Equals $0.08

• RFMD Generates Approximately $31.4 Million In Quarterly Free Cash Flow And
  Trailing 12-Month Free Cash Flow Is Approximately $188 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 2011 fourth quarter, ended April 2, 2011. RFMD’s March 2011 quarterly revenue declined approximately 18% year-over-year and approximately 23% sequentially to $213.3 million, primarily as a result of seasonality and declining revenue at RFMD’s largest customer. On a GAAP basis, gross margin equaled 35.4%, quarterly operating income totaled $13.2 million, and quarterly net income was $24.1 million, or $0.08 per diluted share.  

 

On a non-GAAP basis, gross margin equaled 37.5%, quarterly operating income totaled $23.7 million, and quarterly net income was $21.7 million, or $0.08 per diluted share. During the quarter, RFMD generated approximately $31.4 million in free cash flow, retired $35.5 million principal amount of convertible debt and repurchased approximately 1.7 million shares of common stock.

RFMD Strategic Highlights:

• RFMD’s PowerSmart™ power platforms recognized as the industry's most innovative device of 2011 by Compound Semiconductor magazine

 

 

 

 

 

 

• RFMD’s Cellular Products Group (CPG) commenced volume production of new, higher margin 3G/4G solutions, including RFMD’s PowerSmart™ power platforms and RFMD’s RF724x family of ultra high efficiency 3G/4G PAs

• CPG secured multiple design wins for high-performance, silicon-based switches and switch filter modules across the world’s leading smartphone and tablet manufacturers

• RFMD’s Multi-Market Products Group (MPG) commenced production of new GaN-based products for high-power military radar and CATV applications

• MPG secured major design wins across multiple growth markets, including wireless infrastructure, Smart Energy, high-performance WiFi for smartphones and tablets, and point-to-point radio for cellular backhaul

GAAP RESULTS
(in millions, except
percentages and per			Q4 Fiscal			Q3 Fiscal			Change				Q4 Fiscal			Change
share data)			2011			2011			vs. Q3 2011				2010			vs. Q4 2010
Revenue		$	213.3		$	278.8			(23.5)%			$	260.8			(18.2)%
Gross Margin			35.4%			37.0%			(1.6)	ppt			37.7%			(2.3)	ppt
Operating Income		$	13.2		$	43.3		$	(30.1)			$	36.6		$	(23.4)
Net Income		$	24.1		$	36.7		$	(12.6)			$	26.7		$	(2.6)
Diluted EPS		$	0.08		$	0.13		$	(0.05)			$	0.10		$	(0.02)

 

NON-GAAP RESULTS (excluding share-based compensation, amortization of intangibles, integration charges, start-up costs, loss on retirement of convertible subordinated notes, restructuring charges, loss on PP&E, loss (income) from equity investment, and non-cash interest expense on convertible subordinated notes and tax adjustments)
(in millions, except
percentages and per			Q4 Fiscal			Q3 Fiscal			Change				Q4 Fiscal			Change
share data)			2011			2011			vs. Q3 2011				2010			vs. Q4 2010
Gross Margin			37.5%			38.7%			(1.2)	ppt			39.6%			(2.1)	ppt
Operating Income		$	23.7		$	54.0		$	(30.3)			$	47.7		$	(24.0)
Net Income		$	21.7		$	52.6		$	(30.9)			$	43.8		$	(22.1)
Diluted EPS		$	0.08		$	0.19		$	(0.11)			$	0.16		$	(0.08)

Business Outlook

 

RFMD currently believes the demand environment in its end markets supports the following expectations and projections:
 

• RFMD expects June quarterly revenue to be flat to down 5% sequentially, as 8-12% growth in RFMD’s core business is offset by declining sales of legacy products

• RFMD expects to further diversify its revenue base, with its largest customer approaching 15% of revenue in the June 2011 quarter

• RFMD anticipates its transceiver products will be immaterial to financial results in the June 2011 quarter and thereafter

• RFMD expects June quarterly gross margin to increase approximately 100 basis points, driven by continued customer diversification and improved product mix

• RFMD expects to return to sequential growth beginning in the September quarter

 

 

 

 

 

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, “RFMD’s strategic restructuring, announced three years ago, is now complete and driving diversified growth opportunities for RFMD. Sales in our Multi-Market Products Group grew by more than 30% in fiscal 2011 over fiscal 2010 and in our Cellular Products Group sales to customers outside our largest customer grew by more than 50% during the same period. In the June quarter we anticipate transceiver products will be immaterial to financial results and we expect to achieve our most diverse quarter of customer mix in RFMD’s history as a public company.

 

“Looking forward, we expect RFMD will take full advantage of global secular growth trends and grow faster than our core markets. This will enable broad improvement in our financials, supporting margin expansion, operating leverage, earnings growth, continued strong free cash flow, and superior return on invested capital.”

 

Dean Priddy, CFO and vice president of administration of RFMD, said, “RFMD is executing on its growth strategy. Revenue in our core business, which excludes transceiver revenue, is expected to grow approximately 8-12% sequentially in the June quarter, driven by exciting new product cycles and technologies. This should drive gross margin expansion beginning in the June quarter.

 

“With all major growth drivers intact, we have the confidence to actively put RFMD’s superior free cash flow to use. During the March quarter, we repurchased approximately 1.7 million shares of common stock and retired $35.5 million principal amount of convertible debt due in 2012. In addition to the ongoing optimization of our capital structure, RFMD will continue investing in the R&D and customer-facing resources necessary to outpace the growth rate in our markets.”

 

Non-GAAP Financial Measures

 

In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), RFMD's earnings release contains some or all of the following non-GAAP financial measures: (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating income and operating margin, (iii) non-GAAP net income, (iv) non-GAAP net income per diluted share, (v) non-GAAP operating expenses (research and development, marketing and selling and general and administrative), (vi) free cash flow, (vii), EBITDA, (viii) return on invested capital (ROIC), and (ix) net debt or positive net cash.  Each of these non-GAAP financial measures is either adjusted from GAAP results to exclude certain expenses or derived from multiple GAAP measures, which are outlined in the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables on page 10 and the "Additional Selected Non-GAAP Financial Measures And Reconciliations" tables on pages 11 and 12.

 

 

 

 

 

In managing RFMD's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures.  In developing and monitoring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce unit costs with the goal of increasing gross margin and operating margin.  In addition, management relies upon these non-GAAP financial measures to assess whether research and development efforts are at an appropriate level, and when making decisions about product spending, administrative budgets, and marketing programs. In addition, we believe that non-GAAP financial measures provide useful supplemental information to investors and enable investors to analyze the results of operations in the same way as management.  We have chosen to provide this supplemental information to enable investors to perform additional comparisons of operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses and share-based compensation expense, which may obscure trends in RFMD's underlying performance.

 

We believe that these non-GAAP financial measures offer an additional view of RFMD's operations that, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of RFMD's results of operations and the factors and trends affecting RFMD's business.  However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

 

Our rationale for using these non-GAAP financial measures, as well as their impact on the presentation of RFMD's operations, are outlined below:

 

Non-GAAP gross profit and gross margin.  Non-GAAP gross profit and gross margin exclude share-based compensation expense, amortization of intangible assets, other non-cash expenses and adjustments for restructuring and integration charges.  We believe that exclusion of these costs in presenting non-GAAP gross profit and gross margin gives management and investors a more effective means of evaluating RFMD's historical performance and projected costs and the potential for realizing cost efficiencies.  We believe that the majority of RFMD's purchased intangibles are not relevant to analyzing current operations because they generally represent costs incurred by the acquired company to build value prior to acquisition, and thus are effectively part of transaction costs rather than ongoing costs of operating RFMD's business.  In this regard, we note that (i) once the intangibles are fully amortized, the intangibles will not be replaced with cash costs and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time, and (ii) although we set the amortization expense based on useful life of the various assets at the time of the transaction, we cannot influence the timing and amount of the future amortization expense recognition once the lives are established.  Similarly, we believe that presentation of non-GAAP gross profit and gross margin and other non-GAAP financial measures that exclude the impact of share-based compensation expense assists management and investors in evaluating the period-over-period performance of RFMD's ongoing operations because (i) the expenses are non-cash in nature, and (ii) although the size of the grants is within our control, the amount of expense varies depending on factors such as short-term fluctuations in stock price volatility and prevailing interest rates, which can be unrelated to the operational performance of RFMD during the period in which the expense is incurred and generally is outside the control of management.  Moreover, we believe that the exclusion of share-based compensation expense in presenting non-GAAP gross profit and gross margin and other non-GAAP financial measures is useful to investors to understand the impact of the expensing of share-based compensation to RFMD's gross profit and gross margins and other financial measures in comparison to both prior periods as well as to its competitors.  We also believe that the adjustments to profit and margin related to other non-cash expenses and restructuring and integration charges do not constitute part of RFMD's ongoing operations and therefore the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP gross profit and gross margin has economic substance because the excluded expenses do not represent continuing cash expenditures and, as described above, we have little control over the timing and amount of the expenses in question.

 

 

 

 

 

Non-GAAP operating income and operating margin.  Non-GAAP operating income and operating margin exclude share-based compensation expense, amortization of intangible assets, other non-cash expenses, restructuring and integration charges, loss on PP&E and start-up costs.  We believe that presentation of a measure of operating income and operating margin that excludes amortization of intangible assets and share-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin.  We believe that other non-cash expenses, restructuring and integration charges, loss on PP&E and start-up costs do not constitute part of RFMD’s ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP operating income and operating margin has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

 

Non-GAAP net income and non-GAAP net income per diluted share. Non-GAAP net income and non-GAAP net income per diluted share exclude the effects of share-based compensation expense, amortization of intangible assets, other non-cash expenses, restructuring and integration charges, loss on PP&E, start-up costs, loss on retirement of convertible subordinated notes, non-cash interest expense on convertible subordinated notes, loss (income) from equity investment and also reflect an adjustment of income taxes for cash basis. We believe that presentation of measures of net income and net income per diluted share that exclude these items is useful to both management and investors for the reasons described above with respect to non-GAAP gross profit and gross margin and non-GAAP operating income and operating margin. We believe disclosure of non-GAAP net income and non-GAAP net income per diluted share has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

 

Non-GAAP research and development, marketing and selling and general and administrative expenses. Non-GAAP research and development, marketing and selling and general and administrative expenses exclude share-based compensation expense, amortization of intangible assets, and restructuring and integration charges (benefits). We believe that presentation of measures of these operating expenses that exclude amortization of intangible assets and share-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin. We believe that restructuring and integration charges (benefits) do not constitute part of RFMD’s ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance. We believe disclosure of these non-GAAP operating expenses has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

 

Free cash flow. RFMD defines free cash flow as net cash provided by operating activities during the period minus property and equipment expenditures made during the period. We use free cash flow as a supplemental financial measure in our evaluation of liquidity and financial strength. Management believes that this measure is useful as an indicator of our ability to service our debt, meet other payment obligations and make strategic investments. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.

 

EBITDA.  RFMD defines EBITDA as earnings before interest expense and interest income, income tax expense (benefit), depreciation and intangible amortization.  Management believes that this measure is useful to evaluate our ongoing operations and as a general indicator of our operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges).  The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in our equipment term loan agreement.  The definition of EBITDA as used in the loan agreement is further adjusted for certain cash and non-cash charges, including stock compensation expense, and is used to determine compliance with financial covenants.

 

 

 

 

Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP financial measure that management believes provides useful supplemental information for management and the investor by measuring the effectiveness of our operations’ use of invested capital to generate profits. We use ROIC to track how much value we are creating for our shareholders. Non-GAAP ROIC is calculated by dividing annualized non-GAAP operating income, net of cash taxes, by average invested capital.  Average invested capital is calculated by subtracting the average of the beginning balance and the ending balance of current liabilities (excluding the current portion of long-term debt and other short-term financings) from the average of the beginning balance and the ending balance of net accounts receivable, inventories, other current assets, net property and equipment and a cash amount equal to seven days of quarterly revenue.

 

Net debt or positive net cash. Net debt or positive net cash is defined as unrestricted cash, cash equivalents and short-term investments minus the principal amount of RFMD’s convertible subordinated notes due 2012 and 2014. Management believes that net debt or positive net cash provides useful information regarding the level of RFMD’s indebtedness by reflecting cash and investments that could be used to repay debt.

 

Limitations of non-GAAP financial measures. The primary material limitations associated with the use of non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP net income per diluted share, free cash flow, EBITDA, non-GAAP ROIC and net debt or positive net cash, as compared to the most directly comparable GAAP financial measures of gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities are (i) they may not be comparable to similarly titled measures used by other companies in RFMD's industry, and (ii) they exclude financial information that some may consider important in evaluating our performance. We compensate for these limitations by providing full disclosure of the differences between these non-GAAP financial measures and the corresponding GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, to enable investors to perform their own analysis of our gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities.

 

RF Micro Devices will conduct a conference call at 5:00 p.m. EDT today to discuss today’s press release.  The conference call will be broadcast live over the Internet and can be accessed by any interested party at http://www.rfmd.com (under “Investors”).  A telephone playback of the conference call will be available approximately one hour after the call’s completion by dialing 303-590-3030 and entering pass code 4432787#. 

 

About RFMD

RF Micro Devices, Inc. (Nasdaq GS: RFMD) is a global leader in the design and manufacture of high-performance radio frequency components and compound semiconductor technologies. RFMD’s products enable worldwide mobility, provide enhanced connectivity and support advanced functionality in the cellular handset, wireless infrastructure, wireless local area network (WLAN), CATV/broadband and aerospace and defense markets. RFMD is recognized for its diverse portfolio of semiconductor technologies and RF systems expertise and is a preferred supplier to the world's leading mobile device, customer premises and communications equipment providers.

Headquartered in Greensboro, N.C., RFMD is an ISO 9001- and ISO 14001-certified manufacturer with worldwide engineering, design, sales and service facilities. RFMD is traded on the NASDAQ Global Select Market under the symbol RFMD. For more information, please visit RFMD's web site at www.rfmd.com.

 

 

 

 

 

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under the federal securities laws. RF Micro Devices' business is subject to numerous risks and uncertainties, including variability in operating results, risks associated with the impact of global macroeconomic and credit conditions on our business and the business of our suppliers and customers, our reliance on a few large customers for a substantial portion of our revenue, the rate of growth and development of wireless markets, our ability to bring new products to market, our reliance on inclusion in third party reference designs for a portion of our revenue, our ability to manage channel partner and customer relationships, risks associated with the operation of our wafer fabrication, molecular beam epitaxy, assembly and test and tape and reel facilities, our ability to complete acquisitions and integrate acquired companies, including the risk that we may not realize expected synergies from our business combinations, our ability to attract and retain skilled personnel and develop leaders, variability in production yields, raw material costs and availability, our ability to reduce costs and improve margins in response to declining average selling prices, our ability to adjust production capacity in a timely fashion in response to changes in demand for our products, dependence on gallium arsenide (GaAs) for the majority of our products, dependence on third parties, and substantial reliance on international sales and operations. These and other risks and uncertainties, which are described in more detail in RF Micro Devices' most recent Annual Report on Form 10-K and other reports and statements filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

RF MICRO DEVICES® and RFMD® are trademarks of RFMD, LLC. All other trade names, trademarks and registered trademarks are the property of their respective owners.

 

 

 

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

 

	Three Months Ended
		April 2, 2011			April 3, 2010
Total revenue	$	213,326		$	260,825
Costs and expenses:
Cost of goods sold		137,806			162,396
Research and development		35,471			35,484
Marketing and selling		15,386			14,461
General and administrative		11,062			10,887
Other operating expense		352			958
Total costs and expenses		200,077			224,186
Operating income		13,249			36,639
Other expense		(4,164)			(5,499)
Income before income taxes	$	9,085		$	31,140
Income tax benefit (expense)		15,050			(4,412)
Net income	$	24,135		$	26,728
Net income per share, diluted	$	0.08		$	0.10
Weighted average outstanding diluted shares		285,248			275,986

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

	Twelve Months Ended
		April 2, 2011			April 3, 2010
Total revenue	$	1,051,756		$	978,393
Costs and expenses:
Cost of goods sold		662,085			623,224
Research and development		141,097			138,960
Marketing and selling		59,470			56,592
General and administrative		48,003			48,316
Other operating expense		1,582			4,895
Total costs and expenses		912,237			871,987
Operating income		139,519			106,406
Other expense		(16,014)			(21,572)
Income before income taxes	$	123,505		$	84,834
Income tax benefit (expense)		1,053			(13,815)
Net income	$	124,558		$	71,019
Net income per share, diluted	$	0.44		$	0.25
Weighted average outstanding diluted shares		280,394			289,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

 

	Three Months Ended
		April 2, 2011			January 1, 2011			April 3, 2010
GAAP operating income	$	13,249		$	43,320		$	36,639
Share-based compensation expense		5,293			5,615			5,047
Amortization of intangible assets		4,614			4,614			4,750
Restructuring charges related to fiscal 2009 strategic          restructuring and adverse macroeconomic conditions		199			107			117
Other expenses (restructuring, loss on PP&E, integration,         start-up costs and other non-cash expenses)		391			347			1,131
Non-GAAP operating income		23,746			54,003			47,684
GAAP net income		24,135			36,686			26,728
Share-based compensation expense		5,293			5,615			5,047
Amortization of intangible assets		4,614			4,614			4,750
Restructuring charges related to fiscal 2009 strategic         restructuring and adverse macroeconomic conditions		199			107			117
Other expenses (restructuring, loss on PP&E, integration,         start-up costs, and other non-cash expenses)		391			347			1,131
Loss on retirement of convertible subordinated notes		766			-			-
Non-cash interest expense on convertible subordinated notes		3,074			3,046			4,316
Loss (income) from equity investment		30			(34)			-
Tax adjustments		(16,806)			2,257			1,717
Non-GAAP net income		21,696			52,638			43,806
Plus:  Income impact of assumed conversions for interest on     1.50% convertible notes		-			-			37
Non-GAAP net income plus assumed conversion of notes-     Numerator for diluted income per share	$	21,696		$	52,638		$	43,843
GAAP and Non-GAAP weighted average outstanding diluted     shares		285,248			284,152			275,986
Non-GAAP net income per share, diluted	$	0.08		$	0.19		$	0.16

 

	Three Months Ended
		April 2, 2011				January 1, 2011				April 3, 2010
GAAP gross margin	$	75,520	35.4 %		$	103,089	37.0 %		$	98,429	37.7 %
Adjustment for intangible amortization		3,514	1.6 %			3,515	1.2 %			3,651	1.4 %
Adjustment for share-based compensation		759	0.4 %			1,065	0.4 %			895	0.3 %
Other expenses (restructuring, integration          and other non-cash expenses)		239	0.1 %			262	0.1 %			427	0.2 %
Non-GAAP gross margin	$	80,032	37.5 %		$	107,931	38.7 %		$	103,402	39.6 %

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES

ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands, except percentages)
(Unaudited)

 

	Three Months Ended
Non-GAAP Operating Income	April 2, 2011
(as a percentage of sales)
GAAP operating income	6.2 %
Share-based compensation expense	2.5 %
Amortization of intangible assets	2.2 %
Restructuring charges related to fiscal 2009 strategic restructuring and adverse          macroeconomic conditions	0.1 %
Other expenses (restructuring, loss on PP&E, integration, start-up costs and other          non-cash expenses)	0.1 %
Non-GAAP operating income	11.1 %

 

	Three Months Ended
		April 2, 2011					January 1, 2011				April 3, 2010
GAAP research and development expense	$	35,471				$	33,920			$	35,484
Less:
Share-based compensation expense		1,410					1,405				1,386
Amortization of intangible assets		13					13				12
Non-GAAP research and       development expense	$	34,048				$	32,502			$	34,086
	Three Months Ended
		April 2, 2011					January 1, 2011				April 3, 2010
GAAP marketing and selling expense	$	15,386				$	14,621			$	14,461
Less:
Share-based compensation expense		1,249					1,255				1,213
Amortization of intangible assets		1,087					1,086				1,087
Non-GAAP marketing and selling       expense	$	13,050				$	12,280			$	12,161
	Three Months Ended
		April 2, 2011					January 1, 2011				April 3, 2010
GAAP general and administrative expense	$	11,062			$		11,036			$	10,887
Less:
Share-based compensation expense		1,875					1,890				1,553
Other restructuring and integration      benefit		-					-				(136)
Non-GAAP general and      administrative expense	$	9,187			$		9,146			$	9,470

 

 

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES

ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

 (Unaudited)

 

Free Cash Flow (1)		Three Months Ended
		April 2, 2011
(In millions)
Net cash provided by operating activities	$	36.2
Purchases of property and equipment		(4.8)
Free cash flow	$	31.4

 

(1)   Free Cash Flow is calculated as net cash provided by operating activities minus property and equipment expenditures.

 

EBITDA (2)		Three Months Ended
		April 2, 2011
(In millions)
Net Income	$	24.1
Interest		3.6
Income tax benefit		(15.0)
Depreciation		15.2
Amortization		4.6
EBITDA	$	32.5

 (2)  EBITDA is calculated by adjusting net income for interest expense and interest income, income tax expense, depreciation and intangible amortization.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 

		April 2, 2011			April 3, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	131,760		$	104,778
Restricted cash and trading security investments		422			17,698
Short-term investments		159,881			134,882
Accounts receivable, net		120,375			108,219
Inventories		149,813			122,509
Other current assets		37,908			60,738
Total current assets		600,159			548,824
Property and equipment, net		209,478			247,085
Intangible assets, net		83,685			102,169
Goodwill		95,628			95,628
Long-term investments		2,694			2,175
Other non-current assets		33,749			18,127
Total assets	$	1,025,393		$	1,014,008
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		130,973			124,253
Current portion of long-term debt		3,852			15,053
Other short-term liabilities, net		112			13,427
Total current liabilities		134,937			152,733
Long-term debt, net		177,343			289,837
Other long-term liabilities		36,758			41,354
Total liabilities		349,038			483,924
Shareholders’ equity		676,355			530,084
Total liabilities and shareholders’ equity	$	1,025,393		$	1,014,008