Alpha Reports Fiscal 2002 Second-Quarter Financial Results; Wireless Handset Business Increases 60% Sequentially Company Meets Previous Guidance
Net sales for the second quarter were $33.0 million, compared with $32.2 million in the first quarter of fiscal 2002 and $73.2 million for the same period a year earlier. The net loss for the second quarter was $2.6 million, or $0.06 per diluted share, compared with a net loss of $3.9 million, or $0.09 per share, in the first quarter of fiscal 2002 and net income of $10.6 million, or $0.24 per diluted share, in the second quarter of fiscal 2001.
"Driven primarily by orders from top-tier OEMs, our wireless handset revenue exceeded our expectations, increasing 60 percent from the first quarter," said David Aldrich, Alpha's president and CEO. "These orders reflect the working down of inventory in the channel and our strong participation in new models across multiple standards including GSM, CDMA and GPRS-enabled phones.
"While we are extremely pleased with the performance of our handset business, we continue to experience softness and low visibility in our infrastructure business," Aldrich said. "We had anticipated that orders from infrastructure customers would stabilize in the September quarter and resume moderate growth in the December quarter. Given the economic uncertainties that have prevailed in recent weeks, these infrastructure and broadband orders have been delayed. Although visibility remains clouded, Alpha is well positioned when these markets rebound, with products on virtually all of the leading OEM platforms."
Recent Highlights
Alpha introduced in August its advanced InP-based HBT (Indium Phosphide heterojunction bipolar transistor) process for high-performance wireless and optical applications. InP extends the Company's semiconductor process technology arsenal, which includes InGaP HBT, GaAs MESFET, GaAs PHEMT, silicon and ceramics, opening up emerging markets for extremely high-speed fiber optic, Ethernet and other high performance wireless applications. Alpha's InP process uses the automated production line at the Company's Sunnyvale, California wafer fabrication facility. Initially Alpha intends to use its InP HBT technology to develop integrated circuits for the transmission and receive path in 40 Gb/s networks.
Alpha opened a design center in the Chicago suburb of Mundelein, Illinois. The center will focus on development of wide band code division multiple access (W-CDMA) and other linear power amplifier modules for next-generation wireless applications. These modules will leverage Alpha's process technology breadth, particularly InGaP and the Company's Alpha Integration Platform. The new R&D center puts Alpha in close geographic proximity to its largest customer. The Company has recruited a talented group of design engineers for this location.
Alpha's aiIP integration platform technology drove several key design wins for the Company's InGaP HBT power amplifier modules on a variety of handset model platforms that are slated for production by major OEMs next year. The Company's expanding line of integrated RF modules dramatically reduces design complexity and time to market for new wireless handset products.
"Alpha's solution-driven module strategy continues to generate important design wins with the world's leading handset OEMs," Aldrich said. "These advances bring us ever closer to achieving full RF front-end integration. Coupled with our use of internally produced semiconductor content and our industry-leading cycle times, this strategy allows us to offer critical time-to-market advantages to wireless handset OEMs around the world.
Business Outlook
"Looking ahead to the December quarter, we expect continued strong order flow for Alpha's wireless handset products - including InGaP PA and multi-function front-end modules - in line with OEM product roadmaps for calendar year 2002. In our infrastructure and broadband markets, however, we expect low visibility to persist for the next one or two quarters."
"On balance, we expect rising handset sales to generate modest overall revenue growth in our fiscal 2002 third quarter and a more substantial increase in Q4," Aldrich continued. "We estimate that our bottom line will improve, with our net loss ranging from $0.02 to $0.04 per share in the December quarter and a return to profitability in the March quarter. We continue to make strategic investments in next generation products. Alpha has established an enviable record of success in translating these R&D investments into design wins, and we fully expect to extend this record in the future."
Conference Call
Alpha will discuss its second-quarter fiscal 2002 financial results with investors in a conference call that will be broadcast at 5:15 p.m. (ET) today, October 17, 2001. Investors also can hear the call live by dialing 719-457-2633. A replay of the call will be available from 8:15 p.m. (ET) October 17 through midnight (ET) Wednesday, October 24. The replay phone number is 719-457-0820. Please refer to confirmation code 493188.
Alpha also will provide a live audio Webcast of the call. Investors who want to listen to the Webcast should log on to the investor relations section of Alpha's Web site, www.alphaind.com, at least 15 minutes prior to the event's broadcast. Then, follow the instructions provided to assure that the necessary audio applications are downloaded and installed. The call will be archived on the Web site for two weeks.
About Alpha
Alpha Industries is a leading provider of RF integrated circuit-based solutions, including semiconductors and ceramic components, for the broadband and wireless communications markets. Alpha's GaAs and silicon switches, power amplifiers and discrete semiconductors are used by the world's leading broadband, infrastructure and wireless communications companies to enhance the speed, quality and performance of voice, data and video. The Company's Alpha Integration Platform (aiIP) is a breakthrough manufacturing, packaging and design technique that reduces design complexity and improves the OEM's overall time to market for new products. For more information, please visit Alpha's Web site, www.alphaind.com.
Safe Harbor Statement - Except for historical information, this release contains forward-looking statements. These statements reflect the Company's current expectations and predictions of future results, accomplishments, intentions and other matters, all of which are inherently subject to risks and uncertainties. The Company's actual results may differ materially from those anticipated in the Company's forward-looking statements, based on various factors. Such factors include, but are not limited to: variations in projected financial results for FY 2002 and the remaining quarters of FY 2002, expected benefits from and timing and success of the Company's product development efforts, Alpha's ability to generate increased dollar content per platform, successful participation in new data services such as 3G, GPRS and 2.5G, the timing and extent of recovery in the infrastructure, broadband and wireless markets, the success of Alpha's various strategic relationships, Alpha's success in penetrating new markets, cancellation or postponement of customer orders, inability to predict customer orders, the disproportionate impact of Alpha's business relationships with its larger customers, erosion of selling prices or margins, modification of the Company's plans or intentions, and market developments, competitive pressures and changes in economic conditions that vary from the Company's expectations. Additional information on these and other factors that may cause actual results and the Company's performance to differ materially is included in the Company's periodic reports filed with the SEC, including but not limited to the Company's Form 10-K for the year ended April 1,2001 and subsequently filed Form 10-Q. Copies may be obtained by contacting the Company or the SEC. The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations or any change in events, conditions or circumstance on which any such statement is based.
ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands, except per share data)
Second Quarter Ended Six Months Ended
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2001 2000 2001 2000
Net sales $ 33,001 $ 73,201 $ 65,222 $ 138,889
Cost of sales 22,358 39,454 45,783 75,604
Research and
development expenses 9,906 8,814 19,709 16,709
Selling and
administrative expenses 6,063 10,839 12,771 22,527
Operating (loss) income (5,326) 14,094 (13,041) 24,049
Interest expense (15) (22) (29) (38)
Interest income
and other, net 1,480 1,938 3,358 3,879
(Loss) income before
income taxes (3,861) 16,010 (9,712) 27,890
(Credit) provision
for income taxes (1,274) 5,443 (3,205) 9,482
Net (loss) income $ (2,587) $ 10,567 $ (6,507) $ 18,408
Net (loss) income
per share basic $ (0.06) $ 0.25 $ (0.15) $ 0.43
Net (loss) income
per share diluted $ (0.06) $ 0.24 $ (0.15) $ 0.41
Weighted average
common shares basic 44,037 42,867 43,819 42,765
Weighted average
common shares diluted 44,037 44,737 43,819 44,761
COMPARATIVE BALANCE SHEET
(unaudited) Sept. 30, April 1,
(in thousands) 2001 2001
Assets
Current assets
Cash, cash equivalents
and short-term investments $145,528 $153,784
Accounts receivable, net 24,721 36,984
Inventories 10,984 15,661
Prepaid expenses
and other current assets 21,957 13,572
Property, plant and
equipment, less
accumulated depreciation
and amortization 124,877 114,196
Other assets 2,214 2,822
Total assets $330,281 $337,019
Liabilities and Equity
Current liabilities
Current portion of
long-term debt $ 129 $ 129
Accounts payable 15,582 20,820
Accrued liabilities
and other current
liabilities 7,670 10,764
Long-term debt 139 235
Other long-term
liabilities 4,933 5,893
Stockholders' equity 301,828 299,178
Total liabilities
and equity $330,281 $337,019
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| CONTACT: | Alpha Industries, Inc |
|---|---|
| Paul Vincent | |
| Chief Financial Officer | |
| (781) 935-5150 Ext. 4438 | |