HONG KONG, April 24--PRNewswire Asia/AsiaNet
Company reports sequential revenue and bottomline improvement, exceeding guidance Company anticipates spin-off from Lucent Technologies on June 1, 2002.
Agere Systems (NYSE: AGR.A), the world leader in communications components, today reported its financial results for the second quarter of fiscal 2002, ended March 31, and stated that it would work closely with Lucent Technologies to complete its spin-off on June 1, 2002, as announced by Lucent yesterday.
The company reported revenues of US$551 million, up US$14 million or 2.6 percent from the December quarter, better than the guidance provided by the company in January.
"We are pleased to report our first quarter of sequential revenue growth in six quarters," said John Dickson, president and CEO, Agere Systems. "We are also excited that we are now taking our final steps toward full separation from Lucent, which we believe will benefit our business, our employees and our customers. With the actions we are taking to improve our performance, we believe we are well positioned to take advantage of the opportunities ahead." Reported net loss for the March quarter was US$219 million or US$0.13 per share. Reported net loss includes US$24 million in net restructuring and separation charges; US$16 million in amortization of goodwill and other acquired intangibles; US$176 million in impairment of goodwill and other acquired intangibles associated with the acquisitions of Ortel and Herrmann Technology in 2000; and a gain of US$243 million on the sale of the FPGA business. Reported net loss for the December quarter was US$375 million, or US$0.23 per share.
Pro forma net loss, excluding the items reflected in net loss mentioned above, was US$246 million or US$0.15 per share, an improvement of US$0.02 sequentially, exceeding guidance by US$0.02 per share. This improvement in bottomline performance was due to revenue growth as well as improvements in the company's cost and expense structure.
The Client Systems Group, which targets end-user computing and wireless markets, reported revenues of US$325 million during the March quarter, up US$51 million or 19 percent from the December quarter, as the Wi-Fi(TM) wireless local area networking and storage product offerings posted double-digit growth in revenues. The Infrastructure Systems Group, which serves the network equipment market, reported revenues of US$226 million during the March quarter, down US$37 million or 14 percent from the December quarter. The decline reflects the continued reduction in spending by telecommunications carriers, leading to deployment delays and therefore, lower demand by network equipment customers.
"Our revenue results were driven by strong growth in our Client business, where our leadership positions in wireless data and storage enabled us to take advantage of the increased demand for PC-related components," said Dickson. "Although we are currently experiencing weakness in the Infrastructure business, we are encouraged by our solid design win activity, particularly for integrated solutions in metro core and access."
In the March quarter, the Client Systems group represented about 60 percent of the company's total revenues, while the Infrastructure group made up approximately 40 percent of the revenues.
Cash at the end of the March quarter was US$1.6 billion. Cash in excess of short-term debt was US$493 million, better than the guidance provided in January. This improvement over guidance was due to better operating performance and working capital management, lower capital expenditures and minimal payments for the facilities consolidation. Total short-term debt at the end of the quarter was US$1.1 billion, of which US$960 million was related to the credit facility maturing in September 2002.
The company has taken significant steps to strengthen its balance sheet, including better management of inventory, receivables and capital expenditures, as well as lowering debt. In the past quarter, the company reduced its credit facility from US$1.4 billion to US$960 million as a result of the sale of its FPGA business, accounts receivable securitization and asset sales. The company is also making progress on the consolidation actions announced in January, which include combining a majority of its operations in Pennsylvania and New Jersey into the Allentown, Pa., campus and the intended sale of the Orlando, Fla., operations.
"Through continued cost reduction, we are on track to achieve our financial targets despite a difficult market," Dickson said. "With steps to improve both our topline and bottomline, we are focused on building a long-term profitable future for the company."
In the March quarter, Agere announced a number of industry-leading products in both its Infrastructure business, particularly integrated solutions targeting the metro market, as well as its Client business, for wireless LAN and storage applications.
The company:
* Shipped its new high-performance, low-cost chipsets code-named "Ruby" in several of its Wi-Fi products.
* Introduced the world's first uncooled XENPAK-compliant 10 Gigabit Ethernet transceiver to transmit up to 40 km.
* Announced the world's first low-power, cost-effective 40- and 80-km 10 Gbit/s transponders.
* Became the first to begin volume production of 3D MEMS optical switch components.
* Unveiled the industry's first standards-compliant 10 Gbit/s surface-mount optical receivers.
* Introduced next-generation, 1-GHz read-channel integrated circuits for cost-effective, high-capacity disk drives.
Agere continued to strengthen its relationship with key customers, and in the March quarter, nearly doubled the number of design wins from the previous quarter. Almost two-thirds of the company's design wins were with its top 30 customers. In the Infrastructure business, about half of the design wins were in the metro core and access areas. In the Client business, more than one-third of the design wins were for the storage and wireless LAN product lines.
In the March quarter, the company also:
* Provided ATM port controllers to ADC, a supplier of network equipment, software and services, for the company's digital subscriber line (DSL) access platforms.
* Signed an agreement to supply custom storage chips to DataPlay, a developer of mini-disk media solutions.
* Shipped its 10 millionth system-on-a-chip solution to Maxtor.
Outlook
For the June quarter, Agere expects that both revenues and pro forma net loss per share will be flat to slightly better sequentially. Pro forma net loss per share includes certain costs related to facilities consolidation.
Agere Systems is the world's No.1 provider of components for communications applications with leadership in optical components and integrated circuits. This dual capability uniquely positions Agere to deliver integrated solutions that form the building blocks for advanced wired, wireless, and optical communications networks. Agere also designs and manufactures a wide range of semiconductor solutions for communications-related devices used by consumers such as cellular phones, modems, and hard disk drives for personal computers and workstations. In addition, the company supplies complete wireless computer networking solutions through the ORiNOCO(R) product line. More information about Agere Systems is available from its Web site at http://www.agere.com .
This release contains forward-looking statements based on information available to Agere as of the date hereof. Agere's actual results could differ materially from the results stated or implied by such forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, completion of the distribution of Agere stock by Lucent Technologies, customer demand for our products and services, control of costs and expenses, timely completion of employment reductions and other restructuring and consolidation activities, price and product competition, keeping pace with technological change, dependence on new product development, reliance on major customers and suppliers, availability of manufacturing capacity, components and materials, general industry and market conditions and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2001, and report on Form 10-Q for the period ending December 31, 2001. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Agere Systems
CONTACT: Cynthia Leung of Agere, +852-3129-2031 (office), or +852-9686-2035 (cellular), or [email protected]/
Web Site: http://www.agere.com
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