- Operating margin of 26.1% is highest reported in three years - Virtex-5(R) sales post strong growth
(Logo: http://www.newscom.com/cgi-bin/prnh/20020822/XLNXLOGO)
The Xilinx Board of Directors declared a quarterly cash dividend of $0.14 per outstanding share of common stock, payable on February 25, 2009 to all stockholders of record at the close of business on February 4, 2009.
Additional third quarter comparisons are represented in the charts below:
GAAP Results
(In millions, except EPS)
Growth Rates
Q3 FY 2009 Q2 FY 2009 Q3 FY 2008 Q-T-Q Y-T-Y
Net revenues $458.4 $483.5 $474.8 -5% -3%
Operating
income $119.6 $124.6 $115.3 -4% 4%
Net income $139.4 $81.8 $103.6 70% 35%
Diluted
earnings
per share $0.51 $0.29 $0.35 76% 46%
Sales in the month of December were particularly weak as the current economic recessionary environment began impacting customers in most Xilinx end markets. With the exception of sales to Industrial and Other which were flat, sales to other end markets declined sequentially in the December quarter.
Continued cost reduction efforts contributed to improved gross and operating margins during the quarter. Operating margin of 26.1% was up from 24.3% in the same quarter of the prior year and the highest reported in over three years. Gross margin of 63.9% was up from 63.3% in the same quarter of the prior year and the highest reported in over four years.
"Sales from the Company's flagship Virtex-5 family posted exceptionally strong growth in the December quarter increasing 35% sequentially and representing 15% of total sales, up from 10% in the prior quarter," said Moshe Gavrielov, Xilinx President and Chief Executive Officer. "The success of this product family in today's challenging economic environment underscores a growing affinity for programmable solutions versus ASIC alternatives. Programmable solutions provide customers with lower risk, greater flexibility and, in many cases, lower total overall cost."
Net Revenues by Geography:
Percentages Growth Rates
Q3 Q2 Q3
FY 2009 FY 2009 FY 2008 Q-T-Q Y-T-Y
North America 34% 34% 41% -4% -20%
Asia Pacific 33% 32% 27% -1% 20%
Europe 22% 23% 22% -12% -4%
Japan 11% 11% 10% -4% 1%
Net Revenues by End Market:
Percentages Growth Rates
Q3 Q2 Q3
FY 2009 FY 2009 FY 2008 Q-T-Q Y-T-Y
Communications 44% 43% 41% -3% 4%
Industrial &
Other 33% 32% 33% 0% -2%
Consumer &
Automotive 16% 17% 17% -12% -11%
Data Processing 7% 8% 9% -21% -27%
Net Revenues by Product*:
Percentages Growth Rates
Q3 Q2 Q3
FY 2009 FY 2009 FY 2008 Q-T-Q Y-T-Y
New 48% 45% 35% 2% 34%
Mainstream 36% 38% 45% -9% -22%
Base 11% 12% 14% -17% -29%
Support 5% 5% 6% -11% -19%
* Products are classified as follows:
New Products: Virtex-5, Virtex-4, Spartan(R)-3, and CoolRunner(TM)-II products
Mainstream Products: Virtex-II, Spartan-II, CoolRunner and Virtex-E products
Base Products: Virtex, Spartan, XC4000 and XC9500 products
Support Products: Configuration solutions, HardWire, Software & Support/Services
Highlights - December Quarter Fiscal 2009
-- For the second consecutive quarter, sales to customers in wireless communications were particularly strong, increasing over 10% sequentially. Most of this growth was attributable to the next generation rollout of wireless technologies in China. Xilinx FPGA solutions, most notably Virtex-5 FPGAs, are key beneficiaries of this next generation wireless technology rollout due to their high performance, functionality and system integration capabilities.
-- Xilinx continues to have one of the most stable and resilient business models in the technology industry in terms of profitability and cash flow generation. In the December quarter, Xilinx generated $128.5 million in operating cash flow and paid $146.3 million in cash to repurchase $241.1 million (principal amount) of convertible debentures and $38.4 million in cash dividends. Xilinx currently has among the highest dividend yields in the technology industry.
Key Statistics:
Q3 Q2 Q3
FY 2009 FY 2009 FY 2008
Annual Return on Equity (%)* 24 21 21
Operating Cash Flow (millions) $128 $95 $208
Depreciation Expense (millions) $13 $13 $13
Capital Expenditures (millions) $11 $12 $11
Combined Inventory Days 99 93 91
Revenue Turns (%) 54 59 59
*Return on equity calculation: Annualized net income/average stockholders' equity
Business Outlook - March Quarter Fiscal 2009
-- Sales are expected to be down 15% to 25% sequentially.
-- Gross margin is expected to be in the range of 61% to 63%.
-- Operating expenses are expected to be flat to slightly down
sequentially from the December quarter.
-- Interest and other is expected to be a net expense of $3 million.
-- Fully diluted share count is expected to be approximately 275 million
shares.
-- March quarter tax rate is expected to be approximately 21%.
Conference Call
A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the March quarter. The webcast and subsequent replay will be available in the investor relations section of the company's web site at http://www.investor.xilinx.com. A telephonic replay of the call may be accessed later in the day by calling (800) 642-1687 and referencing confirmation code 76849026. The telephonic replay will be available for two weeks following the live call.
Business Update -- March Quarter Fiscal 2009
The Company expects to issue a fourth quarter business update press release before the market opens on Tuesday, March 3, 2009. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com.
This release contains forward-looking statements and projections. Forward-looking statements and projections can often be identified by the use of forward-looking words such as "expect," "may," "will," "could," "believe," "anticipate," "estimate," "continue," "plan," "intend," "project" or other similar words. Undue reliance should not be placed on such forward-looking statements and projections, which speak only as of the date they are made. We undertake no obligation to update such forward-looking statements. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including the general health of global economies as well as of the semiconductor industry, the health of our end markets and our customers' customers, our ability to forecast end customer demand, customer acceptance of our new products, the ability of our customers to manage their inventories, a high dependence on turns business, more customer volume discounts than expected, greater product mix changes than anticipated, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to successfully manage production at multiple foundries, variability in wafer pricing, and other risk factors listed in our most recent Forms 10-K and 10-Q.
About Xilinx
Xilinx, Inc. (NASDAQ: XLNX) is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com.
Xilinx, the Xilinx logo, Virtex, Spartan, ISE, and other brands designated herein are trademarks of Xilinx in the United States and other countries. All other trademarks are the property of their respective owners. #0904F
XILINX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
Dec. 27, Dec. 29, Sept. 27, Dec. 27, Dec. 29,
2008 2007 2008 2008 2007
Net revenues $458,387 $474,806 $483,537 $1,430,170 $1,365,612
Cost of revenues 165,331 174,414 177,407 519,244 513,014
Gross margin 293,056 300,392 306,130 910,926 852,598
Operating expenses:
Research and
development 86,967 91,011 89,501 267,202 267,175
Selling, general
and
administrative 85,032 92,453 88,080 266,116 272,856
Amortization of
acquisition-
related
intangibles 1,475 1,582 1,426 4,326 5,376
Restructuring
charges - - 2,487 22,023 -
Total operating
expenses 173,474 185,046 181,494 559,667 545,407
Operating income 119,582 115,346 124,636 351,259 307,191
Gain on early
extinguishment of
convertible
debentures 89,672 - - 89,672 -
Impairment loss on
investments (19,540) - (29,001) (53,162) -
Interest and other,
net (575) 14,385 8,490 13,620 47,422
Income before income
taxes 189,139 129,731 104,125 401,389 354,613
Provision for income
taxes 49,765 26,139 22,300 96,261 77,045
Net income $139,374 $103,592 $81,825 $305,128 $277,568
Net income per
common share:
Basic $0.51 $0.36 $0.30 $1.10 $0.94
Diluted $0.51 $0.35 $0.29 $1.10 $0.92
Cash dividends
declared per common
share $0.14 $0.12 $0.14 $0.42 $0.36
Shares used in per
share calculations:
Basic 273,997 289,703 276,169 276,584 296,714
Diluted 274,223 293,036 277,714 277,603 301,030
XILINX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 27, March 29,
2008 2008
(Unaudited) (1)
ASSETS
Current assets:
Cash, cash equivalents and short-
term investments $1,289,930 $1,296,435
Accounts receivable, net 213,590 249,147
Inventories 149,421 130,250
Deferred tax assets and other
current assets 101,327 144,364
Total current assets 1,754,268 1,820,196
Net property, plant and equipment 394,973 404,430
Long-term investments 388,972 564,269
Other assets 343,248 348,212
Total Assets $2,881,461 $3,137,107
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $207,786 $228,988
Deferred income on shipments to
distributors 71,510 111,678
Total current liabilities 279,296 340,666
Convertible debentures 760,107 999,851
Deferred tax liabilities 102,425 84,486
Other long-term liabilities 71,150 40,281
Stockholders' equity 1,668,483 1,671,823
Total Liabilities and Stockholders' Equity $2,881,461 $3,137,107
(1) Derived from audited financial statements
XILINX, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
Dec. 27, Dec. 29, Sept. 27, Dec. 27, Dec. 29,
2008 2007 2008 2008 2007
SELECTED CASH FLOW
INFORMATION:
Depreciation $13,438 $13,497 $13,309 $42,167 $40,323
Amortization 4,120 4,328 4,227 12,573 13,537
Stock-based
compensation 13,041 16,456 13,724 41,188 48,730
Net cash provided by
operating activities 128,479 207,744 94,700 381,676 479,134
Purchases of property,
plant and equipment (11,061) (10,737) (11,777) (32,711) (39,355)
Payment of dividends
to stockholders (38,357) (34,480) (38,697) (115,982) (105,881)
Repurchases of common
stock - (200,000) (125,000) (275,000) (350,000)
Repurchases of
convertible
debentures (146,324) - - (146,324) -
Proceeds from issuance
of common stock to
employees and excess
tax benefit 2,992 11,610 49,856 84,379 90,394
STOCK-BASED COMPENSATION
INCLUDED IN:
Cost of revenues $1,337 $1,937 $1,497 $4,416 $5,785
Research and
development 6,055 7,977 6,293 18,702 22,526
Selling, general and
administrative 5,649 6,542 5,629 17,506 20,419
Restructuring charges - - 305 564 -
Investor Relations Contact:
Lori Owen
Xilinx, Inc.
(408) 879-6911
ir@xilinx.com
Web site: http://www.xilinx.com/