DGAP-News: DIALOG SEMICONDUCTOR REPORTS SECOND QUARTER RESULTS ENDED 28 JUNE 2013.Company delivers second quarter revenue at the upper end of May guidance and year on year gross margin improvement
(firmenpresse) - DGAP-News: Dialog Semiconductor Plc. / Key word(s): Half Year Results
DIALOG SEMICONDUCTOR REPORTS SECOND QUARTER RESULTS ENDED 28 JUNE
2013.Company delivers second quarter revenue at the upper end of May
guidance and year on year gross margin improvement
23.07.2013 / 07:30
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Kirchheim/Teck, Germany, 23 July 2013 - Dialog Semiconductor plc (FWB:
DLG), a provider of highly integrated innovative power management, audio
and low energy short range wireless technologies, today reports results for
its second quarter ending 28 June 2013.
Q2 2013 financial highlights
- Revenue at $152 million, down 5% on Q2 2012
- Connectivity segment revenue up 4% over Q2 2012
- Gross margin at 37.7%, 20bps above Q2 2012
- Underlying (*) EBITDA (**) at $19.8 million or 13.1% of revenue
- IFRS operating profit (EBIT) at $6.1 million or 4.0% of revenue.
Excluding acquisition related costs of $2.9 million incurred in Q2,
IFRS EBIT at 6.0% of revenue
- Connectivity segment IFRS operating profit (EBIT) at $2.3 million or
9.4% of revenue
- IFRS basic and diluted EPS of 3 cents, down 10 and 9 cents respectively
on Q2 2012 Underlying (*) basic and diluted EPS of 15 and 14 cents,
down 6 and 5 cents respectively on Q2 2012. Basic and diluted EPS
impact of acquisition related costs was 4 cents respectively
- Cash generated from operations at $57.7 million. Cash and cash
equivalents balance as of 28 June 2013 increased by $28.1 million from
Q1 2013 to $346.7 million
Q2 2013 operational highlights
- The acquisition of iWatt completed as expected on 16 July
- Continued power management smartphone and tablet design win momentum,
across new platforms and models of our largest clients
- Broadened our product portfolio with the launch of SmartbondTM the
world's lowest power Bluetooth Smart System-on-Chip (SoC)
- Wistron adopted SmartwaveTM, our multi-touch IC to provide tier one PC
manufacturing partners with a 23 inch touch All-in-One product
- Expanded our partnership with Freescale with a new audio codec
reference module for their Tower System Development Platform
Commenting on the results Dialog Chief Executive, Dr Jalal Bagherli, said:
'We have delivered a good set of results in the second quarter while
maintaining our innovation focus and generating significant cash from our
business. The launch of two new product families, SmartbondTM and
SmartwaveTM opens up new addressable markets, supporting the
diversification of our business and enabling exciting new applications.'
'Dialog remains focused on delivering a successful steep ramp of a number
of new products through the next two quarters to meet client demand.
Lastly, I am very excited to have recently completed the acquisition of
iWatt and we are now devoting significant attention to the integration of
the business.'
Outlook
In Q3 2013, excluding the contribution from the acquired iWatt business, we
expect revenue for the quarter to be in the range of $190 to $210 million.
Given the visibility we have, we remain confident about the Company's
revenue growth for the full year, driven by the ramp of high volume new
products.
In Q3 2013, excluding the contribution of the acquired iWatt business,
gross margin is expected to improve sequentially and on a year on year
basis and continue to improve through the second half of 2013. This will
result in gross margin improvement for full year 2013 over 2012.
In Q3 2012, we expect the acquired iWatt business to contribute an
additional $18 to $20 million revenue from July 16, representing
approximately a 15% year on year growth for the full quarter.
Financial overview
IFRS (*) Second Quarter First Half
US$ million 2013 2012 Var. 2013 2012 Var.
Revenue 151.7 159.5 (5)% 331.6 325.9 +2%
Gross Margin 37.7% 37.5% +20bps 37.9% 37.2% +70bps
R&D % 21.6% 19.1% +250bps 20.8% 18.1% +270bps
SG&A % 12.1% 10.0% +210bps 10.3% 10.2% (10)bps
EBIT 6.1 13.4 (55)% 22.6 29.1 (22)%
EBIT % 4.0% 8.4% (440)bps 6.8% 9.0% (220)bps
Net income 2.1 8.5 (76)% 12.0 20.2 (41)%
Basic EPS $ 0.03 0.13 (77)% 0.18 0.31 (42)%
Diluted EPS $ 0.03 0.12 (75)% 0.18 0.30 (40)%
Operating cash flow 57.7 (9.0) n/a 78.2 26.8 +192%
Underlying Second Quarter First Half
US$ million 2013 2012 Var. 2013 2012 Var.
Gross Margin 37.9% 37.5% +40bps 38.1% 37.4% +70bps
EBITDA 19.8 24.4 (19)% 48.1 51.5 (7)%
EBITDA % 13.1% 15.3% (220)bps 14.5% 15.8% (130)bps
EBIT 12.0 16.9 (29)% 31.0 38.5 (19)%
EBIT % 7.9% 10.6% (270)bps 9.3% 11.8% (250)bps
Basic EPS $ 0.15 0.21 (29)% 0.36 0.47 (23)%
Diluted EPS $ 0.14 0.19 (26)% 0.35 0.45 (22)%
(*) Including $2.9 million of acquisition related costs
Revenue in Q2 2013 was down 5% at $152 million. As expected, revenue in
Mobile Systems segment was down 5% over Q2 2012. During the quarter we saw
good momentum in the Connectivity segment, with revenue up 4% on Q2 2012.
Q2 2013 gross margin was 37.7%, 20bps above Q2 2012 and in line with our
May guidance. The anticipated marginal sequential decline versus Q1 2013 is
the result of the lower revenue in the quarter and the subsequent higher
allocation per unit of the fixed component of Cost of Sales - or Cost of
Goods Sold (COGS). In addition to the on-going collaboration with our
foundry partners, the Connectivity segment contributed to the positive year
on year gross margin trend. As a result of all these efforts, we continue
to expect year on year gross margin improvement for the full year 2013.
R&D investment in Q2 2013 stood at 21.6% of revenue, 250 bps over Q2 2012
and despite a sequential decline of 10% on Q1 2013 in the absolute amount
of R&D. On a trailing twelve months basis, R&D was 17.7% of revenue, 70bps
above Q2 2012. The strong investment in R&D resources and projects is an
important part of the company's strategy to accelerate diversification of
its product portfolio, to address new market applications and broaden its
customer base. We remain confident about our product pipeline and we expect
to launch new products through the second half of 2013 and into 2014.
During the quarter we maintained best in class SG&A expense levels.
Excluding $2.9 million costs related to the acquisition of iWatt, SG&A in
Q2 2013 was broadly in line with Q2 2012 at 10.1% of revenue, representing
a sequential decline of 3% on Q1 2013. On a trailing twelve months basis
SG&A was 9.0% of revenue, 90bps below Q2 2012 after excluding acquisition
related costs. As in Q1 2013, we saw lower amortisation expenses relating
to the purchase price allocation from the SiTel acquisition and lower
national insurance costs associated with share based payment charges.
IFRS EBIT in Q2 2013 excluding costs related to the acquisition of iWatt
was down 33% on Q2 2012 to $9.0 million. This decline was the consequence
of the lower revenue in Q2 2013 and the continuing investment in R&D
resources and projects to fuel future growth. The positive trend we saw in
Connectivity segment in Q1 2013 continued during the second quarter. This
segment was for the first time profitable on an IFRS basis with Q2 2013
EBIT at $2.3 million (Q2 2012: loss of $2.2 million). During the second
quarter we continued to benefit from all the initiatives we took during
2012 to gain greater supply chain efficiencies and re-focus on higher
margin business opportunities.
A net tax charge of $0.9 million was recorded in Q2 2013. This is in line
with our May guidance, representing a 30% effective tax rate. This rate is
above the effective tax rate for Q2 2012 of 27%. We continue to expect the
tax rate to peak in 2013 at around 30% before the consolidation of iWatt
into the Group.
IFRS net income was $2.1 million, 76% below Q2 2012. Excluding acquisition
related costs incurred in the quarter, IFRS net income was $5.1 million,
40% below Q2 2012. This drop was the result of the decrease in EBIT and the
higher interest expenses being partially offset by the lower value of the
tax charge. The increase in interest expenses relates to the measurement of
the financial liability from the convertible bond. On an underlying basis
Q2 2013 net income was below Q2 2012 mainly as a result of the lower
revenue and the sustained investment in R&D in line with our strategic
growth and diversification objectives.
At the end of Q2 2013, the value of our total inventory was $114 million,
22% below Q1 2013 (or ~109 days, 11 days below Q1 2013). As indicated in
May, the value of our finished goods continued to reduce, resulting on a
39% decrease on Q1 2013. The percentage of raw materials out of the total
inventory value was 31% (Q1 2013: 30%) and the percentage of work in
progress reached 28% (Q1 2013: 18%). We expect inventory value to increase
during Q3 2013 in anticipation of a number of product launches during the
second half.
At the end of Q2 2013, we had cash and cash equivalents balance of $346.7
million. In the second quarter we generated $57.7 million of operating
cash. Free cash flow (***) movement in the quarter was an inflow of $44.4
million.
(*) Underlying results(net of tax) in Q2-2013 are based on IFRS
consolidated interim net income statement, adjusted to exclude share-based
compensation charges and related charges for National Insurance of US$1.6
million, excluding US$0.9 million of amortisation of intangibles associated
with the acquisition of SiTel (now Dialog B.V.), excluding US$ 1.9 million
non-cash interest expense in connection with the convertible bond,
excluding US$ 0.2 million non-cash effective interest expense related to a
licensing agreement entered into in Q3-2012 and excluding costs of US$2.9
million incurred during the acquisition of iWatt and also excluding the
related tax effects.
Underlying results(net of tax) in Q2-2012 are based on IFRS, adjusted to
exclude share-based compensation charges and related charges for National
Insurance of US$1.9 million, excluding US$1.2 million of amortisation of
intangibles associated with the acquisition of Dialog B.V. and excluding
US$1.7 million interest expense in connection with the convertible bond.
Underlying results (net of tax) in H1-2013 are based on IFRS, adjusted to
exclude share-based compensation charges and related charges for National
Insurance of US$2.8 million, excluding US$1.7 million of amortisation of
intangibles associated with the acquisition of SiTel, excluding US$3.8
million non-cash interest expense in connection with the convertible bond,
US$ 0.4 million non-cash effective interest expense related to a licensing
agreement entered into in Q3-2012, excluding costs of US$2.9 million
incurred during the acquisition of iWatt and also excluding the related tax
effects.
Underlying results (net of tax) in H1-2012 arebased on IFRS, adjusted to
exclude share-based compensation charges and related charges for National
Insurance of US$5.6 million, excluding US$2.8 million of amortisation of
intangibles associated with the acquisition of SiTel and excluding US$1.7
million non-cash interest expense in connection with the convertible bond.
The term 'underlying' is not defined in IFRS and therefore may not be
comparable with similarly titled measures reported by other companies.
Underlying measures are not intended as a substitute for, or a superior
measure to, IFRS measures.
(**) EBITDA is defined as operating profit excluding depreciation for
property, plant and equipment (Q2 2013: US$4.1 million, Q2 2012: US$3.0
million), amortisation for intangible assets (Q2 2013: US$4.9 million, Q2
2012: US$4.3 million) and losses on disposals and impairment of fixed
assets (Q2 2013: US$0.0 million, Q2 2012: US$0.1 million).
EBITDA is defined as operating profit excluding depreciation for property,
plant and equipment (H1-2013: US$8.0 million, H1 2012: US$5.6 million),
amortisation for intangible assets (H1-2013: US$10.0 million, H1-2012:
US$9.0 million) and losses on disposals and impairment of fixed assets
(H1-2013: US$0.3 million, H1-2012: US$0.3 million).
(***) Free Cash Flow is defined as net income of US$2.1 million plus
amortisation and depreciation of US$ 9.0 million, plus net interest expense
of US$2.7 million, plus change in working capital of US$41.0 million and
minus capital expenditure of US$10.4 million.
Operational overview
The acquisition of iWatt closed on 16 July. It underscores Dialog's
strategy to diversify our markets and growth opportunities through select
strategic acquisitions. iWatt's digital power management business is highly
complementary to our existing business, enabling Dialog to address
adjacent emerging power management segments, such as cutting-edge AC/DC
chargers and adapters and ICs for LED solid state lighting. The combined
business will be in a unique position to provide the complete solution for
next-generation faster charging and power management for portable devices.
During the coming months our team will devote significant attention to the
smooth integration of the business.
During the quarter we completed a number of our highly integrated PMIC
designs which are being sampled to our customers, before transition into
our production environment. Our R&D teams are now engaged in next
generation designs, using existing 0.25 micron BCD technology and the new
0.13 micron BCD technology for products to be launched in 2014 and beyond.
Building on our innovation effort and as part of our connectivity strategy
we entered the Bluetooth(R) Smart segment with the launch of SmartbondTM,
the world's lowest power Bluetooth(R) Smart System-on-Chip (SoC). This
solution more than doubles the battery life of an app-enabled smartphone
accessory or computer peripheral in comparison to competing solutions on
the market. It's designed to connect keyboards, mice and remote controls
wirelessly to tablets, laptops or Smart TVs and enables consumers to use
innovative new apps on their smartphones and tablets. Murata is the first
module manufacturer to adopt SmartbondTM.
We continued to broaden our client portfolio and we were very pleased that
Wistron adopted SmartwaveTM, our recently launched multi-touch IC. Wistron
has developed a 23 inch, Windows 8 compliant multi- touch module targeting
high volume All-in-One PCs and display monitors. This multi-touch module
can be used as a direct one-to-one replacement of today's projected
capacitive touch module. This win further supports the diversification of
our business, expanding our addressable market into mass market PCs,
including Ultrabooks(TM).
We extended our cooperation with Freescale with a new audio codec reference
module for their Tower System Development Platform. OEMs can now use
Dialog's latest low power audio codec to significantly improve the
consumer's audio experience. An on-chip, programmable Digital Signal
Processor (DSP) offloads audio software from the hostprocessor, enabling
OEMs to benefit from consistent high quality audio including SRS SoundTM.
Our DA6021 PMIC which we developed in collaboration with Intel for their
Bay Trail processor is now qualified and being sampled to customers.
Together with the Bay Trail processor, this PMIC delivers outstanding
battery life for new tablet designs.
* * * * *
Dialog Semiconductor invites you today at 09.00 am (London) / 10.00 am
(Frankfurt) to take part in a live conference call and to listen to
management's discussion of the Company's Q2 2013 performance, as well as
guidance for Q3 2013. To access the call please use the following dial-in
numbers: Germany: 0800 101 4960, UK: 0800 694 0257, US: 1866 966 9439, ROW:
+44 (0)1452 555 566, with no access code required. An instant replay
facility will be available for 30 days after the call and can be accessed
at +44 (0)1452 550 000 with access code #96486411. An audio replay of the
conference call will also be posted soon thereafter on the Company's
website at:
http://www.diasemi.com/investor-relations
This press release should be read in conjunction with the financial review
and unaudited interim condensed consolidated financial statements, where
further information is given. Full unaudited interim condensed consolidated
financial statements including the independent review report to Dialog
Semiconductor plc, unaudited interim consolidated statement of financial
position, unaudited interim consolidated income statement, unaudited
interim consolidated statement of comprehensive income, unaudited interim
consolidated statement of cash flows, unaudited interim consolidated
statement of changes in equity and unaudited notes to the interim condensed
consolidated financial statements for the period ending 28 June 2013 is
available under the investor relations section of the Company's website at:
http://www.diasemi.com/investor-relations
For further information please contact:
Dialog Semiconductor
Jose Cano
Head of Investor Relations
T: +44 (0)1793 756 961
jose.cano(at)diasemi.com
Dialog Semiconductor
Helen McInnes
Head of Global Corporate Communications
T: +44 (0)1793-756-960
Mobile: +44 (0)7554 419 180
helen.mcinnes(at)diasemi.com
FTI Consulting London
Matt Dixon
T: +44 (0)20 7269 7214
matt.dixon(at)fticonsulting.com
FTI Consulting Frankfurt
Thomas M. Krammer
T: +49 (0) 69 9203 7183
thomas.krammer(at)fticonsulting.com
Note to editors
Dialog Semiconductor creates highly integrated, mixed-signal integrated
circuits (ICs) optimised for personal portable, low energy short-range
wireless, LED solid state lighting, and automotive applications. The
Company provides flexible and dynamic support, world-class innovation and
the assurance of dealing with an established business partner.
With its focus and expertise in energy efficient system power management,
and with a technology portfolio including audio, short range wireless,
AC/DC power conversion and multi-touch technology, Dialog brings decades of
experience to the rapid development of ICs for personal portable
applications including smartphones, tablets, ultrabooks and digital
cordless phones..
Dialog's power management processor companion chips are essential for
enhancing both the performance in terms of extended battery lifetime and
the consumers' multimedia experience. With world-class manufacturing
partners, Dialog operates a fabless business model.
Dialog Semiconductor plc is headquartered near Stuttgart with a global
sales, R&D and marketing organisation. In 2012, it had $774 million in
revenue and was one of the fastest growing European public semiconductor
companies. Dialog Semiconductor currently has approximately 1,000
employees. The Company is listed on the Frankfurt (FWB: DLG) stock exchange
and is a member of the German TecDax index. It also has a convertible bond
listed on the Euro MTF Market on the Luxemburg Stock Exchange (ISIN
XS0757015606)
Forward Looking Statements
This press release contains 'forward-looking statements' that reflect
management's current views with respect tofuture events. The words
'anticipate,' 'believe,' 'estimate, 'expect,' 'intend,' 'may,' 'plan,'
'project' and 'should' and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in the semiconductor
and telecommunications markets; changes in currency exchange rates and
interest rates, the timing of customer orders and manufacturing lead times,
insufficient, excess or obsolete inventory, the impact of competing
products and their pricing, political risks in the countries in which we
operate or sale and supply constraints. If any of these or other risks and
uncertainties occur (some of which are described under the heading 'Risks
and their management' in Dialog Semiconductor's most recent Annual Report)
or if the assumptions underlying any of these statements prove incorrect,
then actual results may be materially different from those expressed or
implied by such statements. We do not intend or assume any obligation to
update any forward-looking statement which speaks only as of the date on
which it is made, however, any subsequent statement will supersede any
previous statement.
End of Corporate News
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Language: English
Company: Dialog Semiconductor Plc.
Tower Bridge House, St. Katharine's Way
E1W 1AA London
United Kingdom
Phone: +49 7021 805-412
Fax: +49 7021 805-200
E-mail: jose.cano(at)diasemi.com
Internet: www.diasemi.com
ISIN: GB0059822006, XS0757015606
WKN: 927200
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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