Exar Corporation Announces Fiscal 2013 Second Quarter Results

        Exar Corporation Announces Fiscal 2013 Second Quarter Results

Company Reports Sequential Growth In Sales and Profit

PR Newswire

FREMONT, Calif., Oct. 24, 2012

FREMONT, Calif., Oct. 24, 2012 /PRNewswire/ --Exar Corporation (Nasdaq:
EXAR), a leading supplier of high performance, analog mixed-signal components
and data management solutions, today reported financial results for the second
quarter of fiscal year 2013 ended September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20120716/SF41155LOGO)

Revenue for the quarter was $30.6 million, or 5% growth compared to the prior
quarter. Non-GAAP net income for the quarter was $2.9 million, or 98% growth
compared to the prior quarter. Non-GAAP net income per fully diluted share
was $0.06 compared to $0.03 in the prior quarter. Non-GAAP gross margin was
46.7%, and non-GAAP operating expenses were $12.1 million. GAAP net income for
the quarter was $0.3 million compared to a net loss of $0.6 million in the
prior quarter, and GAAP net income per fully diluted share was $0.01 compared
to a net loss of $0.01 in the prior quarter.

"The second quarter of fiscal 2013 exceeded our expectations as both revenue
and profit grew nicely. Data Compression and Security products led revenue
growth as our presence in the Big Data Analytics market supported 23% growth
quarter-over-quarter. Our component products, Power Management and
Connectivity, also showed growth in the quarter; however this growth was muted
by lower overall OEM demand and supply limitations," commented Louis DiNardo,
president and CEO.

"During our second fiscal quarter our programmable power management products
began to ship to both Intel and ARM based next generation server designs as
well as in industrial equipment applications," continued Mr. DiNardo. "As more
servers are deployed in data center applications energy monitoring is playing
an increasingly important role. Our programmable power management products
provide critical information for data center management. Additionally, our
PCIe solutions for Big Data Analytics are gaining momentum in large networking
and storage environments as they provide increased system performance and
lower overall system cost. We are pleased with our new product development
efforts and progress in achieving our goal of consistent profitable growth,"
concluded Mr. DiNardo.

For the third quarter of fiscal year 2013 the Company expects revenue growth
in the range of 2% to 4% and non-GAAP gross margin in the range of 47% to
48%. Non-GAAP net income per fully diluted share is expected to be in the
range of $0.06 to $0.07.

GAAP FINANCIAL COMPARISON
(In millions, except per share
amounts)
(Unaudited)
                 THREE MONTHS ENDED                    SIX MONTHS ENDED
                 SEPTEMBER     JULY 1,  OCTOBER    SEPTEMBER   OCTOBER
                 30,                      2,        30,         2,
                 2012           2012       2011        2012         2011
                 $        $      $       $       $    
Net sales         30.6                    36.1    59.9        73.1
                                29.3
Gross margin     43.5%          44.0%      46.3%       43.8%        45.9%
Loss from        $        $      $       $       $    
operations        (0.4)                           (1.5)      
                                (1.2)      (1.5)                    (3.6)
Net income       $        $      $       $       $    
(loss)             0.3                           (0.3)      
                                (0.6)      (1.1)                    (2.5)
Net income (loss) per share
                 $        $      $       $       $    
 Basic          0.01                    (0.02)   (0.01)       (0.06)
                                (0.01)
                 $        $      $       $       $    
 Diluted        0.01                    (0.02)   (0.01)       (0.06)
                                (0.01)


NON-GAAP FINANCIAL COMPARISON
(In millions, except per share
amounts)
(Unaudited)
                 THREE MONTHS ENDED                    SIX MONTHS ENDED
                 SEPTEMBER     JULY 1,  OCTOBER    SEPTEMBER   OCTOBER
                 30,                      2,        30,         2,
                 2012           2012       2011        2012         2011
                 $        $      $       $       $    
Net sales         30.6                    36.1    59.9        73.1
                                29.3
Gross margin     46.7%          47.2%      49.0%       47.0%        48.8%
Income from      $        $      $       $       $    
operations         2.2                          3.1       
                                0.9        0.8                      0.9
                 $        $      $       $       $    
Net income         2.9                          4.3       
                                1.4        1.4                      2.1
Net income per
share
                 $        $      $       $       $    
 Basic          0.06                    0.03    0.09        0.05
                                0.03
                 $        $      $       $       $    
 Diluted        0.06                    0.03    0.09        0.05
                                0.03



Results Conference Call

The Company invites investors, financial analysts, and the general public to
listen to its conference call discussing the Company's financial results for
the second quarter of fiscal year 2013, today, Wednesday, October 24, 2012 at
1:30 p.m. PDT. To access the conference call, please dial 800-230-1059 after
1:20 p.m. PDT. In addition, a live webcast will be available on Exar's
Investor Relations webpage.

To access the webcast, please go to the Company's Investor Relations Homepage
at: http://www.exar.com/news/investornews.aspx. A recorded replay of the
conference call will be available starting at 3:00 p.m. PDT the day of the
call until 11:59 p.m. PDT on October 31, 2012. To access the replay, please
dial 800-475-6701 and use conference ID number 267782.

About Exar

Exar Corporation designs, develops and markets high performance, analog
mixed-signal integrated circuits and advanced sub-system solutions for data
communication, networking, storage, consumer, and industrial applications.
Exar's product portfolio includes power management and connectivity
components, communications products, and network security and storage
optimization solutions. Exar has locations worldwide providing real-time
customer support. For more information about Exar, visit http://www.exar.com.

Forward-Looking Statements

This press release may contain certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations or belief about the
future events and financial, political and social trends and assumptions it
has made based on information currently available to it. Exar cannot assure
that any expectations, forecasts or assumptions made by management preparing
these forward-looking statements will prove accurate, or that any projections
will be realized. Such forward-looking statements may be affected by
inaccurate assumptions or by known or unknown risks or uncertainties. Actual
results may vary materially from those expressed or implied by the statements
herein. Forward-looking statements contained herein speak only as of this
release. Exar does not undertake any obligation to update or revise publicly
any forward-looking statements, whether to reflect new information, future
events or otherwise. For factors that could cause actual results to vary,
perhaps materially, from these forward-looking statements, please refer to
Exar's filings with the Securities and Exchange Commission, including the
Annual Report on Form 10-K for the year ended April 1, 2012 and the Quarterly
Report on Form 10-Q for the period ended July 1, 2012.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP.
Additionally, the Company supplements reported GAAP financials with non-GAAP
measures which are included in related press releases and reports furnished to
the SEC, copies of which are available at the Company's website:
http://www.exar.com or the SEC's website at: http://www.sec.gov. For the
periods presented, we are disclosing non-GAAP gross profit, non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net
income and non-GAAP basic and diluted net income per share, which are
adjusted to exclude from our GAAP results all stock-based compensation,
amortization of acquired intangible assets, restructuring charges and exit
costs, and income tax effects. These non-GAAP measures are presented in part
to enhance the understanding of the Company's historical financial performance
and comparability between reporting periods. The Company believes the
non-GAAP presentation, when shown in conjunction with the corresponding GAAP
measures, provide relevant and useful information to analysts, investors,
management and other interested parties following the semiconductor industry.
For its internal purposes, the Company uses the foregoing non-GAAP measures to
evaluate performance across reporting periods, determine certain employee
benefits as well as plan for and forecast the Company's future periods. These
non-GAAP measures are not in accordance with, or an alternative for measures
prepared in accordance with GAAP, and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are not based
on any comprehensive set of accounting rules or principles. The Company
believes that non-GAAP measures have limitations in that they do not reflect
all of the amounts associated with the Company's results of operations as
determined in accordance with GAAP. These measures should only be used to
evaluate the Company's results of operations in conjunction with the
corresponding GAAP measures.

EXAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                       THREE MONTHS ENDED               SIX MONTHS ENDED
                       SEPTEMBER   JULY    OCTOBER   SEPTEMBER   OCTOBER
                       30,         1,      2,       30,         2,
                       2012         2012     2011       2012         2011
Net sales              $       $       $       $        $    
                         21,528   19,447   25,910     40,975      50,983
Net sales, related     9,094        9,804    10,210     18,898       22,115
party
 Total   30,622       29,251   36,120     59,873       73,098
net sales
Cost of sales:
 Cost of sales        12,054       10,870   13,661     22,924       26,998
 Cost of sales,       4,380        4,512    4,825      8,892        10,568
related party
 Amortization of
purchased intangible   858          919      905        1,777        1,810
assets
 Restructuring
charges and exit       -            81       -          81           152
costs
 Total   17,292       16,382   19,391     33,674       39,528
cost of sales
Gross profit           13,330       12,869   16,729     26,199       33,570
Operating expenses:
 Research and         5,773        5,449    8,838      11,222       18,118
development
 Selling, general     7,639        7,782    9,373      15,421       18,915
and administrative
 Restructuring
charges and exit       291          804      -          1,095        173
costs
 Total   13,703       14,035   18,211     27,738       37,206
operating expenses
Loss from operations   (373)        (1,166)  (1,482)    (1,539)      (3,636)
Other income and
expense, net:
 Interest income     674          646      715        1,320        1,426
and other, net
 Interest expense    (38)         (34)     (61)       (72)         (121)
 Total
other income and       636          612      654        1,248        1,305
expense, net
Income (loss) before   263          (554)    (828)      (291)        (2,331)
income taxes
Provision for income   -            22       249        22           172
taxes
Net income (loss)      $       $      $       $       $    
                           263  (576)   (1,077)     (313)      (2,503)
Net income (loss) per
share:
 Basic                $       $      $      $       $    
                          0.01  (0.01)   (0.02)     (0.01)      (0.06)
 Diluted              $       $      $      $       $    
                          0.01  (0.01)   (0.02)     (0.01)      (0.06)
Shares used in the
computation of
net income (loss) per
share:
 Basic                45,720       45,388   44,759     45,554       44,676
 Diluted              46,046       45,388   44,759     45,554       44,676



EXAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
                                           SEPTEMBER 30,       APRIL 1,
                                           2012                2012 (1)
ASSETS
Current assets:
Cash and cash equivalents                  $              $      
                                           10,423             8,714
Short-term marketable securities           187,629             187,668
Accounts receivable (net of
allowances of $755 and $781,               12,976              8,454
respectively)
Accounts receivable, related party (net of 3,762               2,918
allowances of $494 and $815, respectively)
Inventories                                16,055              18,374
Other current assets                       3,688               3,124
Total current assets                       234,533             229,252
Property, plant and equipment, net         25,817              27,793
Goodwill                                   3,184               3,184
Intangible assets, net                     7,740               9,755
Other non-current assets                   1,404               1,668
Total assets                               $              $     
                                           272,678             271,652
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable                           $             $      
                                           8,991              7,823
Accrued compensation and related           3,211               3,918
benefits
Deferred income and allowances on          2,872               3,410
sales to distributors
Deferred income and allowances on
sales to distributors, related             9,506               9,608
party
Other current liabilities                  10,468              13,615
 Total current liabilities            35,048              38,374
Long-term lease financing                  3,683               3,771
obligations
Other non-current obligations             6,273               6,215
Total liabilities                          45,004              48,360
Stockholders' equity                       227,674             223,292
Total liabilities and stockholders'        $              $     
equity                                     272,678             271,652
(1) Due to the correction of an immaterial error in the fourth quarter fiscal
of 2012, the balances at April 1, 2012 of Accumulated deficit decreased by
$741 thousand and Additional paid-in capital decreased by $741 thousand. Total
Stockholders' equity remained the same.



EXAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(Unaudited)
                     THREE MONTHS ENDED                 SIX MONTHS ENDED
                     SEPTEMBER   JULY 1,  OCTOBER   SEPTEMBER   OCTOBER
                     30,                    2,       30,         2,
                     2012         2012       2011       2012         2011
Net Sales           $       $      $       $       $    
                     30,622      29,251    36,120      59,873      73,098
GAAP gross profit   $       $      $       $       $    
                     13,330      12,869    16,729      26,199      33,570
GAAP gross margin   43.5%        44.0%      46.3%      43.8%        45.9%
 Stock-based       129          (15)       69         114          128
compensation
 Amortization of
acquired intangible  853          880        905        1,733        1,810
assets
 Restructuring
charges and exit     -            81         -          81           152
costs
Non-GAAP gross       $       $      $       $       $    
profit              14,312      13,815    17,703      28,127      35,660
Non-GAAP gross       46.7%        47.2%      49.0%      47.0%        48.8%
margin
GAAP operating       $       $      $       $       $    
expenses             13,703      14,035    18,211      27,738      37,206
 Stock-based       1,218        189        1,108      1,407        1,933
compensation
 Amortization of
acquired intangible  107          120        174        227          348
assets
 Restructuring
charges and exit     291          804        -          1,095        173
costs
Non-GAAP operating   $       $      $       $       $    
expenses             12,087      12,922    16,929      25,009      34,752
GAAP operating       $       $      $       $       $    
loss                   (373)     (1,166)  (1,482)    (1,539)     (3,636)
 Stock-based       1,347        174        1,177      1,521        2,061
compensation
 Amortization of
acquired intangible  960          1,000      1,079      1,960        2,158
assets
 Restructuring
charges and exit     291          885        -          1,176        325
costs
Non-GAAP operating   $       $      $      $       $    
income                2,225        893   774      3,118        908
GAAP net income      $       $      $       $       $    
(loss)                 263       (576)  (1,077)     (313)     (2,503)
 Stock-based       1,347        174        1,177      1,521        2,061
compensation
 Amortization of
acquired intangible  960          1,000      1,079      1,960        2,158
assets
 Restructuring
charges and exit     291          885        -          1,176        325
costs
 Income tax        (6)          (39)       221        (45)         79
effects
Non-GAAP net         $       $      $      $       $    
income                2,855      1,444   1,400       4,299      2,120
GAAP net income
(loss) per share
 Basic              $       $      $      $       $    
                       0.01      (0.01)  (0.02)      (0.01)     (0.06)
 Diluted            $       $      $      $       $    
                       0.01      (0.01)  (0.02)      (0.01)     (0.06)
Non-GAAP net income
per share
 Basic              $       $      $      $       $    
                       0.06       0.03   0.03       0.09      0.05
 Diluted            $       $      $      $       $    
                       0.06       0.03   0.03       0.09      0.05





EXAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL NET SALES INFORMATION
                   THREE MONTHS ENDED                   SIX MONTHS ENDED
                   SEPTEMBER  JULY     OCTOBER 2,  SEPTEMBER    OCTOBER
                   30,        1,                      30,          2,
By Product Line    2012        2012      2011           2012          2011
Connectivity       53%         55%       52%            54%           52%
Power management   22%         23%       22%            22%           21%
Data compression   15%         12%       14%            14%           12%
and security
Communications     10%         10%       12%            10%           15%
                   THREE MONTHS ENDED                   SIX MONTHS ENDED
                   SEPTEMBER  JULY     OCTOBER 2,  SEPTEMBER    OCTOBER
                   30,        1,                      30,          2,
By Geography       2012        2012      2011           2012          2011
Asia               58%         64%       60%            61%           59%
Americas           27%         22%       26%            24%           26%
EMEA               15%         14%       14%            15%           15%
EXAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE
                               GUIDANCE FOR THE QUARTER ENDING DECEMBER 30,
                               2012
                                         ADJUSTMENTS
                                                        AMORTIZATION
                                                        OF ACQUIRED
                                         STOCK-BASED  INTANGIBLE
                               NON-GAAP  COMPENSATION   ASSETS        GAAP
Net Sales                      2% - 4%                                2% - 4%
Gross Margin                   47% -     ~$0.2 million  ~$0.8         44% -
                               48%                      million       45%
Net income per                 $0.06 -  ~$1.4 million  ~$0.9         $0.01 -
share                          $0.07                   million       $0.02





SOURCE Exar Corporation

Website: http://www.exar.com
Contact: Kevin.Bauer@exar.com, +1-510-668-7000
 
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