Tundra Semiconductor Reports Q4 FY09 and Fiscal 2009 Financial Results



    Fourth Quarter Revenue within Guidance, Annual Revenue Down
    6% Year-over-Year

    OTTAWA, June 3 /CNW Telbec/ - Tundra Semiconductor Corporation (Tundra,
or "the Company") (TSX:TUN), a leader in System Interconnect, today reported
financial results for the fourth quarter of fiscal 2009, and for the fiscal
year, which ended April 30, 2009.

    Q4-2009 RESULTS:

    - Q4 Revenue: $15.5 million
    - Q4 Pro forma earnings: $0.7 million
    - Q4 Pro forma diluted earnings per share: $0.04
    - Q4 GAAP results: loss of $5.3 million or $0.27 per diluted share

    Revenue for the fourth quarter of fiscal year 2009 was $15.5 million,
comprised of $14.5 million in product revenue and $1.0 million in services
revenue. Revenue for the Communications market segment was $9.5 million and
for the Computing/Storage market segment was $5.0 million in the fourth
quarter. Overall quarterly revenue represents a 6% increase from the third
quarter of fiscal year 2009 and a 13% decrease compared to the fourth quarter
of fiscal year 2008. Pro forma earnings for the quarter were $0.7 million or
$0.04 per diluted share, compared to earnings of $0.1 million or $0.00 per
diluted share in the third quarter of fiscal year 2009 and compared to $1.5
million or $0.07 per diluted share in the fourth quarter of fiscal year 2008.
GAAP loss for the quarter was $5.3 million or $0.27 per diluted share,
compared to a loss of $1.1 million or $0.06 per diluted share in the third
quarter of fiscal year 2009, and a loss of $3.9 million or $0.20 per diluted
share in the fourth quarter of fiscal year 2008. The GAAP loss in the fourth
quarter was impacted by a $5.0 million "break fee" paid to Gennum pursuant to
the arrangement agreement entered into on March 19th 2009, and the pending
acquisition agreement entered into with IDT on April 30, 2009.

    Fiscal Year 2009 RESULTS:

    - FY2009 Revenue: $66.4 million
    - FY2009 Pro forma earnings: $4.3 million
    - FY2009 Pro forma diluted earnings per share: $0.22
    - FY2009 GAAP Results: loss of $4.2 million or $0.22 per diluted share

    Revenue for fiscal year 2009 was $66.4 million, a 6% decrease over fiscal
year 2008. Product revenue for the fiscal year was $60.3 million and Services
revenue for the year was $6.1 million. The Communications market segment
generated $35.5 million in revenue for the fiscal year, and the
Computing/Storage market segment generated $24.8 million during fiscal 2009.
Pro forma earnings of $4.3 million represent a 7% decrease compared to $4.6
million in fiscal year 2008. Pro forma diluted earnings per share of $0.22
were comparable to $0.23 per share in fiscal year 2008. For the fiscal year,
GAAP losses were $4.2 million or $0.22 per diluted share, down from a loss of
$59.6 million or $3.00 per diluted share in fiscal year 2008.

    
    Q4-2009 Corporate Highlights

    - On March 19, Gennum Corporation (Gennum) entered into a definitive
      agreement to acquire Tundra in a transaction valued at approximately
      Cdn$86 million. On April 17, Gennum announced that it had increased the
      acquisition purchase price and amended the Arrangement Agreement.
      Pursuant to the amendment, Gennum increased the aggregate purchase
      price for all of the Tundra shares from approximately Cdn$86 million to
      approximately Cdn$112 million representing an increase of approximately
      31%.

    - On April 30, Integrated Device Technology, Inc. (IDT) and Tundra signed
      a definitive acquisition agreement pursuant to which IDT will acquire
      Tundra for Cdn$6.25 per share, for an aggregate purchase price of
      approximately Cdn$120.8 million. The transaction will provide mutual
      customers with a broader product portfolio and strengthened roadmap for
      innovation. The transaction is subject to approval by a minimum of two-
      thirds of the votes cast by Tundra shareholders at a Special Meeting
      scheduled for June 15, 2009, and is subject to Canadian court approval
      as well as customary closing conditions.

    - On May 21, Tundra announced that it had obtained an Interim Order and
      mailed an Information Circular for Special Meeting to its shareholders.
      At the Special Meeting on June 15, 2009, Tundra shareholders will be
      asked to vote on a special resolution to approve a proposed plan of
      arrangement pursuant to which 4440471 Canada Inc., a wholly-owned
      Canadian acquisition subsidiary of Integrated Device Technology, Inc.
      will acquire all of the issued and outstanding shares of Tundra. On
      May 15, 2009, the Ontario Superior Court of Justice granted an interim
      order providing for the calling and holding of the Special Meeting and
      certain other matters related to the Special Meeting and the
      Arrangement.

      The Special Shareholder Meeting will be held at 11:00 a.m. (EST) on
      Monday, June 15, 2009 at The Marshes Golf Club, 320 Terry Fox Drive,
      Ottawa, Ontario. Tundra shareholders of record as of 5:00 p.m. (EST) on
      May 15, 2009 will be entitled to vote in person or by proxy at the
      Special Meeting.

    Q4-2009 Product Highlights

    - On March 31, Tundra announced its RapidIO Gen2 Program. Tundra's New
      RapidIO Gen2 solutions dramatically increase system performance for
      next generation wireless, video and military designs. Backwards
      compatible with RapidIO Specification Rev 1.3, Tundra's new RapidIO
      solutions will offer OEMs increased system performance, reduced power
      consumption and lower system costs when designing next generation
      systems.

      Tundra's RapidIO Gen2 program builds on its industry-leading portfolio
      of Rev 1.3 products and tools, in volume production shipments in WiMAX,
      HSPA, WCDMA, TD-SCDMA, video and military applications today. Gen2 was
      developed by the RapidIO Trade Association to answer the needs of
      existing RapidIO customers whose future systems require increased
      performance and speed, including; 3G and 4G base stations, HD IPTV or
      high-end video conferencing. Tundra's RapidIO Gen2 program includes a
      full portfolio of switches, IP and support tools that will offer new
      wireless broadband and high bandwidth applications even more system
      performance optimization capabilities, and will double the speed of
      current RapidIO Rev 1.3 solutions.

    - On May 12, Tundra announced its new RapidIO System Modeling Tool(TM),
      which offers customers an opportunity to unleash the maximum
      performance potential of RapidIO. The new System Modeling Tool allows
      wireless, military, imaging, video infrastructure and storage OEMs to
      unleash the full performance potential and features of RapidIO
      interconnect to enhance system level performance, optimize architecture
      and reduce power consumption. Tundra's RapidIO System Modeling Tool
      improves end-to-end packet transfers by modeling not only the switch
      fabric, but also the behavior of the endpoints in the system, allowing
      designers to plan and examine the behavior of end-to-end transactions.
      Customers can simulate various traffic flows throughout the system to
      uncover the optimal priorities for system traffic flow performance. The
      new tool, along with the expertise of Tundra Application Engineers,
      allows designers to simulate the performance of multiple systems
      reusing a single hardware platform. Modeling more than one end-use
      application offers OEMs significant cost saving opportunities as
      designers will have performance insight at the design stage of the
      project. Re-use of hardware platforms to serve more than one end
      application is anticipated to get Tundra's customers to market faster
      and with lower bill-of-material cost than their competitors.

    About Tundra

    Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with System Interconnect
products, intellectual property (IP) and design services backed by world-class
customer service and technical support. Tundra's track record of product
leadership includes over a decade of bridges and switches enabling key
industry standards: RapidIO(R), PCI, PCI-X, PCI Express(R), Power
Architecture(TM), VME, HyperTransport(TM), Interlaken, and SPI4.2. Tundra's
products deliver high functional quality and simplified board design and
layout, with specific focus on system level signal integrity. Tundra's design
services division, Silicon Logic Engineering, Inc., offers industry-leading
ASIC and FPGA design services, semiconductor intellectual property and product
development consulting. Tundra's technology connects critical components in
high performance embedded systems around the world. For more information,
please visit www.tundra.com.
    The difference between pro forma and GAAP earnings is due to stock-based
compensation expense, restructuring charges, impairment of goodwill and
intangible assets, amortization of acquisition related intangibles and
termination fee. Tundra uses pro forma measures internally to evaluate and
manage operating performance as well as to forecast and plan. A reconciliation
of the differences between pro forma and GAAP measures is provided in the
tables attached.
    Tundra Semiconductor Corporation is a public company with common shares
listed for trading on the Toronto Stock Exchange (TSX:TUN) in Canada. All
figures, unless otherwise noted, are stated in Canadian dollars in accordance
with accounting principles generally accepted in Canada.

    Forward Looking Information

    Certain statements in this news release regarding the proposed transaction
between Tundra and IDT, the expected timetable for completing the transaction
and any other statements regarding Tundra's future expectations, beliefs,
goals or prospects constitute forward-looking information within the meaning
of applicable securities legislation (collectively "forward-looking
statements"). Any statements that are not statements of historical fact
(including statements containing the words "believes," "plans," "anticipates,"
"expects," "estimates" and similar expressions) should also be considered
forward-looking statements. A number of important factors could cause actual
events or results to differ materially from those indicated or implied by such
forward-looking statements, including without limitation: the parties' ability
to consummate the transaction; the conditions to the completion of the
transaction, including that the receipt of shareholder approval or court
approval required for the transaction may not be obtained on the terms
expected or on the anticipated schedule and the parties' ability to meet
expectations regarding the timing, completion and accounting and tax
treatments of the transaction.
    Tundra assumes no obligation to update the information in this
communication, except as otherwise required by law. Additional information
identifying risks and uncertainties is contained in the Circular and in
Tundra's filings with the various provincial securities commissions which are
available online at www.sedar.com. Forward looking statements are provided for
the purpose of providing information about the current expectations, beliefs
and plans of the management of Tundra relating to the future. Readers are
cautioned that such statements may not be appropriate for other purposes.
Readers are also cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date hereof.

    TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor
Corporation in Canada, the United States, the European Union and the People's
Republic of China. RapidIO is a trademark of the RapidIO Trade Association,
Inc. Other registered and unregistered trademarks are the property of their
respective owners.

    (C) Copyright 2009 Tundra Semiconductor Corporation. All rights reserved.
        Information subject to change without notice.


    TUNDRA SEMICONDUCTOR CORPORATION
    CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
    For the fiscal quarters ended April 30, 2009 and April 30, 2008
    (Canadian dollars, amounts in thousands except per share data)

                                 Three months ended           Year ended
                             ------------------------ -----------------------
                                April 30    April 30    April 30    April 30
                                    2009        2008        2009        2008
                              (Unaudited) (Unaudited)   (Audited)   (Audited)
    Revenue:
      Product                   $ 14,469    $ 15,024    $ 60,298    $ 61,626
      Service                      1,037       2,888       6,100       8,960
    -------------------------------------------------------------------------
                                  15,506      17,912      66,398      70,586

    Cost of revenue:
      Product                      4,685       5,184      19,697      20,027
      Service                        739       1,930       5,568       5,656
    -------------------------------------------------------------------------
                                   5,424       7,114      25,265      25,683

    -------------------------------------------------------------------------
    Gross margin                  10,082      10,798      41,133      44,903

    Expenses:
      Sales and marketing          2,996       2,822      11,817      11,548
      General and administration     999       1,745       7,170       8,009
      Research and development     6,268       4,891      21,260      21,964
      Stock-based compensation       900         592       2,441       2,274
      Amortization of
       acquisition-related
       intangible assets              41         889         621       3,876
      Restructuring charges
       (reversal)                      -        (250)        (30)      3,713
    -------------------------------------------------------------------------
                                  11,204      10,689      43,279      51,384

    Earnings (loss) from
     operations                   (1,122)        109      (2,146)     (6,481)

    Interest and other income        519         416       3,037       2,374
    Impairment of intangible
     assets                            -      (4,749)       (515)     (4,749)
    Impairment of goodwill             -         590           -     (49,981)
    Termination fee               (5,000)          -      (5,000)          -
    -------------------------------------------------------------------------

    Loss before income taxes      (5,603)     (3,634)     (4,624)    (58,837)

    Income tax provision
     (recovery)                     (341)        280        (420)        786

    -------------------------------------------------------------------------

    NET LOSS AND COMPREHENSIVE
     LOSS                       $ (5,262)   $ (3,914)   $ (4,204)   $(59,623)

    -------------------------------------------------------------------------
    Loss per share
      Basic                     $  (0.27)   $  (0.20)   $  (0.22)   $  (3.00)
      Diluted                   $  (0.27)   $  (0.20)   $  (0.22)   $  (3.00)
    Weighted average number of
     common shares outstanding
      Basic                       19,367      19,694      19,512      19,848
      Diluted                     19,367      19,694      19,512      19,848


    TUNDRA SEMICONDUCTOR CORPORATION
    PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
    For the fiscal quarters ended April 30, 2009 and April 30, 2008
    (Canadian dollars, amounts in thousands except per share data)

                                 Three months ended           Year ended
                             ------------------------ -----------------------
                                April 30    April 30    April 30    April 30
                                    2009        2008        2009        2008
                              (Unaudited) (Unaudited)   (Audited)   (Audited)
    Revenue:
      Product                   $ 14,469    $ 15,024    $ 60,298    $ 61,626
      Service                      1,037       2,888       6,100       8,960
    -------------------------------------------------------------------------
                                  15,506      17,912      66,398      70,586

    Cost of revenue:
      Product                      4,685       5,184      19,697      20,027
      Service                        739       1,930       5,568       5,656
    -------------------------------------------------------------------------
                                   5,424       7,114      25,265      25,683

    -------------------------------------------------------------------------
    Gross margin                  10,082      10,798      41,133      44,903

    Expenses:
      Sales and marketing          2,996       2,822      11,817      11,548
      General and administration     999       1,745       7,170       8,009
      Research and development     6,268       4,891      21,260      21,964
    -------------------------------------------------------------------------
                                  10,263       9,458      40,247      41,521

    Pro forma earnings (loss)
     from operations                (181)      1,340         886       3,382

    Interest and other income        519         416       3,037       2,374

    -------------------------------------------------------------------------

    Pro forma earnings before
     income taxes                    338       1,756       3,923       5,756

    Income tax provision
     (recovery)                     (341)        280        (420)      1,107

    -------------------------------------------------------------------------

    PRO FORMA EARNINGS          $    679    $  1,476    $  4,343    $  4,649

    -------------------------------------------------------------------------

    Pro froma earnings per share
      Basic                     $   0.04    $   0.07    $   0.22    $   0.23
      Diluted                   $   0.04    $   0.07    $   0.22    $   0.23
    Weighted average number of
     common shares outstanding
      Basic                       19,367      19,694      19,512      19,848
      Diluted                     19,383      19,694      19,514      19,916


    TUNDRA SEMICONDUCTOR CORPORATION
    RECONCILIATION BETWEEN PRO FORMA AND GAAP MEASURES
    For the fiscal quarters ended April 30, 2009 and April 30, 2008
    (Canadian dollars, amounts in thousands)
    (Unaudited)

    The reconciliation below provides a more detailed description of the
    amounts excluded from the pro forma results.

                                 Three months ended           Year ended
                             ------------------------ -----------------------
                                April 30    April 30    April 30    April 30
                                    2009        2008        2009        2008

    GAAP net loss               $ (5,262)   $ (3,914)   $ (4,204)   $(59,623)
      Stock-based compensation       900         592       2,441       2,274
      Amortization of
       acquisition-related
       intangible assets              41         889         621       3,876
      Restructuring charges
       (reversal)                      -        (250)        (30)      3,713
      Impairment of intangible
       assets                          -       4,749         515       4,749
      Impairment of goodwill           -        (590)          -      49,981
      Termination fee              5,000           -       5,000           -
      Income tax effect                -           -           -        (321)
    -------------------------------------------------------------------------
    Pro forma net earnings      $    679    $  1,476    $  4,343    $  4,649
    -------------------------------------------------------------------------



    GAAP net loss per share     $  (0.27)   $  (0.20)   $  (0.22)   $  (3.00)
      Stock-based compensation      0.05        0.03        0.12        0.11
      Amortization of
       acquisition-related
       intangible assets               -        0.04        0.03        0.19
      Restructuring charges
       (reversal)                      -       (0.01)          -        0.19
      Impairment of intangible
       assets                          -        0.24        0.03        0.24
      Impairment of goodwill           -       (0.03)          -        2.52
      Termination fee               0.26           -        0.26           -
      Income tax effect                -           -           -       (0.02)
    -------------------------------------------------------------------------
    Pro forma net earnings per
     diluted share              $   0.04    $   0.07    $   0.22    $   0.23
    -------------------------------------------------------------------------


    TUNDRA SEMICONDUCTOR CORPORATION
    CONSOLIDATED BALANCE SHEETS
    (Canadian dollars, amounts in thousands)
    (Audited)

                                                           April       April
                                                            2009        2008

    ASSETS

    Current assets
      Cash and cash equivalents                        $  58,965   $  23,861
      Short-term investments                               2,988      35,373
      Accounts receivable                                  5,876       7,470
      Inventories                                          5,115       6,226
      Prepaid expenses and other current assets            2,882       3,288
      Investment tax credits recoverable                   1,805           -
      Future income tax asset                              1,830       2,970
    -------------------------------------------------------------------------

                                                          79,461      79,188

    Other assets                                           1,451       1,919
    Investment tax credits recoverable                     7,200       8,976
    Property, plant and equipment                         14,129      16,272
    Intangible assets                                      4,492       5,720
    Future income tax asset                                5,767       4,638
    -------------------------------------------------------------------------

                                                       $ 112,500   $ 116,713

    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Accounts payable and accrued liabilities         $   6,668   $   7,623
      Deferred revenue                                     2,798       2,290
      Income taxes payable                                    90         131
    -------------------------------------------------------------------------
                                                           9,556      10,044
    Shareholders' equity
      Share capital                                      177,835     181,006
      Contributed surplus                                 13,737      10,087
      Deficit                                            (88,628)    (84,424)
    -------------------------------------------------------------------------

                                                         102,944     106,669

    -------------------------------------------------------------------------

                                                       $ 112,500   $ 116,713

    -------------------------------------------------------------------------


    TUNDRA SEMICONDUCTOR CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the fiscal quarters ended April 30 2009 and April 30, 2008
    (Canadian dollars, amounts in thousands)

                                 Three months ended           Year ended
                             ------------------------ -----------------------
                                April 30    April 30    April 30    April 30
                                    2009        2008        2009        2008
                              (Unaudited) (Unaudited)   (Audited)   (Audited)
    Operating activities:
      Loss                      $ (5,262)   $ (3,914)   $ (4,204)   $(59,623)
      Items not affecting cash:
        Amortization of property,
         plant and equipment and
         asset impairments         1,982       2,077       8,015       8,357
        Amortization of
         acquisition-related
         intangible assets            41         889         621       3,876
        Stock-based compensation     900         592       2,441       2,274
        Investment tax credits
         recoverable                 (32)      1,325         (29)       (606)
        Future income taxes          405      (1,471)         11      (1,574)
        Impairment of intangible
         assets                        -       4,749         515       4,749
        Impairment of goodwill         -        (590)          -      49,981
    -------------------------------------------------------------------------
                                  (1,966)      3,657       7,370       7,434

      Cash effect of changes in:
        Accounts receivable        1,478        (617)      1,594         275
        Inventories                1,892       1,057       1,111       3,056
        Prepaid expenses and
         other assets               (896)       (341)        874       1,162
        Accounts payable and
         accrued liabilities      (1,052)       (849)     (1,740)     (3,119)
        Deferred revenue            (352)        349         508       2,290
        Income taxes payable        (150)        205         (41)         26
    -------------------------------------------------------------------------
                                  (1,046)      3,461       9,676      11,124
    -------------------------------------------------------------------------

    Investing activities:
      Acquisition of capital
       assets                       (107)       (299)     (5,585)     (6,685)
      Purchased intangibles            -           -        (193)     (4,749)
      Acquisition of short-term
       investments                     -           -     (43,678)    (35,373)
      Proceeds on disposal of
       short-term investments     15,894           -      76,063      42,379
    -------------------------------------------------------------------------
                                  15,787        (299)     26,607      (4,428)
    -------------------------------------------------------------------------

    Financing activities:
      Net proceeds on the
       issue of common shares          -           -           -         426
      Repurchase of shares          (247)       (200)     (1,179)     (1,601)
    -------------------------------------------------------------------------
                                    (247)       (200)     (1,179)     (1,175)
    -------------------------------------------------------------------------

    Increase in cash and cash
     equivalents                  14,494       2,962      35,104       5,521

    Cash and cash equivalents,
     beginning of period          44,471      20,899      23,861      18,340
    -------------------------------------------------------------------------

    Cash and cash equivalents,
     end of period                58,965      23,861      58,965      23,861
    Short-term investments,
     end of period                 2,988      35,373       2,988      35,373
    -------------------------------------------------------------------------

    Cash, cash equivalents and
     short-term investments,
     end of period              $ 61,953    $ 59,234    $ 61,953    $ 59,234
    -------------------------------------------------------------------------
    




For further information:

For further information: David Long, Chief Financial Officer, Tundra
Semiconductor, (613) 592-0714, david.long@tundra.com

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