News

Exar Reports Fiscal 2008 Second Quarter Results

November 05, 2007 by Jeff Shepard

Exar Corp. reported financial results for its fiscal 2008 second quarter, ended September 30, 2007. The fiscal 2008 second quarter results include the results of Sipex Corp. from August 26, 2007 through September 30, 2007.

Net sales for the second quarter of fiscal 2008 were $19.2 million, a 12% increase from net sales of $17.1 million for the prior quarter and a 4% increase from net sales of $18.5 million for the same period last year. Net sales for the second quarter of fiscal 2008 include $2.9 million of sales attributable to Sipex and exclude approximately $9.7 million of sales recognized by Sipex prior to its acquisition and $5.9 million of shipments from Sipex’s distributors after acquisition as purchase accounting precludes the company from recognizing revenue on inventories held by Sipex’s distributors as of the acquisition date. In addition, on August 26, 2007, the company began recognizing revenue on shipments to its primary distributors on a sell-through basis. This resulted in the deferral of revenue on approximately $2.1 million of shipments during the second quarter.

The gross margin for the second quarter of fiscal 2008 was 54.7% as compared to 66.4% in the prior quarter and 68.8% for the same period last year. The second quarter fiscal 2008 operating loss was $14.3 million, as compared to an operating loss of $0.2 million for the prior quarter and operating income of $46 thousand for the same period last year. The net loss for the fiscal quarter ended September 30, 2007 was $16.4 million, or $0.39 diluted loss per share, compared to net income of $4.6 million, or $0.13 diluted earnings per share, in the previous quarter and net income of $1.8 million, or $0.05 diluted earnings per share, for the fiscal quarter ended September 30, 2006.

During the second quarter of fiscal 2008, the company’s cash, cash equivalents and marketable securities decreased by $29.2 million to $324.4 million primarily as a result of $28.4 million used to repurchase approximately 2.1 million shares of the company’s common stock in the open market at an average price of $13.35 per share.

On a non-GAAP basis, the gross margin for the second quarter of fiscal 2008 was 63.1% as compared to 68.0% in the prior quarter and 70.3% for the same period last year. The second quarter fiscal 2008 non-GAAP operating loss was $1.4 million, as compared to non-GAAP operating income of $0.8 million for the prior quarter and non-GAAP operating income of $1.4 million for the same period last year. Non-GAAP net income for the fiscal quarter ended September 30, 2007 was $2.0 million, or $0.05 diluted earnings per share, as compared to non-GAAP net income of $3.5 million, or $0.10 diluted earnings per share, in the previous quarter, and non-GAAP net income of $3.8 million, or $0.10 diluted earnings per share, in the second quarter of fiscal 2007.