Fairchild Semiconductor announced results for the first quarter ended March 28, 2010. Fairchild reported first quarter sales of $378 million, up 7% from the prior quarter and 69% higher than the first quarter of 2009.
Fairchild reported first quarter net income of $22.6 million or $0.18 per diluted share compared to net income of $13.1 million or $0.10 per diluted share in the prior quarter and a net loss of $51.1 million or $0.41 per share in the first quarter of 2009. Results for the first quarter of 2010 include $2.4 million in restructuring and impairments and $1.3 million of accelerated depreciation. Gross margin was 32.2% compared to 29.7% in the prior quarter and 15.2% in the year ago quarter.
Fairchild reported first quarter adjusted gross margin of 32.5%, up 220 basis points sequentially and 17%age points higher than in the first quarter of 2009. Adjusted gross margin excludes accelerated depreciation and inventory write-offs/reserve releases related to fab closures. Adjusted net income was $31.8 million or $0.25 per diluted share, compared to $29.9 million or $0.23 per diluted share in the prior quarter and a net loss of $40.1 million or $0.32 per share in the first quarter of 2009. Adjusted net income and loss excludes amortization of acquisition-related intangibles, restructuring and impairments, gain associated with debt buyback, charge/release for litigation, accelerated depreciation and inventory write-offs/reserve releases related to fab closures, and associated net tax benefits of these items and other acquisition-related intangibles.
"We reported significant sales and earnings growth in the first quarter as demand for our latest analog and power management solutions continues to accelerate," said Mark Thompson, Fairchild’s president and CEO. "We grew sales 7% sequentially and further reduced distribution channel inventory in what is typically a down quarter due to the Asian holidays. The inventory of our products at distributors remains at record low levels while the mix of fast moving products to slow turning inventory improved again this quarter. We reported the highest gross margin since 2000 and we expect to continue increasing margins as we ramp a number of significant new design wins into production over the next few quarters. I am also pleased to report that we generated $35.7 million of free cash flow and our cash and securities now exceed debt for the first time in our history."
