Fairchild Semiconductor Reports Results for the First Quarter of 2007
Fairchild Semiconductor announced results for the first quarter ended April 1, 2007. Fairchild reported first quarter sales of $402.6 million, down 3.7% from the prior quarter and 1.7% from first quarter of 2006, which included 14 weeks. These results include $5.1 million of revenue from the System General acquisition for the period of February 5, 2007 to April 1, 2007.
Fairchild reported first quarter net income of $6.3 million or $0.05 per diluted share compared to net income of $8.7 million or $0.07 per diluted share in the prior quarter and a net income of $26.6 million or $0.21 per diluted share in the first quarter of 2006. Gross margin was 27.7%, 130 basis points lower sequentially and 220 basis points lower than in the first quarter of 2006. Excluding the purchase accounting charge of $2.1 million related to the acquisition of System General, gross margin was 28.2%.
Fairchild reported first quarter adjusted net income of $20.1 million or $0.16 per diluted share, compared to adjusted net income of $26.7 million or $0.21 per diluted share in the prior quarter and adjusted net income of $25.6 million or $0.21 per diluted share in the first quarter of 2006. Adjusted net income excludes amortization of acquisition-related intangibles, purchase accounting charges and in-process R&D related to the acquisition of System General, restructuring and impairments, reserves for potential lawsuit losses, net gain on the sale of the LED lamps and displays product line, associated net tax benefits of these items and other acquisition-related intangibles, and certain discrete tax benefits and charges.
"Order rates improved after Chinese New Year which enabled us to deliver solid sales performance in the first quarter and build a slightly higher starting backlog position for the second quarter," said Mark Thompson, Fairchild’s President and CEO. "We continued to tightly manage our supply chain in the first quarter and reduced channel inventories by more than a day sequentially while we maintained internal inventories well within our target range. While the first half of 2007 may be weaker than normal for the industry, our supply chain is well positioned and we are planning on a number of new product introductions and mix improvements that we believe will drive greater content and higher margins in the second half of 2007."