Fairchild Semiconductor Reports Results for the Fourth Quarter and Full Year 2009
Fairchild Semiconductor announced results for the fourth quarter ended December 27, 2009. Fairchild reported fourth quarter sales of $354.5 million, up 7% from the prior quarter and 11% higher than the fourth quarter of 2008.
Fairchild reported fourth quarter net income of $13.1 million or $0.10 per diluted share compared to net income of $2.7 million or $0.02 per diluted share in the prior quarter and a net loss of $218.1 million or $1.76 per share in the fourth quarter of 2008. The fourth quarter of 2008 includes a $203 million goodwill impairment charge. Results for the fourth quarter of 2009 include a $6.0 million charge for litigation, $5.8 million in restructuring and impairments, $2.1 million of accelerated depreciation and a $1.2 million gain associated with debt buyback. Gross margin was 29.7% compared to 26.0% in the prior quarter and 26.5% in the year ago quarter.
Fairchild reported fourth quarter adjusted net income of $29.9 million or $0.23 per diluted share, compared to adjusted net income of $14.9 million or $0.12 per diluted share in the prior quarter and adjusted net income of $7.7 million or $0.06 per diluted share in the fourth quarter of 2008. Adjusted gross margin was 30.3%, up 340 basis points sequentially and 380 basis points higher than in the fourth quarter of 2008. Adjusted gross margin excludes accelerated depreciation and inventory write-offs/reserve releases related to fab closures.
Full year revenues for 2009 were $1.2 billion, a decrease of 25% compared to 2008. Fairchild reported a net loss of $60 million or $0.49 per share in 2009, compared to a net loss of $167 million or $1.35 per share in 2008. On an adjusted basis, the company reported 2009 net income of $1 million or $0.01 per diluted share, compared to $86 million or $0.69 per diluted share in 2008. Adjusted net income and loss excludes amortization of acquisition-related intangibles, restructuring and impairments, net impairment/gain on equity investments, gain associated with debt buyback, goodwill impairment charge, impairment of investments, charge/release for litigation, accelerated depreciation and inventory write-offs/reserve releases related to fab closures, cost associated with the redemption of convertible debt, tax effects from finalized tax filings and positions, and associated net tax benefits of these items and other acquisition-related intangibles.
"We delivered results in the fourth quarter that exceeded our initial expectations in virtually all aspects of the business," said Mark Thompson, Fairchild’s President and CEO. "We grew sales 7% sequentially in what is typically a flat quarter while further reducing our days of inventory both internally and in our distribution channel. Our channel inventories are at record low levels while the mix of fast moving products to slow turning inventory is the best on record. We pushed adjusted gross margin over 30% and have strong momentum heading into the first quarter to exceed our past gross margin peak. Strong execution on sales growth, margins and cost reductions also enabled us to generate $43 million of free cash flow in Q4 and a record $129 million for all of 2009."
