Fairchild Semiconductor Reports Results for the Fourth Quarter and Full Year 2011
Fairchild Semiconductor announced results for the fourth quarter ended December 25, 2011. Fairchild reported fourth quarter sales of $339.4 million, down 16 percent from the prior quarter and 15 percent lower than the fourth quarter of 2010.
Fairchild reported fourth quarter net income of $21.3 million or $0.17 per diluted share compared to $35.8 million or $0.28 per diluted share in the prior quarter and $51.0 million or $0.40 per diluted share in the fourth quarter of 2010. Gross margin was 30.0 percent compared to 35.9 percent in the prior quarter and 37.0 percent in the year ago quarter.
Fairchild reported fourth quarter adjusted gross margin of 30.4 percent, down 560 basis points sequentially and 670 basis points from the fourth quarter of 2010. Adjusted gross margin excludes the change in retirement plans, accelerated depreciation and inventory reserve releases/write offs related to fab closures. Adjusted net income was $19.3 million or $0.15 per diluted share, compared to $44.5 million or $0.34 per diluted share in the prior quarter and $57.3 million or $0.45 per diluted share in the fourth quarter of 2010. Adjusted net income excludes amortization of acquisition-related intangibles, restructuring and impairments, accelerated depreciation and inventory reserve releases/write offs related to fab closures, write off of deferred financing fees, charge for litigation, change in retirement plans, and associated net tax effects of these items and other acquisition-related intangibles.
Full year revenues for 2011 were $1.6 billion, roughly flat to 2010. Fairchild reported net income of $146 million or $1.12 per diluted share in 2011, compared to net income of $153 million or $1.20 per diluted share in 2010. On an adjusted basis, the company reported 2011 net income of $170 million or $1.30 per diluted share, compared to $193 million or $1.51 per diluted share in 2010.
"We reduced our overall inventory dollars in the fourth quarter despite significantly lower demand," said Mark Thompson, Fairchild’s president and CEO. "Distribution sell-through decreased 20 percent sequentially due to lower end market demand and further downstream inventory reductions in the appliance, consumer, industrial, solar and computing supply chains. We also experienced about a 2 to 3 percentage point negative impact to sales due to supply disruptions related to the flooding in Thailand. Despite the weak sell-through and supply disruptions, we reduced channel inventory by 3 percent and internal inventory by 10 percent sequentially. There were some bright spots in demand as our mobile analog business posted solid sequential sales growth in the fourth quarter and our auto sales also held up well. In these times of uncertain demand, we focus on tightly managing the variables under our control such as inventories and expenses. We made good progress reducing inventories and operating expenses in the fourth quarter and we plan to continue these efforts as we enter 2012."
