Fairchild Semiconductor Reports Results for the Fourth Quarter and Full Year of 2006
Fairchild Semiconductor Corp. announced results for the fourth quarter and full year ended December 31, 2006. Fairchild reported fourth quarter sales of $418.3 million, flat from the prior quarter and 13% higher than the fourth quarter of 2005.
Fairchild reported fourth quarter net income of $8.7 million or $0.07 per diluted share compared to net income of $25.1 million or $0.20 per diluted share in the prior quarter, and a net loss of $4.7 million or $0.04 per share in the fourth quarter of 2005. Gross margin was 29.0%, 170 basis points lower sequentially and 480 basis points higher than in the fourth quarter of 2005.
Included in the fourth quarter 2006 results were $6.7 million in total equity based compensation in accordance with Statement of Financial Accounting Standards (SFAS) No. 123®, Share Based Payment. Also included in fourth quarter 2006 results was a restructuring charge of $3.2 million for costs related to the consolidation and simplification of certain supply chain planning processes and the streamlining and transfer of certain information systems support activities, as well as a reserve for potential losses of $8.2 million related to the previously announced unfavorable judgment in the legal proceeding with Zhongxing Telecom Ltd., which Fairchild intends to appeal.
Fairchild reported fourth quarter adjusted net income of $26.7 million or $0.21 per diluted share, compared to adjusted net income of $30.6 million or $0.25 per diluted share in the prior quarter and adjusted net income of $13.6 million or $0.11 per diluted share in the fourth quarter of 2005. Adjusted net income excludes amortization of acquisition-related intangibles, restructuring and impairments, lawsuit settlement gains or reserves for potential losses, net gain on the sale of the LED lamps and displays product line, and associated net tax benefits of these items and other acquisition-related intangibles. Adjusted results include equity based compensation expense in 2006.
Full year revenues for 2006 were $1.65 billion, an increase of 16% compared to $1.43 billion in 2005. Fairchild reported net income of $83.4 million or $0.67 per diluted share in 2006, compared to a net loss of $241.2 million or $2.01 per share in 2005. On an adjusted basis, the company reported 2006 net income of $111.7 million or $0.90 per diluted share, compared to $20.9 million or $0.17 per diluted share in 2005.