SUNNYVALE, Calif., April 28 /PRNewswire-FirstCall/ -- Spansion Inc. today announced operating results for its first quarter of fiscal 2010. Spansion reported first quarter of 2010 net sales of $277.3 million, which reflects the company's refined focus and decision to concentrate primarily on embedded and targeted wireless applications. The company generated net income on a U.S. GAAP basis of $3.7 million, or diluted net income per share of $0.02. U.S. GAAP operating income for the quarter was $17.6 million and gross and operating margins were 31.8% and 6.4%, respectively.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060118/SFW077LOGO) U.S. GAAP Comparison Q1 2010 Q4 2009 Q1 2009 Net sales $277.3 million $307.1 million $399.6 million ($512.6 Net income (loss) $3.7 million $4.3 million million) Diluted net income (loss) per share $0.02 $0.02 ($3.18) Operating income ($156.1 (loss) $17.6 million $20.7 million million) Gross margin 31.8% 33.1% 4.2% ------------ ---- ---- --- Operating margin 6.4% 6.7% (39.0%) ---------------- --- --- -------
"Our strategy to focus on embedded and targeted wireless applications has delivered four consecutive quarters of operating income," said John Kispert, Spansion president and CEO. "Spansion has executed well during the Chapter 11 restructuring process. With our plan of reorganization now confirmed, Spansion has cleared the way for emergence from Chapter 11."
Non-GAAP net income for the first quarter of 2010, excluding restructuring, reorganization, financing related, and other special charges and credits, was $14.5 million, or net income per share of $0.08. Reconciliation between U.S. GAAP operating results and non-GAAP operating results is provided following the financial statements in this release.
Non-GAAP Comparison Q1 2010 Q4 2009 Q1 2009 ($156.3 Net income (loss) $14.5 million $29.8 million million) ----------------- ------------- ------------- -------- Diluted net income (loss) per share $0.08 $0.17 ($0.97) ------------------ ----- ----- ------
Spansion plans to provide earnings guidance for the second quarter of 2010 in early June.
Use of Non-GAAP Financial Information
The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for or superior to, the company's financial results presented in accordance with U.S. GAAP. The non-GAAP financial measures presented by the company may be different than the non-GAAP financial measures presented by other companies.
The non-GAAP and supplemental information is provided to enhance the user's overall understanding of the company's operating performance. Specifically, the company believes the non-GAAP information provides useful measures to investors regarding the company's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP.
About Spansion
Spansion is a leading Flash memory solutions provider dedicated to enabling, storing and protecting digital content in automotive, consumer electronics, networking and wireless applications. Spansion is focused exclusively on designing, developing, manufacturing, marketing, and selling and Flash memory solutions. For more information, visit http://www.spansion.com/.
Spansion®, the Spansion logo, MirrorBit®, MirrorBit® Eclipse(TM), ORNAND(TM), EcoRAM(TM) and combinations thereof, are trademarks and registered trademarks of Spansion LLC in the United States and other countries. Other names used are for informational purposes only and may be trademarks of their respective owners.
Cautionary Statement
This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those statements. The risks and uncertainties include the company's ability to complete the chapter 11 reorganization process in the near future and execute on its new strategic focus on certain markets. The risks and uncertainties related to the chapter 11 cases include: any actions or orders taken by the U.S. Bankruptcy Court that may impact the company's operations; any negative impacts on the company's business, results of operations, financial position or cash management arrangements; the inability to freely deploy cash resources throughout the company's various geographical locations as all or part of the total worldwide cash may not be available in either the United States or for working capital as a result of limitations inherent in the chapter 11 cases in the United States or Spansion Japan's corporate reorganization proceeding or as a result of various restrictions in certain geographies; the negative impact on relationships with employees, customers, suppliers and contract manufacturers and other stakeholders; the failure of the company to obtain the U.S. Bankruptcy Court orders substantially on the terms applied for; the failure of the company to obtain the requisite approvals of affected creditors or the courts for the proposed plan or reorganization, or to successfully implement such a plan or obtain sufficient exit financing, if required, within the time granted by the U.S. Bankruptcy Court, leading to the likely liquidation of the company's assets; and that following the approval of the proposed plan of reorganization, the company's outstanding common stock will be cancelled. In addition, the instability of the global economy and tight credit markets could continue to adversely impact the company's business in several respects, including adversely impacting credit quality and insolvency risk of the company and its customers and business partners, including suppliers and distributors; bookings; and reductions and deferrals of demand for Spansion products. The company urges investors to review in detail the risks and uncertainties discussed in the company's Securities and Exchange Commission filings, including but not limited to the company's most recent Annual Report on Form 10-K for and Quarterly Reports on Form 10-Q. Unless otherwise required by applicable laws, the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spansion Inc. Debtor-in-Possession CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Quarter Quarter Ended Ended March 28, March 29, 2010 2009 ---- ---- Net sales $277,337 $399,628 Cost of sales 189,120 383,035 ------------- ------- ------- Gross margin 88,217 16,593 Research and development 22,953 44,746 Sales, general and administrative 47,608 104,029 Restructuring charges 13 23,942 Operating income (loss) 17,643 (156,124) Interest and other income (expense), net 286 480 Interest expense (19,336) (24,466) Gain on deconsolidation of subsidiary - 30,100 Loss before reorganization items and income taxes (1,407) (150,010) Reorganization items 5,464 (362,457) Income (loss) before income taxes 4,057 (512,467) Provision for income taxes (405) (168) Net income (loss) $3,652 $(512,635) Net income (loss) per common share Basic $0.02 $(3.18) Diluted $0.02 $(3.18) Shares used in per share calculation - Basic 162,403 161,283 - Diluted 174,471 161,283 Spansion Inc. Debtor-in-Possession CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) December March 28, 27, 2010 2009 ---- ---- Assets Current assets: Cash and cash equivalents $321,156 $324,903 Auction rate securities 75,155 100,335 Accounts receivable 125,885 129,174 Accounts receivable from related party 361,983 366,602 Allowance for doubtful accounts (60,833) (56,408) ------------------------------- ------- ------- Accounts receivable, net 427,035 439,368 Inventories 145,531 141,723 Deferred income taxes 12,197 13,332 Restricted cash 531,516 - Prepaid expenses and other current assets 25,139 49,533 ----------------------------------- ------ ------ Total current assets 1,537,729 1,069,194 Property, plant and equipment, net 297,473 322,710 Other assets 40,784 46,073 Total assets $1,875,986 $1,437,977 ============ ========== ========== Liabilities and Stockholders' Deficit Current liabilities: Short term note $36,604 $64,149 Senior secured term loan 450,000 - Accounts payable and accrued liabilities 149,470 146,223 Accounts payable to related party 198,069 221,211 Rights offering deposits 75,783 - Accrued compensation and benefits 24,882 21,630 Deferred income 54,779 62,958 --------------- ------ ------ Total current liabilities 989,587 516,171 Deferred income taxes 12,270 13,405 Other long-term liabilities 9,523 9,825 Liabilities subject to compromise 1,717,352 1,756,269 Stockholders' deficit (852,746) (857,693) Total liabilities and stockholders' deficit $1,875,986 $1,437,977 =================================== ========== ========== Spansion Inc. Debtor-in-Possession CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Quarter Quarter Ended Ended March 28, March 29, 2010 2009 ---- ---- Cash Flows from Operating Activities: Net income (loss) $3,652 $(512,635) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 27,780 59,660 Asset impairment charges 629 - Provision for doubtful accounts 5,591 17,708 Net loss on sale and disposal of property, plant and equipment 1,112 (1,902) Compensation recognized under employee stock plans 1,295 5,430 Gain on deconsolidation of subsidiary - (30,100) Gain on sale of Suzhou plant (3,676) - Gain from approved settlement of rejected capital leases and various licenses (22,517) - Amortization of financing cost and debt premium and discount 897 1,540 Changes in operating assets and liabilities, net of effects of deconsolidation of subsidiary: Decrease (increase) in accounts receivable 13,908 (54,018) (Increase) decrease in inventories (3,808) 142,499 Decrease (increase) in prepaid expenses and other current assets 6,041 (25,191) Decrease (increase) in other assets 1,192 (8,936) (Decrease) increase in accounts payable, accrued liabilities and accrued compensation and benefits (22,430) 382,942 (Decrease) increase in deferred income (8,179) 3,226 Net cash provided (used) by operating activities 1,487 (19,777) ------------------------------------- ----- ------- Cash Flows from Investing Activities: Proceeds from sale of property, plant and equipment 4,917 45 Purchases of property, plant and equipment (8,493) (3,921) Loan made to an investee - (5,263) Cash proceeds from sale of Suzhou plant 18,687 - Proceeds from redemption of auction rate securities 27,325 - Increase in restricted cash (531,516) Cash decrease due to deconsolidation of subsidiary - (52,092) Net cash used by investing activities (489,080) (61,231) ------------------------------------- -------- ------- Cash Flows from Financing Activities: Proceeds from borrowings, net of issuance costs 438,082 117,758 Payments on debt and capital lease obligations (30,019) (54,715) Proceeds from rights offering 75,783 - Net cash provided by financing activities 483,846 63,043 ----------------------------------------- ------- ------ Effect of exchange rate changes on cash and cash equivalents - (3,095) ------------------------------------------- --- ------ Net increase in cash and cash equivalents (3,747) (21,060) Cash and cash equivalents at the beginning of period 324,903 116,387 --------------------------------------------- ------- ------- Cash and cash equivalents at end of period $321,156 $95,327 ========================================== ======== ======= Spansion Inc. Debtor-in-Possession CONDENSED CONSOLIDATED SUPPLEMENTAL INFORMATION (UNAUDITED) (In thousands, except per share amounts) Reconciliation of GAAP Net Income (Loss) to NON-GAAP Net Income (Loss) ---------------------------------------------------------------------- Quarter Quarter Quarter Ended Ended Ended December March 28, 27, March 29, 2010 2009 2009 ---- ---- ---- GAAP net income (loss) $3,652 $4,329 $(512,635) Amortization of Saifun intangible assets 79 79 79 Restructuring charges 3,689 5,091 23,942 Reorganization charges (gain) (5,464) 9,736 362,457 Impairment charges 629 14,431 - Interest expense for the senior secured term loan 5,182 - - Amortization of financing cost for the senior secured term loan 7,855 - - Customer administrative claim 2,569 - - Gain on deconsolidation of subsidiary - - (30,100) Gain on the sale of Suzhou plant (3,676) (3,885) - Non-GAAP net income (loss) $14,515 $29,781 $(156,257) Non-GAAP net income (loss) per diluted share $0.08 $0.17 $(0.97) Shares used in diluted shares calculation 174,471 174,139 161,283 Spansion Inc. Debtor-in-Possession SELECT ITEMS IN THE FINANCIALS (UNAUDITED) (In thousands) Quarter Quarter Quarter Ended Ended Ended December March 28, 27, March 29, 2010 2009 2009 ---- ---- ---- Interest expense, net $19,050 $6,988 $23,986 Benefit (provision) for income taxes (405) (350) 168 Depreciation in cost of sales, R&D and SG&A 26,142 27,853 58,042 Depreciation in restructuring charges 1,559 1,689 - Impairment charges 629 14,431 211 Amortization 79 79 79
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Spansion Inc.
CONTACT: Press, Courtney Brigham, +1-408-616-5056,
courtney.brigham@spansion.com, or Investors, Randy Furr, +1-408-616-3682, both
of Spansion Inc.
Web Site: http://www.spansion.com/
