Exar Announces Fiscal Year 2014 First Quarter Financial Results

FREMONT, Calif., July 24, 2013 /PRNewswire/ -- Exar Corporation (Nasdaq: EXAR), a leading supplier of high performance analog mixed-signal components and data management solutions, today announced financial results for the Company's first quarter of fiscal year 2014.

The Company reported revenue of $32.6 million, up 5% from the fourth quarter of fiscal year 2013 and 12% from $29.3 million in the same quarter a year ago.  Non-GAAP operating income was $4.6 million for the quarter, up $0.3 million from the prior quarter and $3.7 million versus $0.9 million in the same quarter a year ago.  Non-GAAP gross margin was 52.3%, compared to 52.7% in the prior quarter and 47.2% in the first quarter of last year.  Non-GAAP earnings per fully diluted share were $0.10, compared to $0.10 in the prior quarter and $0.03 in the same quarter of the prior year.  On a GAAP basis, net income for the first quarter of fiscal year 2014 was $0.8 million. GAAP gross margin was 47.4% and GAAP net income per fully diluted share was $0.02.

"Our first fiscal quarter results demonstrate continued profitable growth.  Revenue grew 5% sequentially and 12% versus the same quarter a year ago.  We continue to experience strength in the networking and storage market, which represented 30% of our revenue this quarter, and stability in the broad industrial market, at 51% of revenue, while communications infrastructure contracted slightly to 18%. This growth, coupled with continued strong gross margin and a focus on prudent spending, allowed us to maintain a neutral impact to our earnings per share while we absorbed the acquisition of Altior.  On a non-GAAP basis we achieved 14% operating profit and $0.10 earnings per diluted share.  With strong earnings and focus on cash management, our free cash flow of $0.8 million was positive for the quarter, despite two significant one-time events that consumed $4.7 million of cash," commented company President and CEO Louis DiNardo.

"Our goal is to build a sustainable growth business and an enduring brand in both our data management and analog mixed-signal businesses.  As we closed the quarter and fully integrated Altior to support our presence in Big Data, we concluded a transaction to acquire Cadeka Microcircuits that places us at the center of high-performance analog design and development. The Cadeka products, now our High Performance Analog product line, serve key requirements for precision analog components in the industrial, aerospace and medical electronics markets, as well as high-frequency requirements in video applications for distribution, surveillance and security.  Notably, the Cadeka team has been successful in penetrating the video surveillance and security market by developing technology and products that enable high-fidelity signal transmission over long cables.  This technology fills a critical need for the rapidly expanding video distribution, surveillance and security markets.  We believe this acquisition, in conjunction with our recently announced $50 million share repurchase program, has us well positioned to achieve consistent profitable growth and to maximize shareholder return."

For the second quarter of fiscal year 2014 ending September 29, 2013, the Company expects revenue growth in the range of 5% to 8%.  Gross margin on a non-GAAP basis is expected to be in the range of 51% to 53% and non-GAAP net income per fully diluted share is expected to be in the range of $0.09 to $0.11with Weighted Average Shares Outstanding of approximately 50.0 million.

Fiscal Year 2014 First Quarter Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company's financial results for the first quarter of fiscal year 2014, today, Wednesday, July 24, 2013 at 8:00 a.m. PDT.  To access the conference call, please dial (888) 846-5003 or (480) 629-9856.  In addition, a live webcast will be available on Exar's Investor webpage.

An archive of the conference call webcast will be available on Exar's Investor webpage starting at 5:00 p.m. PDT the day of the call. 

About Exar

Exar Corporation designs, develops and markets high-performance, analog mixed-signal integrated circuits and advanced sub-system solutions for the Networking & Storage, Industrial & Embedded Systems, and Communications Infrastructure markets.  Exar's product portfolio includes power management and connectivity components, high-performance analog and mixed-signal products, communications products, and network security and storage optimization solutions.  Exar has locations worldwide providing real-time customer support.  For more information about Exar, visit http://www.exar.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.  The forward-looking statements contained in this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events.  These statements are not guarantees of any event or future performance, involve risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate.  Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which the Company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis at the time expressed, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished and the Company disclaims any duty to update such statements.  The Company urges investors to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended March 31, 2013.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP.  Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.exar.com or the SEC's website at: http://www.sec.gov.  In this press release and in related comments by management, we are disclosing non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income or loss, non-GAAP net income or loss, and non-GAAP basic and diluted net income or loss per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, restructuring charges and exit costs, provision for dispute resolution, certain income tax credits, and related income tax effects on certain excluded items.  We are also disclosing the non-GAAP measure of free cash flow, which is derived from our net cash provided (used) by operations, less purchases of fixed assets and IP, plus proceeds from the sale of IP. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods.  The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provides relevant and useful information to analysts, investors, management and other interested parties.  For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company's future periods.  These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies.  In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.  The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP.  These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.  A reconciliation of the non-GAAP numbers to the most comparable GAAP numbers is provided in the tables included with this press release.

-Tables follow-

SOURCE Exar Corporation