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| Fairchild Semiconductor International, Inc. | |||||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||||
| (In millions, except per share amounts) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | |||||||||||||||||||
|
2009 |
2009 |
2008 |
2009 |
2008 |
|||||||||||||||||||
| Total revenue | $ | 354.5 | $ | 331.8 | $ | 320.9 | $ | 1,187.5 | $ | 1,574.2 | |||||||||||||
| Cost of sales (1) | 249.1 | 245.5 | 235.8 | 897.2 | 1,118.8 | ||||||||||||||||||
| Gross margin | 105.4 | 86.3 | 85.1 | 290.3 | 455.4 | ||||||||||||||||||
| Gross margin % | 29.7 | % | 26.0 | % | 26.5 | % | 24.4 | % | 28.9 | % | |||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development (2) | 25.4 | 24.9 | 23.7 | 99.7 | 112.9 | ||||||||||||||||||
| Selling, general and administrative (3) | 47.5 | 43.4 | 44.3 | 179.3 | 217.7 | ||||||||||||||||||
| Amortization of acquisition-related intangibles | 5.6 | 5.6 | 5.5 | 22.3 | 22.1 | ||||||||||||||||||
| Restructuring and impairments | 5.8 | 4.1 | 15.9 | 27.9 | 29.2 | ||||||||||||||||||
| Goodwill impairment charge | - | - | 203.3 | - | 203.3 | ||||||||||||||||||
| Charge (release) for litigation | 6.0 | - | (3.3 | ) | 6.0 | (3.3 | ) | ||||||||||||||||
| Total operating expenses | 90.3 | 78.0 | 289.4 | 335.2 | 581.9 | ||||||||||||||||||
| Operating income (loss) | 15.1 | 8.3 | (204.3 | ) | (44.9 | ) | (126.5 | ) | |||||||||||||||
| Impairment of investments | - | - | 19.0 | - | 19.0 | ||||||||||||||||||
| Other expense, net | 3.0 | 4.4 | 6.2 | 18.4 | 23.1 | ||||||||||||||||||
| Income (loss) before income taxes | 12.1 | 3.9 | (229.5 | ) | (63.3 | ) | (168.6 | ) | |||||||||||||||
| Provision (benefit) for income taxes | (1.0 | ) | 1.2 | (11.4 | ) | (3.1 | ) | (1.2 | ) | ||||||||||||||
| Net income (loss) | $ | 13.1 | $ | 2.7 | $ | (218.1 | ) | $ | (60.2 | ) | $ | (167.4 | ) | ||||||||||
| Net income (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | 0.11 | $ | 0.02 | $ | (1.76 | ) | $ | (0.49 | ) | $ | (1.35 | ) | ||||||||||
| Diluted | $ | 0.10 | $ | 0.02 | $ | (1.76 | ) | $ | (0.49 | ) | $ | (1.35 | ) | ||||||||||
| Weighted average common shares: | |||||||||||||||||||||||
| Basic | 124.0 | 123.9 | 123.6 | 123.8 | 124.3 | ||||||||||||||||||
| Diluted | 127.6 | 127.5 | 123.6 | 123.8 | 124.3 | ||||||||||||||||||
| (1) Equity compensation expense included in cost of sales | $ | 2.6 | $ | 2.4 | $ | 0.9 | $ | 5.8 | $ | 4.5 | |||||||||||||
| (2) Equity compensation expense included in research and development | $ | 1.2 | $ | 1.1 | $ | 0.9 | $ | 3.8 | $ | 4.1 | |||||||||||||
| (3) Equity compensation expense included in selling, general and administrative | $ | 2.0 | $ | 1.7 | $ | 0.5 | $ | 7.9 | $ | 10.5 | |||||||||||||
| Fairchild Semiconductor International, Inc. | |||||||||||||||||||||||
| Reconciliation of Net Income (Loss) To Adjusted Net Income | |||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | |||||||||||||||||||
|
2009 |
2009 |
2008 |
2009 |
2008 |
|||||||||||||||||||
| Net income (loss) | $ | 13.1 | $ | 2.7 | $ | (218.1 | ) | $ | (60.2 | ) | $ | (167.4 | ) | ||||||||||
| Adjustments to reconcile net income (loss) | |||||||||||||||||||||||
| to adjusted net income (loss): | |||||||||||||||||||||||
| Restructuring and impairments | 5.8 | 4.1 | 15.9 | 27.9 | 29.2 | ||||||||||||||||||
| Net impairment/gain on equity investments (1) | - | - | - | 2.1 | - | ||||||||||||||||||
| Gain associated with debt buyback (1) | (1.2 | ) | - | - | (2.0 | ) | - | ||||||||||||||||
| Accelerated depreciation on assets related to fab closure (2) | 2.1 | 3.0 | - | 8.8 | - | ||||||||||||||||||
| Goodwill impairment charge | - | - | 203.3 | - | 203.3 | ||||||||||||||||||
|
Impairment of investments |
- | - | 19.0 | - | 19.0 | ||||||||||||||||||
| Charge (release) for litigation | 6.0 | - | (3.3 | ) | 6.0 | (3.3 | ) | ||||||||||||||||
| Inventory write-off(release) associated with fab closure (2) | (0.1 | ) | (0.1 | ) | - | 0.4 | - | ||||||||||||||||
| Costs associated with the redemption of convertible debt (1) | - | - | - | - | 0.4 | ||||||||||||||||||
| Amortization of acquisition-related intangibles | 5.6 | 5.6 | 5.5 | 22.3 | 22.1 | ||||||||||||||||||
| Associated net tax effects of the above and other acquisition-related intangibles | (1.4 | ) | (0.4 | ) | (14.6 | ) | (4.1 | ) | (14.4 | ) | |||||||||||||
| Tax effects from finalized tax filings and positions | - | - | - | - | (2.5 | ) | |||||||||||||||||
| Adjusted net income | $ | 29.9 | $ | 14.9 | $ | 7.7 | $ | 1.2 | $ | 86.4 | |||||||||||||
| Adjusted net income per common share: | |||||||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.12 | $ | 0.06 | $ | 0.01 | $ | 0.70 | |||||||||||||
| Diluted | $ | 0.23 | $ | 0.12 | $ | 0.06 | $ | 0.01 | $ | 0.69 | |||||||||||||
| (1) Recorded in other expense, net | |||||||||||||||||||||||
| (2) Recorded in cost of sales | |||||||||||||||||||||||
| Fairchild Semiconductor International, Inc. | |||||||||||||||||||||||
| Reconciliation of Gross Margin To Adjusted Gross Margin | |||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| December 27, | September 27, | December 28, | December 27, | December 28, | |||||||||||||||||||
|
2009 |
2009 |
2008 |
2009 |
2008 |
|||||||||||||||||||
| Gross margin | $ | 105.4 | $ | 86.3 | $ | 85.1 | $ | 290.3 | $ | 455.4 | |||||||||||||
| Adjustments to reconcile gross margin | |||||||||||||||||||||||
| to adjusted gross margin: | |||||||||||||||||||||||
| Accelerated depreciation on assets related to fab closure | 2.1 | 3.0 | - | 8.8 | - | ||||||||||||||||||
| Inventory write-off (release) associated with fab closure | (0.1 | ) | (0.1 | ) | - | 0.4 | - | ||||||||||||||||
| Adjusted gross margin | $ | 107.4 | $ | 89.2 | $ | 85.1 | $ | 299.5 | $ | 455.4 | |||||||||||||
| Adjusted gross margin % | 30.3 | % | 26.9 | % | 26.5 | % | 25.2 | % | 28.9 | % | |||||||||||||
| Adjusted net income, adjusted net income per share, and adjusted gross margin should not be considered as alternatives to net income (loss), net income (loss) per share, gross margin or other measures of consolidated operations and cash flow data prepared in accordance with accounting principles generally accepted in the United States of America, as indicators of our operating performance, or as alternatives to cash flow as a measure of liquidity. | |||||||||||||||||||||||
| Fairchild Semiconductor International, Inc. | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (In millions) | |||||||||||
| (Unaudited) | |||||||||||
| December 27, | September 27, | December 28, | |||||||||
|
2009 |
2009 |
2008 |
|||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 415.8 | $ | 416.4 | $ | 351.5 | |||||
| Short-term marketable securities | 0.1 | 0.7 | 0.8 | ||||||||
| Receivables, net | 134.0 | 131.5 | 155.6 | ||||||||
| Inventories | 189.5 | 182.6 | 231.0 | ||||||||
| Other current assets | 41.8 | 43.1 | 40.0 | ||||||||
| Total current assets | 781.2 | 774.3 | 778.9 | ||||||||
| Property, plant and equipment, net | 653.2 | 662.7 | 731.6 | ||||||||
| Intangible assets, net | 81.1 | 86.7 | 102.1 | ||||||||
| Goodwill | 161.3 | 161.3 | 161.7 | ||||||||
| Long-term securities | 35.8 | 35.4 | 34.6 | ||||||||
| Other assets | 49.8 | 40.9 | 40.9 | ||||||||
| Total assets | $ | 1,762.4 | $ | 1,761.3 | $ | 1,849.8 | |||||
| LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 5.3 | $ | 5.3 | $ | 5.3 | |||||
| Accounts payable | 119.6 | 106.8 | 94.4 | ||||||||
| Accrued expenses and other current liabilities | 70.6 | 67.1 | 94.4 | ||||||||
| Total current liabilities | 195.5 | 179.2 | 194.1 | ||||||||
| Long-term debt, less current portion | 466.9 | 511.3 | 529.9 | ||||||||
| Other liabilities | 71.1 | 63.4 | 65.9 | ||||||||
| Total liabilities | 733.5 | 753.9 | 789.9 | ||||||||
| Temporary equity - deferred stock units | 2.3 | 2.2 | 2.8 | ||||||||
| Total stockholders' equity | 1,026.6 | 1,005.2 | 1,057.1 | ||||||||
| Total liabilities, temporary equity and stockholders' equity | $ | 1,762.4 | $ | 1,761.3 | $ | 1,849.8 | |||||
| Fairchild Semiconductor International, Inc. | |||||||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||||||
| (In millions) | |||||||||||||||
| (Unaudited) | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
| December 27, | December 27, | December 28, | |||||||||||||
|
2009 |
2009 |
2008 |
|||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net income (loss) | $ | 13.1 | $ | (60.2 | ) | $ | (167.4 | ) | |||||||
| Adjustments to reconcile net income (loss) to cash provided | |||||||||||||||
| by operating activities: | |||||||||||||||
| Depreciation and amortization | 39.7 | 160.4 | 136.6 | ||||||||||||
| Non-cash stock-based compensation expense | 5.8 | 17.5 | 19.1 | ||||||||||||
| Non-cash restructuring and impairments expense | 0.8 | 1.6 | 12.2 | ||||||||||||
| Non-cash impairment of investments | - | - | 19.0 | ||||||||||||
| Non-cash goodwill impairment | - | - | 203.3 | ||||||||||||
| Non-cash write-off of equity investment | - | 2.3 | - | ||||||||||||
| Gain on debt buyback | (1.4 | ) | (2.2 | ) | - | ||||||||||
| Gain on sale of equity investment | - | (0.2 | ) | - | |||||||||||
| Deferred income taxes, net | 3.0 | (8.6 | ) | (11.2 | ) | ||||||||||
| Other | 1.0 | 1.9 | 2.3 | ||||||||||||
| Changes in operating assets and liabilities, net | |||||||||||||||
| of acquisitions | 7.5 | 75.9 | (28.5 | ) | |||||||||||
| Cash provided by operating activities | 69.5 | 188.4 | 185.4 | ||||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Capital expenditures | (26.8 | ) | (59.8 | ) | (168.7 | ) | |||||||||
| Purchase of marketable securities | (0.1 | ) | (0.5 | ) | (3.8 | ) | |||||||||
| Sale of marketable securities | 0.6 | 0.9 | 5.1 | ||||||||||||
| Maturity of marketable securities | - | 0.2 | 0.2 | ||||||||||||
| Other | (0.7 | ) | (1.9 | ) | (5.2 | ) | |||||||||
| Acquisitions | - | (1.5 | ) | - | |||||||||||
| Cash used in investing activities | (27.0 | ) | (62.6 | ) | (172.4 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||||
| Repayment of long-term debt | (42.9 | ) | (60.6 | ) | (204.4 | ) | |||||||||
| Issuance of long-term debt | - | - | 150.0 | ||||||||||||
| Proceeds from issuance of common stock and | |||||||||||||||
|
from exercise of stock options, net |
- | - | 9.0 | ||||||||||||
| Purchase of treasury stock | - | - | (21.7 | ) | |||||||||||
| Other | (0.2 | ) | (0.9 | ) | (3.4 | ) | |||||||||
| Cash used in financing activities | (43.1 | ) | (61.5 | ) | (70.5 | ) | |||||||||
| Net change in cash and cash equivalents | (0.6 | ) | 64.3 | (57.5 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 416.4 | 351.5 | 409.0 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 415.8 | $ | 415.8 | $ | 351.5 | |||||||||
| Fairchild Semiconductor International, Inc. | |||||||||||||||
| Reconciliation of Cash Provided by Operating Activities to Free Cash Flow | |||||||||||||||
| (In millions) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 27, | December 27, | December 28, | |||||||||||||
|
2009 |
2009 |
2008 |
|||||||||||||
| Cash provided by operating activities | $ | 69.5 | $ | 188.4 | $ | 185.4 | |||||||||
| Capital expenditures | (26.8 | ) | (59.8 | ) | (168.7 | ) | |||||||||
| Free cash flow | $ | 42.7 | $ | 128.6 | $ | 16.7 | |||||||||
