News

17 November 2009

 

RFMD raises free cash flow guidance and retires $197m of debt

GaAs power amplifier maker RF Micro Devices Inc of Greensboro, NC, USA says that it has completed all previously announced restructuring activities.

The firm hence expects continued strength in financial results, with an emphasis on non-GAAP operating income, free cash flow (net cash from operating activities minus property and equipment expenditures) and return on invested capital (ROIC). In fiscal second-quarter 2010 (ended 3 October 2009), RFMD delivered year-over-year and sequential improvements in gross margin, operating margin and earnings per share. Free cash flow was $45.8m in fiscal second-quarter 2010 and $80.3m through fiscal first-half 2010.

RFMD now expects that free cash flow in fiscal 2010 will exceed its guidance of $130m provided on 27 October. The firm also expects to be net cash positive in fiscal 2011 (ending 2 April 2011).

“The new RFMD is positioned today to achieve strong financial results and continued leadership in lucrative and growing core markets,” says president & CEO Bob Bruggeworth. “With our restructuring activities complete, we are focused sharply on building superior shareholder value through profitable growth and ROIC in excess of our cost of capital,” he adds. “RFMD is commencing new technology and product cycles, and we are at the forefront of exciting new secular growth trends, such as data mobility, smart grid deployment and alternative energy generation.”

RFMD repurchases and retires $197m of convertible notes due 2010

With cash, cash equivalence, short-term investment and trading security investment of $357.8m at the end of fiscal Q2, RFMD has used cash on hand to repurchase and retire $197m of its convertible subordinated notes prior to their maturity in July 2010 (paying the principal amount of the notes plus accrued interest). RFMD hence expects to save about $1.9m in further interest expense.

The aggregate amount of 2010 notes outstanding is now about $10m (down from $230m at issue). Since the March 2008 quarter, RFMD has repurchased 30 million shares of common stock and retired about $262m original principal amount of total convertible debt.

See related item:

RFMD’s revenue grows 20%, boosted by CATV growth of 70%

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