Strategic Restructuring to Leverage Leadership in RF Components and
Compound SemiconductorsCompany Expects to Eliminate
Approximately $75 Million in Annual Wireless Systems Expenses
GREENSBORO, N.C., May 6
-- RF Micro Devices, Inc. (Nasdaq: RFMD), a global leader in the design
and manufacture of high-performance semiconductor components, today
announced that effective immediately RFMD(R) is reducing its investments
in wireless systems, including cellular transceivers and GPS solutions,
in order to focus on core semiconductor component opportunities, including
cellular front ends and other components in RFMD's Cellular Products
Group (CPG) and the expanding portfolio of semiconductor components
in RFMD's Multi-Market Products Group (MPG).
As a result, RFMD
currently expects to eliminate product development expenses related
to its wireless systems business by approximately $75 million this fiscal
year beginning in the June 2008 quarter, with the full benefit expected
to be realized in the December 2008 quarter.
president and CEO of RFMD, said, "These strategic actions will enable
RFMD to deliver more predictable financial results and substantially
higher profitability. We are the industry leader in RF components and
the world's largest manufacturer of compound semiconductors. We are
investing in growing markets where we have a demonstrated track record
of success, and we will measure our progress using operating income
and return on invested capital (ROIC) as key performance metrics. We
anticipate steady financial improvement throughout the year, and we
currently forecast at least 10% non-GAAP operating income and double-digit
ROIC by the end of the calendar year.
"While this is a difficult
decision because of the impact on employees, these actions are the result
of a comprehensive strategic review, including extensive market analyses
and discussions with key customers and channel partners. We are confident
the steps we have taken will increase shareholder value and provide
significant long-term benefits to our global customers and stakeholders."
Key Restructuring Actions
-- RFMD is eliminating approximately
$75 million in annual expenses by reducing investments in wireless systems,
including cellular transceivers and GPS solutions.
-- RFMD projects
approximately $40 million -- $50 million in restructuring charges, approximately
two-thirds of which is expected to be non-cash, over the next two quarters
with a global workforce reduction of approximately 350 employees.
-- RFMD is engaged in discussions with strategic and financial
buyers for some of these assets, but is not commenting currently on
any potential transactions, including possible proceeds.
RFMD will fully support cellular transceivers currently in production
or commencing production, including POLARIS(R) 2, POLARIS 2 Radio Module,
POLARIS 3 and POLARIS 3 Silver(TM).
RFMD anticipates revenue
growth in cellular transceivers in fiscal 2009, with transceiver revenue
continuing in fiscal 2010.
RF Micro Devices will conduct a conference
call at 5:00 p.m. EDT today to discuss today's press release. The conference
call will be broadcast live over the Internet and can be accessed by
any interested party at
(under Investor Info). A telephone playback of the conference call will
be available approximately one hour after the call's completion by dialing
303-590-3000 and entering pass code 11111145.
About RFMD: RF
Micro Devices, Inc. (Nasdaq GS: RFMD) is a global leader in the design
and manufacture of high-performance semiconductor components. RFMD's
products enable worldwide mobility, provide enhanced connectivity and
support advanced functionality in the cellular handset, wireless infrastructure,
wireless local area network (WLAN), CATV/broadband and aerospace and
defense markets. RFMD is recognized for its diverse portfolio of semiconductor
technologies and RF systems expertise and is a preferred supplier to
the world's leading mobile device, customer premises and communications
Headquartered in Greensboro, N.C., RFMD
is an ISO 9001- and ISO 14001-certified manufacturer with worldwide
engineering, design, sales and service facilities. RFMD is traded on
the NASDAQ Global Select Market under the symbol RFMD. For more information,
please visit RFMD's web site at
This press release includes "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include,
but are not limited to, statements about our plans, objectives, representations
and contentions and are not historical facts and typically are identified
by use of terms such as "may," "will," "should," "could," "expect,"
"plan," "anticipate," "believe," "estimate," "predict," "potential,"
"continue" and similar words, although some forward-looking statements
are expressed differently. You should be aware that the forward-looking
statements included herein represent management's current judgment and
expectations, but our actual results, events and performance could differ
materially from those expressed or implied by forward-looking statements.
We do not intend to update any of these forward-looking statements or
publicly announce the results of any revisions to these forward-looking
statements, other than as is required under the federal securities laws.
RF Micro Devices' business is subject to numerous risks and uncertainties,
including variability in quarterly operating results, the rate of growth
and development of wireless markets, risks associated with our planned
exit from our wireless systems business, including cellular transceivers
and GPS solutions, the risk that restructuring charges may be greater
than originally anticipated and that the cost savings and other benefits
from the restructuring may not be achieved, risks associated with the
operation of our wafer fabrication facilities, molecular beam epitaxy
facility, assembly facility and test and tape and reel facilities, our
ability to complete acquisitions and integrate acquired companies, including
the risk that we may not realize expected synergies from our business
combinations, our ability to attract and retain skilled personnel and
develop leaders, variability in production yields, our ability to reduce
costs and improve gross margins by implementing innovative technologies,
our ability to bring new products to market, our ability to adjust production
capacity in a timely fashion in response to changes in demand for our
products, dependence on a limited number of customers, and dependence
on third parties. These and other risks and uncertainties, which are
described in more detail in RF Micro Devices' most recent Annual Report
on Form 10-K and other reports filed with the Securities and Exchange
Commission, could cause actual results and developments to be materially
different from those expressed or implied by any of these forward-looking
RF MICRO DEVICES(R), RFMD(R) and POLARIS(TM) TOTAL RADIO(TM)
are trademarks of RFMD, LLC. All other trade names, trademarks and registered
trademarks are the property of their respective owners.
RF Micro Devices, Inc.
/CONTACT: Dean Priddy, CFO,
+1-336-678-7975, Doug DeLieto, VP, Investor
or Jerry Neal, EVP, Marketing and Strategic
/Web site: http://www.rfmd.com /