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NetLogic Microsystems Updates Fourth Quarter 2008 Guidance

^{Published on 2008-12-08 07:08:14 - Market Wire}
 

MOUNTAIN VIEW, Calif.--([ BUSINESS WIRE ])--NetLogic Microsystems, Inc. (NASDAQ:NETL) today announced that it now expects revenue for the fourth quarter of 2008 to be in the range of $30.9 to $31.2 million. Given the weakness in the macroeconomic environment, the company previously stated that it expected its revenues to decline for the three months ended December 31, 2008 to approximately $36.1 million.

"Customer demand for our products deteriorated more than anticipated in November," said Ron Jankov, president and CEO. "We experienced many customer requests for push-outs of existing backlog that had been scheduled for fourth quarter deliveries. We proactively decided to accept such reschedule requests in order to accelerate our customers' efforts to minimize their inventory levels going into the New Year. Although we are disappointed with our revenue reduction in this difficult economic environment, we remain confident in our market position and the continued adoption of our technologies to serve the growing need of converged IP networks."

The company additionally expects non-GAAP net income for the fourth quarter of 2008 to be in a range of $0.23 to $0.24 per diluted share, compared with previous expectations of $0.37. Non-GAAP net income excludes stock-based compensation expense, the amortization of intangible assets, and fair value inventory adjustments. The company expects GAAP net loss for the fourth quarter to be in a range of $0.13 to $0.12 per diluted share, compared with previous expectations of GAAP net income of $0.02 per diluted share.

About NetLogic Microsystems

NetLogic Microsystems, Inc. (NASDAQ:NETL), a fabless semiconductor company headquartered in Mountain View, California, designs, develops and markets high-performance knowledge-based processors and high-speed integrated circuits that accelerate the delivery of voice, video, data and multimedia content for advanced enterprise, datacenter, communications and mobile wireless networks. NetLogic Microsystems' products include high-performance knowledge-based processors, application-aware content processors, 10-Gigabit Ethernet interconnects and network search engines that are being deployed by Tier 1 original equipment manufacturers (OEMs) in leading systems such as routers, switches, wireless infrastructure equipment, network security appliances, datacenter servers, network access equipment and network storage devices. NetLogic Microsystems' knowledge-based processors and content processors employ an advanced processor architecture and a large knowledge or signature database containing information on the network, as well as applications and content that run on the network, to make complex decisions about individual packets of information traveling through the network. NetLogic Microsystems' products significantly enhance the performance and functionality of next-generation networks that are designed to deliver high-definition video delivery over the Internet (IPTV), media-rich content over advanced mobile wireless services, voice transmission over the Internet (VoIP) and network security applications. For more information about products offered by NetLogic Microsystems, call +1-650-961-6676 or visit the NetLogic Microsystems Web site at [ http://www.netlogicmicro.com ].

NetLogic Microsystems and the NetLogic Microsystems logo are trademarks of NetLogic Microsystems, Inc. All other trademarks are the sole property of their respective holders.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding NetLogic Microsystems' business which are not historical facts may be "forward-looking statements" that involve risks and uncertainties. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to, the future financial performance of the company, customer acceptance and demand for our products, the volume of sales to our principal product customers, the timing of our receipt of customer orders during the quarter, manufacturing yields for our products, the timing of manufacture and delivery of product by our foundry suppliers, potential warranty claims and product defects, the length of our sales cycles, our average selling prices, our ability to successfully develop and sell new products, the strength of the OEM networking equipment market and the cyclical nature of that market and the semiconductor industry. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that NetLogic Microsystems files from time to time with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and NetLogic Microsystems undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

Non-GAAP Financial Information

The company believes non-GAAP financial measures provide useful information to both management and investors. Non-GAAP financial measures exclude the income statement effects of stock-based compensation, amortization of intangible assets, and fair value adjustments of acquired inventory, and the effects of stock-based compensation on the number of diluted shares used in calculating non-GAAP earnings per share.

We exclude stock-based compensation expense which is non-cash in nature and is difficult to predict as its valuation is affected by market forces that are not within the control of management. We also exclude amortization of intangibles, and fair value adjustments related to acquired inventory, as they are considered non-cash in nature and unrelated to our core operating performance.

We use the non-GAAP financial measures that exclude these items to make strategic decisions, forecast future results and evaluate the Company's current performance. We believe that the presentation of non-GAAP financial measures that exclude these items is useful to investors because we do not consider these charges either part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that are used to evaluate management's operating performance.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided historical reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures in prior announcements. For additional information regarding these non-GAAP financial measures, and management's explanation of why it considers such measures to be useful, refer to the Form 8-K dated October 28, 2008 that the Company has submitted to the Securities and Exchange Commission.