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Ramtron Reports Second Quarter 2011 Financial Results

^{Published on 2011-07-20 13:21:10 - Market Wire}
 

COLORADO SPRINGS, Colo.--([ BUSINESS WIRE ])--U.S. semiconductor maker Ramtron International Corporation (Nasdaq: RMTR), a leading developer and supplier of ferroelectric-based low-power memory and integrated semiconductor products, today reported results for the second quarter ended June 30, 2011.

"Ramtrona™s second quarter performance clearly reflects the unparalleled support from our Texas wafer source and the progress we have made in strengthening our supply chain, which allowed us to better meet our customersa™ needs"

2011 Second-Quarter Financial Highlights

• Revenue of $16.8 million increased 58% sequentially, compared to $10.6 million in the first quarter of 2011
• The sequential revenue increase was due to increased support from the Companya™s Texas wafer source and assembly and test subcontractors, which allowed Ramtron to begin shipping in greater volume
• Product gross margin declined slightly to 47%, compared to a margin of 48% in the first quarter of 2011
• First half revenue of $27.4 million exceeded the Companya™s first half revenue guidance of $25 million

2011 Second-Quarter Corporate Highlights

• Ramtron customers began sampling the first pre-qualification ferroelectric random access memory (F-RAM) devices built at the companya™s new wafer source at IBM Corporation
• Upgrades were announced to Ramtrona™s family of Processor Companion products targeted at the high-volume, processor-based electronics system market
• Taiwan-based King Yuan Electronics Co., LTD (KYEC) was selected to expand the test capacity for Ramtrona™s line of F-RAM products
• Mark R. Kent was named chief financial officer, bringing nearly 30 years of finance experience with a strong track record of financial leadership in semiconductor companies

aRamtrona™s second quarter performance clearly reflects the unparalleled support from our Texas wafer source and the progress we have made in strengthening our supply chain, which allowed us to better meet our customersa™ needs,a said Eric Balzer, Ramtrona™s chief executive officer. aAs a result of these improvements and our customer-centric mindset, we were able to fulfill more of our customersa™ orders and clear more backlog than initially anticipated. Ramtron now has a clear roadmap and timetable for fully resolving any remaining supply constraints before the end of 2011. Additionally, the company has already implemented a comprehensive ongoing program of process review and improvements designed to attain and maintain operational excellence across the company.

Looking forward, Ramtrona™s focus is to capture market share for its existing product set, to introduce innovative product platforms to meet its current customersa™ evolving needs and, over the longer term, to penetrate new markets with leading-edge mixed-signal system solutions. We also expect our new manufacturing line in Burlington to be in full production in the first quarter of 2012.a

The Company reported total revenue of $16.8 million for the second quarter of 2011, compared with $18.3 million for the same quarter last year, and a 58% sequential increase compared to first-quarter 2011 revenue of $10.6 million. The sequential increase in revenue was due to the support from the Companya™s Texas wafer source and related capacity expansion, which allowed the Company to ship product in greater volume. Product gross margin for the second quarter of 2011 was 47%, compared with 49% for the second quarter of 2010, down slightly compared to the 2011 first quarter margin of 48%. The product gross margin decline is primarily due to new products, which at this stage have lower yields and increased test costs. Over the next few quarters, as test times decrease, manufacturing processes are optimized, and the IBM manufacturing line in Burlington reaches full production, the Company expects product gross margin to improve toward historical high levels.

The Company reported a net loss for the second quarter of 2011 of $683,000, or ($0.02) per share, compared with net income of $357,000, or $0.01 per share for the second quarter of 2010. Second-quarter 2011 results included stock-based compensation expense of $441,000 and an income tax benefit of $270,000. As anticipated, the Companya™s research and development expenses continue to be historically high in connection with engineering wafers at the Companya™s new wafer source. The combination of higher expenses and lower gross margin is the primary reason for the net loss in the second quarter of 2011. At June 30, 2011, the Companya™s cash and cash equivalents totaled $3.3 million.

2011 Full Year Outlook

aWith the continued support from our Texas wafer source, as well as the product manufacturing and test capacity relationships already in place, we anticipate that our second half revenue will exceed that of the first half of 2011 by a minimum of 40%. We believe this and our strong backlog will drive full-year revenue of between $65 million and $70 million, reflecting a full recovery from our forced foundry transition,a said Mark Kent, Ramtrona™s chief financial officer. aDuring the second half of the year, we also plan to invest in engineering to support our continued capacity ramp and accelerate new product launches. Additionally, we are focused on building a world-class sales organization and we expect to announce a new head of worldwide sales this quarter. As a result, we are adjusting our earnings outlook and now expect to report a GAAP net loss of up to ($0.04) per share for the second half of 2011.a

Conference Call

Ramtron managementa™s teleconference today will be webcast live on the corporate website and management will also host a live question-and-answer session with institutional investors and research analysts.

How to Participate

Ramtron Second-Quarter 2011 Results Teleconference

July 20, 2011 at 2:00 p.m. PT / 5:00 p.m. ET

Go to the home page of the Ramtron site at [ www.ramtron.com ] and click on the teleconference link. From this site, you can access the teleconference webcast, assuming that your computer system is configured properly. A webcast replay will be available for one year, and a telephonic replay will be available for seven days after the live call at 617-801-6888, code #59473922.

About Ramtron

Ramtron International Corporation, headquartered in Colorado Springs, Colorado, is a fabless semiconductor company that designs, develops and markets specialized semiconductor memory, microcontroller and integrated semiconductor solutions used in a wide range of product applications and markets.

Cautionary Statements

Except for historical information, this press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as abelieve,a aexpect,a aanticipate,a ashould,a and apotential,a among others. These statements include statements about Ramtrona™s prospects for future growth and expected revenue and net income for second-half and full-year 2011. These forward-looking statements are inherently difficult to predict and involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to: general and regional economic conditions and conditions specific to the semiconductor industry; demand for Ramtrona™s products; order cancellations or reduced order placements; product sales mix; the timely development of new technologies; competitive factors such as pricing pressures on existing products and the timing and market acceptance of new product introductions; Ramtrona™s ability to maintain an appropriate amount of low-cost foundry production capacity from its foundry sources in a timely manner; our foundry partnersa™ timely ability to successfully manufacture products for Ramtron; our foundry partnersa™ ability to supply increased orders for F-RAM products in a timely manner using Ramtrona™s proprietary technology; any disruptions of Ramtrona™s foundry or test and assembly contractor relationships; currency fluctuations; unexpected design and manufacturing difficulties; defects in products that could result in product liability claims; and the risk factors listed from time to time in Ramtrona™s SEC reports, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2010, and quarterly reports on Form 10Q for 2011. SEC-filed documents are available at no charge at the SECa™s website ([ www.sec.gov ]) or from the company.

All forward-looking statements included in this release are based upon information available to Ramtron as of the date of this release, which may change.

The financial information in this press release and the attached financial statements have been prepared from the books and records of the company with the omission of certain information and disclosures normally included in financial statements.