Second quarter 2001 revenue was $14.5 million, a decrease of 18% from the $17.7 million reported in first quarter 2001 and a 4% decrease from revenue of $15.1 million in the comparable quarter of 2000. Gross margins were 30% in the second quarter 2001 compared to 30% in first quarter 2001, excluding additional inventory reserves recorded in first quarter 2001. Gross margins continue to be impacted by lower loading of the Company’s module factories and pricing pressure on more mature product lines. Pro forma loss per share, which excludes non-cash charges for stock option compensation and amortization of intangibles and goodwill, was $0.09 for second quarter 2001, an increase of $0.02 over the pro forma loss per share of $0.07 in first quarter 2001.
Microtune ended the second quarter 2001 with $71.1 million in cash and cash equivalents compared to $71.8 million at the end of first quarter 2001. The Company’s balance sheet continues to show strength with minimal net cash burn and a reduction in overall inventories and accounts receivable during the quarter. Cash outflows in second quarter 2001 included a convertible loan issued in the amount of $1.0 million to a private RF-focused company.
During the quarter, Microtune continued to fortify its position across customers and products, positioning itself for market recovery, future growth and continued RF technology and market leadership, even during the current period of economic and industry slowdown. First, Microtune expanded its market reach by introducing the MT4950 RF Subsystem, the industry’s first commercially available RF transceiver supporting primary-line, cable-based phone services. Based on Microtune’s RF silicon and systems technologies, the MT4950 provides one of the critical building blocks for enabling bundled video, voice and data services to the home. Unique in supporting both circuit-switched and packet-switched architectures, the MT4950 provides a migration strategy to future Voice over Internet Protocol (VoIP) platforms, a critical consideration for cable equipment suppliers. The new MT4950 further extends Microtune’s RF technology portfolio into the cable telephony segment and positions the company for leadership as the market begins to ramp.
Microtune also announced several design wins for its RF silicon products across a diverse group of cable broadband products and customers, including Motorola, which extended its supply agreement to include Microtune’s amplifier chips in its set-top box products. In the second quarter, approximately 19% of products shipped contained Microtune proprietary silicon, further demonstrating the expanded adoption of Microtune’s RF silicon in both on-board and subsystems solutions, up from less than 10% in the first quarter of 2001.
Microtune also announced an agreement with STMicroelectronics for the development of high-performance, cost-optimized solutions that will integrate both companies’ silicon and systems technologies into products targeted for next-generation cable modems, set-top boxes and other digital cable broadband appliances. The two companies introduced the first product in their collaboration, an all-silicon cable modem Reference Design, which is expected to offer the most cost-effective cable modem system on the market.
Supporting this initiative and the migration to silicon tuner-on-board implementations, Microtune’s MicroTuner(TM) tuner and MicroStreamer(TM) upstream amplifier were integrated into a cable modem that achieved DOCSIS certification during CableLabs’ Certification Wave 18. This represents the industry’s first cable modem to be certified using a single-chip tuner. Combined with the other cable modems that achieved the DOCSIS-certified seal with Microtune’s RF technology, Microtune has supplied the tuner-receiver in one or more models for 32 of 51 companies that have achieved certification.
Further solidifying its position in the RF automotive market, Microtune announced a teaming relationship with Delphi Automotive Systems’ Fuba Automotive GmbH subsidiary to develop advanced, integrated mobile multimedia systems. Microtune’s new class of 5102 automotive multimedia tuners, developed as part of this alliance, delivers premium radio and rear seat in-vehicle television and video. This device expands Microtune’s portfolio of mobile RF solutions and places the company at the forefront of the expanding automotive/consumer electronics convergence market.
Supporting the quality-driven manufacturing processes required by the automotive industry, Microtune also announced that its newest manufacturing facility, NSF RF Technologies Corporation, in Manila (Philippines) has received official certification for QS9000 and ISO 9001, while its European Headquarters operation in Ingolstadt (Germany) has been re-certified for QS9000 and ISO 9001. These certifications meet demanding automotive specifications and also demonstrate the company’s strong commitment to quality across all its product lines.
Microtune remains positive about the cable broadband markets and the commitment of cable operators to deploy new broadband services, said Douglas J. Bartek, Chairman and CEO of Microtune, Inc. The stabilization of cable modem inventories that is expected later this year is a key indicator. During the current economic conditions, we are managing our business to ensure cost-efficient operations, as evidenced by our cash neutral position. At the same time, we are aggressively focused on our strategic long-term objectives across all our markets. The introduction of new industry-leading RF silicon and systems products and our continued design-win successes strengthen our position for the future as the market recovers.
SOURCE: COMPANY PRESS RELEASE
