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RF Micro Devices Inc. Q4 2010 Earnings Call Transcript

RF Micro Devices Inc. Q4 2010 Earnings Call Transcript

RF Micro Devices Inc. (RFMD)

Q4 2010 Earnings Call

April 27, 2010 5:00 PM AM ET


Doug DeLieto – Investor Relations

Bob Bruggeworth – President and CEO

Dean Priddy – Chief Financial Officer

Eric Creviston – President, Cellular Products Group

Bob Van Buskirk – President, Multi-Market Products Group


Harsh Kumar – Morgan Keegan

Scott Searle – Merriman Curhan Ford

Edward Snyder – Charter Equity Research

Jaeson Schmidt – Craig-Hallum

Parag Agarwal – UBS

Todd Koffman – Raymond James

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Venkatesh Nathamuni – JP Morgan

Tim Luke – Barclays Capital Incorporated

Ittai Kidron – Oppenheimer

Steve Ferranti – Stephens Incorporated

Aaron Husock – Lanexa Global

Nathan Johnson – Pacific Crest

Tore Svanberg – Thomas Weisel Partners

Mike Burden – FBN Securities

Stephen Patel – Broadpoint AmTech

Aalok Shah – D. A. Davidson



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Good evening, ladies and gentlemen. And thank you for standing by. Welcome to the RF Micro Devices Q4 2010 Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions).

This conference is being recorded today, Tuesday, April 27, 2010. I would now like to turn the conference over to Doug DeLieto, Vice President, Investor Relations, RFMD. Please go ahead, sir.

Doug DeLieto

Thanks very much, Mitch. Hello, everyone, and welcome to our conference call at 4:00 p.m. today we issued a press release. If anyone listening did not receive a copy of the release, please call Samantha Alphonso at the Financial Relations Board at 212-827-3746, Sam will fax a copy to you and verify that you are on our distribution list. In the meantime, the release is also available on our website, under the heading Investors.

At this time, I want to remind our audience that this call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from managements current expectations, we encourage you to review the Safe Harbor statement contained in the earnings release published today, as well as our most recent SEC filings for a complete description.

In today’s release and on today’s call we provide both GAAP and non-GAAP financial measure, we provide supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain non-cash expenses or unusual item that may obscure trends in our underlying performance.

During our call our comments and comparisons to income statement items will be based primarily on non-GAAP results. For complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today available on our corporate website, under Investors. Similarly for an explanation of how RFMD calculate return on invested capital or ROIC, please refer to today’s earnings release.

In fairness to all listeners, we ask that participants please limit themselves to one question and a follow up. After each person in the queue has received a turn, we’ll give participants an opportunity to ask a second question.

With me today on the line are Bob Bruggeworth, President and CEO; Dean Priddy, Chief Financial Officer; Eric Creviston, President of our Cellular Products Group; and Bob Van Buskirk, President of our Multi-Market Products Group, as well as, other members of RFMD management team.

And with that, I’ll turn the call over to Bob Bruggeworth.

Bob Bruggeworth

Thank you, Doug. And welcome, everyone. Earlier today we released our fiscal 2010 fourth quarter results. I’m pleased to report the RFMD team achieved another quarter of outstanding execution highlighted by year-over-year and sequential improvements in revenue, margin, EPS and cash flow.

RFMD’s global work force continued to propel RFMD on an exciting new trajectory and we achieved record performances across key financial metrics. By focusing sharply on our core competencies in RF components and compound semiconductor technology, we’ve made substantial progress on our strategic initiatives, namely product leadership, diversification and operation excellence.

RFMD surpassed typical March seasonality this year and grew 4% sequentially to $260.8 million driven by market share gains and industry leading new products. On a year-over-year basis, quarterly revenue surged 51%.

On record revenue for March quarter, RFMD delivered $0.16 in EPS. We generated record free cash flow and we had (inaudible) the quarter with $257 million in cash and equivalents.

Our performance was highlighted by strength in 3G devices and share gains in Asia and a continued adoption of RFMD’s products and technologies and SmartEnergy, point-to-point radio, CATV and other high value markets.

On today’s call, we’ll discuss how we’re extending our product leadership, diversifying our revenue and improving upon our operational excellence to become an even stronger and more profitable RFMD.

Let’s begin with product leadership. In cellular, RFMD offers the industries largest portfolio of power amplifiers and switch based products and RFMD continues to invest more R&D dollars than any peer company in pursuit of the cellular front-end.

In fiscal 2010, CPG had a record year of new product introductions releasing40 new product that delivered on our goals of diversification and product leadership. We also announced our PowerSmart Power Platforms, a revolutionary new product category delivering the industries highest performance, lowest cost and smaller size multimode, multi-band front-end solution.

We currently expect our PowerSmart platforms to ramp in production later this fiscal year.. CPG is quickly tailoring customer specific derivative products from new product platforms getting to market sooner and capturing reference designed faster. We are growing our share on reference designs and our new product platforms coupled with our increased R&D velocity are two reasons why.

In MPG, we’re continuing to rollout breakthrough Gallium Nitride technology and products, that deliver performance that can alter the performance landscape for power products across multiple industries.

There are multiple high-value global markets that can benefit from RFMD’s gallium technology. Opportunities for worldwide deployment include cable infrastructure, military communications, private mobilized radio, emergency radio and military and civil radar applications.

Our gallium based broadband transmission product enable enhanced bandwidth driven services for CATV operators and their subscribers. Our new product provide option for cable operators to seamlessly upgrade their network infrastructure, enhance their network performance and provide increase bandwidth for growing video and data services. All of this demonstrated performance improvement comes with a potential network energy savings of 20% or more.

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