RF Micro Devices, Inc.
Apr 26, 2011

RFMD® Announces March Quarterly Financial Results

GREENSBORO, N.C., April 26, 2011 /PRNewswire/ --

Company Highlights: 

  • Quarterly Revenue Totals $213.3 Million
  • GAAP Operating Income Is $13.2 Million, And GAAP Diluted EPS Is $0.08
  • Non-GAAP Operating Income Equals $23.7 Million, Or 11.1% Of Revenue
  • Non-GAAP Diluted EPS Equals $0.08
  • RFMD Generates Approximately $31.4 Million In Quarterly Free Cash Flow And Trailing 12-Month Free Cash Flow Is Approximately $188 Million

RF Micro Devices, Inc. (Nasdaq GS: RFMD), a global leader in the design and manufacture of high-performance radio frequency components and compound semiconductor technologies, today reported financial results for its fiscal 2011 fourth quarter, ended April 2, 2011. RFMD's March 2011 quarterly revenue declined approximately 18% year-over-year and approximately 23% sequentially to $213.3 million, primarily as a result of seasonality and declining revenue at RFMD's largest customer. On a GAAP basis, gross margin equaled 35.4%, quarterly operating income totaled $13.2 million, and quarterly net income was $24.1 million, or $0.08 per diluted share.  

On a non-GAAP basis, gross margin equaled 37.5%, quarterly operating income totaled $23.7 million, and quarterly net income was $21.7 million, or $0.08 per diluted share. During the quarter, RFMD generated approximately $31.4 million in free cash flow, retired $35.5 million principal amount of convertible debt and repurchased approximately 1.7 million shares of common stock.

RFMD Strategic Highlights:

  • RFMD's PowerSmart™ power platforms recognized as the industry's most innovative device of 2011 by Compound Semiconductor magazine
  • RFMD's Cellular Products Group (CPG) commenced volume production of new, higher margin 3G/4G solutions, including RFMD's PowerSmart™ power platforms and RFMD's RF724x family of ultra high efficiency 3G/4G PAs
  • CPG secured multiple design wins for high-performance, silicon-based switches and switch filter modules across the world's leading smartphone and tablet manufacturers
  • RFMD's Multi-Market Products Group (MPG) commenced production of new GaN-based products for high-power military radar and CATV applications
  • MPG secured major design wins across multiple growth markets, including wireless infrastructure, Smart Energy, high-performance WiFi for smartphones and tablets, and point-to-point radio for cellular backhaul


GAAP RESULTS

(in millions, except


















percentages and per



Q4 Fiscal



Q3 Fiscal



Change




Q4 Fiscal



Change


share data)



2011



2011



vs. Q3 2011




2010



vs. Q4 2010


Revenue


$

213.3


$

278.8



(23.5)%



$

260.8



(18.2)%


Gross Margin



35.4%



37.0%



(1.6)

ppt



37.7%



(2.3)

ppt

Operating Income


$

13.2


$

43.3


$

(30.1)



$

36.6


$

(23.4)


Net Income


$

24.1


$

36.7


$

(12.6)



$

26.7


$

(2.6)


Diluted EPS


$

0.08


$

0.13


$

(0.05)



$

0.10


$

(0.02)





NON-GAAP RESULTS (excluding share-based compensation, amortization of intangibles, integration charges, start-up costs, loss on retirement of convertible subordinated notes, restructuring charges, loss on PP&E, loss (income) from equity investment, and non-cash interest expense on convertible subordinated notes and tax adjustments)

(in millions, except


















percentages and per



Q4 Fiscal



Q3 Fiscal



Change




Q4 Fiscal



Change


share data)



2011



2011



vs. Q3 2011




2010



vs. Q4 2010


Gross Margin



37.5%



38.7%



            (1.2)

ppt



39.6%



            (2.1)

ppt

Operating Income


$

23.7


$

        54.0


$

(30.3)



$

        47.7


$

(24.0)


Net Income


$

21.7


$

        52.6


$

(30.9)



$

        43.8


$

(22.1)


Diluted EPS


$

0.08


$

        0.19


$

(0.11)



$

        0.16


$

(0.08)





Business Outlook

RFMD currently believes the demand environment in its end markets supports the following expectations and projections:

  • RFMD expects June quarterly revenue to be flat to down 5% sequentially, as 8-12% growth in RFMD's core business is offset by declining sales of legacy products
  • RFMD expects to further diversify its revenue base, with its largest customer approaching 15% of revenue in the June 2011 quarter
  • RFMD anticipates its transceiver products will be immaterial to financial results in the June 2011 quarter and thereafter
  • RFMD expects June quarterly gross margin to increase approximately 100 basis points, driven by continued customer diversification and improved product mix
  • RFMD expects to return to sequential growth beginning in the September quarter

RFMD's actual quarterly results may differ from these expectations and projections, and such differences may be material.

Comments From Management

Bob Bruggeworth, president and chief executive officer of RFMD, said, "RFMD's strategic restructuring, announced three years ago, is now complete and driving diversified growth opportunities for RFMD. Sales in our Multi-Market Products Group grew by more than 30% in fiscal 2011 over fiscal 2010 and in our Cellular Products Group sales to customers outside our largest customer grew by more than 50% during the same period. In the June quarter we anticipate transceiver products will be immaterial to financial results and we expect to achieve our most diverse quarter of customer mix in RFMD's history as a public company.

"Looking forward, we expect RFMD will take full advantage of global secular growth trends and grow faster than our core markets. This will enable broad improvement in our financials, supporting margin expansion, operating leverage, earnings growth, continued strong free cash flow, and superior return on invested capital."

Dean Priddy, CFO and vice president of administration of RFMD, said, "RFMD is executing on its growth strategy. Revenue in our core business, which excludes transceiver revenue, is expected to grow approximately 8-12% sequentially in the June quarter, driven by exciting new product cycles and technologies. This should drive gross margin expansion beginning in the June quarter.

"With all major growth drivers intact, we have the confidence to actively put RFMD's superior free cash flow to use. During the March quarter, we repurchased approximately 1.7 million shares of common stock and retired $35.5 million principal amount of convertible debt due in 2012. In addition to the ongoing optimization of our capital structure, RFMD will continue investing in the R&D and customer-facing resources necessary to outpace the growth rate in our markets."

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), RFMD's earnings release contains some or all of the following non-GAAP financial measures: (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating income and operating margin, (iii) non-GAAP net income, (iv) non-GAAP net income per diluted share, (v) non-GAAP operating expenses (research and development, marketing and selling and general and administrative), (vi) free cash flow, (vii), EBITDA, (viii) return on invested capital (ROIC), and (ix) net debt or positive net cash.  Each of these non-GAAP financial measures is either adjusted from GAAP results to exclude certain expenses or derived from multiple GAAP measures, which are outlined in the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables on page 10 and the "Additional Selected Non-GAAP Financial Measures And Reconciliations" tables on pages 11 and 12.

In managing RFMD's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures.  In developing and monitoring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce unit costs with the goal of increasing gross margin and operating margin.  In addition, management relies upon these non-GAAP financial measures to assess whether research and development efforts are at an appropriate level, and when making decisions about product spending, administrative budgets, and marketing programs. In addition, we believe that non-GAAP financial measures provide useful supplemental information to investors and enable investors to analyze the results of operations in the same way as management.  We have chosen to provide this supplemental information to enable investors to perform additional comparisons of operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses and share-based compensation expense, which may obscure trends in RFMD's underlying performance.

We believe that these non-GAAP financial measures offer an additional view of RFMD's operations that, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of RFMD's results of operations and the factors and trends affecting RFMD's business.  However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Our rationale for using these non-GAAP financial measures, as well as their impact on the presentation of RFMD's operations, are outlined below:

Non-GAAP gross profit and gross margin.  Non-GAAP gross profit and gross margin exclude share-based compensation expense, amortization of intangible assets, other non-cash expenses and adjustments for restructuring and integration charges.  We believe that exclusion of these costs in presenting non-GAAP gross profit and gross margin gives management and investors a more effective means of evaluating RFMD's historical performance and projected costs and the potential for realizing cost efficiencies.  We believe that the majority of RFMD's purchased intangibles are not relevant to analyzing current operations because they generally represent costs incurred by the acquired company to build value prior to acquisition, and thus are effectively part of transaction costs rather than ongoing costs of operating RFMD's business.  In this regard, we note that (i) once the intangibles are fully amortized, the intangibles will not be replaced with cash costs and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time, and (ii) although we set the amortization expense based on useful life of the various assets at the time of the transaction, we cannot influence the timing and amount of the future amortization expense recognition once the lives are established.  Similarly, we believe that presentation of non-GAAP gross profit and gross margin and other non-GAAP financial measures that exclude the impact of share-based compensation expense assists management and investors in evaluating the period-over-period performance of RFMD's ongoing operations because (i) the expenses are non-cash in nature, and (ii) although the size of the grants is within our control, the amount of expense varies depending on factors such as short-term fluctuations in stock price volatility and prevailing interest rates, which can be unrelated to the operational performance of RFMD during the period in which the expense is incurred and generally is outside the control of management.  Moreover, we believe that the exclusion of share-based compensation expense in presenting non-GAAP gross profit and gross margin and other non-GAAP financial measures is useful to investors to understand the impact of the expensing of share-based compensation to RFMD's gross profit and gross margins and other financial measures in comparison to both prior periods as well as to its competitors.  We also believe that the adjustments to profit and margin related to other non-cash expenses and restructuring and integration charges do not constitute part of RFMD's ongoing operations and therefore the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP gross profit and gross margin has economic substance because the excluded expenses do not represent continuing cash expenditures and, as described above, we have little control over the timing and amount of the expenses in question.

Non-GAAP operating income and operating margin.  Non-GAAP operating income and operating margin exclude share-based compensation expense, amortization of intangible assets, other non-cash expenses, restructuring and integration charges, loss on PP&E and start-up costs.  We believe that presentation of a measure of operating income and operating margin that excludes amortization of intangible assets and share-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin.  We believe that other non-cash expenses, restructuring and integration charges, loss on PP&E and start-up costs do not constitute part of RFMD's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP operating income and operating margin has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

Non-GAAP net income and non-GAAP net income per diluted share. Non-GAAP net income and non-GAAP net income per diluted share exclude the effects of share-based compensation expense, amortization of intangible assets, other non-cash expenses, restructuring and integration charges, loss on PP&E, start-up costs, loss on retirement of convertible subordinated notes, non-cash interest expense on convertible subordinated notes, loss (income) from equity investment and also reflect an adjustment of income taxes for cash basis. We believe that presentation of measures of net income and net income per diluted share that exclude these items is useful to both management and investors for the reasons described above with respect to non-GAAP gross profit and gross margin and non-GAAP operating income and operating margin. We believe disclosure of non-GAAP net income and non-GAAP net income per diluted share has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

Non-GAAP research and development, marketing and selling and general and administrative expenses. Non-GAAP research and development, marketing and selling and general and administrative expenses exclude share-based compensation expense, amortization of intangible assets, and restructuring and integration charges (benefits). We believe that presentation of measures of these operating expenses that exclude amortization of intangible assets and share-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin. We believe that restructuring and integration charges (benefits) do not constitute part of RFMD's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance. We believe disclosure of these non-GAAP operating expenses has economic substance because the excluded expenses are either unrelated to operations or do not represent current cash expenditures.

Free cash flow. RFMD defines free cash flow as net cash provided by operating activities during the period minus property and equipment expenditures made during the period. We use free cash flow as a supplemental financial measure in our evaluation of liquidity and financial strength. Management believes that this measure is useful as an indicator of our ability to service our debt, meet other payment obligations and make strategic investments. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.

EBITDA.  RFMD defines EBITDA as earnings before interest expense and interest income, income tax expense (benefit), depreciation and intangible amortization.  Management believes that this measure is useful to evaluate our ongoing operations and as a general indicator of our operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges).  The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in our equipment term loan agreement.  The definition of EBITDA as used in the loan agreement is further adjusted for certain cash and non-cash charges, including stock compensation expense, and is used to determine compliance with financial covenants.

Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP financial measure that management believes provides useful supplemental information for management and the investor by measuring the effectiveness of our operations' use of invested capital to generate profits. We use ROIC to track how much value we are creating for our shareholders. Non-GAAP ROIC is calculated by dividing annualized non-GAAP operating income, net of cash taxes, by average invested capital.  Average invested capital is calculated by subtracting the average of the beginning balance and the ending balance of current liabilities (excluding the current portion of long-term debt and other short-term financings) from the average of the beginning balance and the ending balance of net accounts receivable, inventories, other current assets, net property and equipment and a cash amount equal to seven days of quarterly revenue.

Net debt or positive net cash. Net debt or positive net cash is defined as unrestricted cash, cash equivalents and short-term investments minus the principal amount of RFMD's convertible subordinated notes due 2012 and 2014. Management believes that net debt or positive net cash provides useful information regarding the level of RFMD's indebtedness by reflecting cash and investments that could be used to repay debt.

Limitations of non-GAAP financial measures. The primary material limitations associated with the use of non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP net income per diluted share, free cash flow, EBITDA, non-GAAP ROIC and net debt or positive net cash, as compared to the most directly comparable GAAP financial measures of gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities are (i) they may not be comparable to similarly titled measures used by other companies in RFMD's industry, and (ii) they exclude financial information that some may consider important in evaluating our performance. We compensate for these limitations by providing full disclosure of the differences between these non-GAAP financial measures and the corresponding GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, to enable investors to perform their own analysis of our gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities.

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 http://www.rfmd.com (under "Investors").  A telephone playback of the conference call will be available approximately one hour after the call's completion by dialing 303-590-3030 and entering pass code 4432787#.  

About RFMD

RF Micro Devices, Inc. (Nasdaq GS: RFMD) is a global leader in the design and manufacture of high-performance radio frequency components and compound semiconductor technologies. 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 equipment providers.

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 www.rfmd.com.

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 operating results, risks associated with the impact of global macroeconomic and credit conditions on our business and the business of our suppliers and customers, our reliance on a few large customers for a substantial portion of our revenue, the rate of growth and development of wireless markets, our ability to bring new products to market, our reliance on inclusion in third party reference designs for a portion of our revenue, our ability to manage channel partner and customer relationships, risks associated with the operation of our wafer fabrication, molecular beam epitaxy, assembly 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, raw material costs and availability, our ability to reduce costs and improve margins in response to declining average selling prices, our ability to adjust production capacity in a timely fashion in response to changes in demand for our products, dependence on gallium arsenide (GaAs) for the majority of our products, dependence on third parties, and substantial reliance on international sales and operations. 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 and statements 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 statements.

RF MICRO DEVICES® and RFMD® are trademarks of RFMD, LLC. All other trade names, trademarks and registered trademarks are the property of their respective owners.

RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)


Three Months Ended



April 2, 2011



April 3, 2010

Total revenue

$

213,326


$

260,825







Costs and expenses:






  Cost of goods sold  


137,806



162,396

  Research and development


35,471



35,484

  Marketing and selling


15,386



14,461

  General and administrative


11,062



10,887

  Other operating expense


352



958







  Total costs and expenses


200,077



224,186







Operating income


13,249



36,639

Other expense


(4,164)



(5,499)







Income before income taxes

$

9,085


$

31,140

Income tax benefit (expense)


15,050



(4,412)







Net income

$

24,135


$

26,728







Net income per share, diluted

$

0.08


$

0.10







Weighted average outstanding diluted shares


285,248



275,986










RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)


Twelve Months Ended



April 2,
2011



April 3,
2010

Total revenue

$

1,051,756


$

978,393







Costs and expenses:






  Cost of goods sold  


662,085



623,224

  Research and development


141,097



138,960

  Marketing and selling


59,470



56,592

  General and administrative


48,003



48,316

  Other operating expense


1,582



4,895







  Total costs and expenses


912,237



871,987







Operating income


139,519



106,406

Other expense


(16,014)



(21,572)







Income before income taxes

$

123,505


$

84,834

Income tax benefit (expense)


1,053



(13,815)







Net income

$

124,558


$

71,019







Net income per share, diluted

$

0.44


$

0.25







Weighted average outstanding diluted shares


280,394



289,429










RF MICRO DEVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages and per share data)
(Unaudited)


Three Months Ended



April 2,
2011



January 1,
2011



April 3,
2010










GAAP operating income

$

13,249


$

43,320


$

36,639

 Share-based compensation expense


5,293



5,615



5,047

 Amortization of intangible assets


4,614



4,614



4,750

 Restructuring charges related to fiscal 2009 strategic
        restructuring and adverse macroeconomic conditions


199



107



117

 Other expenses (restructuring, loss on PP&E, integration,
       start-up costs and other non-cash expenses)


391



347



1,131

Non-GAAP operating income


23,746



54,003



47,684










GAAP net income


24,135



36,686



26,728

 Share-based compensation expense


5,293



5,615



5,047

 Amortization of intangible assets


4,614



4,614



4,750

 Restructuring charges related to fiscal 2009 strategic
       restructuring and adverse macroeconomic conditions


199



107



117

 Other expenses (restructuring, loss on PP&E, integration,
       start-up costs, and other non-cash expenses)


391



347



1,131

 Loss on retirement of convertible subordinated notes


766



-



-

 Non-cash interest expense on convertible subordinated notes


3,074



3,046



4,316

 Loss (income) from equity investment


30



(34)



-

 Tax adjustments


(16,806)



2,257



1,717










Non-GAAP net income


21,696



52,638



43,806

Plus:  Income impact of assumed conversions for interest on
   1.50% convertible notes      


-



-



37

Non-GAAP net income plus assumed conversion of notes-
   Numerator for diluted income per share

$

21,696


$

52,638


$

43,843










GAAP and Non-GAAP weighted average outstanding diluted
   shares


285,248



284,152



275,986










Non-GAAP net income per share, diluted

$

0.08


$

0.19


$

0.16















Three Months Ended



April 2, 2011



January 1, 2011



April 3, 2010

GAAP gross margin

$

75,520

35.4%


$

103,089

37.0%


$

98,429

37.7%

 Adjustment for intangible amortization


3,514

1.6%



3,515

1.2%



3,651

1.4%

 Adjustment for share-based compensation


759

0.4%



1,065

0.4%



895

0.3%

 Other expenses (restructuring, integration
   and other non-cash expenses)


239

0.1%



262

0.1%



427

0.2%

Non-GAAP gross margin

$

80,032

37.5%


$

107,931

38.7%


$

103,402

39.6%
















RF MICRO DEVICES, INC. AND SUBSIDIARIES
ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands, except percentages)
(Unaudited)


Three Months Ended

Non-GAAP Operating Income

April 2, 2011

(as a percentage of sales)




GAAP operating income

6.2%

 Share-based compensation expense

2.5%

 Amortization of intangible assets

2.2%

 Restructuring charges related to fiscal 2009 strategic restructuring and adverse
        macroeconomic conditions

0.1%

 Other expenses (restructuring, loss on PP&E, integration, start-up costs and other
        non-cash expenses)

0.1%

Non-GAAP operating income

11.1%








Three Months Ended



April 2, 2011



January 1, 2011



April 3, 2010

GAAP research and development expense

$

35,471


$

33,920


$

35,484

Less:









 Share-based compensation expense


1,410



1,405



1,386

 Amortization of intangible assets


13



13



12

Non-GAAP research and development expense

$

34,048


$

32,502


$

34,086


























Three Months Ended



April 2, 2011



January 1, 2011



April 3, 2010

GAAP marketing and selling expense

$

15,386


$

14,621


$

14,461

Less:









 Share-based compensation expense


1,249



1,255



1,213

 Amortization of intangible assets


1,087



1,086



1,087

Non-GAAP marketing and selling expense

$

13,050


$

12,280


$

12,161


























Three Months Ended



April 2, 2011



January 1, 2011



April 3, 2010

GAAP general and administrative expense

$

11,062


$

11,036


$

10,887

Less:









 Share-based compensation expense


1,875



1,890



1,553

 Other restructuring and integration benefit


-



-



(136)

Non-GAAP general and administrative expense

$

9,187


$

9,146


$

9,470
















RF MICRO DEVICES, INC. AND SUBSIDIARIES
ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(Unaudited)

Free Cash Flow (1)


Three Months
Ended


April 2, 2011

(In millions)






Net cash provided by operating activities

$

36.2 

Purchases of property and equipment


(4.8)

Free cash flow

$

31.4 




(1)   Free Cash Flow is calculated as net cash provided by operating activities
minus property and equipment expenditures.




EBITDA (2)


Three Months
Ended


April 2, 2011

(In millions)






Net Income

$

24.1

  Interest


3.6

  Income tax benefit


(15.0)

  Depreciation


15.2

  Amortization


4.6

EBITDA

$

32.5




(2)  EBITDA is calculated by adjusting net income for interest expense and interest income,
income tax expense, depreciation and intangible amortization.



RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In tho usands)
(Unaudited)



April 2,
2011



April 3,
2010

ASSETS






Current assets:






 Cash and cash equivalents

$

131,760


$

104,778

 Restricted cash and trading security investments


422



17,698

 Short-term investments


159,881



134,882

 Accounts receivable, net


120,375



108,219

 Inventories


149,813



122,509

 Other current assets


37,908



60,738

Total current assets


600,159



548,824







Property and equipment, net


209,478



247,085

Intangible assets, net


83,685



102,169

Goodwill


95,628



95,628

Long-term investments


2,694



2,175

Other non-current assets


33,749



18,127

Total assets

$

1,025,393


$

1,014,008







LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






 Accounts payable and accrued liabilities


130,973



124,253

 Current portion of long-term debt


3,852



15,053

 Other short-term liabilities, net


112



13,427

Total current liabilities


134,937



152,733







Long-term debt, net


177,343



289,837

Other long-term liabilities


36,758



41,354

Total liabilities


349,038



483,924







Shareholders' equity


676,355



530,084







Total liabilities and shareholders' equity

$

1,025,393


$

1,014,008










SOURCE RF Micro Devices, Inc.

News Provided by Acquire Media