-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Em2ShLt/ElLTMCve0pu9EapBD7KKk5uWlVuR5M7TPE+88aEImHrp7/OyS31tYX4T Po/U8jOt8eqC4Q+bE3JNsw== 0000950135-02-003405.txt : 20020724 0000950135-02-003405.hdr.sgml : 20020724 20020724155132 ACCESSION NUMBER: 0000950135-02-003405 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020724 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC CENTRAL INDEX KEY: 0001036960 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 043363001 STATE OF INCORPORATION: DE FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15181 FILM NUMBER: 02709864 BUSINESS ADDRESS: STREET 1: 82 RUNNING HILL RD CITY: SOUTH PORTLAND STATE: ME ZIP: 04106 BUSINESS PHONE: 2077758100 MAIL ADDRESS: STREET 1: 82 RUNNING HILL RD CITY: SOUTH PORTLAND STATE: ME ZIP: 04106 FORMER COMPANY: FORMER CONFORMED NAME: FSC SEMICONDUCTOR CORP DATE OF NAME CHANGE: 19970424 8-K 1 b43811fse8vk.txt FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 24, 2002 FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC. ------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 001-15181 04-3363001 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) 82 RUNNING HILL ROAD SOUTH PORTLAND, MAINE 04106 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (207) 775-8100 ITEM 5. OTHER EVENTS On July 23, 2002 we announced our consolidated financial results for the quarter ended June 30, 2002. In addition, we announced the formation of the Integrated Circuits Group. Press releases announcing the results and the formation of the new group are filed as exhibits to, and incorporated by reference in, this report. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS c) Exhibits 99.1 Press Release dated July 23, 2002 (Q2 Financial Results) 99.2 Press Release dated July 23, 2002 (Integrated Circuits Group formation) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Fairchild Semiconductor International, Inc. Date: July 24, 2002 /s/ David A. Henry ------------------------------------- David A. Henry Vice President, Corporate Controller (Principal Accounting Officer and Duly Authorized Officer) EX-99.1 3 b43811fsexv99w1.txt PRESS RELEASE DATED JULY 23, 2002 EXHIBIT 99.1 For Immediate Release www.fairchildsemi.com July 23, 2002 Investor Relations: Pete Groth 207-775-8660 investor@fairchildsemi.com Corporate Communications: Fran Harrison 207-775-8576 fran.harrison@fairchildsemi.com Public Relations Firm: Barbara Ewen CHEN PR 781-466-8282 bewen@chenpr.com NEWS RELEASE FAIRCHILD SEMICONDUCTOR REPORTS SECOND QUARTER 2002 * TOTAL SALES INCREASE 7% FROM FIRST QUARTER 2002 * 26-WEEK BACKLOG GROWS 11% SEQUENTIALLY * BOOK-TO-BILL RATIO OVER 1.1 TO 1, AND ABOVE 1 TO 1 FOR FOURTH CONSECUTIVE QUARTER * LONG-TERM DEBT REDUCED BY $285 MILLION * DEBT-EQUITY RATIO NOW 0.7 TO 1 * POSITIVE OPERATING CASH FLOW FOR 14TH STRAIGHT QUARTER South Portland, Maine - Fairchild Semiconductor International (NYSE: FCS), one of the largest global suppliers of high performance power products for multiple end markets, today reported results for the second quarter 2002. Second quarter sales were $360.5 million, up 7% from the first quarter of 2002 and down 3% from second quarter 2001. Second quarter gross margins were 26.7%, 310 basis points higher than the first quarter of 2002. The company reported a net loss in the quarter of $13.0 million, or $0.12 per share, compared to a loss of $8.0 million, or $0.08 per share in the second quarter of 2001. On June 28, the company redeemed all of its 10 1/8% senior subordinated notes that were due in March 2007 at a redemption price of 105.063% of face value. In connection with this redemption, the company had one-time charges totaling $22.1 million, including $14.5 million for the call premium and other transaction fees, and a $7.6 million write-off of deferred financing fees associated with the original bond offering. This redemption was made possible by the company's sale of common stock which raised $397.7 million. On a pro forma basis, which excludes amortization of acquisition-related intangibles, restructuring, impairments and other unusual items, Fairchild reported second quarter income of $7.5 million, up 29% from pro forma net income of $5.8 million in the second quarter of 2001. Pro forma earnings were $0.07 per diluted share, compared to a First Call consensus estimate of pro forma earnings of $0.04 per diluted share, and up 17% from the pro forma earnings of $0.06 per diluted share in the second quarter of 2001. "Our robust bookings period earlier this year was driven by an increase in our customers' end demand as well as their rebuilding of our backlog to support their longer term growth plans," said Kirk Pond, president, CEO and chairman of the Board. "During the second quarter we saw our order rates begin tracking what we believe to be end market consumption rates. Our book-to-bill ratio was above 1.1 to 1 and remained above 1 to 1 for the fourth consecutive quarter. Our 26 week backlog grew 11% during the quarter, with much of the strength in our power products." Highlights of the second quarter include the following: * Increased sales and gross profits sequentially in all product segments--analog, discrete, interface, logic and optoelectronics product segments; * Maintained positive book-to-bill ratios in communications, displays, consumer and industrial market segments; * Named by Gartner Dataquest as the top worldwide power transistor supplier in 2001, moving up from ninth place in 2000; * Completed 22.2 million share follow-on equity offering, which included 16.2 million additional primary shares, and used proceeds from the offering to repay debt, strengthen the balance sheet, and reduce interest expenses by roughly $30 million annually; * Recorded 14th straight quarter with positive operating cash flow; * Maintained end market segment balance with 10% of sales into communications, 31% into computing and displays, 23% into consumer, 30% into industrial, and 6% into automotive; and * Introduced more than 115 new products targeted at high performance power and interface applications. Orders from DVD, cell phone, displays and communications segments were up sequentially, while orders from PC motherboard and notebook suppliers weakened during the latter half of the second quarter," said Pond. "Our continued focus on providing semiconductor products for power applications has improved our penetration into optical drives, displays, cellular handsets, power supplies, portable power adaptors, printers, and networking segments. Our strong presence in multiple end markets helped offset the significant drop in orders from the personal computer segment we saw in May and June. Overall we believe the recovery that began in the third quarter of 2001 is on track, and we believe our investments in developing new power products, improving manufacturing efficiencies, and strengthening marketing and sales infrastructure are positioning us to improve revenues and earnings over the next several years." "During the quarter we improved our balance sheet, raised our cash position, reduced our debt and improved our gross margins in every major product segment," stated Joe Martin, Fairchild's executive vice president and chief financial officer. "We successfully completed a secondary offering and used the proceeds to retire all of our 10 1/8% bonds. Overall gross margins improved more than 300 basis points from the first quarter and were 120 basis points higher than second quarter of 2001. Inventory turns and days sales outstanding also improved. "We are reaffirming our prior guidance for third quarter revenues to be flat to slightly up from the second quarter," said Martin. "We entered the quarter with more than 80% of these guided revenues already on the backlog. While we have continued to see weak order rates from the personal computer segment during July, we expect overall bookings to improve beginning late August and into September due to normal seasonality and the beginning of holiday builds for the computing and consumer segments. We expect overall pricing on shipments to remain roughly flat in the third quarter, with improvements in mix and costs to help increase gross margins roughly 50 basis points. For the third quarter and the remainder of 2002 we expect research, development, sales, marketing and administrative (R&D and SG&A) expenses to stay roughly flat as a percentage of sales. We plan capital spending for 2002 to continue to be about 10% to 12% of sales, with spending focused on cost reduction and the expansion of assembly and test capacity for new power products. "I'm very pleased overall to point out that compared to our performance in the second quarter a year ago, all financial indicators are improving," said Martin. "Profits, margins, cash and backlog are all higher, while R&D and SG&A expenses, inventories, and receivables are all lower. We expect to deliver continued improvements in financial performance as we move through this recovery." This press release is accompanied by a pro forma statement of operations (which excludes expenses for amortization of intangibles, restructuring, impairments and other unusual items), a generally accepted accounting principles (GAAP) statement of operations (which includes these expenses) and a reconciliation from pro forma to GAAP results. SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS: The statements in the second-to-last and third-to-last paragraphs above are forward-looking statements that are based on management's assumptions and expectations and that involve risk and uncertainty. Other forward-looking statements may also be found in this news release. Forward-looking statements usually, but do not always, contain forward-looking terminology such as "we believe," "we expect," or "we anticipate," or refer to management's expectations about Fairchild's future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: changes in overall global or regional economic conditions; changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks; availability of manufacturing capacity; availability of raw materials; competitors' actions; loss of key customers; order cancellations or reduced bookings; changes in manufacturing yields or output; and significant litigation. These and other risk factors are discussed in the company's quarterly and annual reports filed with the Securities and Exchange Commission (SEC) and available at the Investor Relations section of Fairchild Semiconductor's web site at investor.fairchildsemi.com or the SEC's web site at www.sec.gov. FAIRCHILD SEMICONDUCTOR INTERNATIONAL: Fairchild Semiconductor International (NYSE: FCS) is a leading global supplier of high performance products for multiple end markets. With a focus on developing leading edge power and interface solutions to enable the electronics of today and tomorrow, Fairchild's components are used in computing, communications, consumer, industrial and automotive applications. Fairchild's 10,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland, Maine, USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com. Fairchild Semiconductor International, Inc. Pro Forma Statement of Operations (In millions, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, July 1, June 30, July 1, 2002 2001 2002 2001 Revenue: Net sales--trade $346.8 $354.5 $673.0 $722.3 Contract manufacturing 13.7 17.9 24.4 35.4 ----- ----- ----- ----- Total revenue 360.5 372.4 697.4 757.7 Operating expenses: Cost of sales--trade 253.9 266.2 502.5 521.2 Cost of contract manufac- turing 10.2 11.2 18.9 23.4 Research and development 21.8 21.8 42.5 45.3 Selling, general and administrative 37.6 41.0 72.1 84.3 ----- ----- ----- ----- Total operating expenses 323.5 340.2 636.0 674.2 ----- ----- ----- ----- Operating income 37.0 32.2 61.4 83.5 Interest expense, net 25.5 23.6 51.6 40.1 ----- ----- ----- ----- Income before income taxes 11.5 8.6 9.8 43.4 Provision for income taxes 4.0 2.8 3.4 11.5 ----- ----- ----- ----- Pro forma net income $ 7.5 $ 5.8 $ 6.4 $ 31.9 ----- ----- ----- ----- Pro forma net income per common share: Basic $ 0.07 $ 0.06 $ 0.06 $ 0.32 ----- ----- ----- ----- Diluted $ 0.07 $ 0.06 $ 0.06 $ 0.31 ----- ----- ----- ----- Weighted average common shares: Basic 106.9 99.5 103.7 99.4 ----- ----- ----- ----- Diluted (1) 112.9 102.6 109.6 102.0 ----- ----- ----- ----- Pro forma statements of operations are intended to present the Company's operating results, excluding special items described below, for the periods presented. During the three and six months ended June 30, 2002 and July 1, 2001 the special items included restructuring and impairments, purchased in- process research and development, costs associated with the 10 1/8% Notes redemption, inventory charge associated with Analog restructuring, gain on sale of space and defense product line, and amortization of acquisition- related intangibles. These special items are presented using our calculated effective tax rate at the time. (1) Diluted pro forma net income per common share is calculated using weighted average common shares that take into consideration the dilutive effect of stock options, which are anit-dilutive in the calculation of net loss per common share. Fairchild Semiconductor International, Inc. Reconciliation of Net Loss To Pro Forma Net Income (In millions) (Unaudited) Three Months Ended Six Months Ended June 30, July 1, June 30, July 1, 2002 2001 2002 2001 Net loss $(13.0) $ (8.0) $(10.3) $ (6.4) Adjustments to reconcile net loss to pro forma net income: Restructuring and impairments -- 3.9 3.6 13.4 Purchased in-process research and development -- -- 1.7 12.8 Cost associated with the redemption of the 10 1/8% Notes 22.1 -- 22.1 -- Inventory charge associated with Analog restructuring -- 2.5 -- 2.5 Gain on sale of space and defense product line -- -- (20.5) -- Amortization of acquisition- related intangibles 9.5 14.2 18.8 24.6 Less associated tax effects (11.1) (6.8) (9.0) (15.0) ----- ----- ----- ----- Pro forma net income $ 7.5 $ 5.8 $ 6.4 $ 31.9 ----- ----- ----- ----- Fairchild Semiconductor International, Inc. Statement of Operations (In millions, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, July 1, June 30, July 1, 2002 2001 2002 2001 Revenue: Net sales--trade $346.8 $354.5 $673.0 $722.3 Contract manufacturing 13.7 17.9 24.4 35.4 ----- ----- ----- ----- Total revenue 360.5 372.4 697.4 757.7 Operating expenses: Cost of sales--trade 253.9 268.7 502.5 523.7 Cost of contract manufac- turing 10.2 11.2 18.9 23.4 Research and development 21.8 21.8 42.5 45.3 Selling, general and administrative 37.6 41.0 72.1 84.3 Amortization of acquisition- related intangibles (2) 9.5 14.2 18.8 24.6 Restructuring and impairments -- 3.9 3.6 13.4 Purchased in-process research and development -- -- 1.7 12.8 ----- ----- ----- ----- Total operating expenses 333.0 360.8 660.1 727.5 ----- ----- ----- ----- Operating income 27.5 11.6 37.3 30.2 Interest expense, net 25.5 23.6 51.6 40.1 Other expense 22.1 -- 1.6 -- ----- ----- ----- ----- Loss before income taxes (20.1) (12.0) (15.9) (9.9) Benefit for income taxes (7.1) (4.0) (5.6) (3.5) ----- ----- ----- ----- Net loss (2) $(13.0) $ (8.0) $(10.3) $ (6.4) ----- ----- ----- ----- Net loss per common share: Basic $(0.12) $(0.08) $(0.10) $(0.06) ----- ----- ----- ----- Diluted (2) $(0.12) $(0.08) $(0.10) $(0.06) ----- ----- ----- ----- Weighted average common shares: Basic 106.9 99.5 103.7 99.4 ----- ----- ----- ----- Diluted 106.9 99.5 103.7 99.4 ----- ----- ----- ----- (2) In accordance with generally accepted accounting principles (GAAP), earnings for the three and six months ended July 1, 2001 reflect charges for the amortization of goodwill and assembled workforce of $5.3 million and $7.4 million, respectively, which are no longer being amortized with the adoption of FASB Statement No. 142. Net losses for the three and six months ended July 1, 2001 would have been $4.5 million, or $0.04 per fully diluted share, and $1.6 million, or $0.02 per fully diluted share, respectively, without this amortization charge. Fairchild Semiconductor International, Inc. Balance Sheet (In millions) June 30, December 30, 2002 2001 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 613.4 $ 504.4 Receivables, net 153.3 133.6 Inventories 205.5 209.1 Other current assets 30.8 27.7 -------- -------- Total current assets 1,003.0 874.8 Property, plant and equipment, net 657.4 659.6 Intangible assets, net 457.6 479.8 Other assets 134.9 135.0 -------- -------- Total assets $2,252.9 $2,149.2 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 0.4 $ 0.4 Accounts Payable 99.9 106.7 Accrued expenses and other current liabilities 90.8 92.2 -------- -------- Total current liabilities 191.1 199.3 Long-term debt, less current portion 852.9 1,138.2 Other liabilities 3.4 3.7 -------- -------- Total liabilities 1,047.4 1,341.2 Total stockholders' equity 1,205.5 808.0 -------- -------- Total liabilities and stockholders' equity $2,252.9 $2,149.2 -------- -------- EX-99.2 4 b43811fsexv99w2.txt PRESS RELEASE DATED JULY 23, 2002 EXHIBIT 99.2 For Immediate Release www.fairchildsemi.com July 23, 2002 Corporate Communications: Fran Harrison 207-775-8576 fran.harrison@fairchildsemi.com Public Relations Firm: Barb Ewen CHEN PR 781-466-8282 bewen@chenpr.com NEWS RELEASE FAIRCHILD SEMICONDUCTOR ANNOUNCES FORMATION OF INTEGRATED CIRCUITS GROUP * INCLUDES INTERFACE & LOGIC AND ANALOG & MIXED SIGNAL DIVISIONS * BUILDS UPON LEADING MARKET SHARE POSITIONS * KEITH JACKSON NAMED TO LEAD THE GROUP South Portland, Maine - Fairchild Semiconductor International (NYSE: FCS), one of the largest global suppliers of high performance power products for multiple end markets, today announced the formation of the Integrated Circuits Group to accelerate growth and leverage market opportunities. The group will include the company's Interface & Logic Division and the Analog & Mixed Signal Division. Keith Jackson, formerly executive vice president and general manager of the Analog & Mixed Signal Division, was named to lead the new group. "By leveraging the talents and energies of the Interface & Logic Division with our Analog & Mixed Signal Division, we will be able to more aggressively capitalize on market opportunities," said Kirk Pond, president, CEO and chairman of the Board of Fairchild Semiconductor. "The two businesses have worked closely together for a number of years, particularly in the areas of interface and analog. This is an opportunity for creating an organization where the whole is greater than the sum of its parts. I'm excited about the Integrated Circuit Group's potential to accelerate Fairchild's revenue growth, improve margins and build upon our industry leading analog and logic market share positions." "We have identified significant opportunities to increase our shared techniques in integrated circuit mixed signal design and cross-use of libraries while strengthening our position in new system applications by combining our technology and marketing efforts," said Keith Jackson, executive vice president and general manager of the Integrated Circuits Group. "Fairchild has gained significant market share in both our Interface & Logic business as well as our Analog business - which we built from scratch four years ago into a business of approximately $340 million today. The combined strengths within the Integrated Circuits Group will accelerate that growth momentum." Keith has more than two decades of experience in the semiconductor industry. He has been a member of the Executive Committee of Fairchild Semiconductor since he joined the company in 1998. He was previously the vice president of National Semiconductor's Interface Group and of their Analog & Mixed Signal Division. Keith brings engineering, marketing and management experience gained at National, Texas Instruments and the original Fairchild Semiconductor to his new role. He earned bachelor's and master's degrees in Electrical Engineering from Southern Methodist University and holds numerous patents. W.T. Greer, formerly senior vice president and general manager of the Interface & Logic Division, has announced his intention to retire effective September 1, 2002 after more than thirty years in the semiconductor industry. ABOUT FAIRCHILD SEMICONDUCTOR INTERNATIONAL: Fairchild Semiconductor International (NYSE: FCS) is a leading global supplier of high performance products for multiple end markets. With a focus on developing leading edge power and interface solutions to enable the electronics of today and tomorrow, Fairchild's components are used in computing, communications, consumer, industrial and automotive applications. Fairchild's 10,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland, Maine, USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com. SPECIAL NOTE ON FORWARD LOOKING-STATEMENTS: This press release includes forward-looking statements that are based on management's assumptions and expectations and that involve risk and uncertainty. Forward-looking statements usually, but do not always, contain forward-looking terminology such as "we believe," "we expect," "we plan," or "we anticipate," or refer to management's expectations about Fairchild's future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: changes in overall global or regional economic or political conditions (including as a result of terrorist attacks and responses to them); changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks; availability of manufacturing capacity; availability of raw materials; competitors' actions; loss of key customers; order cancellations or reduced bookings; changes in manufacturing yields or output; and significant litigation. These and other risk factors are discussed in more detail in our annual and quarterly filings with the Securities and Exchange Commission, available on the SEC's website at www.sec.gov or at Fairchild Semiconductor's website at investor.fairchildsemi.com. -----END PRIVACY-ENHANCED MESSAGE-----