Zarlink Revises Guidance for Second Quarter Fiscal 2008 Following Acquisition of Legerity Holdings, Inc.
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Zarlink Semiconductor Corp.
400 March Rd.
Ottawa, ON, K2K3H4
Press release date: August 20, 2007
OTTAWA, Aug. 20 /-- Zarlink Semiconductor Inc. (NYSE/TSX:ZL) today announced revised guidance for its Fiscal 2008 second quarter, ending September 28, 2007, following the closing of its acquisition of Legerity Holdings, Inc. ('Legerity') which was announced on August 3, 2007.
On July 24, 2007, Zarlink had projected second quarter revenues of between US$32 million and US$34 million and a second quarter loss of US$0.02 to US$0.03 per share. Including eight weeks of second quarter revenue from Legerity, Zarlink's guidance for the second quarter Fiscal 2008 revenue has been revised to between US$47 million and US$50 million.
Zarlink expects to incur integration costs of approximately US$5 million during the second quarter of Fiscal 2008 as a result of the acquisition of Legerity, and anticipates incurring costs of a similar magnitude in the third quarter.
Under U.S. Generally Accepted Accounting Principles (GAAP) for business combinations, Zarlink must perform a valuation of the acquired business and allocate the purchase price between the acquired assets. The value of In-Process Research and Development (IP R&D) identified as part of the valuation is required to be immediately expensed at the date of acquisition. Based on Zarlink's preliminary evaluation, it expects to record a one-time, non-cash expense of US$20 million for IP R&D during the second quarter of Fiscal 2008.
Zarlink will also record a second quarter gain of US$12.9 million, or US$0.10 per share, related to the sale of its investment in Mitel Networks Corporation, which was announced on August 16, 2007.
As a result, Zarlink expects a second quarter loss of US$0.13 to US$0.15 per share. The Company also expects to finish the second quarter Fiscal 2008 with unrestricted cash and cash equivalents of approximately US$40 million, and restricted cash balances of approximately US$15 million.
About Zarlink Semiconductor
For over 30 years, Zarlink Semiconductor has delivered semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. The Company's success is built on its technology strengths including voice and data networks, optoelectronics and ultra low-power communications. For more information, visit www.zarlink.com.
Shareholders and other individuals wishing to receive, free of charge, copies of the reports filed with the U.S. Securities and Exchange Commission and Regulatory Authorities, should visit the Company's web site at www.zarlink.com or contact Investor Relations.
Source: ZARLINK SEMICONDUCTOR
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