CSR reports good results


09-02-2011

CSR has reported its Q4 and full year results for the 52 weeks ended 31 December 2010. They show Q4 revenue and margin at the upper end of market guidance; good results for the full year, and good progress on key catalysts for growth in 2011 and beyond.

Highlights

• Solid fourth quarter financial performance
o Q4 revenue of $184.8m at upper end of market guidance (Q4 2009: $198.1m),
o Improved underlying* gross margin in Q4 of 48.7% (Q4 2009: 47.3%),
o Higher underlying* R&D costs in Q4 of $49.4m (Q4 2009: $43.2m) resulting from the purchase of intellectual property (“IP”), o Higher underlying* SG&A expenses in Q4 of $32.5m (Q4 2009: $24.6m), reflecting higher legal costs prior to reaching a settlement with Broadcom Corporation (“Broadcom”),
o Underlying* diluted EPS of $0.07 (Q4 2009: $0.14); diluted EPS loss under IFRS of $0.16 (Q4 2009: earnings of $0.11),
o IFRS Q4 equivalents: Gross margin 47.9% (Q4 2009: 47.3%), SG&A expenses $94.8m (Q4 2009: $25.5m), R&D costs $51.8m (Q4 2009: $47.1m).

• Good financial performance for the full year
o Revenue growth of 33% to $800.6m (2009: $601.4m); aggregated* revenue growth of 17% to $800.6m (2009 aggregated* revenue: $681.9m), reflecting pre-acquisition SiRF revenues,
o Improved underlying* gross margin of 47.7% (2009: 44.6%),
o Underlying* operating profit tripled to $79.0m (2009: $26.9m),
o Underlying* diluted EPS more than doubled to $0.43 per share (2009: $0.20),
o Diluted EPS under IFRS of $0.09 (2009: loss of $0.07), reflecting the exceptional charge for the cost of the legal settlement with Broadcom,
o IFRS Full Year equivalents: Gross margin 47.0% (2009: 44.6%), operating loss $6.3m (2009: loss $15.9m), diluted
EPS $0.09 (2009: EPS loss of $0.07).

• Strong operating cash flow with total cash of $440.1m (2009: $412.4m), after buying back $37.5m of shares.

• Intention to pay a proposed maiden dividend of $0.065 (£0.04) per share announced.

• Good progress on key catalysts for growth in 2011 and beyond
o Bluetooth and GPS products (CSR8000 and SiRFstarIV) ramping well in handsets, with an important new Tier One Smartphone design win for SiRFstarIV,
o Good Wi-Fi traction with 30 design wins in 2010,
o Further design wins and overall market growth driving our Audio & Consumer and Automotive & Personal Navigation Devices (“PND”) businesses.

• Legal settlement with Broadcom ends all litigation and legal proceedings between the parties.

Commenting, Joep van Beurden, Chief Executive Officer, said: “CSR delivered fourth quarter revenue at the upper end of guidance with a further improvement in our underlying gross margin to 48.7%. Our results for the full year were also robust, with good revenue growth, improved underlying gross margins and a tripling of our underlying operating profit. Underlying earnings per share doubled to $0.43 and cash flow was excellent, increasing to $77.9m (2009: $50.2m). Our recent acquisitions are integrating well and contributing to our revenue growth, and we continue to create value for our shareholders, with a share buyback in the latter part of 2010 and the intention to pay a proposed maiden dividend.

“At our analyst day last November, we highlighted a number of catalysts to drive growth over the next several years, and we are making good progress in delivering on those catalysts. In handsets, our CSR8000 and SiRFstarIV products are ramping well, and we secured a new Tier One design win in GPS. Our progress in Wi-Fi is especially gratifying. Having built a meaningful presence in 2010, we have added 30 design wins over the year. Across our Audio & Consumer and Automotive & PND Businesses, overall market growth and our momentum in design wins from new
and existing customers continue to underpin our performance.

“Our product roadmap and partnership strategies are progressing well. CSR9800, our 40nm Bluetooth/Wi-Fi combination chip and SiRFstarV, our next generation location platform, also on 40nm, are both in advanced stages of development and are receiving good feedback from potential customers. Our SiRFprimaII platform for automotive infotainment now has four Tier One launch customers, and CSR8600, our next generation headset platform, has two Tier One launch customers. With an exciting roadmap of more than 30 new products launching over the next several years and the growth prospects in our markets for connectivity and location expanding, we are confident of our ability to drive shareholder value.”


OUTLOOK
For 2011 overall, we reiterate our expectation to continue growing revenues. We expect first quarter revenues to be in the range of $155m to $170m, reflecting normal seasonality.

For the full report, including financial summary tables and notes,   please see http://ir.csr.com/strategy-and-performance/financial-reports/2011.aspx

 

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Enquiries:
CSR plc
Will Gardiner, Chief Financial Officer
Cynthia Alers, Investor Relations Director
Tel: +44 (0) 1223 692 000

 

 

 

 

 

 

NOTES TO FINANCIAL SUMMARY TABLES
Non-GAAP Disclosure: Although International Financial Reporting Standards (“IFRS”) disclosures provide investors with an overall view of CSR’s performance, CSR also provides underlying and aggregated line item disclosure. CSR believes that these underlying and aggregated items (in particular, underlying gross margin, underlying R&D, SG&A expenditure, and operating profit, operating margin, profit before tax and earnings per share derived therefrom) provide additional information on underlying trends that is useful to investors. Management uses these underlying and aggregated measures, along with the most directly comparable IFRS financial measures, to assess CSR’s operating performance and value creation. These underlying and aggregated measures form the basis for management’s performance targets and resource allocation decisions, and are also used to determine and manage the long term growth of the business. We present and discuss these measures in order to: (a) provide consistency with the way management views the business and discuss performance with investors; (b) ensure that the measures are fully understood in the light of how CSR manages the business; (c) properly define the metrics used and confirm their calculation; (d) share the metrics with all investors at the same time; (e) improve transparency for investors; (f) assist investors in their assessment of the long-term value of CSR; and (g) assist investors in understanding management behaviour. The term “underlying” is not defined in IFRS, and may therefore not be comparable with similarly titled measures reported by other companies. Underlying measures should not be considered in isolation from, as substitutes for, or as superior measures to, IFRS measures. A reconciliation of each underlying measure to the nearest IFRS measure is provided in notes 4, 5, 6 and 7.

*Underlying results for Q4 2010 add back charges in cost of sales for amortisation of acquired intangible assets (Q4 2010: $1.5m; Q3 2010: $1.5m; Q4 2009: $nil), in R&D for the amortisation of acquired intangible assets (Q4 2010: $1.2m; Q3 2010: $1.2m; Q4 2009: $2.5m) and share option charges (Q4 2010: $1.1m; Q3 2010: $1.3m; Q4 2009: $1.4m) and in SG&A for amortisation of acquired intangible assets (Q4 2010: $0.9m; Q3 2010: $0.9m; Q4 2009: $1.0m), integration and restructuring charges (Q4 2010: $1.1m; Q3 2010: $nil; Q4 2009: $0.1m), acquisition fees (Q4 2010: $nil; Q3 2010: $0.4m; Q4 2009: $nil), share option charges (Q4 2010: $0.6m; Q3 2010: $0.9m; Q4 2009: $0.1m (credit)) and the litigation settlement (Q4 2010: $59.8m;Q3 2010: $nil; Q4 2009: $nil). Underlying diluted earnings per share also adds back the tax effects associated with the above items, as well as the recognition of pre-acquisition losses (Q4 2010: credit of $11.9m; Q3 2010: $nil; Q4 2009: $nil) and tax impacts of deferred tax on share options (Q4 2010: $0.5m; Q3 2010: $0.5m; Q4 2009: $nil).

2010 refers to the 52 week period ended 31 December 2010; 2009 refers to the 52 week period ended 1 January 2010. Underlying results for 2010 add back charges in cost of sales for amortisation of acquired intangible assets (2010: $5.7m; 2009: $nil), in R&D for the amortisation of acquired intangible assets (2010: $5.0 m; 2009: $7.5m) and share option charges (2010: $5.8m; 2009: $6.8m) and in SG&A, amortisation of acquired intangible assets (2010: $3.5m; 2009: $2.0m), integration and restructuring charges (2010: $1.1m; 2009: $12.2m), acquisition costs (2010: $0.4m; 2009: $10.6m), share option charges (2010: $4.1m; 2009: $3.8m) and the litigation settlement (2010: $59.8m; 2009: $nil). Underlying earnings per share also excludes the tax effects associated with the above items, as well as the recognition of pre-acquisition losses (2010: credit of $11.9m; 2009: $nil) and tax impacts of deferred tax on share options (2010: $2.6m; 2009: $nil).

 

Qualcomm Incorporated (NASDAQ: QCOM) is the world leader in 3G and next-generation mobile technologies. For more than 30 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other.

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