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Xilinx Reports 53% Increase in Profits; New Products Post Strong Revenue Growth

PRNewswire-FirstCall
SAN JOSE, Calif.
Oct 21, 2004

Xilinx, Inc. (NASDAQ: XLNX) today announced revenues of $403 million in the second quarter of fiscal 2005, a sequential decrease of 5% from the prior quarter and an increase of 28% from the same quarter a year ago. Net income was $86 million or $0.24 per diluted share compared to $56 million and $0.16 per diluted share in the prior year.

(Logo: http://www.newscom.com/cgi-bin/prnh/20041021/SFTH069 )

Xilinx also announced today that the company's Board of Directors declared a quarterly cash dividend of $0.05 per outstanding share of common stock, payable on December 1, 2004 to all stockholders of record at the close of business on November 17, 2004.

Additional fiscal second quarter comparisons are represented in the chart below.

   Quarterly Information
   (In millions, except EPS)

                                                              Growth Rates
                    Q2 FY 2005  Q1 FY 2005    Q2 FY 2004    Q-T-Q   Y-T-Y
   Revenues           $403.3       $423.6       $315.5        -5%      28%
   Operating income   $101.3        118.3         69.0       -14%      47%
   Net income          $86.2         95.3         56.4       -10%      53%
   Net income per
    share              $0.24        $0.26        $0.16        -8%      50%

European revenues, which are typically seasonally slow in the September quarter, were better than expected increasing 3% sequentially and 45% versus the same quarter a year ago. Much of this increase was driven by strength in the communications, industrial and automotive sectors. However, sales to Asia Pacific were weak during the quarter, declining 15% sequentially. Much of this weakness was attributable to excess inventories at a few US-based customers with manufacturing operations in Asia Pacific and a slowdown within the China market for technology products.

"New product sales increased 44% sequentially and represented 17% of total Xilinx sales, up from 6% a year ago. This is a strong testament to the customer acceptance and design win momentum of these products," said Wim Roelandts, Xilinx's chairman and chief executive officer. "Virtex-II Pro™ FPGA sales increased nearly 70% sequentially as several customer design wins began moving into volume production. CoolRunner®-II CPLD sales nearly doubled sequentially. Additionally, sales from the Spartan™ family of FPGAs increased to nearly 22% of total Xilinx revenues, up from 19% in the same quarter a year ago. Most of this growth was driven by Spartan-IIE and Spartan-3™ products, which are found in wide ranging applications such as digital television, media servers, automotive telematics and multi-function printers."

  Business Review - September Quarter FY05

  -- Xilinx generated $69 million in cash flow from operations.

-- Total inventory days at Xilinx and distribution were 156 days, up from 131 days last quarter.

-- Accounts receivables days sales outstanding were 46, up from 45 in the prior quarter.

  -- Capital expenditures and depreciation were both $13 million.

   Revenue by Geography:

                                Percentages                  Growth Rates
                   Q2 FY 2005    Q1 FY 2005  Q2 FY 2004     Q-T-Q   Y-T-Y
   North America       42%          42%         44%          -5%       22%
   Europe             21 %          20%         19%           3%       45%
   Japan               15%          14%         14%           1%       37%
   Asia Pacific/ROW    22%          24%         23%         -15%       19%


   Revenue by End Market:
                               Percentages                  Growth Rates
                   Q2 FY 2005   Q1 FY 2005   Q2 FY 2004   Q-T-Q      Y-T-Y
   Communications     53 %         53%          49%        -5%         39%
   Storage & Servers   13%         11%          21%         8%        -23%
   Consumer,
    Industrial
    & Other            34%         36%          30%        -9%         45%

   Revenue by Product*:
                               Percentages                   Growth Rates
                   Q2 FY 2005   Q1 FY 2005   Q2 FY 2004   Q-T-Q      Y-T-Y
   New                17%           11%          6%         44%       286%
   Mainstream         58%           63%         66%        -11%        14%
   Base               18%           20%         21%        -15%         3%
   Support             7%            6%          7%          1%        21%

   *Products are classified as follows:

New products: Virtex-4™, Virtex-II Pro, Spartan™-IIE, Spartan-3, Easypath™ and CoolRunner®- II products

Mainstream products: Virtex-II, Spartan-II, SpartanXL, CoolRunner, Virtex®-E and Virtex products

Base products: XC3000, XC3100, XC4000, XC4000XL, XC4000XLA, XC4000XV, XC4000E, XC4000EX, XC5200, XC9500, XC9500XL, XC9500XV and Spartan products

Support products: Configuration solutions, HardWire™, Software & Support/Services

Product Highlights:

-- Xilinx began shipping two additional Virtex-4 devices during the quarter bringing the total number of devices shipping to three. Manufactured using the world's first triple-oxide 90nm CMOS technology with 11-layer metal interconnect, Virtex-4 devices offer significant performance and power advantages versus competing solutions. Additionally, Xilinx introduced its latest generation software, ISE 6.3i, which supports up to 200,000 logic cells and 500 MHz performance. The combination of ISE 6.3i and Virtex-4 FPGAs enables up to 40% faster FPGA fabric performance than the nearest competing offering.

-- Xilinx continues to be the only PLD company in volume production at 90-nanometer technology. Xilinx is currently shipping its Spartan-3 and Virtex-4 FPGAs on 90nm technology and has shipped over one million 90nm devices since its introduction of the Spartan-3 family in April, 2003.

-- Xilinx recently announced a strategic foundry relationship with Toshiba. Together, the companies have achieved a key manufacturing milestone with the successful production of functional 90nm silicon at Toshiba's state-of-the-art 300mm wafer fabrication facility at Oita, in Kyushu, Japan.

-- Xilinx announced the creation of Digital Signal Processing (DSP) and Embedded Processing Divisions, demonstrating the importance of these two technologies in future PLD design. By focusing resources in these critical areas, Xilinx will be able to capitalize on an incremental market opportunity estimated by Gartner Dataquest to be approximately $7 billion.

  Business Outlook - December Quarter FY05

  -- Revenues expected to be down 2% to 6% sequentially.
  -- Gross margin expected to be approximately 64%.
  -- Operating expenses expected to be approximately flat sequentially.
  -- Other income expected to be approximately $7 million.
  -- Tax rate expected to be 22%.

-- Fully diluted share count expected to remain approximately flat at 358 million shares.

Business Update - December Quarter FY05

A third quarter business update will be issued in the form of a press release after the market closes on Wednesday, December 8, 2004. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com/ .

This release contains forward-looking statements and projections. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including the general health of global economies as well as of the semiconductor industry, the health of our end markets and our customers' customers, our ability to forecast end customer demand, potential impact to customer ordering patterns, customer acceptance of our new products, the ability of our customers to manage their inventories, higher-than-anticipated product delinquencies, more customer volume discounts than expected, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to secure meaningful wafer capacity from our suppliers, our ability to successfully manage production at multiple foundries, currency fluctuations and their respective impact to customer purchasing power, variability in wafer pricing, and other risk factors listed in our most recent Form 10K.

About Xilinx

Xilinx, Inc. is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com/ .

   XILINX, INC.

  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  (Unaudited)
  (In thousands, except per share amounts)

                                Three Months Ended        Six Months Ended
                            Oct. 02,  Sep. 27,  Jul. 03,  Oct. 02,  Sep. 27,
                             2004      2003      2004      2004      2003
  Net revenues             $403,277  $315,547  $423,583  $826,860  $628,834

  Costs and expenses :
     Cost of revenues       145,024   122,897   144,163   289,187   247,996
     Research and
      development            78,135    59,286    71,923   150,058   118,828
     Selling, general and
      administrative         77,086    60,833    80,590   157,676   122,846
     Amortization of
      acquisition-related
      intangibles             1,757     3,535     1,402     3,159     7,070
     Litigation settlement
      and contingency           --         --        --        --     6,400
     Write-off of acquired
      in-process research
      and development           --         --      7,198     7,198       --
       Total costs and
        expenses            302,002   246,551   305,276   607,278   503,140

  Operating income          101,275    68,996   118,307   219,582   125,694
  Interest income and
   other, net                 7,323     6,217     5,841    13,164    11,174

  Income before income
   taxes                    108,598    75,213   124,148   232,746   136,868
  Provision for income
   taxes                     22,389    18,803    28,896    51,285    34,217

  Net income                $86,209   $56,410   $95,252  $181,461  $102,651

  Basic net income per
   common share               $0.25     $0.17     $0.27     $0.52     $0.30
  Diluted net income per
   common share               $0.24     $0.16     $0.26     $0.51     $0.29
  Cash dividends declared
   per common share           $0.05       $--     $0.05     $0.10       $--

  Common and equivalent
   shares used in
   computing net income
   per share amounts:
    Basic                   347,859   341,295   347,173   347,350   340,233
    Diluted                 357,832   353,366   359,419   358,882   352,317


  XILINX, INC.

  CONDENSED CONSOLIDATED BALANCE SHEETS
  (In thousands)
                                                 Oct. 02,           Apr. 03,
                                                  2004               2004
                                               (Unaudited)            (1)

  ASSETS
  Current assets
  Cash, cash equivalents and short-
   term investments                             $669,334           $798,960
  Accounts receivable, net                       202,511            248,956
  Inventories                                    188,412            102,454
  Deferred tax assets and other
   current assets                                126,860            151,182

  Total current assets                         1,187,117          1,301,552

  Net property, plant and equipment              338,841            335,114
  Long-term investments                          997,550            767,671
  Investment in United
   Microelectronics Corp.                        244,597            324,026
  Other assets                                   222,563            209,110

  Total assets                                $2,990,668         $2,937,473

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
  Accounts payable and accrued
   liabilities                                  $231,823           $230,151
  Deferred income on shipments to
   distributors                                  126,733            150,979

  Total current liabilities                      358,556            381,130

  Deferred tax liabilities                        70,271             73,281

  Stockholders' equity
  Common stock and additional paid-in
   capital                                       891,530            907,461
  Retained earnings                            1,667,622          1,521,568
  Treasury stock, at cost                         (2,313)            (1,031)
  Accumulated other comprehensive
   income                                          5,002             55,064

  Total stockholders' equity                   2,561,841          2,483,062

  Total liabilities and stockholders'
   equity                                     $2,990,668         $2,937,473

    (1) Derived from audited financial statements


  Xilinx, Inc.
  Condensed Consolidated Statements of Cash Flows
  (Unaudited)
  (In thousands)
                                                     Six Months Ended
                                                 Oct. 2,           Sept. 27,
                                                 2004                2003

  Cash flows from operating activities:
  Net income                                    $181,461          $102,651
     Adjustments to reconcile net
      income to net cash provided
       by operating activities:
            Depreciation and
             amortization                         31,000            36,928
            Amortization of deferred
             compensation                            611             2,299
            Write-off of acquired in-
             process research and
             development                           7,198                 0
            Net gain on sale of
             available-for-sale
             securities                             (485)           (4,237)
            Litigation settlement and
             contingency                               0             6,400
            Tax benefit from exercise
             of stock options                     14,084            20,048
     Changes in assets and liabilities:
             Accounts receivable, net             46,751            29,667
             Inventories                         (85,958)            1,567
             Deferred income taxes                 3,263            (3,026)
             Prepaid expenses and other
              current assets                      10,236            (9,336)
             Other assets                           (445)            6,583
             Accounts payable                     13,509             6,075
             Accrued liabilities                   1,644            (4,434)
             Income taxes payable                 20,548             5,837
             Deferred income on
              shipments to distributors          (23,942)          (10,023)
                     Total adjustments            38,014            84,348
                         Net cash
                         provided by
                         operating
                         activities              219,475           186,999

  Cash flows from investing activities:
     Purchases of available-for-sale
      securities                              (1,532,214)       (1,276,710)
     Proceeds from sale or maturity of
      available-for-sale securities            1,377,793         1,235,507
     Purchases of property, plant and
      equipment                                  (29,410)          (17,306)
     Acquisition of business, net of
      cash acquired                              (18,636)                0
                          Net cash
                           used in
                           investing
                           activities           (202,467)          (58,509)

  Cash flows from financing activities:
     Acquisition of treasury stock               (66,054)          (23,515)
     Proceeds from issuance of common
      stock                                       34,000            40,136
     Payment of dividends to
      stockholders                               (34,749)                0
                           Net cash
                            provided by (used
                            in) financing
                            activities           (66,803)           16,621

  Net increase (decrease) in cash and
   cash equivalents                              (49,795)          145,111

  Cash and cash equivalents at
   beginning of period                           337,343           213,995

  Cash and cash equivalents at end of
   period                                       $287,548          $359,106
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20041021/SFTH069
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Xilinx, Inc.

CONTACT: investors, Lori Owen of Xilinx, Inc., +1-408-879-6911, or
ir@xilinx.com

Web site: http://www.xilinx.com/


Worldwide Media Contacts

Silvia E. Gianelli
Phone: 408-626-4328
Email: silvia.gianelli@xilinx.com

 

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