Fairchild Semiconductor International In (FCS) filed Quarterly Report for the period ended 2009-09-27.
Fairchild Semiconductor Corporation is a global company solely focused on designing manufacturing and marketing high performance semiconductors for multiple end market uses. Fairchild's multi-market components are used in computer telecommunications automotive consumer and industrial applications. Supplying logic analog mixed signal non-volatile memory and discrete power and signal technologies solutions Fairchild is filling the gap in the global supply of building block semiconductors. (PRESS RELEASE) Fairchild Semiconductor International In has a market cap of $1.03 billion; its shares were traded at around $8.3 with and P/S ratio of 0.6. Fairchild Semiconductor International In had an annual average earning growth of 8.2% over the past 5 years.
Highlight of Business Operations:
Restructuring and Impairments. During the three and nine months ended September 27, 2009, we recorded restructuring and impairment charges, net of releases, of $4.1 million and $22.1 million, respectively. In the third quarter of 2009, the charges include $2.4 million of employee separation costs and $1.7 million of fab closure costs associated with the 2009 Infrastructure Realignment Program as well $0.1 million in employee separation costs associated with the 2008 Infrastructure Realignment Program and $0.1 million in releases associated with the 2007 Infrastructure Realignment Program. The charges in the first six months of 2009 included $6.8 million of employee separation costs, $0.7 million in lease impairment costs and $0.6 million in releases associated with the 2008 Infrastructure Realignment Program as well as $0.8 million in asset impairment costs, $9.1 million in employee separation costs and $1.2 million in fab closure costs associated with the 2009 Infrastructure Realignment Program.
During the three and nine months ended September 28, 2008, we recorded restructuring and impairment charges, net of releases, of $1.8 million and $13.3 million, respectively. In the third quarter of 2008, the charges include $0.2 million of employee separation costs and $1.7 million in lease impairment costs for the streamlining of warehouse operations associated with the 2008 Infrastructure Realignment Program and $0.1 million in releases associated with the 2007 Infrastructure Realignment Program. Charges for the nine months ended September 28, 2008 also include $2.3 million of employee separation costs, $8.0 million in asset impairment costs and $0.1 million in office closure costs all associated with the 2008 Infrastructure Realignment Program and $1.3 million of employee separation costs and $0.2 million in reserve releases both associated with the 2007 Infrastructure Realignment Program.
The 2009 worldwide restructuring action, excluding facility closures, impacted 264 employees. We achieved annual savings associated with these employee separation costs of $13.7 million by the end of the third quarter of 2009. We previously announced that the consolidation of the South Korea fabrication processes and the closure of the Mountaintop facility would be completed by June 2010. However, as a result of increased demand for the products manufactured at these facilities, we now expect to complete these actions during the fourth quarter of 2010. We do not anticipate that this extension will have any significant impact on the cash and non-cash charges we originally planned or upon the annualized rate of cost savings that we expect to achieve once these closures are complete. Once the closures are complete we expect to achieve annualized cost savings ranging from $20 to $25 million.
Interest income. Interest income in the third quarter and first nine months of 2009 decreased $1.7 million and $6.7 million, respectively, as compared to the same periods in 2008 as a result of lower rates of return.
Other (income) expense, net. The first nine months of 2009 includes a $2.3 million impairment of a strategic investment, offset by a $0.2 million gain on the sale of a strategic investment and a $0.8 million net gain on the debt buyback transaction all booked in the second quarter of 2009.
Income Taxes. Income tax provision (benefit) in the third quarter and first nine months of 2009 was $1.2 million and $(2.1) million on income (loss) before taxes of $3.9 million and $(75.4) million, respectively, as compared to income tax provision of $5.0 million and $10.2 million on income before taxes of $31.7 million and $60.9 million, respectively, for the same periods of 2008. The effective tax rate for the third quarter and first nine months of 2009 was 30.8% and (2.8)% compared to 15.8% and 16.7% respectively, for the comparable periods of 2008. The change in effective tax rate is primarily due to shifts of income and loss among jurisdictions with differing tax rates, foreign currency revaluations of tax liabilities and discrete tax expenses as a result of finalization of certain tax filings. In the first nine months of 2009, the valuation allowance on our deferred tax assets increased by $9.2 million. The overall increase did not impact our results of operations.
FCS is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Chris Davis of Davis Selected Advisers.
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