[opendtv] Micronas' future uncertain
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 1 Aug 2007 17:41:04 -0400
Ron Economos mentioned something about the Casper chip being in trouble.
Maybe it's more than just one product. Micronas is the German company
that bought Linx Electronics, makers of the original 4th gen ATSC demod.
Bert
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http://www.digitaltvdesignline.com/news/showArticle.jhtml;jsessionid=RFN
BLC13XO1AWQSNDLPCKH0CJUNN2JVN?articleID=201202332
July 23, 2007
Micronas' future uncertain
By Bolaji Ojo
Micronas Semiconductor Holding AG told shareholders back in February
that 2006 had been a difficult year. It looks like 2007 will be even
more challenging for the supplier of consumer and automotive electronic
products.
On Monday, Micronas (Zurich, Switzerland) announced lackluster
second-quarter results and told investors it would be conducting a
strategic review of its operations over the next few months to decide on
the best options for its businesses.
Could Micronas or segments of its operation be sold off to
competitors--or to one of the groups of private equity investors that
have been trolling the semiconductor market for hidden treasures? The
company would say only that it will consider a wide range of options.
"We have started a thorough investigation of all our businesses," said
chief executive officer Wolfgang Kalsbach. "We do not expect to announce
the results of the review in the third quarter but definitely [will do
so] this year."
Micronas' key consumer electronics market is in the throes of change, as
consumers abandon CRT-based televisions in favor of flat-panel TVs. As a
result, the company's consumer division has been under pressure for
several quarters and is struggling to increase sales of products
addressing faster-growing applications.
"The consumer division was hit by the marked slump in the key TV
market," Micronas said in a statement announcing its latest quarterly
results. "In the growing worldwide market for flat-panel screens, three
trends are asserting themselves: bigger screens, higher resolution and a
growing market share of digital TVs. As a result, there are increasing
demands on sound and picture quality."
Sales at Micronas in the three months ended June 30 slipped to $142.3
million (171.2 Swiss francs), down almost 6 percent, from $150.5
million, in the immediately preceding quarter and down nearly 10
percent, from $157.7 million, in the year-ago quarter. The company
attributed the decline to sluggish sales in its consumer division and
said the smaller automotive-IC business performed better. But even the
latter unit posted operating profit that was only "on a par with the
previous quarter," Micronas stated.
Indeed, the weak sales hurt both profits and gross margins. The company
reported a net loss of $9.2 million for the second quarter, slightly
wider than the $8.31 million loss it recorded in the first quarter.
Second-quarter gross margins fell to 48.4 percent from 53.3 percent in
the earlier sequential quarter.
While the second-quarter financial results demonstrated some weakness
from the preceding quarter, the disparities with the year-ago comparable
period were even more pronounced. For instance, Micronas recorded
revenue of $292.8 million for the first half of 2007, down 14 percent
from $341.8 million in the first half of 2006.
The company's net loss for the first six months of this year also
widened sharply, to $17.5 million from $3.3 million in the 2006 first
half. Micronas said it had restated the year-ago first-half net loss to
reflect the capitalization costs of a U.S. subsidiary.
Possible moves
Micronas did not offer details on the options it is considering, but
companies under similar duress have entertained a variety of options
that included the sale or divestiture of the troubled parts of the
business.
One option available to Micronas would be the sale of its consumer
electronics division, which--while contributing more than two-thirds of
the company's revenue--has been a drag on sales and margin growth.
The company acknowledged during its earnings call that sales for the
consumer division would likely remain under pressure. Its sales forecast
for the consumer business in the current quarter, for instance, is
between $93 million and $97 million. Micronas expects the division to
record an operating loss this quarter of $37 million to $39 million.
Another possibility open to Micronas would be the sale of the
more-profitable automotive division, although the resulting breakup of
the company could lead to its eventual demise. The automotive division
is forecast to report operating profit of $8.3 million to $10 million in
the third quarter on sales of $44 million to $48 million.
Micronas will hold off on all cost-cutting moves, including staff
reduction, until its strategic review is complete.
"We have given our customers our commitment to support all products, and
we will not implement any kind of major restructuring until we have
examined all options," CEO Kalsbach said.
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