Fairchild Semiconductor International In (FCS, Financial) filed Quarterly Report for the period ended 2009-03-29.
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 $753.9 million; its shares were traded at around $6.09 with a P/E ratio of 33.8 and P/S ratio of 0.5. Fairchild Semiconductor International In had an annual average earning growth of 8.2% over the past 5 years.
During the three months ended March 30, 2008, we recorded restructuring and impairment charges, net of releases, of $0.2 million. The charges included $0.3 million of employee separation costs and $0.1 million in reserve releases both associated with the 2007 Infrastructure Realignment Program.
Income Taxes. Income tax benefit for the first three months of 2009 was $0.9 million on loss before taxes of $52.0 million as compared to income taxes of $4.5 million on income before taxes of $21.6 million for the same period of 2008. The effective tax rate for the first quarter of 2009 was 1.7% compared to 20.8% for the comparable period 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 three months of 2009, the valuation allowance on our deferred tax assets increased by $4.2 million. The overall increase did not impact our results of operations.
We have a borrowing capacity of $100.0 million on a revolving basis for working capital and general corporate purposes, including acquisitions, under our senior credit facility. At March 29, 2009, $19.4 million was drawn on the revolver and after adjusting for outstanding letters of credit we had up to $78.9 million available under the senior credit facility. We had additional outstanding letters of credit of $1.1 million that do not fall under the senior credit facility. We also had $5.7 million of undrawn credit facilities at certain of our foreign subsidiaries. These outstanding amounts do not impact available borrowings under the senior credit facility.
Our senior credit facility, which includes $514.5 million in term loans and $100.0 million revolving line of credit, and other debt instruments we may enter into in the future, impose various restrictions and contain various covenants that could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities. The restrictive covenants include limitations on consolidations, mergers and acquisitions, creating liens, paying dividends or making other similar restricted payments, asset sales, capital expenditures and incurring indebtedness, among other restrictions. The senior credit facility also limits our ability to modify our certificate of incorporation and bylaws, or enter into shareholder agreements, voting trusts or similar arrangements. In addition, the covenants in the senior credit facility also include financial measures, as defined by the credit agreement, such as a minimum interest coverage ratio of 2.5 to 1.00, a maximum net leverage ratio of 4.0 to 1.00 and a minimum four quarter trailing EBITDA (earnings before interest, taxes, depreciation and amortization) less capital expenditures measure of $30.0 million. The interest coverage ratio is the ratio of annualized interest expense to the cumulative four quarter trailing EBITDA. The maximum net leverage ratio is the ratio of debt, less up to $100 million (to the extent our unrestricted cash on hand exceeds $200 million), to the cumulative four quarter trailing EBITDA. EBITDA, as defined by the credit agreement excludes restructuring, non-cash equity compensation and other adjustments as defined by the credit agreement. At March 29, 2009, we were in compliance with these covenants. Based on our current models through 2009, we expect to remain in compliance with our credit facility covenants. This expectation is subject to various risks and uncertainties, including, among others, the risk that our assumptions and expectations about business conditions, expenses and cash flows for the remainder of the year will be inaccurate.
Cash used in investing activities during the first three months of 2009 totaled $16.8 million compared to $29.4 million for the same period of 2008. The decrease in the use of cash is primarily the result of lower capital expenditures in the first three months of 2009. Our capital expenditures during the first three months of 2009 were $14.9 million compared to $30.7 million in the same period in 2008.
Read the The complete ReportFCS is in the portfolios of Chris Davis of Davis Selected Advisers.
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 $753.9 million; its shares were traded at around $6.09 with a P/E ratio of 33.8 and P/S ratio of 0.5. 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 months ended March 29, 2009, we recorded restructuring and impairment charges, net of releases, of $6.7 million. The charges include $5.8 million of employee separation costs, $0.3 million in lease impairment costs for the streamlining of warehouse operations and $0.2 million in releases associated with the 2008 Infrastructure Realignment Program. The charges also include $0.8 million for the impairment of software associated with the 2009 Infrastructure Realignment Program.During the three months ended March 30, 2008, we recorded restructuring and impairment charges, net of releases, of $0.2 million. The charges included $0.3 million of employee separation costs and $0.1 million in reserve releases both associated with the 2007 Infrastructure Realignment Program.
Income Taxes. Income tax benefit for the first three months of 2009 was $0.9 million on loss before taxes of $52.0 million as compared to income taxes of $4.5 million on income before taxes of $21.6 million for the same period of 2008. The effective tax rate for the first quarter of 2009 was 1.7% compared to 20.8% for the comparable period 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 three months of 2009, the valuation allowance on our deferred tax assets increased by $4.2 million. The overall increase did not impact our results of operations.
We have a borrowing capacity of $100.0 million on a revolving basis for working capital and general corporate purposes, including acquisitions, under our senior credit facility. At March 29, 2009, $19.4 million was drawn on the revolver and after adjusting for outstanding letters of credit we had up to $78.9 million available under the senior credit facility. We had additional outstanding letters of credit of $1.1 million that do not fall under the senior credit facility. We also had $5.7 million of undrawn credit facilities at certain of our foreign subsidiaries. These outstanding amounts do not impact available borrowings under the senior credit facility.
Our senior credit facility, which includes $514.5 million in term loans and $100.0 million revolving line of credit, and other debt instruments we may enter into in the future, impose various restrictions and contain various covenants that could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities. The restrictive covenants include limitations on consolidations, mergers and acquisitions, creating liens, paying dividends or making other similar restricted payments, asset sales, capital expenditures and incurring indebtedness, among other restrictions. The senior credit facility also limits our ability to modify our certificate of incorporation and bylaws, or enter into shareholder agreements, voting trusts or similar arrangements. In addition, the covenants in the senior credit facility also include financial measures, as defined by the credit agreement, such as a minimum interest coverage ratio of 2.5 to 1.00, a maximum net leverage ratio of 4.0 to 1.00 and a minimum four quarter trailing EBITDA (earnings before interest, taxes, depreciation and amortization) less capital expenditures measure of $30.0 million. The interest coverage ratio is the ratio of annualized interest expense to the cumulative four quarter trailing EBITDA. The maximum net leverage ratio is the ratio of debt, less up to $100 million (to the extent our unrestricted cash on hand exceeds $200 million), to the cumulative four quarter trailing EBITDA. EBITDA, as defined by the credit agreement excludes restructuring, non-cash equity compensation and other adjustments as defined by the credit agreement. At March 29, 2009, we were in compliance with these covenants. Based on our current models through 2009, we expect to remain in compliance with our credit facility covenants. This expectation is subject to various risks and uncertainties, including, among others, the risk that our assumptions and expectations about business conditions, expenses and cash flows for the remainder of the year will be inaccurate.
Cash used in investing activities during the first three months of 2009 totaled $16.8 million compared to $29.4 million for the same period of 2008. The decrease in the use of cash is primarily the result of lower capital expenditures in the first three months of 2009. Our capital expenditures during the first three months of 2009 were $14.9 million compared to $30.7 million in the same period in 2008.
Read the The complete ReportFCS is in the portfolios of Chris Davis of Davis Selected Advisers.
