Wolfson reduces loss in first fiscal half

Key financials for the second quarter 2013:

• Revenue of $45.4m, up 13% year-on-year (Q1 2013: $48.1m; Q2 2012: $40.3m)
• Gross profit broadly flat at $19.7m, gross margin of 43.3% (Q1 2013: 40.3%; Q2 2012: 48.5%)
• Underlying operating loss of $2.3m (Q1 2013: $2.8m loss; Q2 2012: $1.3m loss)
• Operating loss of $2.5m (Q1 2013: $6.3m loss; Q2 2012: $3.0m loss)

Key financials for the first half 2013:

• Revenue of $93.5m, up 32% year-on-year (H1 2012: $70.6m)
• Gross profit $39.0m, up 13% year-on-year (H1 2012: $34.4m), gross margin 41.7% (H1 2012: 48.7%)
• Underlying* operating loss improved to $5.1m (H1 2012: $7.7m loss)
• Operating loss improved to $8.8m (H1 2012: $11.4m loss)
• Cash and short-term deposits of $29.8m, with no debt

Outlook:

• Q3 2013 sales expectations are moderated by inventory at major customers due to lower-than-expected end product sell-through in the first half. The Company expects to return to strong revenue growth within the subsequent couple of quarters as customer inventory normalises, customer new products launch and revenues from higher value Audio Hubs and MEMS microphones both become material
• Q3 2013 revenue is expected to be in the range of $40m to $50m, depending on customer new product ramps and product sell-through
• Q3 2013 gross margin is expected to improve further to approximately 44%, depending on product mix and MEMS microphone ramp

Commenting on the results, Mike Hickey, CEO of Wolfson, said: "Sales grew strongly year-on-year in the first half of 2013. Revenue growth moderated in the second quarter due to widely reported lower-than-expected end product sell-through at some key customers. We expect this to continue to impact revenue over the next few months, as customer inventory is run down, before growth resumes. "Our Audio Hub products continue to grow strongly driven by smartphones, tablets and other smart device applications. As our Audio Hubs provide more features to our customers' products, selling prices are increasing and this is accelerating our growth prospects in a very large market. This, coupled with increased participation in fast-growing markets such as China, and our MEMS microphones becoming material to revenue, gives us increased confidence in the underlying strength of our business."