Fairchild reported fourth quarter sales of $333.4 million, down 7 percent from the prior quarter and 2 percent lower than the fourth quarter of 2011.
Fairchild Semiconductor, a leading global supplier of power semiconductors,announced results for the fourth quarter and full year ended December 30, 2012. Fairchild reported fourth quarter sales of $333.4 million, down 7 percent from the prior quarter and 2 percent lower than the fourth quarter of 2011.
Fairchild reported a fourth quarter net loss of $13.6 million or $0.11 per share compared to net income of $24.7 million or $0.19 per diluted share in the prior quarter and $21.3 million or $0.17 per diluted share in the fourth quarter of 2011. Gross margin was 29.8 percent compared to 33.5 percent in the prior quarter and 30.0 percent in the year-ago quarter.
Full year revenues for 2012 were $1.4 billion, down about 12% from 2011. Fairchild reported net income of $25 million or $0.19 per diluted share in 2012, compared to net income of $146 million or $1.12 per diluted share in 2011. The company reported 2012 adjusted net income of $71 million or $0.55 per diluted share, compared to $170 million or $1.30 per diluted share in 2011.
"We saw better than seasonal distribution sell through and a significant improvement in bookings during the fourth quarter," said Mark Thompson, Fairchild's chairman and CEO. "The solid sell through contributed to our larger than expected channel inventory reduction of $17 million during the fourth quarter. Bookings were up substantially in the fourth quarter and we have a solidly positive book to bill so far in the first quarter. We also reduced internal inventory another 2% and now have very lean channel and internal inventories at levels not seen since we emerged from the recession. We believe we are well positioned to translate improving demand into higher sales and margins as we progress through 2013."
Fourth Quarter Financials
"Gross margin decreased 370 basis points sequentially due primarily to lower factory loadings as we further reduced inventories," said Mark Frey, Fairchild's executive vice president and CFO. "R&D and SG&A expenses were $86.9 million which was better than guidance due primarily to spending controls. In the reconciliation of GAAP to non-GAAP results there are three noteworthy items totaling nearly $23 million for the fourth quarter. The largest is the realized loss we recorded after selling all our remaining auction rate securities in the quarter. There is also a restructuring expense related to organization streamlining and a small VAT expense due to an internal IP sale. Free cash flow was a positive $49 million for the fourth quarter which was driven by lower capital spending, reduced internal inventory and improved cash conversion cycle time. Given this strong cash flow we paid down our debt another $50 million in the fourth quarter to $250 million, the lowest level in our history."