Dialog Semiconductor Plc.: DIALOG SEMICONDUCTOR ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2010

Dialog Semiconductor Plc. / Quarter Results

10.05.2010 07:59

Dissemination of an Ad hoc announcement according to §
15 WpHG, transmitted by DGAP - a company of EquityStory
AG.
The issuer is solely responsible for the content of
this announcement.


-------------------------------------------------------

Company reports revenue in first quarter of $61.1
million, achieving strong year-on-year revenue growth
of 70% 
Kirchheim/Teck, Germany, 10th May 2010 - Dialog
Semiconductor plc (FWB: DLG), a leading provider of
Power Management Semiconductor solutions, today reports
results for the first quarter ended 2 April 2010.

Q1 2010 Financial Highlights   

  - Revenue for Q1 2010 was $61.1 million, a
year-on-year increase of 70%     over the corresponding
first quarter of 2009.

  - Cash, cash equivalents and restricted cash
increased in Q1 2010 by     $15.1million over Q4 2009
to stand at $138.2 million. Dialog remains     debt
free.

  - Recorded our tenth consecutive quarter of
profitability with an     operating profit in Q1 2010
of $6.6 million or 10.8% of revenue     compared to
$0.9 million or 2.6% in the corresponding first
quarter of     2009.

  - Diluted and Basic earnings per share of 8 cents.

Q1 2010 Operational Highlights   

  - Successful launch of our second generation of
system level Power     Management Integrated Circuits
(PMICs) which now include an integrated     class G
audio codec.

  - Continued design win success in the mobile market:

      - LG selects Dialog for its Android smartphone
for China Mobile 
      - Sharp selects Dialog for a series of Softbank
3G cellphones 
  - Collaboration with TSMC for industry-leading BCD
process for higher     integrated next generation Power
Management ICs.

Commenting on the results Dialog Chief Executive, Dr
Jalal Bagherli, said: 
'I am very pleased to report a strong start to 2010,
with revenue, gross margin, cash generation and
earnings performance greatly exceeding the levels and
growth rates we achieved in the corresponding quarter
of the prior year.

Execution to our strategy of market share expansion
and increasing the power management content delivered
into our smartphones and other high growth emerging
convergent portable device customers, represent a
powerful combination which we expect will allow Dialog
to continue its positive operational and financial
trajectory.' 
FINANCIAL OVERVIEW

Revenue in Q1 2010 was $61.1 million, an increase of
70% over the $36.0 million in the first quarter of 2009
and a sequential decrease of 21% on the $77.6 million
of revenue delivered in the prior quarter, in line with 
the typical seasonal reduction in demand. During the
quarter we also benefited from $3.5 million sales of
last time buy products within the Automotive and
Industrial segment. These products were sold as a
result of last year's notification of the phasing out
of an older manufacturing process from one of our
foundry partners.

Gross margin in Q1 2010 was 46.0%. This represents an
increase of 9.3 percentage points over the 36.7%
achieved in the comparative period last year and a
decrease of 2.0 percentage points over the 48.0%
achieved in Q4 2009. Excluding the effect of the last
time buy program, our underlying gross margin would
have been 44.9% in the first quarter, 
Our operating expenses in Q1 2010 decreased by $1.53
million over the prior quarter to $21.5 million, with
R&D and SG&A at 21.6% and 13.6% of revenue 
respectively, compared to 17.2% R&D and 12.5% SG&A in
the prior quarter.
The operating expenses in Q1 2010 include $3.0 million
of expense associated with share based compensation
programmes of which $1.4 million was a onetime charge
principally resulting from additional social charges 
payable as a result of the effect of the increase in
the share price post 2009 year end. Excluding this
onetime charge, which mainly impacts SG&A, Q1 2010
underlying operating expenses would have been 32.9% of
Q1 2010 revenue.

Operating profit in Q1 2010 was $6.6 million or 10.8%
of total revenue compared to $0.95 million or 2.6% of
total revenue delivered in Q1 2009 and $14.2 million or
18.3% of total revenue in the prior quarter. Excluding
the onetime charge associated with share based
compensation programmes, Q1 2010 operating profit would
have been 12.0% of total revenue.

Q1 2010 taxable profits continued to benefit from the
utilisation of brought forward tax losses resulting in
a residual minimum level tax charge mainly applying to
taxable profits in Germany. A net tax charge of $0.6 
million was recorded for Q1 2010 which included a
benefit of $1.37 million - or 2 cents per diluted and
basic share, being a further recognition of a 
proportion of the deferred tax assets principally
relating to carried forward losses.  As a result, the
Q1 2010 effective tax rate was 11.0%. As we have
previously stated, going forward and on a quarterly
basis, we will consider whether it is appropriate to
continue to recognise further currently unrecognised
deferred tax assets.

In Q1 2010, net income was $4.9 million or 8.1% of
revenue.  Earnings per diluted and basic share were 8
cents: our tenth consecutive quarter of profitability.
This compares to a net income of $0.8 million or 2
cents per diluted and basic share in Q1 2009 and to a
net income of $19.9 million or 31 cents and 34 cents
per diluted share and basic share delivered in Q4 2009.

At the end of Q1 2010, we had a cash, cash equivalents
and restricted cash balance of $138.2 million, with no
debt. This represents an increase of $97.4 million over
the cash and cash equivalents and restricted cash 
balance at the end of Q1 2009 and an increase of $15.1
million over the prior quarter.  In September 2009 net
proceeds of $59.7 million were raised from an
international equity offering which contributed to the
increase in cash balances over the prior 12 months.

At the end of Q1 2010, our inventory level was $21.3
million (or ~58 days): a reduction of $4.9 million over
the prior quarter, demonstrating continued tight
inventory management.

OPERATIONAL OVERVIEW

In addition to starting the year with a strong
quarterly revenue performance, we have continued our
strategy of launching innovative new products to expand
our ASSP portfolio and engaging new customers for 
continued growth.

We launched our second generation of system level
power management ICs - DA9057 - which now include an
integrated class G audio codec with an accompanying
DA7021 Class D speaker driver device.

Additionally, we announced a number of important
design wins with leading smartphone and cellphone
manufacturers including a win with LG for a power 
management and audio device which has been designed
into the company's GW880 smartphone, to be offered by
China Mobile to its customers.

In addition, our power management and audio technology
has been designed into a series of Sharp 3G cellphones:
the first of which, the Sharp AQUOS SHOT 940SH, is now
available from the Japanese network operator, Softbank.

Our recently released DA7210 ultra low power audio
codec product continues to find positive traction with
major consumer electronics companies, and is currently
undergoing detailed design evaluation in Japan and
Korea.

We continue to work closely with our SmartXtend(TM)
passive matrix OLED display module partners, one of 
whom demonstrated their first transparent display
module based on our technology at Japan's Finetech
show in March.   Our plans remain on track for
production-ready modules to be available by the end of
this year and by multiple module providers.

We saw increased demand for our automotive motor
control devices for deliveries throughout the year. In
addition, our Q1 2010 revenue in this segment was also
bolstered by a number of last time buy programs which
we entered into due to the phasing out of an older
process by one of our foundry partners.

In support of our strategy to strengthen power
management technology leadership while continuing to
deliver the industry's highest integrated power
management solutions, we executed on a number of
intellectual property licensing, acquisition
transactions and technology partnerships during the
quarter.

We announced an ongoing partnership with our foundry
partner Taiwan Semiconductor Manufacturing Company
(TSMC) on a bipolar-CMOS-DMOS (BCD) technology
specifically tailored to high-performance power
management ICs for portable devices. The 0.25-micron
high-voltage process node enables higher voltage
functionality to be integrated efficiently into single
chip power management ICs, increasing cost efficiencies
and expanding the addressable market for Dialog
solutions.

During the quarter we entered into an agreement with
NXP to license its leading CoolFlux(TM) audio DSP and
LifeVibes software for eliminating background noise and
echo, while improving speech quality in smartphones and
portable media devices. This technology will enhance
the user's experience by allowing their smartphone to
automatically respond to their environment and to
deliver natural and immersive sound at quality beyond 
that achievable today.

We acquired complimentary power management assets and
certain intellectual property rights from Diodes Zetex
GmbH.  As part of the transaction, a design team also
transferred to Dialog. The acquired IP is already being 
integrated into a new generation of power management
devices which will allow the consumer to better manage
and achieve greater operating lifetime from their
battery powered devices.

Subsequent to the quarter close, we also acquired a
number of power management patents from Leadis
Technology Inc, complimenting our existing intellectual
property patent portfolio.

OUTLOOK

We believe we can continue to achieve sequential
quarterly revenue growth, with Q2 2010 revenue expected
to be in the range of $64.0 million to $69.0 million,
maintaining our trajectory of quarterly year over year
growth since Q3 2007. We maintain our previous outlook
for the full year and despite some market uncertainty
still remaining, we remain confident in our ability to
grow our revenue faster than the broader market and to
deliver a successful result for 2010.

 

Dialog Semiconductor invites you today at 09:00 London
/ 10:00 Frankfurt time to listen to and participate in
a live conference call including a management
discussion of Q1 2010 performance. To access the call
please use the following dial-in numbers: Germany: 0800
101 4960, UK: 01452 569 393, US:1 866 434 1089 with no
access code required. An instant replay facility will
be available for 30 days after the call and can be
accessed at +44 (0)1452 550 000 with access code
71147857. An audio replay of the conference call will
also be posted soon thereafter on the company's website
at: 
http://www.diasemi.com/investor_relations.php  

Additional information to this ad hoc release
including the company's consolidated income statement,
consolidated balance sheet and consolidated statements
of cash flows for the period ending 2 April 2010 is
available under the investor relations section of the
Company's web site.

For further information please contact:

Dialog Semiconductor  FD - London   FD - Frankfurt

Neue Straße 95   Matt Dixon   Ivo Lingnau

D-73230 Kirchheim/Teck T +44 20 7269 7214  T  +49 69
920 37 133 
Germany   matt.dixon@fd.com  ivo.lingnau@fd.com

T +49-7021-805-412 

F +49-7021-805-200 

dialog@fd.com 

www.dialog-semiconductor.com 

Information about Dialog Semiconductor:

Dialog Semiconductor creates energy-efficient, highly
integrated, mixed-signal circuits optimised for
personal mobile, lighting & display and automotive
applications. The company provides flexible and
dynamic support, world-class innovation and the
assurance of dealing with an established business
partner.

With its focus and expertise in system power
management, Dialog brings decades of experience to the
rapid development of integrated circuits for power
management, audio, display processing and motor
control. Dialog's processor companion chips enhance
both the performance of hand-held products and the
consumers' multimedia experience. With world-class 
manufacturing partners, Dialog operates a fabless
business model.

Dialog Semiconductor plc is headquartered near
Stuttgart with a global sales, R&D and marketing
organisation. In 2009, it recorded $218 million in 
revenue and was one of the fastest growing European
public semiconductor companies. It currently has
approximately 350 employees. The company is listed on
the Frankfurt (FWB: DLG) stock exchange.

Forward Looking Statements:

This press release contains 'forward-looking
statements' that reflect management's current views
with respect to future events. The words 'anticipate,'
'believe,' 'estimate, 'expect,' 'intend,' 'may,'
'plan,' 'project' and 'should' and similar expressions
identify forward-looking statements. Such statements
are subject to risks and uncertainties, including, but
not limited to: an economic downturn in the
semiconductor and telecommunications markets; changes
in currency exchange rates and interest rates, the
timing of customer orders and manufacturing lead times, 
insufficient, excess or obsolete inventory, the impact
of competing products and their pricing, political
risks in the countries in which we operate or sale and
supply constraints. If any of these or other risks and 
uncertainties occur (some of which are described under
the heading 'Risks and their management' in Dialog
Semiconductor's most recent Annual Report) or if the
assumptions underlying any of these statements prove
incorrect, then actual results may be materially
different from those expressed or implied by such
statements. We do not intend or assume any obligation
to update any forward-looking statement which speaks
only as of the date on which it is made, however, any
subsequent statement will supersede any previous
statement.



-------------------------------------------------------

Information and Explaination of the Issuer to this
News: 
Commenting on the results Dialog Chief Executive, Dr
Jalal Bagherli, said: 
'I am very pleased to report a strong start to 2010,
with revenue, gross margin, cash generation and
earnings performance greatly exceeding the levels and
growth rates we achieved in the corresponding quarter
of the prior year.

Execution to our strategy of market share expansion
and increasing the power management content delivered
into our smartphones and other high growth emerging
convergent portable device customers, represent a
powerful combination which we expect will allow Dialog
to continue its positive operational and financial
trajectory.' 
FINANCIAL OVERVIEW

Revenue in Q1 2010 was $61.1 million, an increase of
70% over the $36.0 million in the first quarter of 2009
and a sequential decrease of 21% on the $77.6 million
of revenue delivered in the prior quarter, in line with 
the typical seasonal reduction in demand. During the
quarter we also benefited from $3.5 million sales of
last time buy products within the Automotive and
Industrial segment. These products were sold as a
result of last year's notification of the phasing out
of an older manufacturing process from one of our
foundry partners.

Gross margin in Q1 2010 was 46.0%. This represents an
increase of 9.3 percentage points over the 36.7%
achieved in the comparative period last year and a
decrease of 2.0 percentage points over the 48.0%
achieved in Q4 2009. Excluding the effect of the last
time buy program, our underlying gross margin would
have been 44.9% in the first quarter, 
Our operating expenses in Q1 2010 decreased by $1.53
million over the prior quarter to $21.5 million, with
R&D and SG&A at 21.6% and 13.6% of revenue 
respectively, compared to 17.2% R&D and 12.5% SG&A in
the prior quarter.
The operating expenses in Q1 2010 include $3.0 million
of expense associated with share based compensation
programmes of which $1.4 million was a onetime charge
principally resulting from additional social charges 
payable as a result of the effect of the increase in
the share price post 2009 year end. Excluding this
onetime charge, which mainly impacts SG&A, Q1 2010
underlying operating expenses would have been 32.9% of
Q1 2010 revenue.

Operating profit in Q1 2010 was $6.6 million or 10.8%
of total revenue compared to $0.95 million or 2.6% of
total revenue delivered in Q1 2009 and $14.2 million or
18.3% of total revenue in the prior quarter. Excluding
the onetime charge associated with share based
compensation programmes, Q1 2010 operating profit would
have been 12.0% of total revenue.

Q1 2010 taxable profits continued to benefit from the
utilisation of brought forward tax losses resulting in
a residual minimum level tax charge mainly applying to
taxable profits in Germany. A net tax charge of $0.6 
million was recorded for Q1 2010 which included a
benefit of $1.37 million - or 2 cents per diluted and
basic share, being a further recognition of a 
proportion of the deferred tax assets principally
relating to carried forward losses.  As a result, the
Q1 2010 effective tax rate was 11.0%. As we have
previously stated, going forward and on a quarterly
basis, we will consider whether it is appropriate to
continue to recognise further currently unrecognised
deferred tax assets.

In Q1 2010, net income was $4.9 million or 8.1% of
revenue.  Earnings per diluted and basic share were 8
cents: our tenth consecutive quarter of profitability.
This compares to a net income of $0.8 million or 2
cents per diluted and basic share in Q1 2009 and to a
net income of $19.9 million or 31 cents and 34 cents
per diluted share and basic share delivered in Q4 2009.

At the end of Q1 2010, we had a cash, cash equivalents
and restricted cash balance of $138.2 million, with no
debt. This represents an increase of $97.4 million over
the cash and cash equivalents and restricted cash 
balance at the end of Q1 2009 and an increase of $15.1
million over the prior quarter.  In September 2009 net
proceeds of $59.7 million were raised from an
international equity offering which contributed to the
increase in cash balances over the prior 12 months.

At the end of Q1 2010, our inventory level was $21.3
million (or ~58 days): a reduction of $4.9 million over
the prior quarter, demonstrating continued tight
inventory management.

OPERATIONAL OVERVIEW

In addition to starting the year with a strong
quarterly revenue performance, we have continued our
strategy of launching innovative new products to expand
our ASSP portfolio and engaging new customers for 
continued growth.

We launched our second generation of system level
power management ICs - DA9057 - which now include an
integrated class G audio codec with an accompanying
DA7021 Class D speaker driver device.

Additionally, we announced a number of important
design wins with leading smartphone and cellphone
manufacturers including a win with LG for a power 
management and audio device which has been designed
into the company's GW880 smartphone, to be offered by
China Mobile to its customers.

In addition, our power management and audio technology
has been designed into a series of Sharp 3G cellphones:
the first of which, the Sharp AQUOS SHOT 940SH, is now
available from the Japanese network operator, Softbank.

Our recently released DA7210 ultra low power audio
codec product continues to find positive traction with
major consumer electronics companies, and is currently
undergoing detailed design evaluation in Japan and
Korea.

We continue to work closely with our SmartXtend(TM)
passive matrix OLED display module partners, one of 
whom demonstrated their first transparent display
module based on our technology at Japan's Finetech
show in March.   Our plans remain on track for
production-ready modules to be available by the end of
this year and by multiple module providers.

We saw increased demand for our automotive motor
control devices for deliveries throughout the year. In
addition, our Q1 2010 revenue in this segment was also
bolstered by a number of last time buy programs which
we entered into due to the phasing out of an older
process by one of our foundry partners.

In support of our strategy to strengthen power
management technology leadership while continuing to
deliver the industry's highest integrated power
management solutions, we executed on a number of
intellectual property licensing, acquisition
transactions and technology partnerships during the
quarter.

We announced an ongoing partnership with our foundry
partner Taiwan Semiconductor Manufacturing Company
(TSMC) on a bipolar-CMOS-DMOS (BCD) technology
specifically tailored to high-performance power
management ICs for portable devices. The 0.25-micron
high-voltage process node enables higher voltage
functionality to be integrated efficiently into single
chip power management ICs, increasing cost efficiencies
and expanding the addressable market for Dialog
solutions.

During the quarter we entered into an agreement with
NXP to license its leading CoolFlux(TM) audio DSP and
LifeVibes software for eliminating background noise and
echo, while improving speech quality in smartphones and
portable media devices. This technology will enhance
the user's experience by allowing their smartphone to
automatically respond to their environment and to
deliver natural and immersive sound at quality beyond 
that achievable today.

We acquired complimentary power management assets and
certain intellectual property rights from Diodes Zetex
GmbH.  As part of the transaction, a design team also
transferred to Dialog. The acquired IP is already being 
integrated into a new generation of power management
devices which will allow the consumer to better manage
and achieve greater operating lifetime from their
battery powered devices.

Subsequent to the quarter close, we also acquired a
number of power management patents from Leadis
Technology Inc, complimenting our existing intellectual
property patent portfolio.

OUTLOOK

We believe we can continue to achieve sequential
quarterly revenue growth, with Q2 2010 revenue expected
to be in the range of $64.0 million to $69.0 million,
maintaining our trajectory of quarterly year over year
growth since Q3 2007. We maintain our previous outlook
for the full year and despite some market uncertainty
still remaining, we remain confident in our ability to
grow our revenue faster than the broader market and to
deliver a successful result for 2010.

 

Dialog Semiconductor invites you today at 09:00 London
/ 10:00 Frankfurt time to listen to and participate in
a live conference call including a management
discussion of Q1 2010 performance. To access the call
please use the following dial-in numbers: Germany: 0800
101 4960, UK: 01452 569 393, US:1 866 434 1089 with no
access code required. An instant replay facility will
be available for 30 days after the call and can be
accessed at +44 (0)1452 550 000 with access code
71147857. An audio replay of the conference call will
also be posted soon thereafter on the company's website
at: 
http://www.diasemi.com/investor_relations.php  

Additional information to this ad hoc release
including the company's consolidated income statement,
consolidated balance sheet and consolidated statements
of cash flows for the period ending 2 April 2010 is
available under the investor relations section of the
Company's web site.


Information about Dialog Semiconductor:

Dialog Semiconductor creates energy-efficient, highly
integrated, mixed-signal circuits optimised for
personal mobile, lighting & display and automotive
applications. The company provides flexible and
dynamic support, world-class innovation and the
assurance of dealing with an established business
partner.

With its focus and expertise in system power
management, Dialog brings decades of experience to the
rapid development of integrated circuits for power
management, audio, display processing and motor
control. Dialog's processor companion chips enhance
both the performance of hand-held products and the
consumers' multimedia experience. With world-class 
manufacturing partners, Dialog operates a fabless
business model.

Dialog Semiconductor plc is headquartered near
Stuttgart with a global sales, R&D and marketing
organisation. In 2009, it recorded $218 million in 
revenue and was one of the fastest growing European
public semiconductor companies. It currently has
approximately 350 employees. The company is listed on
the Frankfurt (FWB: DLG) stock exchange.

Forward Looking Statements:

This press release contains 'forward-looking
statements' that reflect management's current views
with respect to future events. The words 'anticipate,'
'believe,' 'estimate, 'expect,' 'intend,' 'may,'
'plan,' 'project' and 'should' and similar expressions
identify forward-looking statements. Such statements
are subject to risks and uncertainties, including, but
not limited to: an economic downturn in the
semiconductor and telecommunications markets; changes
in currency exchange rates and interest rates, the
timing of customer orders and manufacturing lead times, 
insufficient, excess or obsolete inventory, the impact
of competing products and their pricing, political
risks in the countries in which we operate or sale and
supply constraints. If any of these or other risks and 
uncertainties occur (some of which are described under
the heading 'Risks and their management' in Dialog
Semiconductor's most recent Annual Report) or if the
assumptions underlying any of these statements prove
incorrect, then actual results may be materially
different from those expressed or implied by such
statements. We do not intend or assume any obligation
to update any forward-looking statement which speaks
only as of the date on which it is made, however, any
subsequent statement will supersede any previous
statement.

For further information please contact:

Dialog Semiconductor        FD - London         FD -
Frankfurt Neue Straße 95            Matt Dixon         
  Ivo Lingnau D-73230 Kirchheim/Teck    T +44 20 7269
7214    T  +49 69 920 37 133 Germany                  
matt.dixon@fd.com     ivo.lingnau@fd.com T
+49-7021-805-412  F +49-7021-805-200 
dialog@fd.com 
www.dialog-semiconductor.com 



10.05.2010 Ad hoc announcement, Financial News and
Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and
www.dgap.de 

-------------------------------------------------------
 

-------------------------------------------------------