For the third quarter of fiscal 2001, net sales increased 64% to a record level of $78.7 million, compared with the $48.0 million reported for the third quarter a year ago. On a sequential basis, net sales grew 7%. Net income for the third quarter of fiscal 2001 rose to $11.6 million, or $0.26 per diluted share, also a Company record. This compares to net income of $5.5 million, or $0.12 per diluted share, for the comparable period last year. Operating profit grew sequentially for the 17th consecutive quarter to $15.4 million, a 9% increase from the second quarter of fiscal 2001.
For the nine months ended December 31, 2000, net sales increased 69% to a record $217.6 million. Net sales for the comparable year-earlier period were $128.6 million. Net income for the nine months of fiscal 2001 grew 129% to $30.0 million, or $0.67 per diluted share, from $13.1 million, or $0.31 per diluted share for the comparable period a year ago.
I am pleased with our performance in the third quarter, said Alpha President and CEO David Aldrich. Despite challenging market conditions, we met or exceeded our business objectives and executed our key strategic initiatives — continuing to diversify our wireless customer base, expanding our broadband business and increasing our dollar content per customer platform. These strategies have served us well, enabling us to sustain our top-line growth in the third quarter, despite pockets of softening demand as the quarter progressed.
Alpha’s third-quarter broadband sales continued to exceed the Company’s forecast, topping $16 million, or more than 20% of total sales. Several of the world’s largest broadband equipment OEMs have embraced Alpha’s family of GaAs HBT and PHEMT products — including amplifiers and switches as well as ceramic filters — for a wide variety of platforms. These platforms span the access and network markets including digital set-top boxes, cable modems, digital broadcast satellite, fixed wireless access and fiber optic equipment. Alpha extended its broadband penetration in the third quarter by:
Forging a global sourcing alliance to supply GaAs MMIC switches, attenuators, passive products and millimeterwave devices to the world’s leading end-to-end networking solutions provider.
Delivering additional volume shipments of GaAs switches, silicon RF semiconductor devices and other components for Metricom, Inc.’s high-speed Ricochet(R) mobile data network.
Doubling sequential sales to Nortel across multiple RF product and technology platforms for Nortel’s fiber-optic and next-generation wireless offerings.
During the third quarter, Alpha continued to add new wireless OEM customers and to increase participation in customer platforms. The Company sustained high levels of design and production activity with Sony and Siemens and other emerging handset OEMs. Among the Company’s third-quarter wireless highlights:
Alpha’s first production order from Sony Corporation, which is using the Company’s RF semiconductors in Sony’s newly released, next-generation wireless handsets.
Initial shipments of GaAs integrated circuits into Siemens AG’s newest dual-band GSM wireless handsets for the European market, with full production expected to begin by June 2001.
Sales to Motorola increased 14% sequentially during the quarter on the strength of power amplifier and switch shipments for Motorola’s new Accompli(TM), V-Series GSM and latest mid-tier GSM dual-band phones.
Responding to growing demand for integrated semiconductor solutions that drastically reduce design complexity and speed an OEM’s time-to-market, the Company introduced the Alpha Integration Platform(TM) (aiIP(TM)). The aiIP is a manufacturing, packaging and design technique that combines multiple RF components in a single module-based platform, and represents the keystone in Alpha’s strategy to integrate elements of the RF front end. In recent weeks:
Customers have begun sampling Alpha’s new line of aiIP switch filter modules for wireless GSM handsets. Volume production of the switch filter module is expected to begin during the second half of calendar 2001.
HBT amplifier products achieved volume production levels while development of next-generation dual and tri-band integrated amplifier modules progressed on schedule.
Increasing diversification in wireless, deeper broadband penetration and increasing levels of Alpha content in each OEM platform continue to be growth drivers for our company, Aldrich said. However, a buildup of inventory at contract manufacturers and distributors, primarily among digital set-top box customers and second tier handset OEMs, resulted in orders being scaled back late in the quarter. This resulted in a 0.97 book-to-bill. Consequently, our forecast is cautious and reflects the uncertainty that currently exists in the component supply chain.
We anticipate reporting a level top line for the next two quarters, while continuing to maintain solid operating profit margins. In the second half of the calendar year we expect order rates to rebound, along with a return to strong net sales gains beginning in the second quarter of fiscal 2002, Aldrich continued. This forecast is based on our customers’ projections for rising global handset growth in the second half of calendar 2001, our increased customer penetration and a reduction of inventory in the supply chain. In addition, we are seeing an accelerating level of broadband design activity with an expanding array of OEMs, and we anticipate that this segment will accelerate at the same time. Based on those market dynamics, we expect to reach net sales of $365 million to $375 million for fiscal year 2002.
