Final Results

Filtronic PLC 29 July 2002 For Immediate Release 7:00am 29th July 2002 FILTRONIC PLC FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2002 'Filtronic much stronger financially and operationally than one year ago'; Product Development and Marketing Alliance with Powerwave Technologies, Inc. Filtronic plc ('Filtronic'), a leading global designer and manufacturer of customised microwave electronic subsystems, announces its Final Results for the year ended 31 May 2002. Its technology and engineering can be applied to general business sectors in both the commercial and defence areas. Filtronic has worldwide sites in the UK (North of England, Yorkshire, Midlands, Scotland), in the US, in Finland, in China and in Australia. Both major businesses, Wireless Infrastructure and Cellular Handset Products, increased their contribution to operating profit and again improved their market share. Wireless Infrastructure is the world's number one independent supplier of transmit/receive modules for mobile base stations and Cellular Handset Products is the world's leading manufacturer of antennas for handsets. Lucent, Motorola and Nokia are among Filtronic's customers. In his Statement, Professor David Rhodes, Executive Chairman said: 'Filtronic is much stronger than it was one year ago, both financially and operationally. Filtronic holds the number one independent supplier position in its two major businesses. Both cash flow and operating margins in those businesses are strong. Actions have been taken to improve trading performance in our smaller businesses. The company has and continues to be cash generative. Since 31 May 2001, total debt has been reduced by £37.7m and cash balances increased.' Financial Highlights • Results in line with May trading update and ahead of market expectations • Group sales of £280.5m (2001: £297.4m) • Operating profit before non-cash items up 46% from £12.2m to £17.8m • Wireless Infrastructure operating profit up 17% from £27.2m to £31.8m • Handset Products operating profit up 68% from £6.9m to £11.6m • Strong margins in Wireless Infrastructure and Cellular Handset products • Maintained final dividend 1.8p (2001: 1.8p), payable 1 November 2002; total dividend 2.7p per share • Net cash generated from operations up from £7.5m to £64.2m • Net debt reduced 33% by £41.2m from £125.9m to £84.7m • Gearing reduced from 97% to 81% Operational Highlights • Global presence in Europe, USA, Asia • Market shares of 35% and 25%, respectively, in two major businesses • Leader in transmit/receive module technology and low cost manufacturing • Strong position in 3G programmes with major customers • Targeting further increases in market share in both businesses • 86 million antennas supplied by Cellular handsets, an increase of 21% • Principal supplier of handset antennas to Nokia • Strong position in new programmes with Nokia and several new customers • Closure of Filtronic Solid State, California facility • Compound semiconductor agreements with M/A-COM and BAE underway • GaAs Power Amplifier Modules successfully demonstrated to 3 leading OEMs • Potential new channel to merchant market via Powerwave Powerwave Alliance • Product Development and Marketing Alliance with NASDAQ listed Powerwave Technologies, Inc. • Agreement to develop integrated transmit receive module and power amplifier for the 3G market • Integrated products to comprise Filtronic's transmit/receive filter modules and Powerwave's power amplifiers • Future potential agreement to incorporate Filtronic's GaAs power amplifier modules into joint integrated products and selected future Powerwave products Outlook In his Statement, Professor David Rhodes said: 'While global market conditions remain challenging and the short term outlook is unclear, Filtronic will continue to improve the efficiency of its businesses and reduce its debt when practical. The development of compound semiconductor based products and investment in the related technologies will remain the principal technical focus. The Board believes that this strategy will deliver financial stability, business growth and shareholder value in the medium to longer term.' Business Segmental Analysis Year Ended 31 May 2002 31 May 2001 £m £m SALES Wireless Infrastructure 188.6 207.8 Cellular Handset Products 48.8 42.2 Electronic Warfare 27.0 25.7 Broadband Access 12.5 11.3 Inter Segment (3.9) (0.8) --------------- --------------- 273.0 286.2 Compound Semiconductors 7.5 11.2 --------------- --------------- 280.5 297.4 ========= ========= OPERATING PROFIT BEFORE NON CASH CHARGES Wireless Infrastructure 31.8 27.2 Cellular Handset Products 11.6 6.9 Electronic Warfare (1.4) (0.4) Broadband Access (3.0) (2.8) Central Costs (5.0) (3.8) --------------- --------------- 34.0 27.1 Compound Semiconductors (16.2) (14.9) --------------- --------------- 17.8 12.2 ========= ========= Enquiries: Professor J. David Rhodes, Executive Chairman, Filtronic plc Tel: 020 7786 9600 (all week) John Samuel, Finance Director, Filtronic plc Professor Christopher Snowden, Director, Filtronic plc Tel: 01274 530 622 Peter Binns, Paul Vann, Paul McManus, Charlotte Barker, Binns & Co Tel: 020 7786 9600 Executive Chairman's Statement Financial results Sales for the year ended 31 May 2002 were £280.5m (2001 £297.4m). Operating profit before goodwill amortisation, exceptional goodwill and tangible fixed asset impairment and share compensation costs was £17.8m (2001 £12.2m), an increase of 46% over last financial year. After charging non-cash items of £30.9m and net interest and financing currency costs of £12.4m, the loss before tax was £25.5m (2001 £21.2m). After tax this increased to £29.0m (2001 £22.8m), resulting in a basic loss per share of 39.31p (2001 31.24p basic loss), which is the same on a diluted basis (2001 31.24p loss). The non-cash items can be analysed as follows: £m Normal annual goodwill amortisation 5.4 Exceptional goodwill impairment at Sigtek and Filtronic Solid State 16.1 Exceptional tangible fixed asset impairment at Filtronic Solid State 7.9 Share compensation 1.6 Total £30.9 Cash During the last financial year, the company generated £39.6m of net cash. This included the fee received from BAE SYSTEMS Avionics Limited ('BAE'), none of which is included in the Profit and Loss Account. £22.0m was applied in paying down long term debt, including buying in $29.25m of 10% Senior Notes. The net increase in cash of £17.9m compares with a cash consumption of £48.5m in 2001. Dividend The Board is proposing to maintain the final dividend of 1.8p (2001 1.8p) payable on 1 November 2002 to shareholders on the register at 16 August 2002. World market environment Worldwide demand for the supply of telecommunications products has declined significantly during the last year with few signs of an imminent upturn. Within this environment, Filtronic has increased and consolidated its position as the leading independent supplier of both transmit/receive modules for mobile base stations and antennas for handsets. Additionally, the company has developed several new processes including those for high power microwave transistors, the key technology for the company's high performance power amplifier modules. Technology hardware demonstrations of these modules have taken place with three leading Original Equipment Manufacturers ('OEMs'). These have been well received and further development work for these potential customers is underway, including the provision of sample modules. The objective remains to become qualified into 3G WCDMA programmes with one or more of these customers. Agreement with Powerwave Technologies, Inc. To provide a potential sales channel through the merchant market, Filtronic has signed a Product Development and Marketing Alliance Agreement with Powerwave Technologies, Inc. ('Powerwave'), based in Santa Ana, California. Powerwave, which is listed on NASDAQ in the USA, is the leading independent supplier of power amplifiers for mobile communications base stations, with annual sales in excess of $400m. Powerwave's principal OEM customers include Nortel, Nokia and Lucent. This agreement will enable Powerwave's power amplifiers to be integrated with Filtronic's transmit/receive filter modules to provide an integrated solution for both OEMs and network operators where appropriate. Following the demonstration of Filtronic's proprietary gallium arsenide based power amplifier modules, which Powerwave are currently evaluating, the agreement provides for a potential future agreement for the inclusion of such modules into the joint integrated solution and into selected future Powerwave products. Operations The segmental analysis of the business is as follows: Operating profit before goodwill amortisation and impairment, Sales tangible fixed asset impairment and share compensation Year ended 31 May 2002 2001 2002 2001 £m £m £m £m Wireless infrastructure 188.6 207.8 31.8 27.2 Cellular handset products 48.8 42.2 11.6 6.9 Electronic warfare 27.0 25.7 (1.4) (0.4) Broadband access 12.5 11.3 (3.0) (2.8) Inter segment (3.9) (0.8) - - Central costs ___- ___- (5.0) (3.8) Excluding Compound semiconductors 273.0 286.2 34.0 27.1 Compound semiconductors 7.5 11.2 (16.2) (14.9) 280.5 297.4 17.8 12.2 Wireless Infrastructure Filtronic's Wireless Infrastructure business is the number one independent supplier of its type in the world with a market share estimated at 35%. During the last two years, this share has grown, although the overall market has declined as wireless operators have restricted capital expenditure. Each of the Wireless Infrastructure operations in the UK, Finland, USA and Australia was profitable with only China, which is at an early stage of production volumes, incurring losses. Continued focus on customer support, cost reductions and operating efficiency has been the key to a further very successful year for Filtronic's principal business. Cellular Handset Products The Cellular Handset Products business has also had an outstanding year, further increasing its market share as the world's leading manufacturer of handset antennas. During financial year 2001/02, Filtronic supplied 86m handset antennas, almost all of which were internal antennas, an increase of 21% over the previous financial year. This was achieved against a background of lower world sales for cellular handsets during this period. Demand for ceramic diplexers for US TDMA mobile handsets continued throughout the last financial year at a higher level than expected, helping to improve overall operating margins, however, demand for this product has now reduced. Ceramic diplexer sales are not expected to increase until volume production of WCDMA handsets begins. Electronic Warfare Sales in the Electronic Warfare business segment have improved slightly on last year as the European Fighter Aircraft programme has now started in initial production quantities. This business moved into profitability in the second half of the financial year and is expected to improve its financial performance as EFA production volumes increase. Broadband Access The Broadband Access business has suffered from very low levels of demand for its current point to point transceiver products in the second half of the financial year resulting in continuing losses. Market conditions are such that major improvements in the trading performance of this business are unlikely in the next financial year. Compound Semiconductors The strategy for the investment in the compound semiconductor facility at Newton Aycliffe remains unaltered but with an additional range of products. The Supply and Development Agreement with BAE has resulted in a substantial cash receipt during the second half of last financial year, although none of this has been recognised in the profit and loss account this year. Business opportunities for compound semiconductor products are arising from the strengthening relationship with BAE. These opportunities have been enhanced by new restrictions on the export of strategic compound semiconductor products from the USA for military applications. The first sales to M/A-COM, Inc., have now been recorded although currently they are at modest levels. As outlined in my statement on 20 May 2002, the rate of increase in and the ultimate level of the business with M/A-COM is dependent on their success in the related end markets, the principal one of which is the cellular handset market. It is probable that handset switches will now form the majority of the products to be supplied to M/A-COM. Presently, it is difficult for any company in this market to have good forward demand visibility. Moreover, there are four specific switch opportunities, among several, which, were M/A-COM to be successful in winning the business, should provide volume wafer throughput for Newton Aycliffe such that the monthly run rate of wafers being processed would be at an approximate break even level by May 2003. This was the original objective of the M/A-COM agreement. The benefit of this potential business would fall initially in the second half of this financial year. Were M/A-COM not to be successful with these opportunities, then losses at Newton Aycliffe would not be expected to be materially less than £1m per month for the rest of the 2002/03 financial year, since most of the other revenue opportunities will only contribute materially after 31 May 2003. The main objective of Newton Aycliffe remains the production of high quality compound semiconductor devices for integration into higher added value Filtronic products. The first major product of this type is the power amplifier gain block, the development of which continues to progress. Filtronic Solid State, California The Board announces the closing of the fabrication facility for compound semiconductors at Filtronic Solid State, Santa Clara, California. Although the acquisition of this 3' wafer facility 4 years ago enabled the company to enter the compound semiconductor market and subsequently develop the Newton Aycliffe facility, substantial investment would now be required if the Santa Clara facility were to become a viable operation. £10.4m of the exceptional goodwill impairment relates to this operation and an exceptional tangible fixed asset impairment charge of £7.9m has also been applied. Further closure costs estimated to be £2.5m will be incurred during the financial year ending 31 May 2003. Filtronic Solid State will operate a 'fabless' compound semiconductor business using the manufacturing capability at Newton Aycliffe. Financing At 31 May 2002, Filtronic had a cash balance of £9.1m, Filtronic's remaining debt was $140.75m (£96.2m) of 10% Senior Notes. Additionally, the company continues to have bank borrowing facilities totalling £31.0m, none of which was being utilised at the year end. Net gearing was 81%, compared to 97% at 31 May 2001. The directors expect the company to continue to generate cash during financial year 2002/03. Outlook Uncertain short term global market conditions remain for both the Wireless Infrastructure and Cellular Handset Products businesses. The same underlying uncertainties affect Broadband Access and the prospects for the M/A-COM products at Newton Aycliffe. Currently, demand for 2.5G GSM products remains strong, underpinned by the deployment of these systems in the United States of America. However, demand for CDMA 2000 transmit/receive modules has recently weakened and future requirements are uncertain. Growth in each of the major businesses remains dependent upon the timing and extent of the roll out of 3G WCDMA systems. Filtronic is exceptionally well positioned to support customers' needs for base station transmit/receive modules, tower top amplifiers, handset antennas and ceramic diplexers and high efficiency compound semiconductor based power amplifier modules for the 3G WCDMA wireless infrastructure market. The importance of compound semiconductors to wireless communications will grow over the next decade in much the same way as silicon did for the electronics industry in the last 25 years. The high efficiency power amplifier modules are the first of what will be many leading edge products based on compound semiconductor technology to be produced at Newton Aycliffe. The marketing strategy is to support OEMs directly with these modules and the merchant market through Powerwave. The proprietary design concepts used rely upon the availability of the high power, high gain field effect transistors, which have been developed over the last year and can be produced cost effectively. Shareholder value At this time last year, I stated that the Board of Filtronic had recognised the significant loss of shareholder value which had occurred during the 2000/01 financial year. Today, Filtronic is much stronger than it was one year ago, both financially and operationally. Filtronic holds the number one independent supplier position in its two major businesses. Both cash flow and operating margins in those businesses are strong. Actions have been taken to improve trading performance in our smaller businesses. The company has been and continues to be cash generative. Since 31 May 2001, total debt has been reduced by £37.7m from £131.5m to £93.8m and cash balances have increased by £3.5m. While global market conditions remain challenging and the short term outlook is unclear, Filtronic will continue to improve the efficiency of its businesses and reduce its debt when practical. The development of compound semiconductor based products and investment in the related technologies will remain the principal technical focus. The Board believes that this strategy will deliver financial stability, business growth and shareholder value in the medium to longer term. Professor J D Rhodes CBE FRS FREng Executive Chairman and CEO 29 July 2002 Consolidated Profit and Loss Account for the year ended 31 May 2002 Excluding Compound Compound semi-conductors semi-conductors 2002 2002 2002 £000 £000 £000 note Sales 1, 2 273,066 7,481 280,547 ========= ========= ========= Operating profit/(loss) before goodwill amortisation and impairment, tangible fixed asset impairment and share compensation 1, 2 34,029 (16,196) 17,833 Goodwill amortisation (3,880) (1,472) (5,352) Exceptional goodwill impairment 3 (5,658) (10,378) (16,036) Exceptional fixed asset impairment 4 - (7,938) (7,938) Share compensation 5 (1,570) - (1,570) --------------- --------------- --------------- Operating profit/(loss) 1, 2 22,921 (35,984) (13,063) --------------- --------------- --------------- Net interest payable 6 (12,638) Net financing currency exchange gain 7 165 --------------- (12,473) --------------- Loss on ordinary activities before taxation (25,536) Taxation on loss on ordinary activities 8 (3,508) --------------- Loss on ordinary activities after taxation (29,044) Dividends (1,999) --------------- Deficit for the year (31,043) ========= Adjusted earnings per share Basic 9 2.28p Diluted 9 2.25p Loss per share Basic 9 (39.31)p Diluted 9 (39.31)p Dividend per share 2.70p Consolidated Profit and Loss Account for the year ended 31 May 2001 Excluding Compound Compound semi-conductors semi-conductors 2001 2001 2001 £000 £000 £000 note Sales 1, 2 286,201 11,233 297,434 ========= ========= ========= Operating profit/(loss) before goodwill amortisation and impairment, tangible fixed asset impairment and share compensation 1, 2 27,154 (14,930) 12,224 Goodwill amortisation (3,368) (1,516) (4,884) Exceptional goodwill impairment 3 - (14,078) (14,078) Exceptional tangible fixed asset impairment 4 - - - Share compensation 5 (2,293) - (2,293) --------------- --------------- --------------- Operating profit/(loss) 1, 2 21,493 (30,524) (9,031) --------------- --------------- --------------- Net interest payable 6 (12,531) Net financing currency exchange gain 7 335 --------------- (12,196) --------------- Loss on ordinary activities before taxation (21,227) Taxation on loss on ordinary activities 8 (1,564) --------------- Loss on ordinary activities after taxation (22,791) Dividends (1,994) --------------- Deficit for the year (24,785) ========= Adjusted earnings per share Basic 9 (2.56)p Diluted 9 (2.56)p Loss per share Basic 9 (31.24)p Diluted 9 (31.24)p Dividend per share 2.70p Statement of Total Recognised Gains and Losses for the year ended 31 May 2002 2002 2001 £000 £000 Loss on ordinary activities after taxation (29,044) (22,791) Currency exchange movement arising on consolidation 1,422 3,047 Currency exchange movement on loan 2,496 (5,932) --------------- --------------- Total recognised gains and losses (25,126) (25,676) ========= ========= Consolidated Balance Sheet at 31 May 2002 2002 2001 £000 £000 Fixed assets Intangible assets 34,720 54,673 Tangible assets 108,589 126,302 --------------- --------------- 143,309 180,975 --------------- --------------- Current assets Stocks 43,735 51,274 Debtors 55,435 66,771 Cash 9,083 5,589 --------------- --------------- 108,253 123,634 Creditors: amounts falling due within one year 39,774 55,524 --------------- --------------- Net current assets 68,479 68,110 --------------- --------------- Total assets less current liabilities 211,788 249,085 Creditors: amounts falling due after one year 93,769 117,083 Provision for deferred tax 408 - Deferred income 12,415 1,515 --------------- --------------- Net assets 105,196 130,487 ========= ========= Capital and reserves Called up share capital 7,409 7,365 Share premium account 134,151 132,932 Shares to be issued 6,682 7,616 Revaluation reserve 106 106 Profit and loss account (43,152) (17,532) --------------- --------------- Equity shareholders' funds 105,196 130,487 ========= ========= Consolidated Cash Flow Statement for the year ended 31 May 2002 2002 2001 note £000 £000 Net cash flow from operating activities A 64,218 7,522 --------------- --------------- Returns on investment and servicing of finance Interest received 358 1,031 Interest paid (11,629) (12,716) Interest element of finance lease payments - (4) --------------- --------------- Net cash flow from returns on investment and servicing of finance (11,271) (11,689) --------------- --------------- Tax paid (2,345) (3,091) --------------- --------------- Capital expenditure Purchase of tangible fixed assets (11,369) (40,982) Sale of tangible fixed assets 1,312 171 Government grants received 1,034 480 --------------- --------------- Net cash flow from capital expenditure (9,023) (40,331) --------------- --------------- Acquisitions Acquisition costs - (118) Cash acquired with subsidiary - 14 --------------- --------------- Net cash flow from acquisitions - (104) --------------- --------------- Equity dividends paid (1,992) (1,964) --------------- --------------- Net cash flow before financing 39,587 (49,657) --------------- --------------- Financing Issue of shares 264 1,844 Capital element of finance lease payments - (147) Loans repaid (21,982) (567) --------------- --------------- Net cash flow from financing (21,718) 1,130 --------------- --------------- Increase/(decrease) in cash B 17,869 (48,527) ========= ========= Notes to the Consolidated Cash Flow Statement for the year ended 31 May 2002 A Reconciliation of operating loss to net cash flow from operating activities 2002 2001 £000 £000 Operating loss (13,063) (9,031) Goodwill amortisation 5,352 4,884 Exceptional goodwill impairment 16,036 14,078 Share compensation 1,570 2,293 Depreciation 20,433 16,759 Exceptional tangible fixed asset impairment 7,938 - Loss/(profit) on disposal of tangible fixed assets 191 (70) Deferred licence fee income received 10,000 - Government grants released (134) (167) Movement in stocks 7,445 (10,642) Movement in debtors 12,115 (4,307) Movement in creditors (3,665) (6,275) --------------- --------------- Net cash flow from operating activities 64,218 7,522 ========= ========= B Reconciliation of net cash flow to movement in net debt 2002 2001 £000 £000 Increase/(decrease) in cash 17,869 (48,527) Cash flow from debt 21,982 567 Cash flow from finance leases - 147 --------------- --------------- Change in net debt from cash flows 39,851 (47,813) Loans acquired with subsidiary - (300) Non-cash movement (1,367) (842) Currency exchange movement 2,754 (5,662) --------------- --------------- Movement in net debt 41,238 (54,617) Opening net debt (125,924) (71,307) --------------- --------------- Closing net debt (84,686) (125,924) ========= ========= Notes to the Consolidated Cash Flow Statement for the year ended 31 May 2002 C Analysis of movement in net debt At Currency At 31 May 1 June Cash Non-cash exchange 2002 2001 flow movement movement £000 £000 £000 £000 £000 Cash 5,589 9,083 Overdraft (14,202) - ------------ ----------- Net (overdraft)/cash (8,613) 17,869 - (173) 9,083 ------------ ----------- Loans due within one year (228) - Loans due after one year (117,083) (93,769) ------------ ----------- Loans (117,311) 21,982 (1,367) 2,927 (93,769) ------------ --------- ------------ ------------ ----------- Net debt (125,924) 39,851 (1,367) 2,754 (84,686) ======= ===== ====== ===== ====== Reconciliation of Shareholders' Funds for the year ended 31 May 2002 2002 2001 £000 £000 Loss on ordinary activities after taxation (29,044) (22,791) Dividends (1,999) (1,994) --------------- --------------- Deficit for the year (31,043) (24,785) Contribution to QUEST (461) - Currency exchange movement arising on consolidation 1,422 3,047 Currency exchange movement on loan 2,496 (5,932) Issue of shares 3,229 4,992 Shares to be issued - shares issued (2,504) - Shares to be issued - acquisition contingent consideration - 5,323 Shares to be issued - share compensation 1,570 2,293 --------------- --------------- Movement in shareholders' funds (25,291) (15,062) Opening shareholders' funds 130,487 145,549 --------------- --------------- Closing shareholders' funds 105,196 130,487 ========= ========= Notes to the Financial Statements for the year ended 31 May 2002 1 Geographical segment analysis by origin 2002 2001 £000 £000 Sales United Kingdom 108,951 114,030 Finland 68,936 54,223 United States of America 98,871 118,946 Australia 14,962 17,774 China 12,857 12,448 Inter segment (24,030) (19,987) --------------- --------------- 280,547 297,434 ========= ========= Operating profit/(loss) before goodwill amortisation and impairment, tangible fixed asset impairment and share compensation United Kingdom 2,862 1,961 Finland 12,316 3,915 United States of America 2,482 6,209 Australia 793 2,315 China 4,332 1,649 Central costs (4,952) (3,825) --------------- --------------- 17,833 12,224 ========= ========= Operating profit/(loss) United Kingdom 2,862 1,961 Finland 10,424 2,147 United States of America (26,522) (13,278) Australia 793 2,315 China 4,332 1,649 Central costs (4,952) (3,825) --------------- --------------- (13,063) (9,031) ========= ========= The operating loss in the United States of America is after charging £16,036,000 (2001 £14,078,000) of exceptional goodwill impairment and £7,938,000 (2001 £nil) of exceptional tangible fixed asset impairment. Notes to the Financial Statements for the year ended 31 May 2002 2 Business segment analysis 2002 2001 £000 £000 Sales Wireless infrastructure 188,589 207,777 Cellular handset products 48,845 42,174 Electronic warfare 26,977 25,728 Broadband access 12,544 11,273 Inter segment (3,889) (751) --------------- --------------- Excluding compound semiconductors 273,066 286,201 Compound semiconductors 7,481 11,233 --------------- --------------- 280,547 297,434 ========= ========= Operating profit/(loss) before goodwill amortisation and impairment, tangible fixed asset impairment and share compensation Wireless infrastructure 31,777 27,212 Cellular handset products 11,570 6,979 Electronic warfare (1,336) (443) Broadband access (3,030) (2,769) Central costs (4,952) (3,825) --------------- --------------- Excluding compound semiconductors 34,029 27,154 Compound semiconductors (16,196) (14,930) --------------- --------------- 17,833 12,224 ========= ========= Operating profit/(loss) Wireless infrastructure 31,777 27,212 Cellular handset products 9,678 5,211 Electronic warfare (1,583) (698) Broadband access (11,999) (6,407) Central costs (4,952) (3,825) --------------- --------------- Excluding compound semiconductors 22,921 21,493 Compound semiconductors (35,984) (30,524) --------------- --------------- (13,063) (9,031) ========= ========= The operating loss of compound semiconductors is stated after charging £10,378,000 (2001 £14,078,000) of exceptional goodwill impairment and £7,938,000 (2001 £nil) of exceptional tangible fixed asset impairment. The operating loss of broadband access is stated after charging £5,658,000 (2001 £nil) of exceptional goodwill impairment. Notes to the Financial Statements for the year ended 31 May 2002 3 Exceptional goodwill impairment 2002 2001 £000 £000 Exceptional goodwill impairment 16,036 14,078 ========= ========= £10,378,000 (2001 £14,078,000) of the exceptional goodwill impairment arose in respect of the compound semiconductor operation at Filtronic Solid State and £5,658,000 (2001 £nil) in respect of Filtronic Sigtek, Inc., which forms part of the broadband access business segment. 4 Exceptional tangible fixed asset impairment 2002 2001 £000 £000 Exceptional tangible fixed asset impairment 7,938 - ========= ========= The exceptional tangible fixed asset impairment arose in respect of the compound semiconductor operation at Filtronic Solid State. 5 Share compensation 2002 2001 £000 £000 Share compensation 1,570 2,293 ========= ========= As a result of the acquisition of Filtronic Sigtek, Inc. on 22 August 2000, a maximum cumulative charge of £4,958,000, comprising the issue of a maximum of 421,226 ordinary shares of 10p each in Filtronic plc, could arise over the four year period following the acquisition. This share compensation is contingent on Filtronic Sigtek, Inc. maintaining the number and quality of its engineers over that period. The cumulative charge at 31 May 2002 was £3,863,000 (2001 £2,293,000). Notes to the Financial Statements for the year ended 31 May 2002 6 Net interest payable 2002 2001 £000 £000 Interest receivable Interest on bank deposits 358 1,031 --------------- --------------- Interest payable Interest on bank borrowings 460 603 Interest on other loans 11,169 12,113 Finance lease interest - 4 Debt issue costs - amortisation 824 842 Debt issue costs - loss on repayment of debt 543 - --------------- --------------- 12,996 13,562 --------------- --------------- Net interest payable 12,638 12,531 ========= ========= 7 Net financing currency exchange gain 2002 2001 £000 £000 Currency exchange (loss)/gain on cash balances (224) 335 Currency exchange gain on loan 389 - --------------- --------------- 165 335 ========= ========= 8 Taxation on loss on ordinary activities 2002 2001 £000 £000 Current tax United Kingdom 162 130 Overseas 2,938 1,434 --------------- --------------- 3,100 1,564 --------------- --------------- Deferred tax Overseas origination and reversal of timing differences 408 - --------------- --------------- 3,508 1,564 ========= ========= The United Kingdom current tax charge arises from taxes paid overseas on income paid to the United Kingdom which cannot be fully relieved against United Kingdom taxes. The overseas tax charge for the year arises primarily from the group's operations in Finland where taxable profits cannot be relieved by losses available in the United Kingdom and the United States of America. Notes to the Financial Statements for the year ended 31 May 2002 9 Loss per share 2002 2001 Adjusted basic earnings per share 2.28p (2.56)p Effect of adjusted items net of taxation (41.59)p (28.68)p --------------- --------------- Basic loss per share (39.31)p (31.24)p ========= ========= Adjusted diluted earnings per share 2.25p (2.56)p Effect of adjusted items net of taxation (41.56)p (28.68)p --------------- --------------- Diluted loss per share (39.31)p (31.24)p ========= ========= £000 £000 Adjusted profit/(loss) 1,687 (1,871) Goodwill amortisation (5,352) (4,884) Exceptional goodwill impairment (16,036) (14,078) Exceptional tangible fixed asset impairment (7,938) - Share compensation (1,570) (2,293) Net financing currency exchange gain 165 335 --------------- --------------- Loss on ordinary activities after taxation (29,044) (22,791) ========= ========= Weighted average number of shares in issue 73,881,832 72,962,735 Dilution effect of share options 243,482 - Dilution effect of contingently issuable shares 708,543 - --------------- --------------- Diluted weighted average number of shares 74,833,857 72,962,735 ========= ========= The adjusted loss per share figures have been provided in order that the effects of the adjusted items on reported earnings per share can be fully appreciated. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Filtronic (FTC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today