Tundra Reports Revenue Growth of 16%, Earnings up 34%

Tundra Semiconductor Corporation (TSX:TUN), the leader in System Interconnect, reported financial results for the third quarter of fiscal year 2007, which ended January 28, 2007.

  • Q3 Revenue: $21.7 million
  • Q3 Pro forma earnings: $3.0 million
  • Q3 Pro forma diluted earnings per share: $0.15
  • Q3 GAAP Results: earnings of $1.3 million or $0.06 per diluted share

Revenue for the third quarter of fiscal year 2007 was $21.7 million, a 16% increase over the third quarter in fiscal year 2006, and a 1% decrease from the second quarter of fiscal year 2007. Pro forma earnings of $3.0 million represent a 34% increase compared to the third quarter of fiscal year 2006, and a 26% increase over the second quarter of fiscal year 2007. Pro forma diluted earnings per share of $0.15 were at the top of range of the Company’s per share earnings guidance for the quarter of $0.11 to $0.15. GAAP earnings for the quarter were $1.3 million or $0.06 per diluted share, down from earnings of $1.5 million or $0.08 in the third quarter fiscal year 2006, up from a loss of $0.2 million or $0.01 per diluted share in the second quarter in fiscal year 2007.

“Tundra delivered exceptional profit growth in the third quarter and revenue continued to gain on a year-over-year basis. Tundra overcame continued volatility in communications infrastructure, one of the key markets that the Company serves. Tundra’s core business remains strong with multiple products in the PCI and HyperTransport(TM) product lines moving into production in the quarter and good momentum behind the roll out of new products,” said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. “Today we announced another significant RapidIO(R) achievement and another industry first. Tundra has entered into a partnership with Enea, a leading provider of network software and services, to deliver the first RapidIO-based system level software for the wireless communications infrastructure market. Tundra continues to deliver innovative solutions in response to growing demands from the RapidIO ecosystem.”

“Additionally, with engineering samples now ready to ship to lead customers, we are on track for the upcoming launch of our first PCI Express Bridge,” added Daniel Hoste.

Tundra’s VME bridge business remained strong in the quarter. Tundra’s VME customers continue to adopt RapidIO switches to their new VME product designs, as the high performance serial interconnect protocol in the core of their systems. The steady penetration of RapidIO into the existing VME market is increasing the addressable embedded computing market for Tundra’s products.

Management offers the following outlook for the fourth quarter of fiscal year 2007:

  • Q4 Revenue is expected to be in the range of $20.0 million to $23.0 million
  • Q4 Pro forma diluted earnings per share is expected to be in the range of $0.11 to $0.15.

Q3 FY2007 Highlights

Product Announcements:

  • Tundra recently announced a partnership with Enea, based in Sweden, to produce system level software which is RapidIO ready, signaling further demand and adoption for RapidIO and Tundra products in the wireless infrastructure market.
  • Silicon Logic Engineering, Inc. (SLE), Tundra’s Design Services Division, announced the development of an Interlaken Interconnect Protocol Intellectual Property (IP) Core. Interlaken is a scalable, high speed chip-to-chip interconnect protocol developed jointly by Cisco Systems, Inc. and Cortina Systems. Designed and tested by SLE to be easily integrated into many ASIC and FPGA technologies, this IP Core is designed to work with off-the-shelf components from most leading technology vendors, and will be made commercially available by SLE later this quarter. The IP Core enables silicon suppliers to scale their components to 40Gbps and beyond, simplify designs, reduce development costs and reduce time-to-market.
  • In January, the Tundra Tsi110(TM) Host Bridge for PowerPC(R) began sampling. Further broadening Tundra’s Host Bridge portfolio, this Bridge targets high volume applications such as, home gateways, video-over-IP, and video surveillance, where cost and power consumption are of primary concern.
  • In January, the Tundra Tsi148(TM) VME Bridge was reduced in price. The Tsi148 consumes half the power and 68% of the board footprint of the industry’s leading VME Bridge, Tundra’s Universe(TM) II.
  • In November, Tundra launched a new high quality PCI-to-PCI Bridge, the Tsi340(TM) which is expected to be in general sampling later this month. The Bridge targets a wide range of applications such as, communications and networking equipment, video capture cards, embedded video recorders, multi-function printers, and network interface cards.

Corporate Announcements:

  • Tundra transferred the business and operations of RIOLAB(TM), the world’s first RapidIO interoperability testing facility, to an independent third party, Fabric Embedded Tools, Inc., in February. RIOLAB was established by Tundra a year ago as a facility designed to give commercial semiconductor vendors, FPGA and ASIC developers, and OEMs, the ability to validate interoperability of their products and test for specification compliance. With both the establishment and transfer of RIOLAB, Tundra continues to demonstrate leadership within the RapidIO ecosystem.
  • In January, Daniel Hoste presented the key note address at the VME industry’s annual event, Bus and Boards and said, “RapidIO technology provides the optimal performance and reliability for next generation critical embedded systems such as, medical imaging, military and aerospace applications. It is therefore, the serial interconnect of choice to complement VME-based designs.”
  • Terry Nickerson, former Chief Financial Officer of ATI, joined the Tundra board of directors in November 2006 bringing notable financial and business background and skills to the group.

About Tundra
Tundra Semiconductor Corporation (TSX:TUN) supplies the world’s leading communications, computing and storage companies with smart System Interconnect products and design services backed by world-class customer service and technical support. Tundra’s track record of product leadership includes over a decade of bridges and switches enabling key industry standards: RapidIO(R), PCI, PCI-X, PCI Express(R), PowerPC(R), VME, HyperTransport(TM), Interlaken, and SPI4.2. Tundra’s products deliver high functional quality and simplified board design and layout, with specific focus on system level signal integrity. Tundra’s design services division, Silicon Logic Engineering, Inc., offers industry-leading ASIC and FPGA design services, semiconductor intellectual property and product development consulting. Tundra’s smart technology connects critical components in high performance embedded systems around the world.

TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor Corporation in Canada, European Union and People’s Republic of China (registration is pending in the United States). TUNDRA is a registered trademark of Tundra Semiconductor Corporation (Canada, U.S. and U.K.). Universe II, Tsi340, Tsi110, Tsi148 and Design.Connect.Go. are trademarks of Tundra Semiconductor Corporation. RapidIO is a trademark of the RapidIO Trade Association, Inc. PowerPC is a trademark of International Business Machines Corporation, used under license there from.