Melexis Q4 2008 results

Intermediate declaration by the Board of Directors

The statutory auditors BDO Atrio Bedrijfsrevisoren BCV, have confirmed that their audit procedures, which have been substantially completed, have not revealed any material adjustments which would have to be made to the accounting information included in this press release.

For the year 2008, revenues were 185.5 million EUR, a decrease of 9% compared to the previous year.
Currency fluctuations had a negative effect of 5%.
Gross margin was 76 million EUR, a decrease of 10.5% compared to the previous year.
The operating result was 29.6 million EUR, a decrease of 28% compared to last year.
Net profit was 22.5 million EUR, 39.5% less than the previous year.

Revenues in the 4th quarter of 2008 were 33.7 million EUR, 35% less than the 4th quarter of 2007.
Currency fluctuations had a positive effect of 2%.
Gross margin was 12.5 million EUR, a decrease of 42% compared to 2007.
The operating result was 137 k EUR, compared to 11.7 million EUR in the same quarter last year.
R&D expenses were at 22% of sales, while SG&A expenses rose to 13% of sales.
The other operating expense of 0.8 million EUR is the result of a restructuring provision. 
Net loss was 3 million EUR, compared to a net profit of 11.6 million EUR in the same quarter last year.

A different accounting valuation (IFRS39 lite) resulted in 4.25 million EUR impairment charges of the CDO-portfolio and the reclassification of the remaining 10.75 million EUR from current assets to non-current assets (total 15 million EUR CDO’s was purchased from a Belgian Bank in 2006). The old valuation until September 30, 2008 was based on market to market valuation and the difference was recorded in revaluation reserves. Up and until today the invested capital is still intact and the portfolio still fully generates its interests.
During the year 2008, the company purchased 1.245.335 additional shares at an average price of 9.78 EUR bringing the total number of own shares at 1.703.713.

Rudi De Winter, CEO of Melexis comments: 
“Despite the fact that all our customers run their operations with a tighter budget as before, no development programs have been cancelled. On the contrary, for example, the German automotive industry, being already the highest R&D investor in the country, intends to maintain and even increase their high level of investment in 2009 according to the VDA, the German automobile association (Verband der Automobilindustrie). There is no doubt that the innovation to make cars greener is fully launched and it fits perfectly with the Melexis product offering.”

Françoise Chombar, CEO of Melexis comments:
“Inventory corrections seem to last longer than the 2 months we anticipated, but we still believe in a strong rebound of demand, once inventory levels have bottomed out. Therefore we keep inventory at current levels or even allow them to slightly increase. There are already cautious signs of recovery. Amidst the turmoil, German car manufacturers recorded an increase in incoming orders of 16% in the last week of January, the first rise since September 2008, according to VDA.”

Outlook
Melexis expects sales for the first quarter of 2009 to further decrease with 20-35% compared to the previous quarter, mainly due to further re-active inventory reductions and the frantic search by many of our upstream customers for positive working capital changes.
For the full year Melexis expects revenues to be minimum 155 million EUR and EBIT to be minimum 22 million EUR. 
Current budget control and cost reduction programs will result in min. 8 million EUR cost savings in 2009. These savings relate to 4 million EUR savings in operational expenses and another 4 million EUR related to manufacturing operations. 
Furthermore, Melexis does not expect to violate any of its bank covenants in 2009.

Financial Calendar 
The BOD also agreed to organize an extraordinary shareholders’ meeting on April 20th,, 2009. The agenda will be published at a later date.
• Shareholders Meeting on April 20th 2009.
• Release of Q1-results on April 23rd 2009.
• Release of H1-results on July 30th 2009.
• Release of Q3-results on October 22nd 2009

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