Melexis Q1 2009 results

Intermediate declaration by the Board of Directors
Ieper, Belgium – April 23rd, 2009, 07.00 hrs CET

Revenues for the first quarter were 22.5 million EUR, a decrease of 57% compared to the same quarter of the previous year and a decrease of 33% versus the previous quarter, in line with our expectations as published on February 12th, 2009.
Gross margin was 7.8 million EUR, a decrease of 64% compared to the same quarter last year. 
The operating result was at -2.6 million EUR, compared to 10 million EUR in the same quarter last year.
Consistent with the valuation technique used at year end 2008, the company has recorded an additional financial loss of 627.000 EUR on the fair value of the CDO portfolio.
Net profit was at -3.6 million EUR, -8 cent per share, down from 20 cent per share in the first quarter of 2008.
R&D expenses were 29% of sales. Selling increased to 5.5% of sales and G&A was at 12% of sales. Melexis is on track with its cost reduction program and managed to save 1.2 million EUR on operating costs compared to the previous quarter. 
Melexis purchased 22.230 own shares during the quarter at an average price of 4,98 EUR. As a result, the total amount of purchased shares was 1.725.943 at the end of the quarter.

Melexis expects a quarter-on-quarter increase of sales of around 10% in Q2 and of minimum 25% in Q3 compared to Q2. The last quarter of this year could rebounce to a more normal level of 40 to 45 million EUR generating an EBIT in the range of 6 to 8 million EUR. 
A quarterly sales level of minimum 29 million EUR will result in a positive EBIT margin. 
Breach of a covenant in the next quarter could potentially lead to increased borrowing costs for a portion of outstanding debt. 

Rudi De Winter, CEO of Melexis comments: 
“The gross profit margin dropped to 34.5% due to lower utilization rates in our test facilities. This will return to low forties when production goes up to normal levels.”

Françoise Chombar, CEO of Melexis adds:
"The supply chain analysis Melexis has effected during the past 3 months on some of our major customers unveiled how some pipelines were overfilled, sometimes for no reason", Françoise Chombar, CEO comments. "The past few years, there has been a trend to push responsibility for any decision away from the OEMs down the supply chain, in defiance of the inventory accelerator theory which has proven that the further away from the end customer decisions are taken, the worse they become. It will be a major challenge for the semiconductor, electronics and automotive industries alike to reconcile the risk of alleged excessive inventories with the need for security of supply. This can be achieved by working together to provide a balanced transparency down- as well as upstream. Memories of economies as of people tend to be short-lived. Melexis will hence continue to inform and recommend its stakeholders, mainly its customers, to not repeat the same mistakes. Indeed, now inventories start to get bottomed while confidence is still too low, customers risk to wait too long to place orders which may well result in an opposite effect, namely that of an overheated supply chain.”
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