"New" Conexant to appear within 45 days

June 2, 2008 - US semiconductor firm Conexant plans to execute a previously-approved reverse stock split on June 27 of this year and sell off its Broadband Media Processing product lines to NXP Semiconductors within 45 days from today.

The new Conexant will consist of the two semiconductor business units of Imaging and PC Media, focused on delivering products targeted at high-volume, high-growth applications that include imaging, audio, PC video and video surveillance; and Broadband Access, which will deliver DSL products for client-side and central-office applications, and for next-generation technologies that include VDSL2 and passive optical networking. The decision to execute a reverse stock split was reportedly taken to increase the per-share trading price of the firm's common stock, making it more attractive to potential investors.

“We are focused on strengthening our market-leading positions by accelerating investments in the areas that offer the best opportunities for profitable growth in the future,” said Scott Mercer, CEO of Conexant. “For the next fiscal year, we expect to deliver moderate revenue growth. We also anticipate that we will maintain core gross margins of approximately 50 percent of revenues and deliver additional savings in core operating expenses, which should enable us to generate cash consistently on an operating basis.”

The company has also projected that revenues for the third quarter of its fiscal 2008, ending June 30, will reach between US$ 167mn and US$ 171mn, while operating profit will range between breakeven and US$ 5mn. Revenues for the fourth quarter of its fiscal 2008, which will exclude results from its Broadband Media Processing product lines, will range between US$ 115mn and US$ 120mn, while operating profit will be between US$ 12mn and US$ 14mn.