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News Article

RF Micro Devices, Inc.Announces Third Quarter Results





Greensboro, NC. RF Micro Devices, Inc. (Nasdaq: RFMD), a leading provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, today reported financial results for its third quarter of fiscal 2000.

Revenues for the quarter ended December 31, 1999 were approximately $73.2 million, an increase of 76.4% over revenues of $41.5 million for the corresponding quarter of fiscal 1999 and an increase of 6.2% from revenues of $68.9 million for the quarter ended September 30, 1999. An increase in orders during the quarter, particularly for CDMA cellular and PCS power amplifiers, resulted in a book to bill ratio above one.

Gross profit rose to $35.6 million, versus $14.6 million for the corresponding quarter of fiscal 1999, an increase of 144%. Compared sequentially, gross profit rose $3.5 million versus $32.1 million for the quarter ended September 30, 1999, an increase of 10.9%. The gross profit margin for the quarter increased sequentially from the preceding quarter by 210 basis points to 48.7% from 46.6%. An increase in the percentage of revenues attributable to lower cost output from the Company s GaAs HBT wafer fab facility was the primary reason for the gross margin expansion.
Net income for the quarter was $12.6 million, or $0.15 per diluted share, compared to net income of $5.6 million, or $0.08 per diluted share, for the third quarter of fiscal 1999, and net income of $12.5 million, or $0.15 per diluted share, for the second quarter of fiscal 2000. Diluted shares outstanding for the three months ended December 31, 1999 were 86.1 million compared to 85.4 million for the three months ended September 30, 1999.

Comments from Management

David Norbury, President and Chief Executive Officer, stated, "This was another good quarter for the Company. We had continued revenue growth and margin expansion. Revenue, however, could have been several million dollars higher were it not for component shortages from other vendors outside our control. This condition seems to be improving, but we will continue to monitor it this quarter. Orders for our relatively new GaAs HBT CDMA power amplifier products accounted for a surprisingly strong 23% of total orders. In addition, we introduced our first Silicon Germanium standard product during the quarter, the RF2461, a CDMA cellular receiver integrated front-end.

This device has a unique combination of low noise figure, high input intercept point and low DC current drain in a very small package. Further, our penetration of the Japanese market continued with new handset models such as Sanyo s Sprint PCS CDMA phone, which is now in production.
"Looking forward, we are encouraged by a number of factors. Based on the most recent forecast from our largest customer, we currently expect that our business with them should grow significantly faster over the next twelve months than it has over the past twelve months.
In addition, over the next several quarters we anticipate that at least two other large customers will for the first time begin high volume handset production using our products. Also, we believe that our aggressive increases in design staffing and GaAs HBT fab capacity have put RFMD in an excellent position to address the growing concern of handset OEMs over component shortages. Our four remote design centers are already helping us capture business that we otherwise couldn t address. And our first fab is continuing to increase its output and is now operating at approximately half of its ultimate capacity. The construction of our second, much larger fab, is currently on schedule, and assuming this trend continues, we should be able to begin producing wafers from this facility at the end of this calendar year. Overall, strong third quarter orders resulted in a book to bill ratio at quarter end above one, which gives us excellent visibility into our fourth quarter. We see opportunities today for revenue growth in our fourth quarter and we intend to pursue those vigorously throughout the rest of this calendar year. In particular,
we believe that we are positioned to substantially improve our market share in CDMA, which is projected by industry analysts to be the highest growth air interface standard for the next few years."

RF Micro Devices, Inc., an ISO 9001 certified manufacturer, designs, develops, manufactures and markets proprietary RFICs for wireless communications applications such as cellular and PCS phones, cordless phones, wireless LANs, wireless local loop handsets, industrial radios, wireless security systems and remote meter readers. The Company offers a broad array of products -- including amplifiers, mixers, modulators/demodulators, and single-chip receivers, transmitters and transceivers -- that represent a substantial majority of the RFICs required in wireless subscriber equipment. The Company s strategy is to focus on wireless markets by offering a broad range of standard and custom designed RFICs in order to position itself as a "one-stop" solution for its customers RFIC needs. RF Micro Devices, Inc. is traded on the Nasdaq National Market under the symbol RFMD.

This press release contains forward-looking statements that relate to the Company s plans, objectives, estimates and goals. Words such as "expects," "anticipates," "intends," "plans," "believes" and "estimates," and variations of such words and similar expressions, identify such forward-looking statements. The Company s business is subject to numerous risks and uncertainties, including probable variability in the Company s quarterly operating results, manufacturing capacity constraints, risks associated with the Company s operation of its current wafer fabrication facility and the construction of an additional facility, dependence on a limited number of customers, variability in production yields, the Company s ability to manage rapid growth, dependence on third parties and risks associated with doing business in Asia and other areas of the world. These and other risks and uncertainties, which are described in more detail in the Company s Annual Report on Form 10-K filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

CONTACT:
RF Micro Devices, Inc., Greensboro
Dean Priddy,
Tel: 336/664-1233

RF Micro Devices, Inc., Greensboro
Dean Priddy,
Tel: 336/664-1233
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