IQE sees sales and losses increase (update)
IQE s second quarter operating loss (before goodwill amortization, operating exceptional items and one off charges) was £5.493 million, compared with a loss of £4.98 million in the previous quarter. The first-half operating loss was £10.38 million, compared with a profit of £2.55 million in the same period last year.
The company has undertaken a "comprehensive strategic review" of its business and says that it will place renewed emphasis on areas where it sees the best prospects for growth. These include wireless, lighting, optical storage and strained silicon markets.
"Notwithstanding the weak industry outlook, we continue to make significant product progress, particularly with regard to our leading position with strained silicon, which is quickly becoming recognized as the key material for next generation microprocessors," said Drew Nelson, IQE’s president and CEO. "We continue to believe strongly in the outsource model and the group’s positioning, and that we will be well placed when demand returns to the technology markets."
As part of the review, significant cost control/reduction actions have been taken. This includes around 60 further redundancies during the current third quarter, reducing IQE s total workforce to 310.
IQE recorded a write-down of goodwill of £33.4 m ($50.9 million), an asset impairment charge of £7.97 m ($12.15 m) and provisions against predominately slow moving inventory of an additional £4.36 m ($6.65 m). The goodwill write-down is largely related to the acquisition of Wafer Technology in 2000, while the £7.97 m charge relates to four MOVPE machines and associated infrastructure at the company s Bethlehem, PA facility. IQE sees "no forecast activity" for this equipment through 2003, given significant capacity in Cardiff, UK.
On August 23, IQE announces changes to its Directorate. Richard Clarke (Group CFO) and Scott Massie (President of IQE Inc) have resigned as directors of IQE plc with effect from 31 August 2002 and will leave IQE. Tim Hawkes, who joined IQE in March 2002, has been appointed acting CFO with immediate effect, and Howard Williams, who has been with IQE since 1988, has been appointed acting General Manager of IQE Inc.
