Dialog hit by lower wireless revenues: News from Dialog Semiconductor

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Dialog Semiconductor has reported sales of Eur 18.6 million for the first quarter of 2005 (compared with Eur 23 million for Q1 2004). Sales from products for automotive/industrial increased by 16% compared with Q1 2004; however this was not sufficient to offset the lower wireless revenue for Q1 2005 which were down by Eur 5.3 million compared with Q1 2004. The company's operational costs in Q1 2005 have been reduced by 8.2% compared with Q1 2004, and by 13.8% compared with Q4 2004.

This optimisation of costs together with tight control of the company's working capital cost and capital expenditure resulted in a positive free cash flow.

Key developments during the quarter were strong growth in demand for LCD drivers, including the start of volume shipments to Sharp for leading mobile handset manufacturers; and the success in developing a broader customer base for the company's products.

These factors place Dialog Semiconductor in a good position to achieve single-digit percentage growth for the full year 2005.

Roland Pudelko, CEO and President said: 'Q1 2005 revenues have decreased from levels achieved in Q1 2004 as a major customer consolidated its inventory holdings given its challenging market conditions'.

'Revenues from other customers grew more than 70% compared with Q1 2004'.

'The most encouraging development for Dialog Semiconductor during the first quarter of 2005 is our success in LCD display drivers'.

'The forecast consumer demand for handsets with more sophisticated multiple displays is being reflected in the interest we are seeing in our ICs'.

'As both 2.5G and 3G service providers push improved entertainment, information and gaming capabilities on handsets, we expect to see a continuation of the strong demand in display driver ICs'.

Pudelko added: 'Dialog Semiconductor's revenue continues to be driven by demand for integrated power management and audio ICs'.

'However display driver ICs and system-on-chip (SoC) solutions for automotive are now providing a much higher proportion of our revenues'.

'This product portfolio has allowed us to widen our customer base: we can report five customers each representing 10% or more of our Q1 revenue'.

'Of these, two are among the top 10 global mobile handset manufacturers'.

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