Excluding intellectual property and transition services segment revenue, fiscal second quarter 2009 revenue from ongoing customer segments was $175.8 million, down 17% compared with $212.1 million in the prior quarter and down 26%, compared with $237.4 million reported in the fiscal second quarter 2008.

IRC reported a fiscal second quarter 2009 net loss of $186.1 million, or $2.56 per share, compared with a net loss of $4.5 million or $0.06 per share in the prior quarter, and net income of $313 thousand or $0.00 per share in the fiscal second quarter of 2008.

The results for the fiscal second quarter 2009 include a $48.9 million asset impairment charge for the company’s Newport, Wales fabrication facility, a $10.3 million investment impairment charge primarily related to long-term investments to reflect the decline in fair market value of the company’s mortgage- and asset-backed securities, and a $102.5 million tax provision charge related to reserves that have been recorded against the company’s tax assets.

Gross margin, including Intellectual Property and Transition Services segments, was 33.9%. Excluding Intellectual Property and Transition Services segments, fiscal second quarter 2009 ongoing customer segments gross margin was 36.3%, flat compared with the prior quarter. The ongoing customer segments gross margin was up 170 basis points compared with ongoing customer segments gross margin of 34.6% in the second fiscal quarter 2008.

R&D expenses for the fiscal second quarter 2009 were $24.9 million, or about flat, compared with $24.7 million in the prior quarter.

Selling and Administrative expenses for the fiscal second quarter 2009 were $61.6 million, down from $65.3 million in the prior quarter. Selling and Administrative expenses for the fiscal second quarter 2009 included around $17.6 million in proxy contest costs and external filing and financial report preparation assistance.

Cash, cash equivalents and marketable investments totaled $700.0 million at the end of the fiscal second quarter 2009. This includes restricted cash of $18.0 million. Net cash provided by operating activities for the fiscal second quarter 2009 was $9.4 million.

Cost Reduction Activities

As of the second fiscal quarter 2009, in view of deteriorating market demand, the company initiated a cost reduction effort to reduce headcount. The company expects a total reduction of about 850 jobs, or around 18 percent of the worldwide workforce for the 2009 fiscal year compared to the fiscal year ended June 30, 2008.

The reductions in headcount are expected to save about $33 million on an annualized basis when completed at the end of the 2009 fiscal year. The company expects to incur severance related costs for the 2009 fiscal year of about $10 million associated with these reductions.

Additionally, in conjunction with the previously announced manufacturing cost reduction plan, the company is consolidating its Newport, Wales fabrication facility, which is expected to conclude at the end of calendar 2009. This facility consolidation is expected to save around $8.0 million per year when completed.

Also, the company is planning to close its El Segundo, California fabrication facility and consolidate its production capacity to the company’s Temecula, California fabrication facility. The company expects to complete this by the end of calendar 2010. The closure of this facility is expected to save around $12.7 million per year when completed.

The company expects to incur costs of about $20 million over the course of the consolidation and closure of both fabrication facilities.

Third Quarter Outlook

“Due to continued poor visibility, we expect fiscal third quarter 2009 revenue from ongoing customer segments to range between $115 million and $150 million,” stated IRC president and chief executive officer Oleg Khaykin. “While the current business climate remains challenging, we are proactively taking steps to help manage the effects and I am pleased with the progress the team is making in restructuring the Company.