The company also completed expense-reduction actions that are expected to save about $4 million per quarter.

First Fiscal Quarter Financial Results:

Conexant presents financial results based on generally accepted accounting principles (GAAP) as well as select non-GAAP financial measures intended to reflect its core results of operations. The company believes these core financial measures provide investors with additional insight into its underlying operating results. Core financial measures exclude certain non-cash and other non-core items as fully described in the GAAP to non-GAAP reconciliation in the accompanying financial data.

Core gross margins were 54.1% of revenues. Core operating expenses were $43.5 million, and core operating income was $3.3 million. Core net loss from continuing operations was $2.9 million, or $0.06 per share.

On a GAAP basis, gross margins were 53.4% of revenues. GAAP operating expenses were $46.5 million. GAAP operating loss was $0.4 million, and GAAP net loss from continuing operations was $10.5 million, or $0.21 per share.

The company ended the quarter with $110.3 million in cash and cash equivalents, a sequential increase of about $4.4 million.

Expense-reduction Actions:

The company recently completed actions that resulted in the elimination of about 140 positions worldwide, which represented a total headcount reduction of more than 11%.

In total, the company expects to save about $4 million per quarter when it realizes the full benefit of the headcount reductions in the June-ending third quarter of fiscal 2009.

Business Perspective:

“In an environment where we continued to see customer push-outs and cancellations, I’m pleased to report that we met the updated guidance we provided in December,” said Scott Mercer, Conexant’s chairman and chief executive officer. “Revenues of $86.5 million were consistent with the range we anticipated, and core gross margins of 54.1 percent of revenues were at the high end of our revised expectations. Core operating income of $3.3 million and a core net loss from continuing operations of $2.9 million, or $0.06 per share, were also within the ranges we expected.

“The worldwide economic crisis that has impacted the financial performance of many of our peers, customers, and suppliers has dramatically affected us as well,” Mercer said. “In response to our declining revenues and deteriorating financial performance, we recently completed cost-reduction actions that included a significant headcount reduction. This reduction will not affect any of our major product-development programs. By keeping our teams and investments essentially intact, we put ourselves in a position to gain market share when the economic recovery eventually begins. Until then, we will continue to focus on contributing to the success of our customers by delivering innovative products on schedule.”

Business Outlook:

The company expects revenues for the second quarter of fiscal 2009 to be in a range between $68 million and $74 million, or 14 to 21% lower sequentially, as a result of the effects of the overall economic environment. Core gross margins for the second fiscal quarter are expected to be between 52 and 53% of revenues. The company expects core operating expenses to be about $42 million. As a result, the company anticipates that the second fiscal quarter core operating loss will be in a range between $3 million and $7 million. Core net loss is expected to be between $0.18 and $0.26 per share.