Exar Corporation (Exar) has reported total net sales of $26.3 million for the third quarter of fiscal 2009, compared with the total net sales of $25.2 million in the year-ago quarter. It has also reported a net loss of $63.8 million, or $1.49 loss per share, for the third quarter of fiscal 2009, compared with a net loss of $11.7 million, or $0.24 loss per share, in the year-ago quarter.

On a GAAP basis, the gross margin for the third quarter of fiscal 2009 was 40.7% compared to 45.8% for the prior quarter and 30.0% in the third quarter of fiscal 2008. On a non-GAAP basis, the gross margin for the third quarter of fiscal 2009 was 45.3% compared to 49.3% for the prior quarter and 47.3% in the third quarter of fiscal 2008.

On a non-GAAP basis, the net loss was $0.8 million, or $0.02 net loss per share, for the third quarter of fiscal 2009, compared to net income of $1.9 million, or $0.04 diluted earnings per share, in the previous quarter, and a net loss of $1.8 million, or $0.04 net loss per share, in the third quarter of fiscal 2008.

The results for the third quarter of fiscal 2009 include estimated non-cash charges of $60.9 million, which is related to the full impairment of goodwill, partial impairment of intangible assets, and acceleration of depreciation on abandoned equipment of $1.2 million. The impairment charges resulted from the evaluation of the company’s carrying value of goodwill and other intangible assets.

During the third quarter of fiscal 2009, the company’s cash, cash equivalents and short-term marketable securities decreased by $3.3 million to $257.5 million primarily as a result of the cycle time required to adjust inventory to the drop off in sales.

We had a tough quarter in a very challenging semiconductor and macro-economic environment and our revenues declined approximately 20% quarter over quarter, said Pete Rodriguez, the company’s president and chief executive officer. As a result, we have accelerated our cost optimizing initiatives and have significantly reduced operating expenses while continuing to dedicate resources to develop winning products. As positive news, we have received the first commitment for our new digital power product for a set top box application. We will continue to do everything possible to focus on exemplary product development, while carefully managing our expenses, and we believe that we will come out of this economic downturn stronger in our core markets, remarked Rodriguez.

Business Outlook:

For the fourth quarter of fiscal 2009 ending March 29, 2009, the company projects that net sales will be between $21.0 million and $23.0 million. The gross margin is expected to be between 40% and 42% on a GAAP basis and between 43% and 45% on a non-GAAP basis. Operating expenses are expected to be between $16.1 million and $16.6 million on a GAAP basis and between $14.6 million and $15.1 million on a non-GAAP basis.