Agere sells opto business to TriQuint

23 October 2002 -- Agere Systems is selling a substantial portion of its optoelectronics business (excluding its cable TV transmission systems components business) to TriQuint Semiconductor for USD40m.

23 October 2002 -- Agere Systems has announced that it is selling a substantial portion of its optoelectronics business to TriQuint Semiconductor Inc for USD40m in cash. The sale is expected to close in early January 2003. The transaction excludes Agere's cable television transmission systems components business, for which it will continue to seek a buyer.

Also, for its fiscal Q4/2002 (to end-September) Agere's revenues were USD529m (down 5.5% on the June quarter and 12% on a year ago). Client Systems Group revenues were USD330m (flat on the June quarter but up on USD302m a year ago); Infrastructure Systems Group revenues were USD199m (down 13% on the June quarter and down from USD298m a year ago, mainly due to optoelectronics).

Net loss was USD885m (down from USD3.4bn a year ago but up from USD332m for the June quarter). The loss reflects the USD755m in restructuring and related charges, including charges associated with the decision announced on 14 August to exit the optoelectronics business.

During the September quarter, Agere also completed the sale of its wireless LAN equipment business to Proxim Inc for USD65m and its analogue line-card business to Legerity Inc for USD70m. Agere has consequently paid the remaining USD222m of debt related to the USD2.5bn bank credit facility it had assumed from Lucent Technologies at the time of Agere's initial public offering.

For fiscal 2002, revenues were USD2.2bn (down 46% on 2001's USD4.1bn). Net loss was USD1.8bn (down on 2001's USD4.6bn).

"We consistently lowered our cost and expense structure every quarter, significantly reduced our short-term debt and ended the year with more than USD900m in cash," said president and CEO John Dickson. "We also redefined the business to focus on advanced integrated circuits that access, move and store network information," he adds.

"Despite continuing market weakness, we believe that the actions we are taking will enable us to achieve profitability on a pro forma net income basis and generate positive cash flow in the fourth quarter of fiscal 2003," said Dickson.

As a result of the implementation of its restructuring program, Agere expects to further lower its cost and expense structure to break even at about USD450m in quarterly revenue in fiscal Q4/2003.

In the December quarter, Agere expects revenues to fall 8-10% sequentially, mainly due to loss of revenues from the two businesses sold in the September quarter.

Excluding revenues from the analogue line-card, wireless LAN equipment and optoelectronics businesses, Agere's revenues for fiscal 2002 would have been about USD1.8bn. On the same basis, it expects fiscal 2003 revenues for its ongoing integrated circuits business will be roughly flat with fiscal 2002. Including optoelectronics revenues until the closing of the transaction with TriQuint, Agere expects revenues for its total business in fiscal 2003 will be about USD1.9bn.

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