Spansion Revises Fourth Quarter 2006 Financial Guidance | Cypress Semiconductor
Spansion Revises Fourth Quarter 2006 Financial Guidance
SUNNYVALE, Calif., Jan 05, 2007 -- Spansion Inc. (Nasdaq: SPSN), the world's largest pure-play provider of Flash memory solutions, today announced it is revising its previous financial guidance for the fourth quarter 2006. For the quarter ended December 31, 2006, the company anticipates net sales in the range of $680 million to $690 million compared to the company's prior net sales guidance range for the fourth quarter of $710 million to $740 million.
The change in revenue guidance is due in large part to a late December delay in customer demand for certain high-density custom Flash memory devices. The company expects these devices to be sold in the first quarter of 2007. Despite this delay in demand, the company continued to grow its business in the fourth quarter 2006 compared to the third quarter of 2006. In addition, the company's net sales grew approximately 16 percent compared to the fourth quarter of 2005 and grew approximately 29 percent for fiscal year 2006 compared to fiscal year 2005.
As a result of the revenue shortfall, the company does not expect to reach its goal of breakeven on a net income basis in the fourth quarter of 2006. The company will provide greater detail on its fourth quarter 2006 financial performance when it releases its final results in the second half of January 2007.
This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated net sales for the quarter ended December 31, 2006, the expectation that certain flash memory devices will be sold in the first quarter of 2007 and that the company does not expect to reach its goal of breakeven on a net income basis in the fourth quarter of 2006. Investors are cautioned that the forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from the company's current expectations. Risks that the company considers to be the important factors that could cause actual results to differ materially from those set forth in the forward-looking statements include the possibility that demand for the company's Flash memory products will be lower than currently expected; that the company will lose rights to key intellectual property arrangements and be subject to intellectual property infringement claims; that customer acceptance of MirrorBit technology will not continue to increase; that OEMs will increasingly choose NAND-based Flash memory products over NOR- and MirrorBit ORNAND-based Flash memory products for their applications; that competitors may introduce new memory or other technologies that may make our Flash memory products uncompetitive or obsolete; that there will be a lack of customer acceptance of MirrorBit ORNAND- or MirrorBit Quad- based Flash memory products; that the company will lose a significant customer; that the company will be adversely affected by its substantial indebtedness; that the company will not be able to raise sufficient capital to enable it to establish leading-edge capacity to meet product demand and maintain market share; that the company may not achieve facilities and capacity implementation schedules; that the company will not be able to reduce expenses; that the company will not successfully develop, introduce and commercialize new products and technologies or to accelerate our product development cycle; that the company will be able to meet customer demand during cyclical industry or economic downturns; that our reliance on third-party manufacturers may harm us; that industry overcapacity may affect our prices and our manufacturing capacity; that average selling prices may decline; and that the company's operations in foreign countries may be subject to economic and geopolitical risks. The company urges investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the company's Quarterly Report on Form 10-Q for the quarter ended October 1, 2006 and the company's Registration Statement on Form S-1/A dated November 3, 2006. The company assumes no obligation to update any forward-looking statements or information included in this press release.
Spansion is the world's largest pure-play provider of Flash memory solutions, dedicated to enabling, storing and protecting digital content in the wireless, automotive, networking and consumer electronics markets. Spansion, previously a joint venture of Advanced Micro Devices, Inc. and Fujitsu Limited, is the largest company in the world dedicated exclusively to developing, designing, and manufacturing Flash memory products and systems. For more information, visit www.spansion.com .
NOTE: Spansion, the Spansion logo, MirrorBit, ORNAND, and combinations thereof, are trademarks of Spansion LLC. Other names used are for informational purposes only and may be trademarks of their respective owners.