Xilinx Announces Third Quarter Fiscal 2009 Results

- Operating margin of 26.1% is highest reported in three years
- Virtex-5(R) sales post strong growth

• Press Release
• Source: Xilinx, Inc.
• On 4:20 pm EST, Wednesday January 14, 2009

SAN JOSE, Calif., Jan. 14 /PRNewswire-FirstCall/ -- Xilinx, Inc. (Nasdaq: XLNX - News) today announced net revenues of $458.4 million in the third quarter of fiscal 2009, down 5% sequentially from the prior quarter and down 3% compared to the same quarter a year ago. Third quarter net income was $139.4 million, or $0.51 per diluted share, including an $89.7 million pre-tax gain on the early extinguishment of convertible debentures and a $19.5 million pre-tax impairment charge on investments. Collectively, these income and expense items represented approximately $0.19 per diluted share after tax.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020822/XLNXLOGO)

The Xilinx Board of Directors declared a quarterly cash dividend of $0.14 per outstanding share of common stock, payable on February 25, 2009 to all stockholders of record at the close of business on February 4, 2009.

    Additional third quarter comparisons are represented in the charts below:



    GAAP Results
    (In millions, except EPS)
                                                            Growth Rates
                 Q3 FY 2009   Q2 FY 2009   Q3 FY 2008      Q-T-Q       Y-T-Y
    Net revenues   $458.4       $483.5       $474.8         -5%         -3%
    Operating
     income        $119.6       $124.6       $115.3         -4%          4%
    Net income     $139.4        $81.8       $103.6         70%         35%
    Diluted
     earnings
     per share      $0.51        $0.29        $0.35         76%         46%

Sales in the month of December were particularly weak as the current economic recessionary environment began impacting customers in most Xilinx end markets. With the exception of sales to Industrial and Other which were flat, sales to other end markets declined sequentially in the December quarter.

Continued cost reduction efforts contributed to improved gross and operating margins during the quarter. Operating margin of 26.1% was up from 24.3% in the same quarter of the prior year and the highest reported in over three years. Gross margin of 63.9% was up from 63.3% in the same quarter of the prior year and the highest reported in over four years.

"Sales from the Company's flagship Virtex-5 family posted exceptionally strong growth in the December quarter increasing 35% sequentially and representing 15% of total sales, up from 10% in the prior quarter," said Moshe Gavrielov, Xilinx President and Chief Executive Officer. "The success of this product family in today's challenging economic environment underscores a growing affinity for programmable solutions versus ASIC alternatives. Programmable solutions provide customers with lower risk, greater flexibility and, in many cases, lower total overall cost."

    Net Revenues by Geography:
                              Percentages                   Growth Rates
                      Q3           Q2          Q3
                   FY 2009      FY 2009      FY 2008       Q-T-Q       Y-T-Y
    North America     34%          34%          41%         -4%        -20%
    Asia Pacific      33%          32%          27%         -1%         20%
    Europe            22%          23%          22%        -12%         -4%
    Japan             11%          11%          10%         -4%          1%



    Net Revenues by End Market:
                              Percentages                   Growth Rates
                      Q3           Q2           Q3
                   FY 2009      FY 2009      FY 2008       Q-T-Q       Y-T-Y
    Communications    44%          43%          41%         -3%          4%
    Industrial &
     Other            33%          32%          33%          0%         -2%
    Consumer &
     Automotive       16%          17%          17%        -12%        -11%
    Data Processing    7%           8%           9%        -21%        -27%



    Net Revenues by Product*:
                              Percentages                   Growth Rates
                     Q3           Q2           Q3
                   FY 2009      FY 2009      FY 2008       Q-T-Q       Y-T-Y
    New               48%          45%          35%          2%         34%
    Mainstream        36%          38%          45%         -9%        -22%
    Base              11%          12%          14%        -17%        -29%
    Support            5%           5%           6%        -11%        -19%



    * Products are classified as follows:

New Products: Virtex-5, Virtex-4, Spartan®-3, and CoolRunner(TM)-II products

Mainstream Products: Virtex-II, Spartan-II, CoolRunner and Virtex-E products

Base Products: Virtex, Spartan, XC4000 and XC9500 products

Support Products: Configuration solutions, HardWire, Software & Support/Services

Highlights - December Quarter Fiscal 2009

-- For the second consecutive quarter, sales to customers in wireless communications were particularly strong, increasing over 10% sequentially. Most of this growth was attributable to the next generation rollout of wireless technologies in China. Xilinx FPGA solutions, most notably Virtex-5 FPGAs, are key beneficiaries of this next generation wireless technology rollout due to their high performance, functionality and system integration capabilities.

-- Xilinx continues to have one of the most stable and resilient business models in the technology industry in terms of profitability and cash flow generation. In the December quarter, Xilinx generated $128.5 million in operating cash flow and paid $146.3 million in cash to repurchase $241.1 million (principal amount) of convertible debentures and $38.4 million in cash dividends. Xilinx currently has among the highest dividend yields in the technology industry.

    Key Statistics:

                                        Q3              Q2            Q3
                                     FY 2009         FY 2009       FY 2008

    Annual Return on Equity (%)*         24              21            21

    Operating Cash Flow (millions)     $128             $95          $208

    Depreciation Expense (millions)     $13             $13           $13
    Capital Expenditures (millions)     $11             $12           $11

    Combined Inventory Days              99              93            91

    Revenue Turns (%)                    54              59            59

*Return on equity calculation: Annualized net income/average stockholders' equity

    Business Outlook - March Quarter Fiscal 2009

    -- Sales are expected to be down 15% to 25% sequentially.
    -- Gross margin is expected to be in the range of 61% to 63%.
    -- Operating expenses are expected to be flat to slightly down
       sequentially from the December quarter.
    -- Interest and other is expected to be a net expense of $3 million.
    -- Fully diluted share count is expected to be approximately 275 million
       shares.
    -- March quarter tax rate is expected to be approximately 21%.

Conference Call

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the March quarter. The webcast and subsequent replay will be available in the investor relations section of the company's web site at http://www.investor.xilinx.com. A telephonic replay of the call may be accessed later in the day by calling (800) 642-1687 and referencing confirmation code 76849026. The telephonic replay will be available for two weeks following the live call.

Business Update -- March Quarter Fiscal 2009

The Company expects to issue a fourth quarter business update press release before the market opens on Tuesday, March 3, 2009. Financial guidance to the investment community will be limited to the points mentioned in the business update document. Please sign up for a push email alert, which is available from our investor relations web site at http://www.investor.xilinx.com.

This release contains forward-looking statements and projections. Forward-looking statements and projections can often be identified by the use of forward-looking words such as "expect," "may," "will," "could," "believe," "anticipate," "estimate," "continue," "plan," "intend," "project" or other similar words. Undue reliance should not be placed on such forward-looking statements and projections, which speak only as of the date they are made. We undertake no obligation to update such forward-looking statements. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including the general health of global economies as well as of the semiconductor industry, the health of our end markets and our customers' customers, our ability to forecast end customer demand, customer acceptance of our new products, the ability of our customers to manage their inventories, a high dependence on turns business, more customer volume discounts than expected, greater product mix changes than anticipated, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to successfully manage production at multiple foundries, variability in wafer pricing, and other risk factors listed in our most recent Forms 10-K and 10-Q.

About Xilinx

Xilinx, Inc. (NASDAQ: XLNX - News) is the worldwide leader of programmable logic solutions. Additional information about Xilinx is available at http://www.xilinx.com.

Xilinx, the Xilinx logo, Virtex, Spartan, ISE, and other brands designated herein are trademarks of Xilinx in the United States and other countries. All other trademarks are the property of their respective owners. #0904F

    XILINX, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
    (In thousands, except per share amounts)

                              Three Months Ended         Nine Months Ended
                         Dec. 27,  Dec. 29, Sept. 27,    Dec. 27,    Dec. 29,
                           2008      2007      2008        2008        2007
    Net revenues         $458,387  $474,806  $483,537  $1,430,170  $1,365,612
    Cost of revenues      165,331   174,414   177,407     519,244     513,014
    Gross margin          293,056   300,392   306,130     910,926     852,598
    Operating expenses:
       Research and
        development        86,967    91,011    89,501     267,202     267,175
       Selling, general
        and
        administrative     85,032    92,453    88,080     266,116     272,856
       Amortization of
        acquisition-
        related
        intangibles         1,475     1,582     1,426       4,326       5,376
       Restructuring
        charges               -         -       2,487      22,023         -
         Total operating
          expenses        173,474   185,046   181,494     559,667     545,407

    Operating income      119,582   115,346   124,636     351,259     307,191
    Gain on early
     extinguishment of
     convertible
     debentures            89,672       -         -        89,672         -
    Impairment loss on
     investments          (19,540)      -     (29,001)    (53,162)        -
    Interest and other,
     net                     (575)   14,385     8,490      13,620      47,422

    Income before income
     taxes                189,139   129,731   104,125     401,389     354,613
    Provision for income
     taxes                 49,765    26,139    22,300      96,261      77,045
    Net income           $139,374  $103,592   $81,825    $305,128    $277,568

    Net income per
     common share:
      Basic                 $0.51     $0.36     $0.30       $1.10       $0.94
      Diluted               $0.51     $0.35     $0.29       $1.10       $0.92

    Cash dividends
     declared per common
     share                  $0.14     $0.12     $0.14       $0.42       $0.36

    Shares used in per
     share calculations:
      Basic               273,997   289,703   276,169     276,584     296,714
      Diluted             274,223   293,036   277,714     277,603     301,030




    XILINX, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
                                                 Dec. 27,         March 29,
                                                   2008              2008
                                               (Unaudited)           (1)

    ASSETS
    Current assets:
      Cash, cash equivalents and short-
       term investments                         $1,289,930        $1,296,435
      Accounts receivable, net                     213,590           249,147
      Inventories                                  149,421           130,250
      Deferred tax assets and other
       current assets                              101,327           144,364
    Total current assets                         1,754,268         1,820,196
    Net property, plant and equipment              394,973           404,430
    Long-term investments                          388,972           564,269
    Other assets                                   343,248           348,212
    Total Assets                                $2,881,461        $3,137,107

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued
       liabilities                                $207,786          $228,988
      Deferred income on shipments to
       distributors                                 71,510           111,678
    Total current liabilities                      279,296           340,666
    Convertible debentures                         760,107           999,851
    Deferred tax liabilities                       102,425            84,486
    Other long-term liabilities                     71,150            40,281
    Stockholders' equity                         1,668,483         1,671,823
    Total Liabilities and Stockholders' Equity  $2,881,461        $3,137,107

     (1) Derived from audited financial statements



    XILINX, INC.
    SUPPLEMENTAL FINANCIAL INFORMATION
    (Unaudited)
    (In thousands)
                                  Three Months Ended       Nine Months Ended
                             Dec. 27,  Dec. 29, Sept. 27,  Dec. 27,  Dec. 29,
                               2008      2007      2008      2008      2007

    SELECTED CASH FLOW
     INFORMATION:
      Depreciation            $13,438   $13,497   $13,309   $42,167   $40,323
      Amortization              4,120     4,328     4,227    12,573    13,537
      Stock-based
       compensation            13,041    16,456    13,724    41,188    48,730
      Net cash provided by
       operating activities   128,479   207,744    94,700   381,676   479,134
      Purchases of property,
       plant and equipment    (11,061)  (10,737)  (11,777)  (32,711)  (39,355)
      Payment of dividends
       to stockholders        (38,357)  (34,480)  (38,697) (115,982) (105,881)
      Repurchases of common
       stock                      -    (200,000) (125,000) (275,000) (350,000)
      Repurchases of
       convertible
       debentures            (146,324)      -         -    (146,324)      -
      Proceeds from issuance
       of common stock to
       employees and excess
       tax benefit              2,992    11,610    49,856    84,379    90,394

    STOCK-BASED COMPENSATION
     INCLUDED IN:
       Cost of revenues        $1,337    $1,937    $1,497    $4,416    $5,785
       Research and
        development             6,055     7,977     6,293    18,702    22,526
       Selling, general and
        administrative          5,649     6,542     5,629    17,506    20,419
       Restructuring charges      -         -         305       564       -



     Investor Relations Contact:
     Lori Owen
     Xilinx, Inc.
     (408) 879-6911
     ir@xilinx.com

Buzz up!