UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 27, 2005
Conexant Systems, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware
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000-24923
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25-179943 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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| 4000 MacArthur Boulevard, Newport Beach, California
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92660 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: 949-483-4600
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 2.02 Results of Operations and Financial Condition.
On July 27, 2005, Registrant released its earnings for the third fiscal quarter of 2005 and is
furnishing a copy of the earnings release to the Securities and Exchange Commission under Item 2.02
of this Current Report on Form 8-K. In addition, Registrant will discuss its financial results
during a webcast and teleconference call today at 5:00 p.m. (EST). To access the webcast and
teleconference call, go to Registrant’s website at http://www.conexant.com/ir .
The press release is attached herewith as Exhibit 99 and is incorporated herein by reference.
The non-GAAP financial measures contained in the attached press release are a supplement to the
corresponding financial measures prepared in accordance with generally accepted accounting
principles (GAAP). The non-GAAP financial measures presented exclude non-cash and non-core
operating and non-operating items as described in the Non-GAAP Core to GAAP Adjustments section in
the press release and in the discussion below. The Non-GAAP Core to GAAP Adjustments exclude (i)
recognized gains and losses related to (a) the sale of equity securities, (b) derivative financial
instruments, and (c) other investments accounted for using the equity method of accounting, held as
a result of a series of transactions that transformed the Company from a broad based communications
semiconductor supplier into a family of focused companies serving distinct markets, (ii) certain
non-cash charges related to the Company’s business combinations, primarily the merger with
GlobespanVirata, (iii) one time charges, integration costs and other expenses related to the
Company’s merger with GlobespanVirata, and (iv) restructuring, asset impairment and other charges
related to the Company’s business restructurings and transition of resources to low cost regions.
Management of the Company believes that the Company’s core results of operations include (i) the
sale of its products and related costs and gross margin, (ii) its on-going cash operating expenses
to develop products and related selling, general and administrative functions, (iii) interest
income from its cash and marketable securities and (iv) its debt service and income tax expense.
Please refer to the Reconciliation of Non-GAAP Core Financial Measures to GAAP Financial Measures
in the press release for a quantitative reconciliation of these non-GAAP financial measures to the most directly
comparable GAAP measures.
The Company has presented non-GAAP total operating expenses, non-GAAP operating income (loss),
non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share, on a basis
consistent with its historical presentation to assist investors in understanding the Company’s core
results of operations on an on-going basis. The non-GAAP financial measures also enhance
comparisons of the Company’s core results of operations with historical periods. The Company is
providing these non-GAAP financial measures to investors to enable them to perform additional
financial analysis and because it is consistent with the financial models and estimates published
by analysts who follow the Company. Management believes that these are important measures in the
evaluation of the Company’s results of operations. Investors should consider non-GAAP financial
measures in addition to, and not as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the
Company may be different from non-GAAP financial measures used by other companies.
The Company has presented the following non-GAAP financial measures:
1) Non-GAAP Core operating expenses:
The use of this non-GAAP financial measure allows management of the Company to quantify and discuss
the core operating expenses of the business on an on-going basis. Items excluded from this non-GAAP
financial measure consist of non-cash and non-core operating expenses more fully described in items
(a) through (f) in the Non-GAAP Core to GAAP Adjustments section of the press release. Management
presents non-GAAP operating expenses to enable investors to understand the core on-going operating
expenses of the Company. Management uses this non-GAAP financial measure in its evaluation of the
Company’s core results of operations and trends between fiscal periods and believes this measure is
an important component of its internal performance measurement process. In addition, the Company
prepares and maintains its budgets and forecasts for future periods on a basis consistent with this
non-GAAP financial measure. This non-GAAP financial measure has certain limitations in that it does
not reflect all of the operating costs and other costs and expenses related to the Company’s
business and may not be indicative of the cash flows from operations as determined in accordance
with GAAP. Management compensates for these limitations by reviewing the Company’s cash flows from
operations which include all operating expenses of the Company.
2) Non-GAAP Core operating income (loss), Non-GAAP Core net income (loss), Non-GAAP Core net income
(loss) per share, basic and diluted:
These non-GAAP financial measures are mathematical subtotals, totals and resultant computations
after considering the non-GAAP adjustments and measure discussed above and in items (g) through (m)
in the Non-GAAP Core to GAAP Adjustments section of the press release. Management presents these
non-GAAP financial measures to enable investors to understand the core on-going results of
operations of the Company. Management uses these non-GAAP financial measures in its evaluation of
the Company’s core results of operations and trends between fiscal periods and believes these
measures are an important component of its internal performance measurement process. In addition,
the Company prepares and maintains its budgets and forecasts for future periods on a basis
consistent with these non-GAAP financial measures. These non-GAAP financial measures have certain
limitations in that they do not reflect all of the operating costs and other expenses related to
the Company’s business and may not be indicative of the cash flows from operations as determined in
accordance with GAAP. Management compensates for these limitations by reviewing the Company’s cash
flows from operations which include all costs and expenses of the Company.