Fairchild Semiconductor International Inc. (NASDAQ:FCS) Q3 2015 Earnings Conference Call - Final Transcript
Oct 15, 2015 • 09:00 am ET
Good day, everyone and welcome to the Fairchild's Third Quarter 2015 Earnings Conference Call. Just a reminder that today's conference is being recorded.
At this time, I'd like to turn the conference over to Mr. Dan Janson. Please go ahead, sir.
Good morning, and thank you for dialing into Fairchild's third quarter 2015 financial results conference call. With me today is Mark Thompson, Fairchild's Chairman, President and CEO; and Mark Frey, our EVP and CFO.
Let me begin by mentioning that we'll be attending the Morgan Stanley Semiconductor & Semi-Cap Equipment Corp Access Day on November 9; and the Raymond James Technology Investors Conference on December 9 in New York City; as well as the Credit Suisse TMT Conference on December 2 in Scottsdale.
I'd also like to point out that we've improved our tracking of sales by end-market segments that we published on our Investor Relations website every quarter. You will note some changes in the data as well as a new category titled Enterprise Computing and Telecom that replaces the Computing category and better reflects the primary applications for our products.
We'll start today's call with Mike Fry who review our third quarter financial results and discuss the current status of fourth quarter business. Mark Thompson will then discuss our product line results, end-markets and operational performance in more detail. Finally, we reserve time for questions and answers.
This call is scheduled to last approximately 60 minutes and has been simultaneously webcast from the Investor Relations section of our website at FairchildSemi.com. The replay for this call will be publicly available for approximately 30 days.
(Forward-Looking Cautionary Statements)
In addition, during this call, we may refer to adjusted or other financial measures that are not prepared according to generally accepted accounting principles. We use non-GAAP measures, because we feel they provide useful information about the operating performance of our businesses that should be considered by investors in conjunction with the GAAP measures that we also provide.
You'll find our reconciliation of non-GAAP to comparable GAAP measures at the Investor Relations section of our website at, investor.FairchildSemi.com. The website also contains a variety of useful information for investors, including an extensive financial section to facilitate your investment analysis.
Now, I'll now turn the discussion over to Mark Frey.
Thanks, Dan. Good morning and thank you for joining us. I'm sure most of you had a chance to review our earnings press release, so I'll focus on just the key points in my comments.
For the third quarter of 2015, Fairchild reported sales of $342 million, down 4% sequentially and 10% from the third quarter of 2014. Distribution sell-through was weaker than seasonal and we reduced our shipments into the channel accordingly, which was the primary cause of our sales decline in the third quarter.
Adjusted gross margin was up 90 basis points from the prior quarter to 34.1% due primarily to lower manufacturing costs and improved product mix. R&D and SG&A expenses were $88 million, down 12% from the prior