Press release
Qimonda AG (NYSE: QI) announced today that it is making progress in its discussions with strategic and financial investors on potential partnerships with Qimonda, and that it will delay the release of its financial results for the fourth quarter of its 2008 financial year and its full financial year ended September 30, 2008 until mid-December while these discussions are proceeding.
Qimonda is making progress in its discussions with several potential strategic and financial investors. Management believes that one of these opportunities may be able to proceed to a point where it can be announced in the next few weeks, although it would remain subject to the necessary regulatory review procedures.
Management believes that the contours of a transaction would impact its financial condition, in particular with respect to the review of its long-lived assets for impairment that it announced in connection with the preparation of its full-year results. Management has therefore decided to delay its release of financial information and the associated conference call until mid-December.
Qimonda expects to announce operating results showing net sales of Euro 476 million in the fourth quarter of its 2008 financial year, an increase of 24% as compared with the third financial quarter of that year as its bit shipments increased, despite capacity cutbacks, as it continued its technology conversion. The company's negative gross margin narrowed somewhat due to these productivity improvements. However, Qimonda expects its operating and net loss to be greater than in the third financial quarter largely due to a write down on its stake in Inotera Memories, Inc., in connection with its disposal, restructuring measures and other writedowns. Year over year, revenues declined and operating and net loss expanded. Qimonda's gross cash position was Euro 432 million at September 30, 2008.
"With the completion of the sale of our stake in Inotera we generated cash inflow of US$ 400 million in the first quarter of the 2009 financial year. We are focused on reducing our cash burn through our global restructuring and cost reduction program as we continue to work on potential partnerships and on further financing opportunities," said Kin Wah Loh, Chief Executive Officer of Qimonda AG. "Our repositioning plan is making good progress and we have reached agreement in principle with our German employee representatives. Our yield in our first months of commercial production on our 65nm buried wordline DRAM technology is very encouraging, and we have achieved first yield on our 46nm buried wordline technology ahead of schedule."
Should none of the strategic and financial initiatives Qimonda is currently pursuing or other opportunities be realizable and Qimonda's industry environment continues to deteriorate or the measures initiated by Qimonda to reduce its cash usage rate are not sufficiently effective, Qimonda estimates that it would face liquidity shortfalls in portions of its operations during the first calendar quarter of 2009 that could impact its ability to operate its business.
