news digest ♦ Equipment and Materials
subordinated to the notes, of the Company. The notes will be convertible, subject to certain conditions.
Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted. The interest rate, conversion rate, conversion price and other terms of the notes will be determined at the time of the pricing of the offering.
In connection with the offering of the notes, the Company plans to enter into convertible note hedge and warrant transactions with an affiliate of the initial purchaser. The convertible note hedge transaction is intended to reduce the potential dilution upon conversion of the notes. However, the warrant transaction will have a dilutive effect on the Company’s earnings per share to the extent that the price of its common stock exceeds the strike price of the warrant.
The Company expects that the counterparty will enter into various over-the-counter derivative transactions with respect to the Company’s common stock concurrently with, or shortly after, the pricing of the notes and may unwind or enter into various over-the-counter derivatives and/ or purchase the Company’s common stock in secondary market transactions following the pricing of the notes. If the initial purchaser exercises its option to purchase additional notes, the Company may enter into additional convertible note hedge and warrant transactions.
Continued strong growth in revenues and profitability for IQE
Sales have been driven by the optoelectronics market and gallium arsenide products for wireless devices and gallium nitride for the radar and wireless infrastructure markets.
IQE, a global supplier of advanced semiconductor wafer products and wafer services to the semiconductor industry, is providing an interim
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www.compoundsemiconductor.net August/September 2011 trading update for the six months to 30 June 2011.
The Group expects to report first-half revenues of at least £38 million and EBITDA of at least £6 million, despite the adverse impact of foreign currency exchange. Compared with the first half of 2010, this represents underlying growth in US dollar revenues of over 20%, which includes approximately £1m from the Galaxy business acquired in September 2010.
The strong organic revenue growth has been driven by both the wireless and optoelectronics markets. Wireless sales have been driven by sales of GaAs products into wireless devices and strongly supplemented by the rapid growth of GaN sales into the radar and wireless infrastructure markets.
Organic revenue growth in the optoelectronics market has been driven across a range of end markets including IQE’s VCSEL technology for consumer and industrial applications, optical communications, and solar power.
The Group continues to make good progress with its electronics division, which is focussed on combining compound semiconductors with silicon to create the next generation in advanced semiconductor materials for a broad range of ultra high speed and high performance applications.
The outlook for the second half remains upbeat. The Board expects continuing robust growth in the Group’s core wireless and optoelectronics businesses, as demand for both industrial and consumer end user devices containing IQE products remain strong. This confidence is strengthened by the continued progress being made in new product developments and qualifications.
Drew Nelson, IQE’s Chief Executive, commented, “The continued growth in demand for our wireless products and accelerated growth for our optoelectronic wafers have enabled us to maintain our rapid growth. The prospects for the Group are very exciting and, with our highly geared business model, provide the Board with considerable confidence in a continued improvement in financial performance for the second half.”
IQE expects to report its interim results on 7 September 2011.
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