Q4 2005 Micro Linear Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good afternoon everyone, and welcome to the Micro Linear Corporation fourth quarter 2005 earnings release conference call. As a reminder, this call is being recorded. For opening remarks and introductions, I will turn the call over to Michael Schradle, Chief Financial Officer. Please go ahead sir.

MICHAEL SCHRADLE, CFO/VP OPERATIONS, MICRO LINEAR: Thank you. Good afternoon, and welcome to Micro Linear's fourth quarter and fiscal year 2005 financial results conference call. Joining me today is Tim Richardson, our President and Chief Executive Officer.

Today's call will begin with a high level review of our financial performance for the fourth quarter and fiscal year 2005. I will then turn the call over to Tim for further remarks, and following this we will open the call up for a question and answer session.

The earnings release was distributed after the close of market today. If you have not received a copy of the press release and financial statements, you may find them on our website at www.microlinear.com.

At this point I would like to remind you that during the course of this conference call we will make statements regarding future events or the future financial performance of the company, including statements that may contain forward-looking information, and there are forward-looking within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon information known to the company as of today, are not guarantees of future results, and are subject to risks and uncertainties that could cause actual results to differ materially. Such statements include, without limitation, any statements relating to the expected benefits arising out of our reduction in force, and our anticipated break even point, the selection of Micro Linear as the exclusive supplier for Uniden's 2006 5.8GHz products, the future market acceptance of our current and future products, the company's expectations regarding the completion of and the expected features, benefits, and performance of the ML1905.

Micro Linear disclaims any obligation to update these forward-looking statements. The risks associated with these forward-looking statements include, but are not limited to, the following; our ability to reach break even and our ability to maintain historical margins, market acceptance of Micro Linear's products, the ability of Micro Linear to meet the price and delivery conditions of Uniden, the level of product orders for our DCC products and PHS products, the ability of the company to complete the development of the ML1905. Additional risks and uncertainties are detailed in the SEC reports of Micro Linear Corporation, including its Form 10Q for the quarter ended October 2, 2005.

Net revenue for the fourth quarter of 2005 was $4.2 million, as compared to $3.7 million in the third quarter of 2005, and $4.4 million reported in the fourth quarter of 2004.

Gross margin for the fourth quarter of 2005 was $1.4 million, which included approximately $1 million in charges for inventory evaluation provisions related to the company's first generation PHS products, the 1900 and the ML1901, which have experienced only limited market acceptance. Gross margin for the third quarter of 2005 was $2.1 million, and gross margin was $2.6 million in the fourth quarter of 2004.

Net loss for the fourth quarter of 2005 was $1.7 million, or $0.13 per share, as compared to a net loss of $1.8 million in the third quarter of 2005 and a net loss of $1.1 million in the fourth quarter of 2004. In addition to the inventory evaluation provision, the fourth quarter of 2005 included approximately $200,000 in charges related to the reduction in force that was completed during the quarter. we anticipate that this reduction in force, combined with other spending reductions, will lower expenses by approximately $900,000 per quarter going forward, resulting in a lowering of our break even to between an estimated $5.5 million to $6 million per …