RF Micro Devices, Inc. at Lehman Brothers Global Technology Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

JEFF KVAAL, ANALYST, LEHMAN BROTHERS: Okay, everyone, thanks very much for coming. Welcome to the RFMD presentation. I'm Jeff Kvaal, I do wireless research at Lehman Brothers.

For those of you who are eagerly awaiting RFMD, reiterating its guidance for the quarter, well, they just did that a few weeks ago. So that is behind us now. It is all squared away. (inaudible) was just last week? Time has really gotten past me a little bit, to be honest about it.

What we do expect to hear are themes of market share gains, strength in tier 1 OEMs -- long-term trends in technology. And of course, steady operating margin improvement. So with that, I will turn it over to Doug DeLieto and also Dean Priddy is here as well, CFO. Thank you.

DOUG DELIETO, DIRECTOR OF IR, RF MICRO DEVICES, INC.: Thank you, Jeff. I want to thank Lehman Brothers as well for inviting us here today.

Quick housekeeping -- before I begin, I want to remind our audience both in the room and on the Internet that the Safe Harbor language that applies to our press releases also applies to today's presentation. In addition, during our presentation today we will be providing both GAAP and non-GAAP financial measures, dating back eight quarters to December of 2004 and including comparisons of 12-month periods ending September 2006 and September 2005. We provide the supplemental information to enable investors to perform additional comparisons of operating results and to analyze best performance without the impact of certain non-cash expenses or unusual items that may obscure trends and the Company's underlying performance.

During our presentation today, our comments and comparisons of income statement items will be based primarily on non-GAAP. For a complete reconciliation of GAAP to non-GAAP, please refer to our earnings announcement on our Web site, RFMD.com under 'Investor Info'.

All right. So getting right to it, let's kick it off with a business update. At a conference last Thursday, our CEO, Bob Bruggeworth, said that we are confident in our business environment and that very much continues to be the case. We believe our wireless markets are strong and growing. Our confidence is supported by customer activity that validates our technology offerings and gives confidence in the inventory levels of our components.

We are enthusiastic about new breakthrough technologies and products that we are introducing this quarter and in coming quarters for existing as well as new markets.

We are expanding our leadership in cellular and analog and RF components. We expect growth and diversification, as well as margin expansion in wireless connectivity and infrastructure. And most importantly, we expect to drive continued growth in revenue, gross profit, operating income and EPS. Given the opportunities before us, we are quickly approaching levels of profitability beyond anything we have ever achieved.

Now taking a quick look at our opportunities by business units, we have three business units -- cellular, wireless connectivity, and infrastructure. Earlier this week we announced we signed a deal to sell the majority of our Bluetooth assets to Qualcomm in a transaction valued at $39 million. The transaction covers the RF 4000 family of products and the RF 1722, both of which are next generation Bluetooth products.

The transaction and our expanding relationship with Qualcomm sharpen our ability to capture our greatest growth opportunities across all of our business units. They include cellular power amplifiers, cellular transceivers, wireless LAN front-end modules, GPS solutions and high-powered power amplifiers using GaN or gallium nitride.

That said, we are not exiting Bluetooth entirely. We will continue to sell and support our legacy Bluetooth products. They include the 3000, the 3500, the 1712 and the 1721, all of which taken in aggregate represent the vast majority of our Bluetooth revenue to date.

For the near term, we expect minimal impact of …