Fairchild Semiconductor Receives Top Liquidity Rating for High Yield Issuers from Moody's Investors Service
SOUTH PORTLAND, Maine--Oct. 7, 2002--The SGL-1 Rating Assesses the Company's Ability to Service Debt and
Maintain Adequate Liquidity
Fairchild Semiconductor , one of the largest global suppliers of high performance power products for multiple end markets, today announced it has received the top rating from Moody's Investors Service, assessing the company's short-term liquidity, including its ability to service debt and maintain adequate cash reserves.
Moody's awarded Fairchild the top level SGL-1 (Speculative Grade Liquidity) rating last week, and at the same time, Moody's confirmed the Company's Ba3 senior implied rating. The liquidity ratings, assessing issuers of high yield debt, range from SGL-1 to SGL-4. Moody's recently announced its intention to provide high-yield investors with these ratings, to provide an independent opinion of an issuer's ability to generate cash from internal resources, and the availability of external sources of committed financing, considering an issuer's cash obligations over the next twelve months.
Moody's cited Fairchild's large existing $613 million cash balance (as of June 30, 2002), its $300 million senior credit facility which remains undrawn, and their expectation that Fairchild's operations will be cash neutral or slightly positive over the next twelve months as three of the leading reasons for awarding the SGL-1 designation. Moody's further noted the company's capital expenditures and interest costs over the next twelve months "can be comfortably accommodated from Fairchild's cash from operations, supplemented by its cash balance."
"To receive this rating from Moody's is an honor. Even though the semiconductor industry has recently suffered through the longest slump in its 40 year history, Fairchild enjoys a balance sheet that is stronger than at any point in its history. We feel this sets us apart from many of our competitors," said Joe Martin, executive vice president and CFO of Fairchild Semiconductor. "Since founding Fairchild five years ago, we have all worked diligently to build a company on an aggressive growth track, supported by strong financial controls and a company culture where employees understand the importance of conservative fiscal management. We focus on growing revenues, containing costs and generating cash while bringing leading power and interface solutions to the electronics world.
"In our first three years Fairchild tripled its revenues, and since our founding we've successfully completed nine acquisitions. Our multi-market business model drove our ability to outperform the semiconductor industry during a tough 2001; while industry revenues dropped 34%, Fairchild contained its revenue decline to 20%. The multi-market business model has proven itself through varied economic times and periods of both strong and weak demand.
"Our products turn raw power into real performance - providing electronic components that manage, convert, distribute and minimize the use of power in every type of electronic application," said Martin. "Whether in household appliances, ultra-portable devices, computers, communications or cars - Fairchild's power solutions perform critical functions that become more important every year. The total available market for multi-market components is expected to reach $42 billion in 2005. We're looking forward to many years of growth and financial success as the need for our components accelerates in all end markets and we continue to operate Fairchild in a financially sound manner."
About Fairchild Semiconductor:
Fairchild Semiconductor is a leading global supplier of high performance products for multiple end markets. With a focus on developing leading edge power and interface solutions to enable the electronics of today and tomorrow, Fairchild's components are used in computing, communications, consumer, industrial and automotive applications. Fairchild's 10,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products from its headquarters in South Portland, Maine, USA and numerous locations around the world. Please contact us on the web at www.fairchildsemi.com.
Special Note on Forward-Looking Statements:
This press release includes forward-looking statements that are based on management's assumptions and expectations and that involve risk and uncertainty. Forward-looking statements usually, but do not always, contain forward-looking terminology such as "we believe," "we expect," "we plan," or "we anticipate," or refer to management's expectations about Fairchild's future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: changes in overall global or regional economic or political conditions (including as a result of terrorist attacks and responses to them); changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks; availability of manufacturing capacity; availability of raw materials; competitors' actions; loss of key customers; order cancellations or reduced bookings; changes in manufacturing yields or output; and significant litigation. These and other risk factors are discussed in more detail in our annual and quarterly filings with the Securities and Exchange Commission, available on the SEC's website at www.sec.gov or at Fairchild Semiconductor's website at www.investor.fairchildsemi.com.