Kirk Mandy. (Image supplied)

Zarlink Semiconductor hit revenue and net loss targets in its fourth quarter, and said it expects to break even in the first quarter of its fiscal 2009 year, as the company tightened its cost and saw revenues added from its Legerity acquisition.

The Ottawa-based chipmaker said net loss grew to US$19.1 million or 16 cents per share, from $900,000 or one cent per share a year earlier, but its losses were in line with its guidance following a February announcement that it would be unloading its money-losing analog chip foundry in Swindon, U.K.

Zarlink said its fourth-quarter results included a loss of $18.2 million on the sale of the Swindon Foundry, and a $5.5-million gain as part of the insurance settlement to cover the plant's flooding in July 2007, for a net impact of a loss of $12.7 million or 10 cents per share. The company also booked $4.6 million in severance and integration costs related to its $75-million acquisition of Texas-based Legerity Holdings.

Gross margin fell to 44.7 per cent, from 45.9 per cent a year earlier.

However, revenue grew by a strong 71.25 per cent year-over-year to $54.8 million, with Legerity accounting for $19.9 million of sales in the fourth quarter.

For the full fiscal year, net loss was $48.4 million or 41 cents per share, compared to a profit of $15.8 million or 11 cents per share a year earlier, while revenues rose 28.8 per cent to $183.6 million.

"This has been a year of change for Zarlink as we build a stronger, more focused company that is positioned for long-term growth," said Zarlink CEO Kirk Mandy in a statement. "The acquisition of Legerity has successfully expanded our portfolio for the fast-growing voice-over-Internet and voice-over-cable markets and helped drive year-on-year revenue growth."

Mr. Mandy added that the company's restructuring activities were largely completed, and with its backlog at the start of fiscal 2009 growing to $53 million, from $47 million at the beginning of the fourth quarter, Zarlink is expecting healthy figures for the next fiscal year.

The company said it is expecting first-quarter revenues of $59 million to $61 million, with net earnings to be approximately break-even, excluding the potential impact of foreign exchange gains or losses related to its denominated debentures.

It noted it is expecting to book losses related to severance and other integration costs of between $1 million and $1.5 million. Excluding integration-related costs, gross margins are expected to be 46 per cent to 48 per cent.