-by Thomas Rasmussen
RF Micro Devices is taking a break from M&A. The radio frequency semiconductor company told us after an investor conference last week that it will sit on the sidelines until at least the second quarter of 2009. The pause comes after a pair of tuck-ins (its $25m acquisition of Filtronic’s semiconductor business and its $24.1m purchase of Universal Microwave) and its $900m bet on Sirenza Microdevices late last year. The company plans to use the next six months to digest its earlier acquisitions.
As it holds off on inorganic growth, RFMD may need to focus on organic growth. Revenue has flatlined at about $1bn in the company’s past two fiscal years and it has lost money in three of its last four quarters. Meanwhile, its cash flow has dried up substantially. In its most-recent four quarters (ending June 30), RFMD reported negative EBITDA of $8m, which is down from a positive EBITDA of $175m in the year-earlier period. That slump has weighed on shares, which have shed two-thirds of their value so far this year. And that has not only cost the company, it has also cost the shareholders of Sirenza, who took two-thirds of their payment in RFMD shares.