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<SEC-DOCUMENT>0000004127-05-000007.txt : 20050207
<SEC-HEADER>0000004127-05-000007.hdr.sgml : 20050207
<ACCEPTANCE-DATETIME>20050207164030
ACCESSION NUMBER:		0000004127-05-000007
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20041231
FILED AS OF DATE:		20050207
DATE AS OF CHANGE:		20050207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SKYWORKS SOLUTIONS INC
		CENTRAL INDEX KEY:			0000004127
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				042302115
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05560
		FILM NUMBER:		05580916

	BUSINESS ADDRESS:	
		STREET 1:		20 SYLVAN ROAD
		CITY:			WOBURN
		STATE:			MA
		ZIP:			01801
		BUSINESS PHONE:		6179355150

	MAIL ADDRESS:	
		STREET 1:		20 SYLVAN ROAD
		STREET 2:		20 SYLVAN ROAD
		CITY:			WOBURN
		STATE:			MA
		ZIP:			01801

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ALPHA INDUSTRIES INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>q1_05.htm
<TEXT>






<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A001></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>UNITED STATES <BR>SECURITIES AND
EXCHANGE COMMISSION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>WASHINGTON, D.C. 20549 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A004></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 10-Q </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A005></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) <BR>OF THE SECURITIES
EXCHANGE ACT OF 1934 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A007></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the quarterly period
ended December 31, 2004 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A008></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commission file number
1-5560 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A009></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=6>SKYWORKS SOLUTIONS,
INC. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Center Italic" FSL="Default" -->
<A NAME=A010></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>(Exact name of
registrant as specified in its charter)</I> </FONT></P>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="400" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Delaware</FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>04-2302115</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="60%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(State or other jurisdiction of<BR> incorporation or organization)</FONT></TD>
     <TD WIDTH="10%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="30%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(I.R.S. Employer<BR> Identification No.)</FONT></TD></TR>
</TABLE>
<BR><BR>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="400" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>20 Sylvan Road, Woburn, Massachusetts</FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>01801</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="60%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Address of principal executive offices)</FONT></TD>
     <TD WIDTH="20%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="20%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Zip Code)</FONT></TD></TR>
</TABLE>
<BR><BR>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="400" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TD WIDTH="70%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant's telephone number, including area code</FONT></TD>
     <TD WIDTH="30%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(781) 376-3000</b></FONT></TD></TR>
</TABLE>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). [X] Yes [ ] No</FONT></P>

<P><FONT face="Times New Roman, Times, Serif" size=2>Indicate the number of shares outstanding of each of
 the issuer&#146;s classes of common stock, as of the latest practicable date. </FONT></P>
<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TH><FONT face="Times New Roman, Times, Serif" size=1><U>Class</U></FONT></TH>
<TH><FONT face="Times New Roman, Times, Serif" size=1><U>Outstanding at January 28, 2005</U></FONT></TH></TR>
<TR vAlign=top>
<TD align=center width="50%"><FONT face="Times New Roman, Times, Serif" size=2>Common Stock, par value $.25 per share</FONT></TD>
<TD align=center width="50%"><FONT face="Times New Roman, Times, Serif" size=2>156,889,331</FONT></TD></TR>
</TABLE>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A015></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Exhibit Index is
located on page 35 </FONT></P>
<BR><hr><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A016></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SKYWORKS SOLUTIONS, INC. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A017></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>QUARTERLY REPORT ON
FORM 10-Q <BR>FOR THE QUARTER ENDED
DECEMBER 31, 2004 <BR><BR>TABLE OF CONTENTS</FONT></P>
<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TH align=left><FONT face="Times New Roman, Times, Serif" size=3>PART I &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL INFORMATION</FONT></TH>
<TH align=center><FONT face="Times New Roman, Times, Serif" size=2>PAGE NO.</FONT></TH></TR>
<TR vAlign=top>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top >
<TD width="90%"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 1:&nbsp;&nbsp; FINANCIAL STATEMENTS</FONT></TD>
<TD align=center width="10%"><FONT face="Times New Roman, Times, Serif" size=2>3</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 2004 AND SEPTEMBER 30, 2004 (UNAUDITED)</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>3</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED STATEMENTS OF OPERATIONS - THREE MONTHS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 (UNAUDITED)</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>4</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 (UNAUDITED)</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>5</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>6</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 2:&nbsp;&nbsp; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>14</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top >
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 3:&nbsp;&nbsp; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>32</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 4:&nbsp;&nbsp; CONTROLS AND PROCEDURES</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>32</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=3><B>PART II &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER INFORMATION</B></FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2></FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 5:&nbsp;&nbsp; OTHER INFORMATION</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>33</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top >
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ITEM 6:&nbsp;&nbsp; EXHIBITS</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>33</FONT></TD></TR>
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR vAlign=top>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIGNATURES</FONT></TD>
<TD align=center><FONT face="Times New Roman, Times, Serif" size=2>34</FONT></TD></TR>
</TABLE>

<BR><BR>
<HR>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A019></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>PART I.&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL
INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A020></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp; CONSOLIDATED
FINANCIAL STATEMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A021></A>
<p ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CONSOLIDATED BALANCE SHEETS</B><BR>(Unaudited, in thousands, except per
share amounts) </FONT> </P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>ASSETS</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>December 31, <BR>
2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>September 30,<BR>
2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="75%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Current assets:</B> </FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Cash and cash equivalents</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;202,203</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;203,539</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Short-term investments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,479</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,000</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Restricted cash</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,013</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,013</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Receivables, net of allowance for doubtful accounts of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;$2,551 and $1,987, respectively</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>170,860</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>157,772</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Inventories</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>79,274</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>79,572</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Other current assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,875</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,968</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>476,704</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>463,864</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Property, plant and equipment, less accumulated depreciation and amortization of</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$270,635 and $261,260, respectively</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>144,131</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>143,534</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Property held for sale</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,485</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,475</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Goodwill</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>500,313</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>504,493</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Intangible assets, less accumulated amortization of $7,293 and $6,746, respectively</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19,348</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19,895</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Deferred tax assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17,420</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19,372</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Other assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,950</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,173</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;1,175,351</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;1,168,806</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> </FONT> <FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>LIABILITIES AND STOCKHOLDERS' EQUITY</B> </FONT> </TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Current liabilities:</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Short-term debt</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Accounts payable</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>74,510</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>73,405</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Accrued compensation and benefits</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27,340</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>36,630</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Other current liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,175</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21,216</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>168,025</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>181,251</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Long-term debt</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>230,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>230,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Other long-term liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,461</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,932</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>404,486</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>417,183</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD>&nbsp; </TD>
      <TD> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Stockholders' equity:</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Preferred stock, no par value: 25,000 authorized, no shares issued</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Common stock, $0.25 par value: 525,000 shares authorized; 156,806 and 156,012</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding, respectively</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>39,201</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>39,003</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Additional paid-in capital</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,317,730</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,312,603</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Accumulated deficit</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(585,280</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(599,197</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Accumulated comprehensive loss</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(786</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(786</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>770,865</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>751,623</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;1,175,351</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;1,168,806</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>



<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are an
integral part of these consolidated financial statements. </FONT></P>
<BR><BR><hr><BR><BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
</B>(Unaudited, in thousands, except per share amounts) </FONT></P>

<BR><BR>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="68%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net revenues</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="11%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;220,160</FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="11%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;175,108</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cost of goods sold</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>132,141</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>105,540</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross profit</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>88,019</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>69,568</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating expenses:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Research and development</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37,113</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>38,065</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Selling, general and administrative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27,224</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20,361</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Amortization</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>737</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>769</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>65,074</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>59,195</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22,945</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,373</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income (expense):</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Interest expense</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,533</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5,374</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Other income, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,121</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>453</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2,412</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4,921</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Income before income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20,533</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,452</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provision for income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,616</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,280</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;13,917</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,172</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Per share information:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Net income, basic and diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.09</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.03</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Weighted average number of common shares outstanding:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Basic</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>156,440</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>148,784</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>158,905</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>150,997</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are an
integral part of these consolidated financial statements. </FONT></P>
<BR><BR><hr><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A022></A>
<p ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CONSOLIDATED STATEMENTS
OF CASH FLOWS</B> <BR>(Unaudited, in thousands) </FONT></P>
<BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=73% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Cash flows from operating activities:</B> </FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;13,917</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,172</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adjustments to reconcile net income to net cash provided by (used in)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>operating activities:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,442</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8,625</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax adjustment to goodwill</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,179</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>737</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>769</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>399</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>553</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Contribution of common shares to Savings and Retirement Plans</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>725</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>56</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,952</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Changes in assets and liabilities:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(13,088</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6,575</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>298</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,676</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>728</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(199</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,105</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14,024</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(13,811</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,651</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,127</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26,125</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Cash flows from investing activities:</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Capital expenditures</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(10,040</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(13,850</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Purchases of short-term investments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2,479</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Maturities of short-term investments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,988</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(12,519</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9,862</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Cash flows from financing activities:</B> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proceeds from (payments on) short-term borrowings</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2,676</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exercise of stock options</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,056</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,158</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,056</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,518</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net increase (decrease) in cash and cash equivalents</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,336</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14,745</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash and cash equivalents at beginning of period</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>203,539</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>161,506</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash and cash equivalents at end of period</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;202,203</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;176,251</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Supplemental cash flow disclosures:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Taxes paid</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;685</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;317</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest paid</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,895</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,331</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are an
integral part of these consolidated financial statements. </FONT></P>
<BR><BR><hr><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A024></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTES TO INTERIM
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A025></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 1.&nbsp;&nbsp;&nbsp;&nbsp; DESCRIPTION OF
BUSINESS AND BASIS OF PRESENTATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Skyworks Solutions, Inc.
(&#147;Skyworks&#148; or the &#147;Company&#148;) is a leading wireless semiconductor
company focused exclusively on radio frequency (&#147;RF&#148;) and complete cellular
system solutions for mobile communications applications. We offer front-end modules, RF
subsystems and cellular systems to leading wireless handset and infrastructure customers. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On June 25, 2002, pursuant to an
Agreement and Plan of Reorganization dated as of December 16, 2001, as amended as of April
12, 2002, by and among Alpha Industries, Inc. (&#147;Alpha&#148;), Conexant Systems, Inc.
(&#147;Conexant&#148;) and Washington Sub, Inc. (&#147;Washington&#148;), a wholly owned
subsidiary of Conexant to which Conexant spun off its wireless communications business,
including its gallium arsenide wafer fabrication facility located in Newbury Park,
California, but excluding certain assets and liabilities, Washington merged with and into
Alpha with Alpha as the surviving entity (the &#147;Merger&#148;). Following the Merger,
Alpha changed its corporate name to Skyworks Solutions, Inc. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Immediately following completion of
the Merger, the Company purchased Conexant&#146;s semiconductor assembly, module
manufacturing and test facility located in Mexicali, Mexico, and certain related
operations (&#147;Mexicali Operations&#148;) for $150 million. For financial accounting
purposes, the sale of the Mexicali Operations by Conexant to Skyworks Solutions was
treated as if Conexant had contributed the Mexicali Operations to Washington as part of
the spin-off, and the $150 million purchase price was treated as a return of capital to
Conexant. For purposes of these financial statements, the Washington business and the
Mexicali Operations are collectively referred to as Washington/Mexicali. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Merger was accounted for as a
reverse acquisition whereby Washington was treated as the acquirer and Alpha as the
acquiree, primarily because Conexant shareholders owned a majority, approximately 67
percent, of the Company upon completion of the Merger. Under a reverse acquisition, the
purchase price of Alpha was based upon the fair market value of Alpha common stock for a
reasonable period of time before and after the announcement date of the Merger and the
fair value of Alpha stock options. The purchase price of Alpha was allocated to the assets
acquired and liabilities assumed by Washington, as the acquiring company for accounting
purposes, based upon their estimated fair market value at the acquisition date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The unaudited condensed consolidated
financial statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the &#147;SEC&#148;). Certain information and footnote
disclosures, normally included in annual consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States of America,
have been condensed or omitted pursuant to those rules and regulations. However, in the
opinion of management, the financial information reflects all adjustments, consisting of
adjustments of a normal recurring nature necessary to present fairly the financial
position, results of operations, and cash flows of the Company. The results of operations
for the three months ended December 31, 2004 are not necessarily indicative of the results
to be expected for the full year. This information should be read in conjunction with the
Company&#146;s financial statements and notes thereto contained in the Company&#146;s Form
10-K for the fiscal year ended September 30, 2004 as filed with the SEC. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Fiscal Periods<I> &#151;
</I></B><I></I>The Company&#146;s fiscal year ends on the Friday closest to September 30.
For convenience, the consolidated financial statements have been shown as ending on the
last day of the calendar month. Fiscal year 2004 ended on October 1, 2004 and the first
quarters of fiscal 2005 and fiscal 2004 actually ended on December 31, 2004 and January 2,
2004, respectively. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Income Taxes</B> &#150; It was the
Company&#146;s intention to permanently reinvest the undistributed earnings of its foreign
subsidiaries in accordance with Accounting Principles Board (&#147;APB&#148;) Opinion No.
23. During the three months ended December 31, 2004 the Company reversed its policy of
permanently reinvesting the earnings of its Mexican business. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Reclassification</B> &#150;
Certain reclassifications have been made to the prior years&#146; financial statements to
conform to the current year&#146;s presentation. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A026></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Recently Issued
Accounting Pronouncements </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In November 2004, the Financial
Accounting Standards Board (&#147;FASB&#148;) issued Statement of Financial Accounting
Standards (&#147;SFAS&#148;) No. 151 &#147;Inventory Costs, an amendment of ARB No. 43,
Chapter 4.&#148; The amendments made by SFAS No. 151 clarify that abnormal amounts of idle
facility expense, freight, handling costs, and wasted materials (spoilage) should be
recognized as current-period charges and require the allocation of fixed production
overheads to inventory based on the normal capacity of the production facilities. The
guidance is effective for inventory costs incurred during fiscal years beginning after
June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal
years beginning after November 23, 2004. The Company does not believe the impact of
adopting SFAS No. 151 will have a material impact on its financial statements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In December 2004, the FASB issued
SFAS No.123 (revised 2004), &#147;Share-Based Payment.&#148; SFAS No. 123(R) requires that
the compensation cost relating to share-based payment transactions be recognized in
financial statements. That cost will be measured based on the fair value of the equity or
liability instruments issued. SFAS No. 123(R) covers a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share purchase plans.
SFAS No. 123(R) replaces SFAS No. 123, &#147;Accounting for Stock-Based
Compensation,&#148; and supersedes APB Opinion No. 25, &#147;Accounting for Stock Issued
to Employees.&#148; SFAS No. 123, as originally issued in 1995, established as preferable
a fair-value-based method of accounting for share-based payment transactions with
employees. However, that Statement permitted entities the option of continuing to apply
the guidance in APB Opinion No. 25, as long as the footnotes to financial statements
disclosed what net income would have been had the preferable fair-value-based method been
used. Public entities (other than those filing as small business issuers) will be required
to apply SFAS No. 123(R) as of the first interim or annual reporting period that begins
after June 15, 2005. For an illustration of the effect of using the fair-value-based
method of accounting for share-based payment transactions on our recent results of
operations, see Note 9. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A027></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 2.&nbsp;&nbsp;&nbsp;&nbsp; INVENTORY </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Inventories
consist of the following (in thousands): </FONT></P>

<BR>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>December 31,<BR>
2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>September 30,<BR>
2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=56% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Raw materials</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=18% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$13,485</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=18% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$12,176</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Work-in-process</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>46,681</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>50,717</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Finished goods</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19,108</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,679</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$79,274</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$79,572</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="RIGHT" COLOR="BLACK"> </TD>
      <TD> </TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A028></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 3.&nbsp;&nbsp;&nbsp;&nbsp; GOODWILL AND
INTANGIBLE ASSETS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Goodwill and intangible assets are
principally the result of the Merger with Washington/Mexicali completed on June 25, 2002.
The Company tests its goodwill for impairment annually as of the first day of its fourth
fiscal quarter and in interim periods if certain events occur indicating that the carrying
value of goodwill may be impaired. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Goodwill and intangible assets
consist of the following (in thousands): </FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=720>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>December 31, 2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>September 30, 2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Weighted<BR>
Average<BR>
Amortization<BR>
Period (Years)</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Gross<BR>
Carrying<BR>
Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Accumulated<BR>
Amortization</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Net<BR>
Carrying<BR>
Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Gross<BR>
Carrying<BR>
Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Accumulated<BR>
Amortization</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Net<BR>
Carrying<BR>
Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></tr>


<TR VALIGN="BOTTOM">
     <TD WIDTH="31%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Goodwill</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;500,313</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;500,313</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;504,493</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;504,493</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> <HR WIDTH="95%" SIZE="2" ALIGN="Right"></TD>
      <TD> </TD>
      <TD> <HR WIDTH="95%" SIZE="2" ALIGN="Right"></TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amortized intangible assets:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Developed technology</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,550</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,995</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,555</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,550</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,777</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,773</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Customer relationships</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,700</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,185</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,515</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,700</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2,868</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,832</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Other</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>122</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(113</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>122</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(101</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> <HR WIDTH="95%" SIZE="1" ALIGN="Right"></TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23,372</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7,293)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,079</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23,372</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6,746)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,626</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unamortized intangible assets:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;Tradenames</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> <HR WIDTH="95%" SIZE="1" ALIGN="Right"></TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total intangible assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$26,641</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;(7,293</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;19,348</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$26,641</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;(6,746</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$19,895</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> <HR WIDTH="95%" SIZE="2" ALIGN="Right"></TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amortization expense related to
intangible assets are as follows (in thousands): </FONT></P>

<BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=300>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=60% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amortization expense</FONT></TD>
     <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$547</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$580</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Annual amortization expense related
to intangible assets is expected to be as follows (in thousands): </FONT></P>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2005</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2006</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2007</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2008</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2009</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amortization expense</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$2,161</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$2,144</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$2,144</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$2,144</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$2,144</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The changes in the gross carrying
amount of goodwill and intangible assets are as follows (in thousands): </FONT></P>

<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=10><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Intangible Assets</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
<TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Goodwill</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Developed<BR>
Technology</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Customer<BR>
Relationships</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Trademarks</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Other</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Total</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     </TR>
<TR VALIGN=Bottom>
     <TD WIDTH=37% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Balance as of September 30, 2004</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;504,493</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$10,550</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$12,700</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$3,269</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$122</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$26,641</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additions (deductions) during year</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4,180</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Balance as of December 31, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;500,313</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$10,550</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$12,700</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$3,269</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$122</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$26,641</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The deduction to goodwill in the
three months ended December 31, 2004 reflects the recognition of a portion of the deferred
tax assets for which no benefit was previously recognized as of the date of the Merger.
The future realization of certain pre-Merger deferred tax assets will be applied to reduce
the carrying value of goodwill. The remaining portion of the valuation allowance for these
pre-Merger deferred tax assets for which subsequently recognized tax benefits may be
applied to reduce goodwill is approximately $40.5 million at December 31, 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A029></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 4.&nbsp;&nbsp;&nbsp;&nbsp; BORROWING
ARRANGEMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A030></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LONG-TERM DEBT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s long-term debt
consists of $230 million of 4.75 percent convertible subordinated notes due November 2007.
These notes can be converted into 110.4911 shares of common stock per $1,000 principal
balance, which is the equivalent of a conversion price of approximately $9.05 per share.
The total number of shares that could be issued under the notes is approximately 25.4
million shares. The Company may redeem the notes at any time after November 20, 2005. The
redemption price of the notes during the period between November 20, 2005 through November
14, 2006 will be $1,011.875 per $1,000 principal amount of notes to be redeemed, plus
accrued and unpaid interest, if any, to the redemption date, and the redemption price of
the notes beginning on November 15, 2006 and thereafter will be $1,000 per $1,000
principal amount of notes to be redeemed, plus accrued and unpaid interest, if any, to the
redemption date. Holders may require the Company to repurchase the notes upon a change in
control of the Company. The Company pays interest in cash semi-annually in arrears on May
15 and November 15 of each year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A031></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SHORT-TERM DEBT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On July 15, 2003, the Company entered
into a receivables purchase agreement under which it has agreed to sell from time to time
certain of its accounts receivable to Skyworks USA, Inc. (&#147;Skyworks USA&#148;), a
wholly-owned special purpose entity that is fully consolidated for accounting purposes.
Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, National
Association providing for a $50.0 million credit facility (&#147;Facility Agreement&#148;)
secured by the purchased accounts receivable. As a part of the consolidation, any interest
incurred by Skyworks USA related to monies it borrows under the Facility Agreement is
recorded as interest expense in the Company&#146;s results of operations. The Company
performs collections and administrative functions on behalf of Skyworks USA. As of
December 31, 2004, Skyworks USA had borrowings of $50.0 million outstanding under this
agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A032></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 5.&nbsp;&nbsp;&nbsp;&nbsp; RESTRUCTURING </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A033></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>2004 Corporate
Restructuring Plan</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During fiscal 2004, the Company
consolidated cellular systems software design centers in an effort to improve the
Company&#146;s overall time to market for next-generation multimedia systems development.
These actions aligned the Company&#146;s structure with its current business environment.
The Company implemented reductions in force at three remote facilities and recorded
restructuring charges of approximately $4.2 million for costs related to severance
benefits for affected employees and lease obligations. Substantially all amounts accrued
for these actions have been paid and the remaining amounts are expected to be paid during
fiscal 2005. </FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Workforce<BR>
Reductions</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Facility<BR>
Closings</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Total</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="63%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Charged to costs and expenses</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;3,685</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;498</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;4,183</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash payments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
        <TD WIDTH=8% ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(3,530</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
<TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(287</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,817</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring balance, September 30, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;155</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;211</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;366</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash payments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
        <TD WIDTH=8% ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(88</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
<TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(64</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(152</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring balance, December 31, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;67</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;147</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;214</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A034></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>2003 Corporate
Restructuring Plans</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During fiscal 2003, the Company
recorded $6.2 million in restructuring charges to provide for workforce reductions and the
consolidation of facilities. The charge was based upon estimates of the cost of severance
benefits for affected employees and lease cancellation, facility sales, and other costs
related to the consolidation of facilities. As of December 31, 2004, substantially all
amounts accrued for these actions have been paid and the remaining amounts are expected to
be paid within one year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Activity and liability balances
related to the fiscal 2003 restructuring actions are as follows (in thousands): </FONT></P>
<BR>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=500>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Workforce<BR>
Reductions</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Facility Closings<BR>
and Other</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Total</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Charged to costs and expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;4,819</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;1,405</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;6,224</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash payments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3,510</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,236</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4,746</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring balance, September 30, 2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;1,309</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;169</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;1,478</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Charged to costs and expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>475</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>475</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash payments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,777</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
<TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(116</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,893</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring balance, September 30, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;60</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash payments</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
<TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(20</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(25</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring balance, December 31, 2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right">  </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A035></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">P<I>re-Merger Alpha
Restructuring Plan</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, the Company assumed
approximately $7.8 million of restructuring reserves from Alpha in connection with the
Merger. During the first quarter of fiscal 2005, and the fiscal years ended September 30,
2004, 2003 and 2002, payments related to the restructuring reserves assumed from Alpha
were $0.2 million, $0.2 million, $4.7 million and $1.1 million, respectively. In addition,
the Company reduced this restructuring reserve by approximately $0.5 million in fiscal
2004 primarily related to a reduction in facility closure costs. As of December 31, 2004,
the restructuring reserve balance related to Alpha was $1.3 million and primarily relates
to estimated future payments on a lease that expires in 2008. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A036></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 6.&nbsp;&nbsp;&nbsp;&nbsp; PENSIONS AND
OTHER RETIREE BENEFITS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with Conexant&#146;s
spin-off of its Washington/Mexicali business, Conexant transferred obligations to
Washington/Mexicali for its pension plan and retiree benefits. The amounts that were
transferred relate to approximately twenty Washington/Mexicali employees that had enrolled
in Conexant&#146;s Voluntary Early Retirement Plan (&#147;VERP&#148;) in 1998. The VERP
also provides health care benefits to members of the plan. The Company currently does not
offer pension plans or retiree benefits to its employees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The components of defined benefit
expense are as follows (in thousands): </FONT></P>

<BR>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=500>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31, 2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31, 2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Pension<BR>
Benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Retiree<BR>
Medical<BR>
Benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Pension<BR>
Benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Retiree<BR>
Medical<BR>
Benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=59% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Service cost-benefits earned</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;--</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;--</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;--</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$--</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest cost on benefit obligation</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>47</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>44</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>44</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Estimated return on assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(27</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(15</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(15</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net amortization</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net periodic benefit cost</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;28</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;30</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;30</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$31</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company contributed $0.1 million
to the pension benefit plan during the three months ended December 31, 2004. The Company
expects to contribute approximately $0.1 million to the benefit pension plan in each of
the remaining quarters of fiscal 2005. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A037></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 7.&nbsp;&nbsp;&nbsp;&nbsp; SEGMENT
INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company follows Statement of
Financial Accounting Standards (&#147;SFAS&#148;) No. 131, &#147;Disclosures About
Segments of an Enterprise and Related Information.&#148; SFAS No. 131 establishes
standards for the way public business enterprises report information about operating
segments in annual financial statements and in interim reports to shareholders. The method
for determining what information to report is based on the way that management organizes
the segments within the Company for making operating decisions and assessing financial
performance. In evaluating financial performance, management uses sales and operating
profit as the measure of the segments&#146; profit or loss. Based on the guidance in SFAS
No. 131, the Company has one operating segment for financial reporting purposes which is
the design, development, manufacture and marketing of proprietary semiconductor products
and system solutions for manufacturers of wireless communication products. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A038></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 8.&nbsp;&nbsp;&nbsp;&nbsp; EARNINGS PER
SHARE </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<A NAME=A039></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<B>In
thousands, except per share amounts)</B> </FONT> </P>
<BR>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=500>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;13,917</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;4,172</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
      <TD> </TD>
<TD> </TD>
<TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>

      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Weighted average shares outstanding - basic</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>156,440</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>148,784</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Effect of dilutive stock options</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,465</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,213</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
<TD> </TD>
<TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>

      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Weighted average shares outstanding - diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>158,905</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>150,997</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
<TD> </TD>
<TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>

      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income per share - basic</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.09</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.03</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Effect of dilutive stock options</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
<TD> </TD>
<TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>

      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income per share - diluted</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.09</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.03</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
<TD> </TD>
<TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>

      <TD> </TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Debt securities convertible into
approximately 25.4 million shares, stock options exercisable into approximately 15.6
million shares and a warrant to purchase approximately 1.0 million shares were outstanding
but not included in the computation of earnings per share for the three months ended
December 31, 2004 as their effect would have been anti-dilutive. Debt securities
convertible into approximately 25.4 million shares, stock options exercisable into
approximately 17.1 million shares and a warrant to purchase approximately 1.0 million
shares were outstanding but not included in the computation of earnings per share for the
three months ended December 31, 2003 as their effect would have been anti-dilutive. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A040></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 9.&nbsp;&nbsp;&nbsp;&nbsp; STOCK-BASED
COMPENSATION PLANS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company applies the provisions of
APB Opinion No. 25, &#147;Accounting for Stock Issued to Employees,&#148; and related
Interpretations in accounting for its stock-based compensation plans. Therefore,
compensation cost is not generally required to be recognized in the financial statements
for the Company&#146;s stock options issued to employees. No stock-based employee
compensation cost is reflected in net income, as all options granted under the
Company&#146;s stock-based employee compensation plans had an exercise price equal to the
market value of the underlying common stock on the date of grant. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As previously discussed, the Company
will be required to apply SFAS No. 123(R) as of the first interim or annual reporting
period that begins after June 15, 2005. SFAS No. 123(R) requires that the compensation
cost relating to share-based payment transactions be recognized in financial statements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table illustrates the
effect on net income and net income per share if the Company had applied the fair value
recognition provisions of SFAS No. 123, &#147;Accounting for Stock-Based
Compensation,&#148; to stock-based compensation. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A041></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>(in thousands, except
per share amounts):</B> </FONT> </H1>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=62% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reported net income</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=14% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,917</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,172</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total stock-based employee compensation</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>expense determined under fair value based</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>method for all awards, net of related tax</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>effects</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6,300</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,292</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adjusted net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,617</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,880</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Per share information, basic and diluted:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reported net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.09</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.03</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total stock-based employee compensation</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>expense determined under fair value based</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>method for all awards, net of related tax</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>effects</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(0.04</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(0.01</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adjusted net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.05</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.02</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purposes of pro forma disclosures
under SFAS No. 123, the estimated fair value of the options is assumed to be amortized to
expense over the options&#146; vesting period. The fair value of the options granted has
been estimated at the date of the grant using the Black-Scholes option pricing model with
the following assumptions: </FONT></P>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=300>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2005</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=65% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Expected volatility</FONT></TD>
     <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>75</FONT></TD>
        <TD WIDTH=9% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>%</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>91</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Risk free interest rate</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.6%</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.9%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividend yield</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Expected option life (years)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0</FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Black-Scholes option valuation
model was developed for use in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable. In addition, option valuation models
require input of highly subjective assumptions, including the expected stock price
volatility. Because options held by employees and directors have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in the opinion
of management, the existing models do not necessarily provide a reasonable measure of the
fair value of these options. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A042></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 10.&nbsp;&nbsp;&nbsp;&nbsp; PURCHASE
COMMITMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under supply agreements entered into
with Conexant and subsequently with Jazz Semiconductor, Inc. (&#147;Jazz
Semiconductor&#148;), the Company receives wafer fabrication, wafer probe and certain
other services from Jazz Semiconductor&#146;s Newport Beach, California foundry. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the terms of these
agreements, the Company is committed to obtaining certain minimum wafer volumes from Jazz
Semiconductor through March 2005. The Company&#146;s remaining minimum purchase
obligations under these supply agreements are approximately $6.4 million through March
2005, at which time the Company will no longer have minimum purchase obligations although
it expects to continue to utilize Jazz Semiconductor as a supplier in its ordinary course
of business. The Company currently anticipates meeting its minimum purchase obligations
under these supply agreements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A043></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 11.&nbsp;&nbsp;&nbsp;&nbsp; CONTINGENCIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>From time to time various lawsuits,
claims and proceedings have been, and may in the future be, instituted or asserted against
Skyworks, including those pertaining to patent infringement, intellectual property,
environmental, product liability, safety and health, employment and contractual matters.
In addition, in connection with the Merger, Skyworks has assumed responsibility for all
then current and future litigation (including environmental and intellectual property
proceedings) against Conexant or its subsidiaries in respect of the operations of
Conexant&#146;s wireless business. The outcome of litigation cannot be predicted with
certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to
Skyworks. Intellectual property disputes often have a risk of injunctive relief which, if
imposed against Skyworks, could materially and adversely affect the financial condition or
results of operations of Skyworks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally, the semiconductor
industry is characterized by vigorous protection and pursuit of intellectual property
rights. From time to time, third parties have asserted and may in the future assert
patent, copyright, trademark and other intellectual property rights to technologies that
are important to our business and have demanded and may in the future demand that we
license their technology. At the present time, the Company is in litigation with Qualcomm
Incorporated (&#147;Qualcomm&#148;) regarding claims that both the Company and Qualcomm
filed and first served against each other on December 4, 2003 asserting violations of
certain of each company&#146;s respective intellectual property rights. The Company
believes Qualcomm&#146;s claims are without merit and is vigorously defending against
Qualcomm&#146;s claims and fully prosecuting its claims against them. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A044></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE 12.&nbsp;&nbsp;&nbsp;&nbsp; GUARANTEES AND
INDEMNITIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company does not currently have
any guarantees. The Company generally indemnifies its customers from third-party
intellectual property infringement litigation claims related to its products. In
connection with certain facility leases, the Company has indemnified its lessors for
certain claims arising from the facility or the lease. The Company indemnifies its
directors and officers to the maximum extent permitted under the laws of the state of
Delaware. The duration of the indemnities varies, and in many cases is indefinite. The
indemnities to customers in connection with product sales generally are subject to limits
based upon the amount of the related product sales and in many cases are subject to
geographic and other restrictions. In certain instances, the Company&#146;s indemnities do
not provide for any limitation of the maximum potential future payments the Company could
be obligated to make. The Company has not recorded any liability for these indemnities in
the accompanying consolidated balance sheets. </FONT></P>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A045></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 2.
MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>This report and other documents we
have filed with the Securities and Exchange Commission (&#147;SEC&#148;) contain
forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended,
and are subject to the &#147;safe harbor&#148; created by those sections. Words such as
&#147;believes,&#148; &#147;expects,&#148; &#147;may,&#148; &#147;will,&#148;
&#147;would,&#148; &#147;should,&#148; &#147;could,&#148; &#147;seek,&#148;
&#147;intends,&#148; &#147;plans,&#148; &#147;potential,&#148; &#147;continue,&#148;
&#147;estimates,&#148; &#147;anticipates,&#148; &#147;predicts,&#148; and similar
expressions or variations or negatives of such words are intended to identify
forward-looking statements, but are not the exclusive means of identifying forward-looking
statements in this report. Additionally, statements concerning future matters such as the
development of new products, enhancements or technologies, sales levels, expense levels
and other statements regarding matters that are not historical are forward-looking
statements. Although forward-looking statements in this report reflect the good faith
judgment of our management, such statements can only be based on facts and factors
currently known by us. Consequently, forward-looking statements involve inherent risks and
uncertainties and actual results and outcomes may differ materially and adversely from the
results and outcomes discussed in or anticipated by the forward-looking statements. A
number of important factors could cause actual results to differ materially and adversely
from those in the forward-looking statements. We urge you to consider the risks and
uncertainties discussed elsewhere in this report and in the other documents filed with the
SEC in evaluating our forward-looking statements. We have no plans, and undertake no
obligation, to revise or update our forward-looking statements to reflect any event or
circumstance that may arise after the date of this report. We caution readers not to place
undue reliance upon any such forward-looking statements, which speak only as of the date
made.</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>In this document, the words
&#147;we,&#148; &#147;our,&#148; &#147;ours&#148; and &#147;us&#148; refer only to
Skyworks Solutions, Inc. and not any other person or entity.</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A046></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OVERVIEW </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Skyworks Solutions, Inc.
(&#147;Skyworks&#148; or the &#147;Company&#148;) is a leading wireless semiconductor
company focused exclusively on radio frequency (&#147;RF&#148;) and complete cellular
system solutions for mobile communications applications. We offer front-end modules, RF
subsystems and cellular systems to leading wireless handset and infrastructure customers. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The wireless communications
semiconductor industry is highly cyclical and is characterized by rapid technological
change, rapid product obsolescence and price erosion, evolving standards, short product
life cycles and wide fluctuations in product supply and demand. Our operating results have
been, and our operating results may continue to be, negatively affected by substantial
quarterly and annual fluctuations and market downturns due to a number of factors, such as
changes in demand for end-user equipment, the timing of the receipt, reduction or
cancellation of significant customer orders, the gain or loss of significant customers,
market acceptance of our products and our customers&#146; products, our ability to
develop, introduce and market new products and technologies on a timely basis,
availability and cost of products from suppliers, new product and technology introductions
by competitors, changes in the mix of products produced and sold, intellectual property
disputes, the timing and extent of product development costs and general economic
conditions. In the past, average selling prices of established products have generally
declined over time and this trend is expected to continue in the future. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A047></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OUR STRATEGY </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Skyworks&#146; vision is to become
the premier supplier of wireless semiconductor solutions. Key elements in our strategy
include: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A048></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Leveraging Core
Technologies </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Skyworks deploys technology building
blocks such as radio frequency integrated circuits, analog/mixed-signal processing cores
and digital baseband engines as well as software across multiple product platforms. We
believe that this approach creates economies of scale in research and development and
facilitates a reduction in the time to market for key products. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A049></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Increasing Integration
Levels </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>High levels of integration enhance
the benefits of our products by reducing production costs through the use of fewer
external components, reduced board space and improved system assembly yields. By combining
all of the necessary communications functions for a complete system solution, Skyworks can
deliver additional semiconductor content, thereby offering existing and potential
customers more compelling and cost-effective solutions. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A050></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Capturing an Increasing
Amount of Semiconductor Content </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We enable our customers to start with
individual components as necessary, and then migrate up the product integration ladder. We
believe that our highly integrated solutions will enable these customers to speed their
time to market while focusing their resources on product differentiation through a broader
range of more sophisticated, next-generation features. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A051></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Diversifying Customer
Base </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Skyworks supports virtually every
wireless handset original equipment manufacturer (&#147;OEM&#148;) including Nokia
Corporation, Motorola, Inc., Samsung Electronics Co., Sony/Ericsson and LG Electronics,
Inc. Additionally, we supply original design manufacturers (&#147;ODMs&#148;) such as
Arima, BenQ, Chi Mei, Compal and Quanta as well as emerging domestic handset suppliers
throughout China. With the industry&#146;s move to outsourcing to enable increased OEM
focus on brand and channel development, we believe we are particularly well-positioned to
address the growing needs of new market entrants and established suppliers alike who seek
RF and system-level integration expertise. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A052></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Delivering Operational
Excellence </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Skyworks operations team
leverages world-class manufacturing technologies and enables highly integrated modules as
well as system-level solutions. Skyworks will vertically integrate where it can
differentiate or will otherwise enter alliances and partnerships for leading-edge
capabilities. These partnerships and alliances are designed to ensure product leadership
and competitive advantage in the marketplace. We are focused on achieving the
industry&#146;s shortest cycle times, highest yields and ultimately the lowest cost
structure. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A053></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RESULTS OF OPERATIONS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A054></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THREE MONTHS ENDED
DECEMBER 31, 2004 AND 2003 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table sets forth the
results of our operations expressed as a percentage of net revenues for the three months
ended December 31, 2004 and 2003: </FONT></P>
<BR>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended<BR>
December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=68% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net revenues</FONT></TD>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0%</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cost of goods sold</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>60</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>60</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross margin</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>40</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>39</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.7</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating expenses:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Research and development</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.9</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.7</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Selling, general and administrative</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.4</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.6</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;Amortization</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.4</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.6</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.8</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operating income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.4</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.9</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.6)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.5</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Income before income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provision for income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.0</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.7</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="left"> </TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3%</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.4%</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="left"> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="left"> </TD></TR>

</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A055></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three months ended
December 31, 2004, we made progress in several key areas that contributed to an
improvement in operating results and the generation of positive cash flows from
operations. More specifically, we: </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Hang Level 2" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
experienced  an  increase  in demand for our  products  and  launched  and  ramped  new highly  integrated products;</FONT></TD>
</TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Para Large Hang Level 2" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
experienced  a 19%  increase in units sold in addition to a 6% aggregate  increase in the average  selling
         price of our products; and </FONT></TD>
</TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Para Large Hang Level 2" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
reduced total operating expenses as a percentage of net revenues to 29.6% for the three
months ended December 31, 2004 from 33.8% for the corresponding period in previous fiscal
year. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A057></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NET REVENUES </FONT></H1>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=28% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net revenues</FONT></TD>
     <TD WIDTH=7% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=19% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$220,160</FONT></TD>
        <TD WIDTH=7% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25</FONT></TD>
        <TD WIDTH=9% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.7%</FONT></TD>
     <TD WIDTH=19% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$175,108</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We market and sell our semiconductor
products and system solutions to leading OEMs of communication electronics products,
third-party ODMs and contract manufacturers and indirectly through electronic components
distributors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net revenues increased for the three
months ended December 31, 2004 when compared to the corresponding period in the previous
fiscal year primarily as the result of increased demand for our wireless product
portfolio. During the three months ended December 31, 2004, we experienced a 19% increase
in units sold in addition to a 6% aggregate increase in the average selling price of our
products as we experienced a shift in our product mix to higher-integrated products
tempered by decreases in the average selling price of our discrete products, when compared
to the corresponding period in the previous fiscal year. More specifically, we launched
and ramped new highly integrated products increasing our average selling prices primarily
within our front-end module products while experiencing a significant increase in units
sold within our cellular systems products. These increases in net revenues for the three
months ended December 31, 2004 when compared to the corresponding period in the previous
fiscal year were tempered by a decrease of approximately $6.8 million in net revenues for
our assembly and test services. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A058></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GROSS PROFIT </FONT></H1>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>

<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross profit:</FONT></TD>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=17% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;88,019</FONT></TD>
        <TD WIDTH=7% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26</FONT></TD>
        <TD WIDTH=7% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.5%</FONT></TD>
     <TD WIDTH=17% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;69,568</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>40.0%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>39.7%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross profit represents net revenues
less cost of goods sold. Cost of goods sold consists primarily of purchased materials,
labor and overhead (including depreciation) associated with product manufacturing, royalty
and other intellectual property costs and sustaining engineering expenses pertaining to
products sold. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross profit improved for the three
months ended December 31, 2004 when compared to the corresponding period in the previous
fiscal year primarily as the result of increased operational efficiency through capacity
utilization. This was partially offset by additional costs we incurred as we launched and
ramped a number of more highly integrated product offerings. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A059></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RESEARCH AND DEVELOPMENT </FONT></H1>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>

<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">(in thousands) </FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Research and development</FONT></TD>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=15% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;37,113</FONT></TD>
        <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.5)%</FONT></TD>
     <TD WIDTH=15% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;38,065</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.9%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.7%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Research and development expenses
consist principally of direct personnel costs, costs for pre-production evaluation and
testing of new devices and design and test tool costs. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The decrease in research and
development expenses for the three months ended December 31, 2004 when compared to the
corresponding period in the previous fiscal year is primarily attributable to our
commitment to streamlining our processes and focusing our product development on
integrated products to meet the needs of our customers. In addition, research and
development expenses were lower for the three months ended December 31, 2004 when compared
to the corresponding period in the previous fiscal year as we realized benefits from cost
saving initiatives implemented in fiscal 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A060></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SELLING, GENERAL AND
ADMINISTRATIVE </FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=53% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selling, general and administrative</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;27,224</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33</FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.7%</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;20,361</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.4%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.6%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selling, general and administrative
expenses include personnel costs (legal, accounting, treasury, human resources,
information systems, customer service, etc.), sales representative commissions,
advertising and other marketing costs. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selling, general and administrative
expenses increased for the three months ended December 31, 2004 when compared to the
corresponding period in the previous fiscal year primarily as the result of additional
direct selling expenses attributable to an increase in demand for our wireless product
portfolio. In addition, selling, general and administrative expenses for the three months
ended December 31, 2004 reflects an increase of approximately $2 million in legal expenses
related to protecting our intellectual property portfolio. See Note 11 of Notes to Interim
Consolidated Financial Statements for information related to our contingencies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A061></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AMORTIZATION OF
INTANGIBLE ASSETS </FONT></H1>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=41% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amortization</FONT></TD>
     <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;737</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=6% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4</FONT></TD>
        <TD WIDTH=11% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.2)%</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;769</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.3%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.4%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 2002, we recorded $36.4 million of
intangible assets related to the Merger consisting of developed technology, customer
relationships and a trademark. These assets are principally being amortized on a
straight-line basis over a 10-year period. Amortization expense for the three months ended
December 31, 2004 and 2003 primarily represents the amortization of these intangible
assets. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A062></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INTEREST EXPENSE </FONT></H1>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=34% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense</FONT></TD>
     <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;3,533</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(34</FONT></TD>
        <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.3)%</FONT></TD>
     <TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;5,374</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.6%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The decrease in interest expense for
the three months ended December 31, 2004 when compared to the corresponding period in the
previous fiscal year is primarily related to the conversion of our $45 million of senior
subordinated notes into shares of our common stock during the third quarter of fiscal
2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See Note 4 of Notes to Interim
Consolidated Financial Statements for information related to our borrowing arrangements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A063></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER INCOME, NET </FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income, net</FONT></TD>
     <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;1,121</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=10% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>147</FONT></TD>
        <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.5%</FONT></TD>
     <TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;453</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.5%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.3%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income, net is comprised primarily
of foreign exchange gains/losses, interest income on invested cash balances and other
non-operating income and expense items. The increase in other income for the three months
ended December 31, 2004 when compared to the corresponding period in the previous fiscal
year is primarily related to the recognition of additional foreign exchange gains. We
recognized $0.3 million in foreign exchange gains for the three months ended December 31,
2004 compared to $0.1 million in foreign exchange losses for the corresponding period in
the previous fiscal year. In addition, interest income on invested cash balances increased
approximately $0.3 million for the three months ended December 31, 2004 when compared to
the corresponding period in the previous fiscal year primarily as a result of growth in
our invested cash balances. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A064></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROVISION FOR INCOME
TAXES </FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=400>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=47% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provision for income taxes</FONT></TD>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;6,616</FONT></TD>
        <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>416</FONT></TD>
        <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.9%</FONT></TD>
     <TD WIDTH=13% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;1,280</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% of net revenues</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.0%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.7%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of our history of
operating losses and the expectation of future operating results, we determined that it is
more likely than not that historic income tax benefits will not be realized except for
certain future deductions associated with our foreign operations. Consequently, as of
December 31, 2004, we have established a valuation allowance against all of our net U.S.
deferred tax assets. Deferred tax assets have been recognized for foreign operations when
management believes they will be recovered during the carry forward period. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The provision for income taxes for
the three months ended December 31, 2004 and 2003 each consist of approximately $0.8
million of foreign income taxes incurred by foreign operations. The provision for income
taxes also includes $1.6 million of additional foreign taxes for the three months ended
December 31, 2004 related to a change in the expected future benefit of our deferred tax
assets as the result of regulated reductions in the applicable tax rates in Mexico. In
addition, the provision for income taxes for the three months ended December 31, 2004 and
2003 consists of approximately $4.2 million and $0.5 million, respectively, of U.S. income
taxes recorded as a charge reducing the carrying value of goodwill. As noted in our annual
report on Form 10-K, no benefit has been recognized for certain pre-Merger deferred tax
assets. The benefit from the recognition of these deferred items reduces the carrying
value of goodwill instead of a reduction of income tax expense. We will evaluate the
realization of the pre-Merger deferred tax assets on a quarterly basis and adjust the
provision for income taxes accordingly. As a result, the effective tax rate may vary in
subsequent quarters. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three months ended
December 31, 2004, we reversed our policy of permanently reinvesting the earnings of our
Mexican subsidiary. We repatriated approximately $17 million of earnings, which was not
subject to Mexican withholding tax and could be applied against U.S. net operating loss
carryforwards resulting in no U.S. income tax expense. In future periods we will provide for U.S.
income tax currently on earnings attributable to our operations in Mexico. No provision
has been made for U.S. federal, state, or additional foreign income taxes which would be
due upon the actual or deemed distribution of undistributed earnings of our other foreign
subsidiaries, which have been or are intended to be permanently reinvested. The effect on
our financial statements is immaterial. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A065></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LIQUIDITY AND CAPITAL
RESOURCES </FONT></H1>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=500>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Three Months Ended December 31,</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(in thousands)</FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2004</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
       <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2003</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=69% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash and cash equivalents at beginning of period</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;203,539</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=11% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;161,506</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,127</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26,125</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(12,519</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9,862</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,056</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,518</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT></TD></TR>

<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="1" ALIGN="Right"> </TD>
      <TD> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash and cash equivalents at end of period</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;202,203</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;176,251</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
      <TD> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD>
      <TD><HR WIDTH="95%" SIZE="2" ALIGN="Right"> </TD>
      <TD> </TD></TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three months ended
December 31, 2004, we made progress in several key areas as we focused our efforts on both
cash and inventory management. We significantly reduced the number of days sales
outstanding for the three months ended December 31, 2004 to 71 from 79 for the
corresponding period in the previous fiscal year. Annualized inventory turns for the three
months ended December 31, 2004 were 6.7 compared to 7.2 for the corresponding period in
the previous fiscal year. Inventory management remains an area of focus as we balance the
need to maintain strategic inventory levels to ensure competitive lead times against the
risk of inventory obsolescence because of rapidly changing technology and customer
requirements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three months ended
December 31, 2004, we generated $7.1 million in cash from operating activities as we
experienced a significant improvement in our operating results when compared to the
corresponding period in the previous fiscal year. This was partially offset by a reduction
in other liabilities of $13.8 million primarily related to payment of prior year
incentives and semi-annual interest, in addition to an increase of $13.1 million in our
net accounts receivable balance. For the three months ended December 31, 2004, we invested
$10.0 million in capital equipment primarily related to the design of new highly
integrated products and processes, enabling us to address new opportunities and to meet
our customers&#146; demands. We believe a focused program of capital expenditures will be
required to sustain our current manufacturing capabilities. We may also consider
acquisition opportunities to extend our technology portfolio and design expertise and to
expand our product offerings. Cash provided by financing activities for the three months
ended December 31, 2004 primarily represents cash provided by stock option exercises. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash provided by operating activities
was $26.1 million for the three months ended December 31, 2003, reflecting net income of
$4.2 million, in addition to non-cash charges, primarily depreciation, amortization, and
contribution of common shares to Savings and Retirement Plans of $10.7 million and a net
decrease in the components of working capital of approximately $11.2 million. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash used in investing activities for
the three months ended December 31, 2003 consisted of capital expenditures of $13.9
million partially offset by approximately $4.0 million of cash provided by the maturity of
short-term investments. Cash used in financing activities for the three months ended
December 31, 2003 principally consisted of approximately $2.7 million of net payments to
Wachovia Bank, National Association under our Facility Agreement. These financing activity
cash outflows were partially offset by approximately $1.2 million of cash provided by
stock option exercises during three months ended December 31, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on our results of operations
for the three months ended December 31, 2004 and current trends, we expect our existing
sources of liquidity, together with cash expected to be generated from operations, will be
sufficient to fund our research and development, capital expenditures, debt obligations,
purchase obligations, working capital and other cash requirements for at least the next
twelve months. However, we cannot assure you that the capital required to fund these
expenses will be available in the future. In addition, any strategic investments and
acquisitions that we may make to help us grow our business may require additional capital
resources. If we are unable to obtain enough capital to meet our capital needs on a timely
basis or at all, our business and operations could be materially adversely affected. </FONT></P>

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<A NAME=A066></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OFF-BALANCE SHEET
ARRANGEMENTS </FONT></H1>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our off-balance sheet arrangements
consist of operating leases and unconditional purchase obligations. We lease certain
facilities and equipment under non-cancelable operating leases. The leases expire at
various dates through 2010 and contain various provisions for rental adjustments. The
leases generally contain renewal provisions for varying periods of time. Our unconditional
purchase obligations relate to supply agreements entered into with Conexant and Jazz
Semiconductor. Pursuant to these supply agreements we receive wafer fabrication, wafer
probe and certain other services from Jazz Semiconductor and are committed to obtaining
certain minimum wafer volumes from Jazz Semiconductor. Our remaining minimum purchase
obligations under these supply agreements are approximately $6.4 million through March
2005, at which time we will no longer have minimum purchase obligations although we expect
to continue to utilize Jazz Semiconductor as a supplier in our ordinary course of
business. </FONT></P>

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<A NAME=A067></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTAIN BUSINESS RISKS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We operate in a rapidly changing
environment that involves a number of risks, many of which are beyond our control. This
discussion highlights some of the risks which may affect our future operating results.
These are the risks and uncertainties we believe are most important for you to consider.
Additional risks and uncertainties not presently known to us, which we currently deem
immaterial or which are similar to those faced by other companies in our industry or
business in general, may also impair our business operations. If any of the following
risks or uncertainties actually occurs, our business, financial condition and operating
results would likely suffer. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We operate in the highly cyclical
wireless communications semiconductor industry, which is subject to significant downturns.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We operate primarily in the
semiconductor industry, which is cyclical and subject to rapid change and evolving
industry standards. From time to time, changes in general economic conditions, together
with other factors, cause significant upturns and downturns in the industry. Periods of
industry downturn are characterized by diminished product demand, production overcapacity,
excess inventory levels and accelerated erosion of average selling prices. These
characteristics, and in particular their impact on the level of demand for digital
cellular handsets, may cause substantial fluctuations in our revenues and results of
operations.&nbsp;&nbsp;Furthermore, downturns in the semiconductor industry may be severe
and prolonged, and any prolonged delay or failure of the industry or the wireless
communications market to recover from downturns would materially and adversely affect our
business, financial condition and results of operations. The semiconductor industry also
periodically experiences increased demand and production capacity constraints, which may
affect our ability to meet customer demand for our products. We have experienced these
cyclical fluctuations in our business and may experience cyclical fluctuations in the
future. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We have incurred substantial
operating losses in the past and may experience future losses.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our operating results for fiscal
years 2002 and 2003 were adversely affected by a global economic slowdown, decreased
consumer confidence, reduced capital spending, adverse business conditions and liquidity
concerns in the telecommunications and related industries. These factors led to a slowdown
in customer orders, an increase in the number of cancellations and reschedulings of
backlog, higher overhead costs as a percentage of our reduced net revenue, and an abrupt
decline in demand for many of the end-user products that incorporate our wireless
communications semiconductor products and system solutions. Although we recently emerged
from this period of economic weakness, should economic conditions deteriorate for any
reason, it could result in underutilization of our manufacturing capacity, reduced
revenues or changes in our revenue mix, and other impacts that would materially and
adversely affect our operating results. Due to this economic uncertainty, although we were
profitable in fiscal 2004, we cannot assure you that we will be able to sustain such
profitability or that we will not experience future operating losses. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally, the conflict in Iraq as
well as other contemporary international conflicts, acts of terrorism and civil and
military unrest have contributed to the economic uncertainty. These continuing and
potentially escalating conflicts can also be expected to place continued pressure on
economic conditions in the United States and worldwide. These conditions make it extremely
difficult for our customers, our vendors and for us to accurately forecast and plan future
business activities. If such uncertainty continues or economic conditions worsen (or
both), our business, financial condition and results of operations will likely be
materially and adversely affected. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The wireless semiconductor markets
are characterized by intense competition.</B> </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The wireless communications
semiconductor industry in general and the markets in which we compete in particular are
intensely competitive. We compete with U.S. and international semiconductor manufacturers
of all sizes in terms of resources and market share. We currently face significant
competition in our markets and expect that intense price and product competition will
continue. This competition has resulted in, and is expected to continue to result in,
declining average selling prices for our products and increased challenges in maintaining
or increasing market share. Furthermore, additional competitors may enter our markets as a
result of growth opportunities in communications electronics, the trend toward global
expansion by foreign and domestic competitors and technological and public policy changes.
We believe that the principal competitive factors for semiconductor suppliers in our
markets include, among others: </FONT></P>

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<TABLE cellSpacing=0 cellPadding=0 width="100%">
<TR vAlign=top>
<TD width="15%"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp; </FONT></TD>
<TD width="85%"><FONT face="Times New Roman, Times, Serif" size=2>&#149;&nbsp;&nbsp;&nbsp;time-to-market;<BR> &#149;&nbsp;&nbsp;&nbsp;timely new product innovation;<BR> &#149;&nbsp;&nbsp;&nbsp;product quality, reliability and performance;<BR> &#149;&nbsp;&nbsp;&nbsp;product price;<BR> &#149;&nbsp;&nbsp;&nbsp;features available in products;<BR> &#149;&nbsp;&nbsp;&nbsp;compliance with industry standards;<BR> &#149;&nbsp;&nbsp;&nbsp;strategic relationships with customers; and<BR> &#149;&nbsp;&nbsp;&nbsp;access to and protection of intellectual property.</FONT></TD></TR>
</TABLE>


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<P><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
 cannot assure you that we will be able to successfully address these factors. Many of our competitors
 enjoy the benefit of: </FONT></P>
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<TABLE cellSpacing=0 cellPadding=0 width="100%">
<TR vAlign=top>
<TD width="15%"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp; </FONT></TD>
<TD width="85%"><FONT face="Times New Roman, Times, Serif" size=2>&#149;&nbsp;&nbsp;&nbsp;long presence in key markets;<BR> &#149;&nbsp;&nbsp;&nbsp;name recognition;<BR> &#149;&nbsp;&nbsp;&nbsp;high levels of customer satisfaction; <BR> &#149;&nbsp;&nbsp;&nbsp;ownership or control of key technology or intellectual property; and <BR> &#149;&nbsp;&nbsp;&nbsp;strong financial, sales and marketing, manufacturing, distribution, technical or other resources.<BR> </FONT></TD></TR>
</TABLE>

<BR>


<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result, certain competitors may
be able to adapt more quickly than we can to new or emerging technologies and changes in
customer requirements or may be able to devote greater resources to the development,
promotion and sale of their products than we can. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Current and potential competitors
have established or may in the future establish financial or strategic relationships among
themselves or with customers, resellers or other third parties. These relationships may
affect customers&#146; purchasing decisions. Accordingly, it is possible that new
competitors or alliances among competitors could emerge and rapidly acquire significant
market share. We cannot assure you that we will be able to compete successfully against
current and potential competitors. Increased competition could result in pricing
pressures, decreased gross margins and loss of market share and may materially and
adversely affect our business, financial condition and results of operations. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our success depends upon our
ability to develop new products and reduce costs in a timely manner.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The wireless communications
semiconductor industry generally and, in particular, the markets into which we sell our
products are highly cyclical and characterized by constant and rapid technological change,
rapid product evolution, price erosion, evolving technical standards, short product life
cycles, increasing demand for higher levels of integration and increased miniaturization,
and wide fluctuations in product supply and demand. Our operating results depend largely
on our ability to continue to cost-effectively introduce new and enhanced products on a
timely basis. The successful development and commercialization of semiconductor devices,
modules and system solutions is highly complex and depends on numerous factors, including: </FONT></P>

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<TABLE width="600" CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;the ability to anticipate customer and market requirements and changes in
technology and industry standards;<BR>
&#149;&nbsp;&nbsp;&nbsp;the ability to obtain capacity
sufficient to meet customer demand;<BR>
&#149;&nbsp;&nbsp;&nbsp;the ability to define new products
that meet customer and market requirements;<BR>
&#149;&nbsp;&nbsp;&nbsp;the ability to complete
development of new products and bring products to market on a timely basis;<BR>
&#149;&nbsp;&nbsp;&nbsp;the ability to differentiate our products from offerings of our competitors;<BR>
&#149;&nbsp;&nbsp;&nbsp;overall market acceptance of our products; and <BR>
&#149;&nbsp;&nbsp;&nbsp;the
ability to obtain adequate intellectual property protection for our new products.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our ability to manufacture current
products, and to develop new products, depends, among other factors, on the viability and
flexibility of our own internal information technology systems (&#147;IT Systems&#148;).
We upgrade and change our IT Systems from time to time, and are currently implementing a
system upgrade, and there can be no assurance that such upgrade will be successful. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We cannot assure you that we will
have sufficient resources to make the substantial investment in research and development
needed to develop and bring to market new and enhanced products in a timely manner. We
will be required to continually evaluate expenditures for planned product development and
to choose among alternative technologies based on our expectations of future market
growth. We cannot assure you that we will be able to develop and introduce new or enhanced
wireless communications semiconductor products in a timely and cost-effective manner, that
our products will satisfy customer requirements or achieve market acceptance or that we
will be able to anticipate new industry standards and technological changes. We also
cannot assure you that we will be able to respond successfully to new product
announcements and introductions by competitors or to changes in the design or
specifications of complementary products of third parties with which our products
interface. If we fail to rapidly and cost-effectively introduce new and enhanced products
in sufficient quantities and that meet our customers requirements, our business and
results of operations would be materially and adversely harmed. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, prices of many of our
products decline, sometimes significantly, over time. We believe that to remain
competitive, we must continue to reduce the cost of producing and delivering existing
products at the same time that we develop and introduce new or enhanced products. We
cannot assure you that we will be able to continue to reduce the cost of our products to
remain competitive. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The markets into which we sell our
products are characterized by rapid technological change.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The demand for our products can
change quickly and in ways we may not anticipate. Our markets generally exhibit the
following characteristics: </FONT></P>
<TABLE width="600" CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;rapid technological developments and product evolution;<BR>
&#149;&nbsp;&nbsp;&nbsp;rapid changes in customer requirements;<BR>
&#149;&nbsp;&nbsp;&nbsp;frequent new product introductions and enhancements;<BR>
&#149;&nbsp;&nbsp;&nbsp;demand for higher levels of integration, decreased size and decreased power consumption;<BR>
&#149;&nbsp;&nbsp;&nbsp;short product life cycles with declining prices over the life cycle of the
product; and<BR>
&#149;&nbsp;&nbsp;&nbsp;evolving industry standards. </FONT></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>These changes in our markets may
contribute to the obsolescence of our products. Our products could become obsolete or less
competitive sooner than anticipated because of a faster than anticipated change in one or
more of the above-noted factors. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The ability to attract and retain
qualified personnel to contribute to the design, development, manufacture and sale of our
products is critical to our success.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As the source of our technological
and product innovations, our key technical personnel represent a significant asset. Our
success depends on our ability to continue to attract, retain and motivate qualified
personnel, including executive officers and other key management and technical personnel.
The competition for management and technical personnel is intense in the semiconductor
industry, and therefore we cannot assure you that we will be able to attract and retain
qualified management and other personnel necessary for the design, development,
manufacture and sale of our products. We may have particular difficulty attracting and
retaining key personnel during periods of poor operating performance, given, among other
things, the use of equity-based compensation by us and our competitors. The loss of the
services of one or more of our key employees or our inability to attract, retain and
motivate qualified personnel, could have a material adverse effect on our ability to
operate our business. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>If OEMs and ODMs of communications
electronics products do not design our products into their equipment, we will have
difficulty selling those products. Moreover, a &#147;design win&#148; from a customer does
not guarantee future sales to that customer.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our products are not sold directly to
the end-user, but are components or subsystems of other products. As a result, we rely on
OEMs and ODMs of wireless communications electronics products to select our products from
among alternative offerings to be designed into their equipment. Without these
&#147;design wins,&#148; we would have difficulty selling our products. If a manufacturer
designs another supplier&#146;s product into one of its product platforms, it is more
difficult for us to achieve future design wins with that platform because changing
suppliers involves significant cost, time, effort and risk on the part of that
manufacturer. Also, achieving a design win with a customer does not ensure that we will
receive significant revenues from that customer. Even after a design win, the customer is
not obligated to purchase our products and can choose at any time to reduce or cease use
of our products, for example, if its own products are not commercially successful, or for
any other reason. We cannot assure you that we will continue to achieve design wins or to
convert design wins into actual sales, and any failure to do so could materially and
adversely affect our operating results. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Lengthy product development and
sales cycles associated with many of our products may result in significant expenditures
before generating any revenues related to those products.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>After our product has been developed,
tested and manufactured, our customers may need three to six months or longer to
integrate, test and evaluate our product and an additional three to six months or more to
begin volume production of equipment that incorporates the product. This lengthy cycle
time increases the possibility that a customer may decide to cancel or change product
plans, which could reduce or eliminate our sales to that customer. As a result of this
lengthy sales cycle, we may incur significant research and development expenses, and
selling, general and administrative expenses, before we generate the related revenues for
these products. Furthermore, we may never generate the anticipated revenues from a product
after incurring such expenses if our customer cancels or changes its product plans. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Uncertainties involving the
ordering and shipment of our products could adversely affect our business.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our sales are typically made pursuant
to individual purchase orders and not under long-term supply arrangements with our
customers. Our customers may cancel orders before shipment. Additionally, we sell a
portion of our products through distributors, some of whom have rights to return unsold
products. We may purchase and manufacture inventory based on estimates of customer demand
for our products, which is difficult to predict. This difficulty may be compounded when we
sell to OEMs indirectly through distributors or contract manufacturers, or both, as our
forecasts of demand will then be based on estimates provided by multiple parties. In
addition, our customers may change their inventory practices on short notice for any
reason. The cancellation or deferral of product orders, the return of previously sold
products, or overproduction due to a change in anticipated order volumes could result in
us holding excess or obsolete inventory, which could result in inventory write-downs and,
in turn, could have a material adverse effect on our financial condition. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our reliance on a small number of
customers for a large portion of our sales could have a material adverse effect on the
results of our operations.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A significant portion of our sales
are concentrated among a limited number of customers. If we lost one or more of these
major customers, or if one or more major customers significantly decreased its orders of
our products, our business would be materially and adversely affected. Sales to Motorola,
Inc. and to Samsung Electronics Co. represented approximately 14% and 12%, respectively,
of net revenues for fiscal 2004. Our future operating results will depend on the success
of these customers and other customers and our success in selling products to them. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Average product life cycles in the
semiconductor industry tend to be very short</B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the semiconductor industry,
product life cycles tend to be short relative to the sales and development cycles.
Therefore, the resources devoted to product sales and marketing may not result in material
revenue, and from time to time we may need to write off excess or obsolete inventory. If
we were to incur significant marketing expenses and investments in inventory that we are
not able to recover, and we are not able to compensate for those expenses, our operating
results would be materially and adversely affected. In addition, if we sell our products
at reduced prices in anticipation of cost reductions but still hold higher cost products
in inventory, our operating results would be harmed. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our leverage and our debt service
obligations may adversely affect our cash flow.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December 31, 2004, we had total
indebtedness of approximately $280 million, which represented approximately 28% of our
total capitalization. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As long as our 4.75 percent
convertible subordinated notes remain outstanding, we will have debt service obligations
on such notes of approximately $10,925,000 per year in interest payments. If we issue
other debt securities in the future, our debt service obligations will increase. If we are
unable to generate sufficient cash to meet these obligations and must instead use our
existing cash or investments, we may have to reduce or curtail other activities of our
business. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We intend to fulfill our debt service
obligations from cash generated by our operations, if any, and from our existing cash and
investments. If necessary, among other alternatives, we may add lease lines of credit to
finance capital expenditures and we may obtain other long-term debt, lines of credit and
other financing. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our indebtedness could have
significant negative consequences, including: </FONT></P>

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<TABLE width="600" CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;increasing our vulnerability to general adverse economic and industry
conditions;<BR>
&#149;&nbsp;&nbsp;&nbsp;limiting our ability to obtain additional financing;<BR>
&#149;&nbsp;&nbsp;&nbsp;requiring the dedication of a substantial portion of any cash flow from
operations to service our indebtedness, thereby reducing the amount of cash flow available
for other purposes, including capital expenditures;<BR>
&#149;&nbsp;&nbsp;&nbsp;limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete; and<BR>
&#149;&nbsp;&nbsp;&nbsp;placing us at a
possible competitive disadvantage to less leveraged competitors and competitors that have
better access to capital
resources. </FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Despite our current debt levels, we
are able to incur substantially more debt, which would increase the risks described above. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We face a risk that capital needed
for our business will not be available when we need it.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We may need to obtain sources of
financing in the future. We expect our existing sources of liquidity, together with cash
expected to be generated from operations, will be sufficient to fund our research and
development, capital expenditures, debt obligations, purchase obligations, working capital
and other cash requirements for at least the next twelve months. However, we cannot assure
you that the capital required to fund these expenses will be available in the future. To
the extent that existing cash and securities and cash from operations are insufficient to
fund our future activities, we may need to raise additional funds through public or
private equity or debt financing. Conditions existing in the U.S. capital markets if and
when we seek additional financing as well as the then current condition of the Company
will affect our ability to raise capital, as well as the terms of any such financing. We
may not be able to raise enough capital to meet our capital needs on a timely basis or at
all. Failure to obtain capital when required would have a material adverse effect on the
Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, any strategic
investments and acquisitions that we may make to help us grow our business may require
additional capital resources. We cannot assure you that the capital required to fund these
investments and acquisitions will be available in the future. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Our manufacturing
processes are extremely complex and specialized.</B> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our manufacturing operations are
complex and subject to disruption, including for causes beyond our control. The
fabrication of integrated circuits is an extremely complex and precise process consisting
of hundreds of separate steps. It requires production in a highly controlled, clean
environment. Minor impurities, contamination of the clean room environment, errors in any
step of the fabrication process, defects in the masks used to print circuits on a wafer,
defects in equipment or materials, human error, or a number of other factors can cause a
substantial percentage of wafers to be rejected or numerous die on each wafer to
malfunction. Because our operating results are highly dependent upon our ability to
produce integrated circuits at acceptable manufacturing yields, these factors present
could have a material adverse affect on our business. In addition, we may discover from
time to time defects in our products after they have been shipped, which may require us to
replace such products. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally, our operations may be
affected by lengthy or recurring disruptions of operations at any of our production
facilities or those of our subcontractors. These disruptions may include electrical power
outages, fire, earthquake, flooding, war, acts of terrorism, or other natural or man-made
disasters. Disruptions of our manufacturing operations could cause significant delays in
shipments until we are able to shift the products from an affected facility or
subcontractor to another facility or subcontractor. In the event of such delays, we cannot
assure you that the required alternative capacity, particularly wafer production capacity,
would be available on a timely basis or at all. Even if alternative wafer production or
assembly and test capacity is available, we may not be able to obtain it on favorable
terms, which could result in higher costs and/or a loss of customers. We may be unable to
obtain sufficient manufacturing capacity to meet demand, either at our own facilities or
through external manufacturing or similar arrangements with others. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Due to the highly specialized nature
of the gallium arsenide integrated circuit manufacturing process, in the event of a
disruption at the Newbury Park, California or Woburn, Massachusetts semiconductor wafer
fabrication facilities, alternative gallium arsenide production capacity would not be
immediately available from third-party sources. These disruptions could have a material
adverse effect on our business, financial condition and results of operations. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We may not be able to maintain and
improve manufacturing yields that contribute positively to our gross margin and
profitability.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Minor deviations or perturbations in
the manufacturing process can cause substantial manufacturing yield loss, and in some
cases, cause production to be suspended. Manufacturing yields for new products initially
tend to be lower as we complete product development and commence volume manufacturing, and
typically increase as we bring the product to full production. Our forward product pricing
includes this assumption of improving manufacturing yields and, as a result, material
variances between projected and actual manufacturing yields will have a direct effect on
our gross margin and profitability. The difficulty of accurately forecasting manufacturing
yields and maintaining cost competitiveness through improving manufacturing yields will
continue to be magnified by the increasing process complexity of manufacturing
semiconductor products. Our manufacturing operations will also face pressures arising from
the compression of product life cycles, which will require us to manufacture new products
faster and for shorter periods while maintaining acceptable manufacturing yields and
quality without, in many cases, reaching the longer-term, high-volume manufacturing
conducive to higher manufacturing yields and declining costs. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We are dependent upon third
parties for the manufacture, assembly and test of our products.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We rely upon independent wafer fabrication
facilities, called foundries, to provide silicon-based products and to supplement our
gallium arsenide wafer manufacturing capacity. We also utilize subcontractors to package,
assemble and test our products. There are significant risks associated with reliance on
third-party foundries, including: </FONT></P>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;the lack of ensured wafer supply, potential wafer shortages and higher wafer
prices;<BR>
&#149;&nbsp;&nbsp;&nbsp;limited control over delivery schedules, manufacturing yields, production
costs and quality assurance; and<BR>
&#149;&nbsp;&nbsp;&nbsp;the inaccessibility of, or delays in
obtaining access to, key process technologies. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Although we have long-term supply
arrangements to obtain additional external manufacturing capacity, the third-party
foundries we use may allocate their limited capacity to the production requirements of
other customers. If we choose to use a new foundry, it will typically take an extended
period of time to complete the qualification process before we can begin shipping products
from the new foundry. The foundries may experience financial difficulties, be unable to
deliver products to us in a timely manner or suffer damage or destruction to their
facilities, particularly since some of them are located in earthquake zones. If any
disruption of manufacturing capacity occurs, we may not have alternative manufacturing
sources immediately available. We may therefore experience difficulties or delays in
securing an adequate supply of our products, which could impair our ability to meet our
customers&#146; needs and have a material adverse effect on our operating results. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We are dependent upon third
parties for the supply of raw materials and components.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our manufacturing operations depend
on obtaining adequate supplies of raw materials and the components used in our
manufacturing processes. We believe we have adequate sources for the supply of raw
materials and components for our manufacturing needs with suppliers located around the
world. While we do not typically rely on a single source of supply for our raw materials,
we are currently dependent on a sole-source supplier for epitaxial wafers used in the
gallium arsenide semiconductor manufacturing processes at our manufacturing facilities. We
cannot assure you that we will not lose a significant or sole supplier or that a supplier
will be able to meet performance and quality specifications or delivery schedules. If we
lost a supplier or a supplier were unable to meet performance or quality specifications or
delivery schedules, our ability to satisfy customer obligations could be materially and
adversely affected. In addition, we review our relationships with suppliers of raw
materials and components for our manufacturing needs on an ongoing basis. In connection
with our ongoing review, we may modify or terminate our relationship with one or more
suppliers. We may also enter into other sole supplier arrangements to meet certain of our
raw material or component needs. If we were to enter into additional sole supplier
arrangements for any of our raw materials or components, the risks associated with our
supply arrangements would be exacerbated. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Remaining competitive in the
semiconductor industry requires transitioning to smaller geometry process technologies and
achieving higher levels of design integration.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In order to remain competitive, we
expect to continue to transition our semiconductor products to increasingly smaller line
width geometries. This transition requires us to modify the manufacturing processes for
our products, design new products to more stringent standards, and to redesign some
existing products. In the past, we have experienced some difficulties migrating to smaller
geometry process technologies or new manufacturing processes, which resulted in
sub-optimal manufacturing yields, delays in product deliveries and increased expenses. We
may face similar difficulties, delays and expenses as we continue to transition our
products to smaller geometry processes in the future. In some instances, we depend on our
relationships with our foundries to transition to smaller geometry processes successfully.
We cannot assure you that our foundries will be able to effectively manage the transition
or that we will be able to maintain our foundry relationships. If our foundries or we
experience significant delays in this transition or fail to efficiently implement this
transition, our business, financial condition and results of operations could be
materially and adversely affected. As smaller geometry processes become more prevalent, we
expect to continue to integrate greater levels of functionality, as well as customer and
third party intellectual property, into our products. However, we may not be able to
achieve higher levels of design integration or deliver new integrated products on a timely
basis, or at all. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We are subject to the
risks of doing business internationally. </B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A substantial majority of our net
revenues are derived from customers located outside the United States, primarily countries
located in the Asia-Pacific region and Europe. In addition, we have design centers and
suppliers located outside the United States, and third-party packaging, assembly and test
facilities and foundries located in the Asia-Pacific region. Finally, we have our own
packaging, assembly and test facility in Mexicali, Mexico. Our international sales and
operations are subject to a number of risks inherent in selling and operating abroad.
These include, but are not limited to, risks regarding: </FONT></P>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;currency exchange rate fluctuations;<BR>
&#149;&nbsp;&nbsp;&nbsp;local economic and political conditions, including social, economic and
political instability;<BR>
&#149;&nbsp;&nbsp;&nbsp;disruptions of capital and trading markets;<BR>
&#149;&nbsp;&nbsp;&nbsp;restrictive governmental actions (such as restrictions on transfer of
funds and trade protection measures, including export duties,
quotas, customs duties, import or export controls and tariffs);<BR>
&#149;&nbsp;&nbsp;&nbsp;changes in legal or regulatory requirements;<BR>
&#149;&nbsp;&nbsp;&nbsp;natural disasters, acts of terrorism, widespread illness and war;<BR>
&#149;&nbsp;&nbsp;&nbsp;limitations on the repatriation of funds;<BR>
&#149;&nbsp;&nbsp;&nbsp;difficulty in obtaining distribution and support;<BR>
&#149;&nbsp;&nbsp;&nbsp;cultural differences in the conduct of
business;<BR>
&#149;&nbsp;&nbsp;&nbsp;the laws and policies of the United States and other countries affecting
trade, foreign investment and loans, and import or export<BR>
&#149;&nbsp;&nbsp;&nbsp;licensing requirements;<BR>
&#149;&nbsp;&nbsp;&nbsp;tax laws;<BR>
&#149;&nbsp;&nbsp;&nbsp;the possibility of being exposed to legal proceedings in a foreign
jurisdiction; and <BR>
&#149;&nbsp;&nbsp;&nbsp;limitations on our ability under local laws to protect or enforce our
intellectual property rights in a particular foreign jurisdiction. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additionally, we are subject to risks
in certain global markets in which wireless operators provide subsidies on handset sales
to their customers. Increases in handset prices that negatively impact handset sales can
result from changes in regulatory policies or other factors, which could impact the demand
for our products. Limitations or changes in policy on phone subsidies in South Korea,
Japan, China and other countries may have additional negative impacts on our revenues. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our operating results may be
adversely affected by substantial quarterly and annual fluctuations and market downturns.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our revenues, earnings and other
operating results have fluctuated in the past and our revenues, earnings and other
operating results may fluctuate in the future. These fluctuations are due to a number of
factors, many of which are beyond our control. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>These factors include, among others: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;changes in end-user demand for the products (principally digital cellular
handsets) manufactured and sold by our customers;<BR>
&#149;&nbsp;&nbsp;&nbsp;the effects of competitive pricing pressures, including decreases in average selling prices of our
products;<BR>
&#149;&nbsp;&nbsp;&nbsp;production capacity levels and fluctuations in manufacturing
yields;<BR>
&#149;&nbsp;&nbsp;&nbsp;availability and cost of products from our suppliers;<BR>
&#149;&nbsp;&nbsp;&nbsp;the gain or loss of significant customers;<BR>
&#149;&nbsp;our ability to develop, introduce and market new products and technologies on a timely basis;<BR>
&#149;&nbsp;&nbsp;&nbsp;new product and technology introductions by competitors;<BR>
&#149;&nbsp;&nbsp;&nbsp;changes in the mix of products produced and sold;<BR>
&#149;&nbsp;&nbsp;&nbsp;market acceptance of our products and our customers;<BR>
&#149;&nbsp;intellectual property disputes;<BR>
 </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The foregoing factors are difficult
to forecast, and these, as well as other factors, could materially and adversely affect
our quarterly or annual operating results. If our operating results fail to meet the
expectations of analysts or investors, it could materially and adversely affect the price
of our common stock<I>.</I> </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Global economic conditions that
impact the wireless communications industry could negatively affect our revenues and
operating results.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Global economic weakness can have
wide-ranging effects on markets that we serve, particularly wireless communications
equipment manufacturers and network operators. The wireless communications industry
appears to be recovering from an industry-wide recession. We cannot predict whether a
recovery will continue, the rate of any such recovery, or what effects negative events,
such as war, may have on the economy or the wireless communications industry. The
continued threat of terrorism and heightened security and military action in response to
this threat, or any future acts of terrorism, may cause further disruptions to the global
economy and to the wireless communications industry and create further uncertainties.
Further, an economic recovery may not benefit us in the near term. If it does not, our
ability to increase or maintain our revenues and operating results may be impaired. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our gallium arsenide
semiconductors may cease to be competitive with silicon alternatives.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Among our product portfolio, we
manufacture and sell gallium arsenide semiconductor devices and components, principally
power amplifiers and switches. The production of gallium arsenide integrated circuits is
more costly than the production of silicon circuits. The cost differential is due to
higher costs of raw materials for gallium arsenide and higher unit costs associated with
smaller sized wafers and lower production volumes. Therefore, to remain competitive, we
must offer gallium arsenide products that provide superior performance over their
silicon-based counterparts. If we do not continue to offer products that provide
sufficiently superior performance to justify the cost differential, our operating results
may be materially and adversely affected. We expect the costs of producing gallium
arsenide devices will continue to exceed the costs of producing their silicon
counterparts. Silicon semiconductor technologies are widely-used process technologies for
certain integrated circuits and these technologies continue to improve in performance. We
cannot assure you that we will continue to identify products and markets that require
performance attributes of gallium arsenide solutions. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We may be subject to claims of
infringement of third-party intellectual property rights, or demands that we license
third-party technology, which could result in significant expense and prevent us from
using our technology.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The semiconductor industry is
characterized by vigorous protection and pursuit of intellectual property rights. From
time to time, third parties have asserted and may in the future assert patent, copyright,
trademark and other intellectual property rights to technologies that are important to our
business and have demanded and may in the future demand that we license their technology
or refrain from using it. At the present time, we are in litigation with Qualcomm
Incorporated regarding claims each of us have filed and served against the other asserting
violations of certain of our respective intellectual property rights. Although we believe
their claims are without merit and we are vigorously defending against their claims and
fully prosecuting our claims against them, we cannot assure you that we will be successful
in defending ourselves from their claims or prosecuting our claims. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any litigation to determine the
validity of claims that our products infringe or may infringe intellectual property rights
of another, including claims arising from our contractual indemnification of our
customers, regardless of their merit or resolution, could be costly and divert the efforts
and attention of our management and technical personnel. Regardless of the merits of any
specific claim, we cannot assure you that we would prevail in litigation because of the
complex technical issues and inherent uncertainties in intellectual property litigation.
If litigation were to result in an adverse ruling, we could be required to: </FONT></P>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;pay substantial damages;<BR>
&#149;&nbsp;&nbsp;&nbsp;cease the manufacture, import, use, sale or offer for sale of infringing
products or processes;<BR>
&#149;&nbsp;&nbsp;&nbsp;discontinue the use of infringing technology;<BR>
&#149;&nbsp;&nbsp;&nbsp;expend significant resources to develop non-infringing technology; and<BR>
&#149;&nbsp;&nbsp;&nbsp;license technology from the third party claiming infringement, which
license may not be available on commercially reasonable terms.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We cannot assure you that our
operating results or financial condition will not be materially adversely affected if we
were required to do any one or more of the foregoing items. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Many of our products incorporate
technology licensed or acquired from third parties.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We sell products in markets that are
characterized by rapid technological changes, evolving industry standards, frequent new
product introductions, short product life cycles and increasing levels of integration. Our
ability to keep pace with this market depends on our ability to obtain technology from
third parties on commercially reasonable terms to allow our products to remain in a
competitive posture. If licenses to such technology are not available on commercially
reasonable terms and conditions, and we cannot otherwise integrate such technology, our
products or our customers&#146; products could become unmarketable or obsolete, and we
could lose market share. In such instances, we could also incur substantial unanticipated
costs or scheduling delays to develop substitute technology to deliver competitive
products. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>If we are not successful in
protecting our intellectual property rights, it may harm our ability to compete.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We rely on patent, copyright,
trademark, trade secret and other intellectual property laws, as well as nondisclosure and
confidentiality agreements and other methods, to protect our proprietary technologies,
information, data, devices, algorithms and processes. In addition, we often incorporate
the intellectual property of our customers, suppliers or other third parties into our
designs, and we have obligations with respect to the non-use and non-disclosure of such
third-party intellectual property. In the future, it may be necessary to engage in
litigation or like activities to enforce our intellectual property rights, to protect our
trade secrets or to determine the validity and scope of proprietary rights of others,
including our customers. This could require us to expend significant resources and to
divert the efforts and attention of our management and technical personnel from our
business operations. We cannot assure you that: &nbsp; &nbsp; &nbsp; </FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;the steps we take to prevent misappropriation, infringement, dilution or other
violation of our intellectual property or the intellectual property of our customers,
suppliers or other third parties will be successful;<BR>
&#149;&nbsp;&nbsp;&nbsp;any existing or future patents, copyrights, trademarks, trade secrets or other
intellectual property rights or ours will not be challenged, invalidated or circumvented;
or<BR>
&#149;&nbsp;&nbsp;&nbsp;any of the measures described above would provide meaningful protection. </FONT></TD>
</tr>
</table>
<BR>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Despite
these precautions, it may be possible for a third party to copy or otherwise obtain and
use our technology without authorization, develop similar technology independently or
design around our patents. If any of our intellectual property protection mechanisms fails
to protect our technology, it would make it easier for our competitors to offer similar
products, potentially resulting in loss of market share and price erosion. In addition,
effective patent, copyright, trademark and trade secret protection may be unavailable or
limited for certain technologies and in certain foreign countries. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our success depends, in part, on
our ability to effect suitable investments, alliances and acquisitions, and to integrate
companies we acquire.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Although we have in the past and
intend to continue to invest significant resources in internal research and development
activities, the complexity and rapidity of technological changes and the significant
expense of internal research and development make it impractical for us to pursue
development of all technological solutions on our own. On an ongoing basis, we intend to
review investment, alliance and acquisition prospects that would complement our product
offerings, augment our market coverage or enhance our technological capabilities. However,
we cannot assure you that we will be able to identify and consummate suitable investment,
alliance or acquisition transactions in the future. Moreover, if we consummate such
transactions, they could result in: </FONT></P>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;issuances of equity securities dilutive to our stockholders; &nbsp;
&#149;&nbsp;&nbsp;&nbsp;large one-time write-offs;<BR>
&#149;&nbsp;&nbsp;&nbsp;the incurrence of substantial debt and assumption of unknown liabilities;<BR>
&#149;&nbsp;&nbsp;&nbsp;the potential loss of key employees from the acquired company;<BR>
&#149;&nbsp;&nbsp;&nbsp;amortization expenses related to intangible assets; and<BR>
&#149;&nbsp;&nbsp;&nbsp;the diversion of management&#146;s attention
from other business concerns. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Moreover, integrating acquired
organizations and their products and services may be difficult, expensive, time-consuming
and a strain on our resources and our relationship with employees and customers and
ultimately may not be successful. Additionally, in periods following an acquisition, we
will be required to evaluate goodwill and acquisition-related intangible assets for
impairment. When such assets are found to be impaired, they will be written down to
estimated fair value, with a charge against earnings. For instance, we recorded a
cumulative effect of a change in accounting principle in fiscal 2003 in the amount of
$397.1 million as a result of the goodwill obtained in connection with the Merger. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Certain provisions in our
organizational documents and Delaware law may make it difficult for someone to acquire
control of us.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have certain anti-takeover
measures that may affect our common stock. Our certificate of incorporation, our by-laws
and the Delaware General Corporation Law contain several provisions that would make more
difficult an acquisition of control of us in a transaction not approved by our Board of
Directors. Our certificate of incorporation and by-laws include provisions such as: </FONT></P>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;the division of our board of directors into three classes to be elected on a
staggered basis, one class each year;<BR>
&#149;&nbsp;&nbsp;&nbsp;the ability of our board of
directors to issue shares of preferred stock in one or more series without further
authorization of stockholders;<BR>
&#149;&nbsp;&nbsp;&nbsp;a prohibition on stockholder action by written consent;<BR>
&#149;&nbsp;&nbsp;&nbsp;elimination
of the right of stockholders to call a special meeting of stockholders;<BR>
&#149;&nbsp;&nbsp;&nbsp;a requirement that stockholders provide advance notice of any stockholder
nominations of directors or any proposal of new business to be considered at any meeting
of stockholders;<BR>
&#149;&nbsp;&nbsp;&nbsp;a requirement that the affirmative vote of at least 66&nbsp;2/3&nbsp;percent
of our shares be obtained to amend or repeal any provision of our by-laws or the provision
of our certificate of incorporation relating to amendments to our by-laws;<BR>
&#149;&nbsp;&nbsp;&nbsp;a requirement that the affirmative vote of at least 80&nbsp;percent of our
shares be obtained to amend or repeal the provisions of our certificate of incorporation
relating to the election and removal of directors, the classified board or the right to
act by written consent;<BR>
&#149;&nbsp;&nbsp;&nbsp;a requirement that the affirmative vote of at least 80&nbsp;percent of our
shares be obtained for business combinations unless approved by a majority of the members
of the board of directors and, in the event that the other party to the business
combination is the beneficial owner of 5&nbsp;percent or more of our shares, a majority of
the members of board of directors in office prior to the time such other party became the
beneficial owner of 5&nbsp;percent or more of our shares;<BR>
&#149;&nbsp;&nbsp;&nbsp;a fair price provision; and<BR>
&#149;&nbsp;&nbsp;&nbsp;a requirement that the affirmative vote of at least 90&nbsp;percent of our
shares be obtained to amend or repeal the fair price provision.</font></td>
</tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition to the provisions in our
certificate of incorporation and by-laws, Section&nbsp;203 of the Delaware General
Corporation Law generally provides that a corporation shall not engage in any business
combination with any interested stockholder during the three-year period following the
time that such stockholder becomes an interested stockholder, unless a majority of the
directors then in office approves either the business combination or the transaction that
results in the stockholder becoming an interested stockholder or specified stockholder
approval requirements are met. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>We may be liable for penalties
under environmental laws, rules and regulations, which could adversely impact our
business.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have used, and will continue to
use, a variety of chemicals and compounds in manufacturing operations and have been and
will continue to be subject to a wide range of environmental protection regulations in the
United States. We cannot assure you that current or future regulation of the materials
necessary for our products would not have a material adverse effect on our business,
financial condition and results of operations. Environmental regulations often require
parties to fund remedial action for violations of such regulations regardless of fault.
Consequently, it is often difficult to estimate the future impact of environmental
matters, including potential liabilities. We cannot assure you that the amount of expense
and capital expenditures that might be required to satisfy environmental liabilities, to
complete remedial actions and to continue to comply with applicable environmental laws
will not have a material adverse effect on our business, financial condition and results
of operations. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Our stock price has been volatile
and may fluctuate in the future. Accordingly, you might not be able to sell your shares of
common stock at or above the price you paid for them.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The trading price of our common stock
has and may continue to fluctuate significantly. Such fluctuations may be influenced by
many factors, including: &nbsp; &nbsp; &nbsp; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Level 3" FSL="Default" -->
<TABLE width="600" CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#149;&nbsp;&nbsp;&nbsp;our performance and prospects;<BR>
&#149;&nbsp;&nbsp;&nbsp;the performance and prospects of our major customers;<BR>
&#149;&nbsp;&nbsp;&nbsp;the depth and liquidity of the market for our common stock;<BR>
&#149;&nbsp;&nbsp;&nbsp;investor perception of us and the industry in which we operate;<BR>
&#149;&nbsp;&nbsp;&nbsp;changes in earnings estimates or buy/sell recommendations by analysts;<BR>
&#149;&nbsp;&nbsp;&nbsp;general financial and other market conditions; and<BR>
&#149;&nbsp;&nbsp;&nbsp;domestic and
international economic conditions. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Public stock markets have recently
experienced extreme price and trading volume volatility, particularly in the technology
sectors of the market. This volatility has significantly affected the market prices of
securities of many technology companies for reasons frequently unrelated to or
disproportionately impacted by the operating performance of these companies. These broad
market fluctuations may materially and adversely affect the market price of our common
stock. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, fluctuations in our
stock price and our price-to-earnings multiple may have made our stock attractive to
momentum, hedge or day-trading investors who often shift funds into and out of stocks
rapidly, exacerbating price fluctuations in either direction, particularly when viewed on
a quarterly basis. Furthermore, if our operating results do not meet the expectations of
securities analysts or investors, our stock price may decline, possibly substantially over
a short period of time. Accordingly, you may not be able to resell your shares of common
stock at or above the price you paid. </FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Changes in the accounting
treatment of stock options could adversely affect our results of operations.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In
December 2004, the Financial Accounting Standards Board issued SFAS&nbsp;No.&nbsp;123R,
&#147;Share-Based Payment&#148; to require companies to expense employee stock options for
financial reporting purposes, effective for interim or annual periods beginning after
June&nbsp;15, 2005. Such stock option expensing will require us to value our employee
stock option grants pursuant to an option valuation formula and amortize that value
against our earnings over the vesting period in effect for those options. We currently
account for stock-based awards to employees in accordance with Accounting Principles Board
Opinion No.&nbsp;25, &#147;Accounting for Stock Issued to Employees,&#148; and have
adopted the disclosure-only alternative of SFAS&nbsp;No. 123, &#147;Accounting for
Stock-Based Compensation.&#148; When we are required to expense employee stock options in
the future, this change in accounting treatment could materially and adversely affect our
reported results of operations as the stock-based compensation expense would be charged
directly against our reported earnings. For an illustration of the effect of such a change
on our recent results of operations, see Note&nbsp;9 of Notes to Interim Consolidated
Financial Statements. </FONT></P>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A070></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp; QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have exposure to foreign exchange
and interest rate risk. There have been no material changes in market risk exposures from
those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30,
2004. </FONT></P>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A071></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp; CONTROLS AND
PROCEDURES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the supervision and with the
participation of our management, including our President and Chief Executive Officer and
Chief Financial Officer, we evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)
as of the end of the period covered by this Quarterly Report (the &#147;Evaluation
Date&#148;). Based upon that evaluation, the President and Chief Executive Officer and
Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls
and procedures were effective in timely alerting them to the material information relating
to us (or our consolidated subsidiaries) required to be included in our periodic SEC
filings. In designing and evaluating the disclosure controls and procedures, our
management recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and our management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There were no significant changes
made in our internal control over financial reporting during the fiscal quarter ended
December 31, 2004 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. </FONT></P>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A072></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II OTHER INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A073></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp; OTHER INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Level 2" FSL="Default" -->
               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
                    <TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Mr. Donald Beall has notified the Registrant of his intention to resign from the
                    Board of Directors of the Registrant immediately following the next Annual
                    Meeting of the Stockholders of the Registrant. Mr. Beall&#146;s resignation is a
                    planned reduction in his many commitments and is not the result of any
                    disagreement with the Registrant. In addition, on February 1, 2005, Mr. David
                    McGlade was elected to the Board of Directors of the Registrant as a Class III
                    Director. The Registant anticipates that Mr. McGlade will be appointed to the
                    Audit Committee of the Board of Directors at a later date. </FONT></P></TD>
                    </TR>
                    </TABLE>
                    <BR>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A074></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp; EXHIBITS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A075></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) Exhibits </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Description</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.a</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification of CEO - Rule 13a-14(a) or 15d-14(a) *</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=34% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.b</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification of CFO - Rule 13a-14(a) or 15d-14(a) *</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>
<!-- MARKER FORMAT-SHEET="Head Sub 3 Left" FSL="Default" -->
<A NAME=A076></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*
Filed herewith. </FONT></P>
<BR><hr><BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A077></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>SIGNATURES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A078></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: February 7, 2005 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Center Underline" FSL="Default" -->
<A NAME=A079></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>SKYWORKS SOLUTIONS,
INC. </U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A080></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant </FONT></P>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=200>
<TR VALIGN=Bottom>
     <TD WIDTH=55% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>By:&nbsp;&nbsp;/s/ DAVID J. ALDRICH</U></FONT></TD>
     </TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;David J. Aldrich</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive Officer</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director</FONT></TD></TR>
</TABLE><BR><BR>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=200>
<TR VALIGN=Bottom>
     <TD WIDTH=55% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>By:&nbsp;&nbsp;/s/ ALLAN M. KLINE</U></FONT></TD>
     </TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allan M. Kline</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer</FONT></TD></TR>
</TABLE>
<BR><BR><hr><BR>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A081></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>EXHIBIT INDEX </FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Description</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.a</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification of CEO - Rule 13a-14(a) or 15d-14(a) </FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=34% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.b</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification of CFO - Rule 13a-14(a) or 15d-14(a) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>exhibit_31a.htm
<TEXT>
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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 31.A </B></FONT></P>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>CERTIFICATIONS </FONT></H1>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, David J. Aldrich, President and
Chief Executive Officer of Skyworks Solutions, Inc. (the &#147;Company&#148;), certify
that: </FONT></P>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this quarterly report on Form 10-Q of the Company; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, this quarterly report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this quarterly report; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this quarterly report; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Designed such disclosure controls and procedures, or caused such disclosure
          controls and procedures to be designed under our supervision, to ensure that
          material information relating to the registrant, including its consolidated
          subsidiaries, is made known to us by others within those entities, particularly
          during the period in which this quarterly report is being prepared; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Evaluated the effectiveness of the registrant&#146;s disclosure controls and
          procedures and presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end of the
          period covered by this report based on such evaluation; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Disclosed in this report any change in the registrant&#146;s internal control
          over financial reporting that occurred during the registrant&#146;s first
          fiscal quarter that has materially affected, or is reasonably likely to
          materially affect, the registrant&#146;s internal control over financial
          reporting; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrant&#146;s auditors and the audit committee of the registrant&#146;s
          board of directors (or persons performing the equivalent functions): </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          All significant deficiencies and material weaknesses in the design or operation
          of internal controls over financial reporting which are reasonably likely to
          adversely affect the registrant&#146;s ability to record, process, summarize and
          report financial information; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrant&#146;s internal control over
          financial reporting. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<BR><BR>
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<A NAME=A003></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: February 7, 2005 </FONT></P>

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<A NAME=A004></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>By: /s/ David J. Aldrich</U>
<BR><U>David J. Aldrich</U><BR><U>President and Chief Executive Officer</U> </FONT></P>


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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 31.B </B></FONT></P>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>CERTIFICATIONS </FONT></H1>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Allan M. Kline, Chief Financial Officer of Skyworks Solutions, Inc. (the &#147;Company&#148;), certify
that: </FONT></P>

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          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this quarterly report on Form 10-Q of the Company; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, this quarterly report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this quarterly report; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this quarterly report; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Designed such disclosure controls and procedures, or caused such disclosure
          controls and procedures to be designed under our supervision, to ensure that
          material information relating to the registrant, including its consolidated
          subsidiaries, is made known to us by others within those entities, particularly
          during the period in which this quarterly report is being prepared; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Evaluated the effectiveness of the registrant&#146;s disclosure controls and
          procedures and presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end of the
          period covered by this report based on such evaluation; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Disclosed in this report any change in the registrant&#146;s internal control
          over financial reporting that occurred during the registrant&#146;s first
          fiscal quarter that has materially affected, or is reasonably likely to
          materially affect, the registrant&#146;s internal control over financial
          reporting; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrant&#146;s auditors and the audit committee of the registrant&#146;s
          board of directors (or persons performing the equivalent functions): </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          All significant deficiencies and material weaknesses in the design or operation
          of internal controls over financial reporting which are reasonably likely to
          adversely affect the registrant&#146;s ability to record, process, summarize and
          report financial information; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH="70%" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER">
          <TR VALIGN=TOP>
          <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
          <TD WIDTH="97%"><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrant&#146;s internal control over
          financial reporting. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<BR><BR>
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<A NAME=A003></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: February 7, 2005 </FONT></P>

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<A NAME=A004></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>By: /s/ Allan M. Kline</U>
<BR><U>Allan M. Kline</U><BR><U>Chief Financial Officer</U> </FONT></P>


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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 32</B> </FONT></P>
<BR><BR>
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<A NAME=A005></A>
<H2 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT
TO<BR> 18 U.S.C. SECTION 1350,<BR> AS ADOPTED PURSUANT TO <BR>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002 </FONT></H2>
<BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the Quarterly Report
of Skyworks Solutions, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ending
December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof
(the &#147;Report&#148;), I, David J. Aldrich, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. &sect; 1350, as adopted pursuant to &sect; 906 of the
Sarbanes-Oxley Act of 2002, that: </FONT></P>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Report fully complies with the requirements of Section 13(a) or 15(d) of the
          Securities Exchange Act of 1934; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The information contained in the Report fairly presents, in all material
          respects, the financial condition and results of operations of the Company. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

<BR><BR>
<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>/s/ David J. Aldrich</U><BR>
David J. Aldrich<BR>
Chief Executive Officer<BR>
February 7, 2005
</FONT></TD></TR>
</TABLE>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the Quarterly Report
of Skyworks Solutions, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarter ending
December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof
(the &#147;Report&#148;), I, Allan M. Kline, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. &sect; 1350, as adopted pursuant to &sect; 906 of the
Sarbanes-Oxley Act of 2002, that: </FONT></P>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Report fully complies with the requirements of Section 13(a) or 15(d) of the
          Securities Exchange Act of 1934; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The information contained in the Report fairly presents, in all material
          respects, the financial condition and results of operations of the Company. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<BR><BR>
<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>/s/ Allan M. Kline</U><BR>
Allan M. Kline<BR>
Chief Financial Officer<BR>
February 7, 2005
</FONT></TD></TR>
</TABLE>
<BR><BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A signed original of this written
statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version
of this written statement required by Section 906, has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange Commission or
its staff upon request. </FONT></P>


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