©2009 SMSC. All rights reserved.
www.smsc.com
SMSC Overview
January 2011
Filed pursuant to Rule 425 under the Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Filing Person: Standard Microsystems Corporation
Commission File No.: 0-7422
Subject Company: Conexant Systems, Inc.
Commission File No.: 000-24923
pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Filing Person: Standard Microsystems Corporation
Commission File No.: 0-7422
Subject Company: Conexant Systems, Inc.
Commission File No.: 000-24923
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©2009 SMSC. All rights reserved.
PC Ecosystem
Consumer Connectivity
Automotive Networking
Smart Mixed-Signal Connectivity™
SMSC Facts:
Deliver Market-Differentiating Connectivity Mixed-Signal Solutions
Enable our Customers’ Success
Generate Attractive Returns
Our Mission
$308M Fiscal 2010 Revenue
- $107M in Q3FY11
Expect revenue to be greater than
$400M in FY11
$400M in FY11
SMSC: Building a Connectivity Ecosystem
$189M in Cash and Investments
95% Revenue Single Sourced
SMSC At A Glance
~85% of Revenue Related to Connectivity
All Data is Unaudited
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©2009 SMSC. All rights reserved.
Unaudited Data
Q3FY11
Q2FY11
Attractive Level of Diversity in End Markets
Product Growth Drivers
Computing & Connectivity
USB application expansion
USB 3.0
Continued enterprise PC sales recovery
Market share gains in Japan and Korea
Security and storage
Automotive
Luxury demand recovery
Initial USB, Ethernet and Companion product ramps
New OEM MOST® ramps
Analog Products
Ramp of RightTouch™ capacitive sensing products
Low-end PC demand, particularly in Asia
Market share gains in thermal management
Battery charging
Consumer Electronics Solutions
New product ramps in:
Portable hubs
Tablet connectivity
Portable power
Home theater
Headphones
Q3FY11 Performance
Computing & Connectivity
64% or $69.2M
Automotive
18% or $18.7M
Consumer Electronics Solutions
8% or $8.7M
Includes newly acquired
Storage Products
Storage Products
Includes Portable &
Wireless Audio Products
Wireless Audio Products
Analog Products
10% or $10.4M
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©2009 SMSC. All rights reserved.
Solid Geographic Diversity
Design Win Location;
Unaudited Data
Unaudited Data
Q3FY11
Q2FY11
$104.1M
$107.0M
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©2009 SMSC. All rights reserved.
Rationale
Business Model
Investment
First SMSC design facility
in low-cost geography
in low-cost geography
■ Broad technical capabilities
■ Drives 2-3X product productivity
$3.4M
Sept 8, 2009
~50 resources
Extends SMSC design
capabilities in low-cost
geographies
capabilities in low-cost
geographies
■ World-class analog / mixed-signal
expertise
expertise
■ Drives 2-3X product productivity
$0
April 1, 2010
~20 resources
Middleware and
framework for MOST®
enabled technologies
framework for MOST®
enabled technologies
>60% GM
$8.9M
Nov 5, 2009
~30 resources
Entrée into wireless audio
market with strong IP
portfolio
market with strong IP
portfolio
38% → ~50% GM
$5.5M
Feb 16, 2010
~15 resources
Expand consumer
presence and solidify
position in wireless audio
market
presence and solidify
position in wireless audio
market
35% → ~50% GM
$22M
June 14, 2010
~40 resources
Investing In Our Future
Sofia Design
Center
Investments exclude potential earnout payments; gross margin goals are non-GAAP
Entrance into the USB 3.0
SuperSpeed market with
storage products in production
SuperSpeed market with
storage products in production
Technology expected to be broadly
deployed across SMSC's
connectivity products
deployed across SMSC's
connectivity products
$5.2M - 2009; $3.1M
bridge financing - 2010
bridge financing - 2010
Closed Nov 12, 2010
~90 resources
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©2009 SMSC. All rights reserved.
Computing & Connectivity Solutions
PC System Management Controller
■ PC system control
■ Embedded connectivity
■ Leading global PC customers
■ 8 bit to 32 bit controllers
USB Connectivity
■ Continued robust USB 2.0 growth
■ Expanding use cases for USB 2.0
■ Transition to USB 3.0 for high-speed applications
■ Low power portable solutions
Embedded Connectivity
■ Mission critical applications
■ Industrial control
■ Consumer interfaces
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©2009 SMSC. All rights reserved.
Automotive Information Systems
Ethernet is the mandated
standard diagnostic interface
by automotive industry
regulation (ISO/SAE)
standard diagnostic interface
by automotive industry
regulation (ISO/SAE)
USB is rapidly becoming
the consumer interface of
choice for mobile device
connection
the consumer interface of
choice for mobile device
connection
MOST is the de-facto industry
standard for high bandwidth
infotainment networking
standard for high bandwidth
infotainment networking
Kleer provides unique
combination of low power
combination of low power
and high quality wireless
audio and control
SMSC is uniquely positioned to offer all four technologies
Diagnostics & Software
Download
The Infotainment Backbone
Wireless Audio
The Consumer Port
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©2009 SMSC. All rights reserved.
Analog Products
SMSC Portable Products
n Our Business Model
Capitalize on SMSC’s Connectivity
Investments
Investments
Optimize for lowest power & smallest footprint
Flexible & nimble to respond to market
& customer changes
& customer changes
High value & profitability
n Our Customers
Smartphone + Portable Consumer Electronics
n Our Products
Feature rich connectivity solutions
Highly differentiated mixed-signal
portable solutions
portable solutions
Centered around USB and its low
power derivatives
power derivatives
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©2009 SMSC. All rights reserved.
Wireless Audio Systems
Our Business Model
■ The established leader for Wireless Audio
■ Proven, unique proprietary technology
■ Leadership through complete coverage of all
volume audio applications
volume audio applications
■ Intimacy with major global customers
■ Leading presence in Home and Portable products
Our Products
■ Full systems & support
▪ Architecture
▪ Hardware
▪ Software
▪ ODM/OEM support
■ Back - and forward compatible products, spanning multiple product life cycles
Our Customers
■ Major global brands
■ Major OEMs worldwide
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©2009 SMSC. All rights reserved.
Our Growing Worldwide R&D Presence
A Successful Design Model
Product Line Engineering
Architecture
High Level Design
Design Solutions Execution
>500 Engineers Worldwide
Validation & Verification
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©2009 SMSC. All rights reserved.
World Class Customers and Partners
PC
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©2009 SMSC. All rights reserved.
Additional Information
n Additional Information About This Transaction
n In connection with the proposed transaction, SMSC will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement
on Form S-4 that will include a proxy statement of Conexant and a prospectus of SMSC. The definitive proxy statement/prospectus will be
mailed to stockholders of Conexant. Conexant and SMSC urge investors and security holders to read the proxy statement/prospectus
regarding the proposed transaction when it becomes available because it will contain important information about the proposed transaction.
You may obtain a free copy of the proxy statement/prospectus (when available) and other related documents filed by SMSC and Conexant with
the SEC at the SEC’s website at www.sec.gov. The proxy statement/prospectus (when it is available) and other documents filed by SMSC or
Conexant with the SEC relating to the proposed transaction may also be obtained for free by accessing SMSC’s website at www.smsc.com by
clicking on the link for “Investor Relations”, then clicking on the link for “SEC Filings” or by accessing Conexant’s website at www.conexant.com
and clicking on the “Investors” link and then clicking on the link for “Financial Information” and then clicking on the link for “SEC Filings”.
on Form S-4 that will include a proxy statement of Conexant and a prospectus of SMSC. The definitive proxy statement/prospectus will be
mailed to stockholders of Conexant. Conexant and SMSC urge investors and security holders to read the proxy statement/prospectus
regarding the proposed transaction when it becomes available because it will contain important information about the proposed transaction.
You may obtain a free copy of the proxy statement/prospectus (when available) and other related documents filed by SMSC and Conexant with
the SEC at the SEC’s website at www.sec.gov. The proxy statement/prospectus (when it is available) and other documents filed by SMSC or
Conexant with the SEC relating to the proposed transaction may also be obtained for free by accessing SMSC’s website at www.smsc.com by
clicking on the link for “Investor Relations”, then clicking on the link for “SEC Filings” or by accessing Conexant’s website at www.conexant.com
and clicking on the “Investors” link and then clicking on the link for “Financial Information” and then clicking on the link for “SEC Filings”.
n Participants in This Transaction
n SMSC, Conexant and their respective directors, executive officers and certain other members of management and employees may be deemed
to be participants in the solicitation of proxies from Conexant stockholders in connection with the proposed transaction. Information regarding
the persons who may, under the rules of the SEC, be considered participants in the solicitation of Conexant stockholders in connection with the
proposed transaction, including the interests of such participants in the proposed transaction, will be set forth in the proxy statement/prospectus
when it is filed with the SEC. You can find information about SMSC’s executive officers and directors in SMSC’s definitive proxy statement filed
with the SEC on June 14, 2010. You can find information about Conexant’s executive officers and directors in Conexant’s definitive proxy
statement filed with the SEC on December 10, 2010. You can obtain free copies of these documents from SMSC or Conexant, respectively,
using the contact information above.
to be participants in the solicitation of proxies from Conexant stockholders in connection with the proposed transaction. Information regarding
the persons who may, under the rules of the SEC, be considered participants in the solicitation of Conexant stockholders in connection with the
proposed transaction, including the interests of such participants in the proposed transaction, will be set forth in the proxy statement/prospectus
when it is filed with the SEC. You can find information about SMSC’s executive officers and directors in SMSC’s definitive proxy statement filed
with the SEC on June 14, 2010. You can find information about Conexant’s executive officers and directors in Conexant’s definitive proxy
statement filed with the SEC on December 10, 2010. You can obtain free copies of these documents from SMSC or Conexant, respectively,
using the contact information above.
n
n Forward Looking Statements
n Except for historical information contained herein, the matters set forth in this document are forward-looking statements about expected future
events and financial and operating results that involve risks and uncertainties. These uncertainties may cause SMSC’s or Conexant’s actual
future results to be materially different from those discussed in the forward-looking statements. These risks and uncertainties include risks
relating to the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule; the failure of Conexant stockholders
to approve the transaction; a failure to consummate or delay in consummating the Merger for other reasons; the risk that the businesses will not
be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or
suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; and other risks relating to the companies’
businesses set forth in their filings with the SEC.
events and financial and operating results that involve risks and uncertainties. These uncertainties may cause SMSC’s or Conexant’s actual
future results to be materially different from those discussed in the forward-looking statements. These risks and uncertainties include risks
relating to the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule; the failure of Conexant stockholders
to approve the transaction; a failure to consummate or delay in consummating the Merger for other reasons; the risk that the businesses will not
be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or
suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; and other risks relating to the companies’
businesses set forth in their filings with the SEC.
n
n Our forward looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and may not
reflect the potential impact of any future acquisitions, mergers or divestitures. All forward-looking statements speak only as of the date hereof
and are based upon the information available to SMSC and Conexant at this time. Such statements are subject to change, and SMSC and
Conexant do not undertake to update such statements, except to the extent required under applicable law and regulation. These and other risks
and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in SMSC’s and Conexant’s
reports filed with the SEC. Investors are advised to read each company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q filed
with the SEC, particularly those sections entitled “Other Factors That May Affect Future Operating Results” or “Risk Factors” for a more
complete discussion of these and other risks and uncertainties.
reflect the potential impact of any future acquisitions, mergers or divestitures. All forward-looking statements speak only as of the date hereof
and are based upon the information available to SMSC and Conexant at this time. Such statements are subject to change, and SMSC and
Conexant do not undertake to update such statements, except to the extent required under applicable law and regulation. These and other risks
and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in SMSC’s and Conexant’s
reports filed with the SEC. Investors are advised to read each company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q filed
with the SEC, particularly those sections entitled “Other Factors That May Affect Future Operating Results” or “Risk Factors” for a more
complete discussion of these and other risks and uncertainties.
.