Included in the second quarter loss is $1.1 million of severance and a write down of assets held for sale associated with our cost reduction activities. In addition, the company generated $4.0 million of cash from operations during the second quarter.
Commenting on the recent second quarter performance, Michael D. Burger, president and chief executive officer said, “The global demand for printed circuit boards in the commercial sectors of our market has been adversely impacted by the recent financial crisis that has affected many areas of the global economy. The restructuring activities that we have taken over the last 18 months have enabled us to substantially offset the decline in gross margin despite the 21% reduction in second quarter revenue when compared to last year.”
Looking ahead Burger commented, “The global economy continues to remain challenging and difficult to predict. However, with our major capital investments behind us our focus will be on the continued aggressive management of our business enabling us to service our customers, while also making the necessary and appropriate decisions to remain healthy financially.”
On a sequential basis, second quarter 2009 revenue decreased 15% when compared to the first quarter of fiscal 2009. This decline was primarily focused in the communications and networking end market segment. In addition, as previously reported our planned shipments in support of Asia’s Oracle implementation caused us to advance ship approximately $2.5 million of product to our Asian customers in the first fiscal quarter adversely impacting revenue in the second quarter.
Merix’ overall gross margin averaged 7.8% of revenue for the second quarter of fiscal 2009 compared to 9.8% and 11.3% in the second quarter of fiscal 2008 and first quarter of fiscal 2009, respectively. North American gross margins declined over 7 points sequentially to 4.1% of revenue due primarily to lower fixed cost absorption resulting from decreased production volumes. Asia gross margins remained stable compared to the first quarter of fiscal 2009 at 11.2%.
Operating expenses totaled $10.3 million in the second quarter of fiscal 2009 compared to $12.7 million and $10.3 million in the second quarter of fiscal 2008 and first quarter of fiscal 2009, respectively.
