Net earnings for the second quarter were $122 million, or $0.38 per share, compared to net earnings of $70 million, or $0.22 per share, in the first quarter of 2015 and $86 million, or $0.28 per share, in the second quarter of 2014. Included in second quarter 2015 net earnings was $9 million of costs associated with the company’s redemption of $100 million of debt securities during the second quarter.

Adjusted operating earnings (defined in Note 1 to the Consolidated Financial Information attached to this press release) for the three months ended July 3, 2015 were $258 million compared to adjusted operating earnings of $234 million in the first quarter of 2015 and $208 million in the second quarter of 2014.

Adjusted net earnings (defined in Note 1 to the Consolidated Financial Information attached to this press release) for the second quarter of 2015 were $182 million, or $0.57 per share, compared to $150 million, or $0.48 per share, in the first quarter of 2015 and $117 million, or $0.38 per share, in the second quarter of 2014. Adjusted net earnings per share grew 50 percent year over year and 19 percent sequentially due to improving sales, higher gross margins, lower operating expense and lower interest expense.

Descriptions of EBITDA excluding the effects of other items, Adjusted EBITDA, adjusted operating earnings and adjusted net earnings and the reconciliations to our GAAP results are included in the tables and notes attached to this press release.

Product Group Revenues

The company’s net sales figures for the second quarter of 2015 were as follows:

• Microcontrollers net sales were $291 million, compared to $235 million in the first quarter of 2015 and $246 million in the second quarter of last year. On a sequential and year-over-year basis, Microcontroller revenues benefitted from increased sales of its 32-bit microcontroller products into distribution and higher sales of applications processors into the automotive market.
• RF net sales, which include sales of power amplifiers to the wireless infrastructure market, were $177 million, compared to $184 million in the first quarter of 2015 and $120 million in the second quarter of last year. RF sales increased over the prior year due to increased spending on 3G and 4G wireless networks. The sequential decline in revenue is a result of slowing wireless capital expenditure spending in major markets including China.
• Automotive MCU net sales were $305 million, compared to $307 million in the first quarter of 2015 and $308 million in the second quarter of last year. Automotive MCU benefitted from growth in vehicle semiconductor content offset by declines in worldwide automotive production, particularly in emerging markets.
• Analog and Sensors net sales were $223 million, compared to $207 million in the first quarter of 2015 and $205 million in the second quarter of last year. Analog and Sensors sales benefitted from increased vehicle semiconductor content along with sales of analog and sensors sold into distribution and OEM accounts.
• Digital Networking net sales were $184 million, compared to $214 million in the first quarter of 2015 and $291 million in the second quarter of last year. Networking net sales declined compared to the prior quarter and the prior year primarily due to lower sales to certain service provider customers and lower sales into distribution.
• Other net sales were $18 million, compared to $22 million in the first quarter of 2015 and $21 million in the second quarter of last year.

Other Financial Information

• Capital Expenditures for the quarter were $47 million;
• Cash and Cash Equivalents were $588 million, inclusive of debt redemption activities during the quarter totaling $108 million; and
• Adjusted EBITDA* for the latest twelve months ended July 3, 2015 was $1.20 billion.

*Adjusted for various items as indicated and defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release.

Third Quarter 2015 Outlook

For the third quarter of 2015, the company expects:

• Net sales to be between $1.10 billion and $1.17 billion;
• Gross margins to decline 80 to 100 basis points sequentially;
• Operating expenses to decline again on a sequential basis;
• Adjusted earnings per share to be in a range of $0.47 to $0.51.