Exar Corporation Revises December Quarter Guidance

FREMONT, Calif., Dec. 18 /PRNewswire-FirstCall/ -- Exar Corporation
(Nasdaq: EXAR), today revised its revenue estimate for its 2008 third fiscal
quarter ending December 30, 2007. The Company now expects that the December
quarter GAAP revenue will be between $22.5 million and $23.5 million. This
estimate excludes approximately $11 million sales due to (1) purchase
accounting which precludes recognition of revenue from sell through of
inventory held by Sipex's distributors as of Exar's acquisition of Sipex on
August 25, 2007; and (2) the change in revenue recognition to the sell through
method from the sell in method (used prior to the acquisition of Sipex) for
Exar's principal distributors. Based upon the revenue recognition practices
in place at each Company prior to the acquisition of Sipex, revenues for the
December quarter would have been approximately $33.5 million to $34.5 million
for the combined Company. Exar had previously indicated that, on
pre-acquisition accounting basis, it expected revenue for the December quarter
to increase by a low single digit percentage from $36.9 million for the
September quarter.
The decrease in expected revenue primarily relates to lower than
anticipated orders for its power and interface products and to wafer
fabrication delays at the Company's supplier in China. The Company now
believes that the results of its merger with Sipex will be accretive in the
September 2008 quarter.
"My immediate focus will be on improving the Company's execution --
driving revenue growth and improving bottom line performance," stated John
McFarlane, interim chief executive officer. "We remain optimistic about
Exar's long-term prospects and are continuing to purchase the Company's stock
under our previously announced share repurchase program."
Safe Harbor Statement
The Company's statements in this release about its future financial
performance, among others, are forward-looking statements that involve risks
and uncertainties. These risks and uncertainties are detailed in the Company's
SEC reports, including its Annual Report on Form 10-K for the year ended March
31, 2007 and Forms 10-Q for the fiscal quarters ended June 30, 2007 and
September 30, 2007.
About Exar
Exar Corporation is Powering Connectivity by delivering highly
differentiated silicon solutions empowering products to connect. With
distinctive knowledge in analog and digital technologies, Exar enables a wide
array of applications such as portable devices, home media gateways,
communications systems, and industrial automation equipment. Exar has
locations worldwide providing real-time system-level support to drive rapid
product innovation. For more information about Exar visit:
http://www.exar.com.
SOURCE Exar Corporation

J. Scott Kamsler, Sr. Vice President and Chief Financial Officer of Exar
Corporation, +1-510-668-7110