##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended April 3, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-24923
 CONEXANT SYSTEMS, INC.
  Delaware
    
    25-1799439(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 4000 MacArthur Boulevard
Newport Beach, California 92660-3095
 (949) 483-4600
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
  
    
    our beliefs, subject to the qualifications expressed, regarding the sufficiency of our
existing sources of liquidity and cash to fund our operations, research and development,
anticipated capital expenditures and our working capital needs for at least the next 12
months and that we will be able to repatriate cash from our foreign operations on a timely
and cost effective basis and that we will be able to sustain the recoverability of our
goodwill, intangible and tangible long-term assets;
    
    our belief that we will be able to sustain the recoverability of our goodwill, intangible
and tangible long-term assets;
    
    expectations that we will have sufficient capital needed to remain in business and repay
our indebtedness as it becomes due;
    
    expectations that we will be able to continue to meet NASDAQ listing requirements;
    
    expectations regarding the market share of our products, growth in the markets we serve
and our market opportunities;
    
    expectations regarding price and product competition;
    
    continued demand and future growth in demand for our products in the communications, PC
and consumer markets we serve;
    
    our plans and expectations regarding the transition of our semiconductor products to
smaller line width geometries;
    
    our product development plans;
    
    our expectation that our largest customers will continue to account for a substantial
portion of our revenue;
    
    expectations regarding our contractual obligations and commitments;
    
    expectation that we will be able to protect our products and services with proprietary
technology and intellectual property protection;
    
    expectation that we will be able to meet our lease obligations (and other financial
commitments);
    
    expectation that we will be able to continue to rely on third party manufacturers to
manufacture, assemble and test our products to meet our customers demands; and
    
    expectations regarding the proposed sale of our Broadband Access Products business to
Ikanos Communications, Inc.
  1




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##### 



CONEXANT SYSTEMS, INC.
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements (unaudited):Condensed Consolidated Balance Sheets  April 3, 2009 and October 3, 2008
    
    
    3Condensed Consolidated Statements of Operations  Fiscal Quarter and Six Fiscal Months Ended April 3,
2009 and March 28, 2008
    
    
    4Condensed Consolidated Statements of Cash Flows  Six Fiscal Months Ended April 3, 2009 and March 28, 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    35Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 4. Controls and Procedures
    
    
    47PART II. OTHER INFORMATION
    
    
    47Item 1. Legal Proceedings
    
    
    47Item 1A. Risk Factors
    
    
    48Item 4. Submission of Matters to a Vote of Security Holders
    
    
    59Item 6. Exhibits
    
    
    60SIGNATURE
    
    
    61EX-31.1EX-31.2EX-32
  2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 CONEXANT SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except par value)
 April 3,
    
    
    October 3,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    110,271
    
    
    $
    105,883Restricted cash
    
    
    17,500
    
    
    
    26,800Receivables, net of allowances of $820 and $834
    
    
    37,172
    
    
    
    48,997Inventories, net
    
    
    18,042
    
    
    
    36,439Other current assets
    
    
    36,740
    
    
    
    38,537Total current assets
    
    
    219,725
    
    
    
    256,656Property, plant and equipment, net
    
    
    18,448
    
    
    
    24,912Goodwill
    
    
    111,360
    
    
    
    110,412Intangible assets, net
    
    
    7,026
    
    
    
    14,971Other assets
    
    
    36,405
    
    
    
    39,452Total assets
    
    $
    392,964
    
    
    $
    446,403LIABILITIES AND SHAREHOLDERS DEFICITCurrent liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    17,707Short-term debt
    
    
    29,721
    
    
    
    40,117Accounts payable
    
    
    18,365
    
    
    
    34,894Accrued compensation and benefits
    
    
    11,712
    
    
    
    14,989Other current liabilities
    
    
    34,461
    
    
    
    44,385Total current liabilities
    
    
    94,259
    
    
    
    152,092Long-term debt
    
    
    391,400
    
    
    
    373,693Other liabilities
    
    
    72,282
    
    
    
    57,352Total liabilities
    
    
    557,941
    
    
    
    583,137Commitments and contingencies (Note 6)Shareholders deficit:Preferred and junior preferred stock
    
    
    
    
    
    
    Common stock, $0.01 par value: 100,000 shares
authorized; 49,780 and 49,601
shares issued and outstanding
    
    
    498
    
    
    
    496Additional paid-in capital
    
    
    4,748,512
    
    
    
    4,744,140Accumulated deficit
    
    
    (4,910,651
    )
    
    
    (4,879,208
    )Accumulated other comprehensive loss
    
    
    (3,288
    )
    
    
    (2,083
    )Shareholder notes receivable
    
    
    (48
    )
    
    
    (79
    )Total shareholders deficit
    
    
    (164,977
    )
    
    
    (136,734
    )Total liabilities and shareholders deficit
    
    $
    392,964
    
    
    $
    446,403
  3




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CONEXANT SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
 Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net revenues
    
    $
    74,479
    
    
    $
    118,518
    
    
    $
    160,977
    
    
    $
    264,451Cost of goods sold (1)
    
    
    35,373
    
    
    
    56,481
    
    
    
    75,721
    
    
    
    120,293Gross margin
    
    
    39,106
    
    
    
    62,037
    
    
    
    85,256
    
    
    
    144,158Operating expenses:Research and development (1)
    
    
    24,468
    
    
    
    30,650
    
    
    
    50,781
    
    
    
    68,473Selling, general and administrative (1)
    
    
    18,678
    
    
    
    20,424
    
    
    
    38,161
    
    
    
    40,438Amortization of intangible assets
    
    
    2,885
    
    
    
    2,859
    
    
    
    6,256
    
    
    
    7,430Gain on sale of intellectual property
    
    
    
    
    
    
    
    
    
    
    (12,858
    )
    
    
    Special charges
    
    
    2,385
    
    
    
    2,594
    
    
    
    12,594
    
    
    
    6,943Total operating expenses
    
    
    48,416
    
    
    
    56,527
    
    
    
    94,934
    
    
    
    123,284Operating (loss) income
    
    
    (9,310
    )
    
    
    5,510
    
    
    
    (9,678
    )
    
    
    20,874Interest expense
    
    
    5,930
    
    
    
    8,628
    
    
    
    11,984
    
    
    
    18,077Other (income) expense, net
    
    
    (1,577
    )
    
    
    4,148
    
    
    
    718
    
    
    
    9,493Loss from continuing operations before income taxes and
(loss) gain on
equity method investments
    
    
    (13,663
    )
    
    
    (7,266
    )
    
    
    (22,380
    )
    
    
    (6,696
    )Provision for income taxes
    
    
    341
    
    
    
    717
    
    
    
    1,253
    
    
    
    1,579Loss from continuing operations before (loss) gain on equity
method
investments
    
    
    (14,004
    )
    
    
    (7,983
    )
    
    
    (23,633
    )
    
    
    (8,275
    )(Loss) gain on equity method investments
    
    
    (835
    )
    
    
    (214
    )
    
    
    (1,681
    )
    
    
    3,559Loss from continuing operations
    
    
    (14,839
    )
    
    
    (8,197
    )
    
    
    (25,314
    )
    
    
    (4,716
    )Income (loss) from discontinued operations, net of tax (1)
    
    
    1,083
    
    
    
    (133,807
    )
    
    
    (6,131
    )
    
    
    (146,506
    )Net loss
    
    $
    (13,756
    )
    
    $
    (142,004
    )
    
    $
    (31,445
    )
    
    $
    (151,222
    )Loss per share from continuing operations  basic and diluted
    
    $
    (0.30
    )
    
    $
    (0.17
    )
    
    $
    (0.51
    )
    
    $
    (0.10
    )Income (loss) per share from discontinued operations  basic
and diluted
    
    $
    0.02
    
    
    $
    (2.71
    )
    
    $
    (0.12
    )
    
    $
    (2.97
    )Net loss per share  basic and diluted
    
    $
    (0.28
    )
    
    $
    (2.88
    )
    
    $
    (0.63
    )
    
    $
    (3.07
    )Shares used in basic and diluted per-share computations
    
    
    49,755
    
    
    
    49,312
    
    
    
    49,706
    
    
    
    49,274
 
 (1)
    
    These captions include non-cash employee stock-based compensation expense as follows
(see Note 7): Fiscal Quarter Ended
    
    Six Fiscal Months EndedApril 3,
    
    March 28,
    
    April 3,
    
    March 28,2009
    
    2008
    
    2009
    
    2008Cost of goods sold
    
    $
    95
    
    
    $
    81
    
    
    $
    138
    
    
    $
    195Research and development
    
    
    733
    
    
    
    912
    
    
    
    1,244
    
    
    
    2,524Selling, general and administrative
    
    
    1,405
    
    
    
    2,210
    
    
    
    3,224
    
    
    
    3,168(Income) loss from discontinued
operations, net of tax
    
    
    
    
    
    
    563
    
    
    
    
    
    
    
    1,163
  4




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CONEXANT SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
 Six Fiscal Months EndedApril 3,
    
    
    March 28,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (31,445
    )
    
    $
    (151,222
    )Adjustments to reconcile net loss to net cash (used in) provided by
operating activities, net of effects of acquisitions:Depreciation
    
    
    4,659
    
    
    
    11,534Amortization of intangible assets
    
    
    6,255
    
    
    
    7,851Asset impairments
    
    
    
    
    
    
    121,785Reversal of provision for bad debts, net
    
    
    
    
    
    
    (698
    )(Reversal of) charges for inventory provisions, net
    
    
    (24
    )
    
    
    4,715Deferred income taxes
    
    
    (158
    )
    
    
    121Stock-based compensation
    
    
    4,606
    
    
    
    7,050(Increase) decrease in fair value of derivative instruments
    
    
    (90
    )
    
    
    14,161Losses on equity method investments
    
    
    2,560
    
    
    
    28Other-than-temporary impairment of marketable securities
    
    
    2,635
    
    
    
    Other-than-temporary impairment of cost method investments
    
    
    135
    
    
    
    Gain on sale of intellectual property
    
    
    (12,858
    )
    
    
    Other items, net
    
    
    1,241
    
    
    
    451Changes in assets and liabilities:Receivables
    
    
    11,825
    
    
    
    8,520Inventories
    
    
    19,319
    
    
    
    3,072Accounts payable
    
    
    (16,529
    )
    
    
    (10,743
    )Accrued expenses and other current liabilities
    
    
    (8,828
    )
    
    
    (24,998
    )Accrued restructuring expenses
    
    
    11,688
    
    
    
    1,931Other, net
    
    
    918
    
    
    
    8,475Net cash (used in) provided by operating activities
    
    
    (4,091
    )
    
    
    2,033Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (347
    )
    
    
    (3,689
    )Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    574Payments for acquisitions
    
    
    (3,578
    )
    
    
    Purchases of equity securities
    
    
    
    
    
    
    (755
    )Release of restricted cash
    
    
    9,300
    
    
    
    Proceeds from sale of intellectual property, net of expenses of $132
    
    
    14,548
    
    
    
    Net cash provided by (used in) investing activities
    
    
    19,923
    
    
    
    (3,870
    )Cash flows from financing activities:Net repayments of short-term debt, including debt costs
of $901 and $1,118
    
    
    (11,297
    )
    
    
    (10,022
    )Repurchases and retirements of long-term debt
    
    
    
    
    
    
    (53,600
    )Proceeds from issuance of common stock
    
    
    28
    
    
    
    707Interest rate swap security deposit
    
    
    (207
    )
    
    
    (6,741
    )Repayment of shareholder note receivable
    
    
    32
    
    
    
    Net cash used in financing activities
    
    
    (11,444
    )
    
    
    (69,656
    )Net increase (decrease) in cash and cash equivalents
    
    
    4,388
    
    
    
    (71,493
    )Cash and cash equivalents at beginning of period
    
    
    105,883
    
    
    
    235,605Cash and cash equivalents at end of period
    
    $
    110,271
    
    
    $
    164,112
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CONEXANT SYSTEMS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Description of Business
  2. Basis of Presentation and Significant Accounting Policies
 Interim Reporting
  Fiscal Periods
 Use of Estimates 
 Revenue Recognition
  6




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Liquidity
   Restricted Cash 
  Income Taxes
  7




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Review of Accounting for Research and Development Costs
 Derivative Financial Instruments 
 Interest Rate Swaps 
   Supplemental Cash Flow Information
 8




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Net Loss Per Share 
  Fiscal Quarter Ended
    
    Six Fiscal Months EndedApril 3,
    
    March 28,
    
    April 3,
    
    March 28,2009
    
    2008
    
    2009
    
    2008Stock options and warrants
    
    
    5,847
    
    
    
    9,010
    
    
    
    6,324
    
    
    
    9,1874.00% convertible subordinated notes due March 2026
    
    
    5,081
    
    
    
    5,081
    
    
    
    5,081
    
    
    
    5,08110,928
    
    
    
    14,091
    
    
    
    11,405
    
    
    
    14,268
  Cash flows
 Six FiscalMonths EndedMarch 28,2008Accrued expenses and other current liabilities, before reclassification
    
    $
    (26,636
    )Accrued restructuring expenses
    
    
    1,638Accrued expenses and other current liabilities, after reclassification
    
    $
    (24,998
    )Other, net, before reclassification
    
    $
    10,926Accrued restructuring expenses
    
    
    (3,569
    )Expenses related to short-term debt
    
    
    1,118Other, net, after reclassification
    
    $
    8,475Repayments of short-term debt, including debt costs, before correction
    
    $
    (8,904
    )Expenses related to short-term debt
    
    
    (1,118
    )Repayments of short-term debt, including debt costs, after correction
    
    $
    (10,022
    )
 Business Enterprise Segments 
 9




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
    
    the nature of their products and services;
    
    the nature of their production processes;
    
    the type or class of customer for their products and services; and
    
    the methods used to distribute their products or provide their services.
  
    
    the sale of semiconductor products is the only material source of revenue for each of
the Companys two operating segments;
    
    the products sold by each of the Companys operating segments use the same standard
manufacturing process;
    
    the products marketed by each of the Companys operating segments are sold to similar
customers;
    
    all of the Companys products are sold through its internal sales force and common
distributors;
    
    the operating segments share common research and development resources and core
engineering resources; and
    
    the operating segments share selling, general and administrative resources.
  Goodwill
    10




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Recently Adopted Accounting Pronouncements
    
 
    
    Level 1: Quoted prices in active markets for identical assets or liabilities.
    
    Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the related assets or liabilities.
    
    Level 3: Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  11




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Recently Issued Accounting Pronouncements
      12




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3. Sale of Assets and Discontinued Operations
     4. Fair Value of Certain Financial Assets and Liabilities
  Level 1
    
    
    Level 2
    
    
    TotalAssets:Cash and cash equivalents
    
    $
    110,271
    
    
    $
    
    
    
    $
    110,271Restricted cash
    
    
    17,500
    
    
    
    
    
    
    
    17,500Marketable securities
    
    
    1,067
    
    
    
    
    
    
    
    1,067Mindspeed warrant
    
    
    
    
    
    
    1,141
    
    
    
    1,141Long-term restricted cash
    
    
    6,800
    
    
    
    
    
    
    
    6,800Total Assets
    
    $
    135,638
    
    
    $
    1,141
    
    
    $
    136,779Liabilities:Interest rate swap financial instruments
    
    $
    
    
    
    $
    2,543
    
    
    $
    2,543Total Liabilities
    
    $
    
    
    
    $
    2,543
    
    
    $
    2,543
 13




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5. Supplemental Financial Information
 Inventories
  April 3,
    
    
    October 3,2009
    
    
    2008Work-in-process
    
    $
    9,753
    
    
    $
    16,082Finished goods
    
    
    8,289
    
    
    
    20,357Total inventories, net
    
    $
    18,042
    
    
    $
    36,439
  Intangible Assets
  April 3, 2009
    
    
    October 3, 2008Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Book
    
    
    Carrying
    
    
    Accumulated
    
    
    BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueDeveloped technology
    
    $
    7,951
    
    
    $
    (7,352
    )
    
    $
    599
    
    
    $
    67,724
    
    
    $
    (62,285
    )
    
    $
    5,439Product licenses
    
    
    3,510
    
    
    
    (1,498
    )
    
    
    2,012
    
    
    
    11,032
    
    
    
    (7,105
    )
    
    
    3,927Other intangible assets
    
    
    7,240
    
    
    
    (2,825
    )
    
    
    4,415
    
    
    
    8,240
    
    
    
    (2,635
    )
    
    
    5,605$
    18,701
    
    
    $
    (11,675
    )
    
    $
    7,026
    
    
    $
    86,996
    
    
    $
    (72,025
    )
    
    $
    14,971
  Remainder of 2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    ThereafterAmortization expense
    
    $
    1,151
    
    
    $
    1,353
    
    
    $
    1,237
    
    
    $
    1,237
    
    
    $
    1,031
    
    
    $
    1,017
  Goodwill
  14




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Goodwill at October 3, 2008
    
    $
    110,412Additions
    
    
    1,000Other adjustments
    
    
    (52
    )Goodwill at April 3, 2009
    
    $
    111,360
  Mindspeed Warrant
   Short-Term Debt
   15




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Long-Term Debt
  April 3,
    
    
    October 3,2009
    
    
    2008Floating rate senior secured notes due November
2010
    
    $
    141,400
    
    
    $
    141,4004.00% convertible subordinated notes due March
2026 with a conversion price of $49.20
    
    
    250,000
    
    
    
    250,000Total
    
    
    391,400
    
    
    
    391,400Less: current portion of long-term debt
    
    
    
    
    
    
    (17,707
    )Long-term debt
    
    $
    391,400
    
    
    $
    373,693
 Floating rate senior secured notes due November 2010 
   16




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4.00% convertible subordinated notes due March 2026 
 6. Commitments and Contingencies
 Legal Matters
  IPO Litigation
 Class Action Suit
 17




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Guarantees and Indemnifications
   7. Stock Option Plans
    18




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Fiscal Quarter Ended
    
    Six Fiscal Months EndedApril 3,
    
    March 28,
    
    April 3,
    
    March 28,2009
    
    2008
    
    2009
    
    2008Stock option plans:Expected dividend yield
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Expected stock price volatility
    
    
    79
    %
    
    
    67
    %
    
    
    77
    %
    
    
    66
    %Risk free interest rate
    
    
    1.80
    %
    
    
    3.20
    %
    
    
    2.00
    %
    
    
    3.80
    %Average expected life (in years)
    
    
    4.68
    
    
    
    5.25
    
    
    
    4.86
    
    
    
    5.00Stock purchase plans:Expected dividend yield
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Expected stock price volatility
    
    
    74
    %
    
    
    68
    %
    
    
    74
    %
    
    
    68
    %Risk free interest rate
    
    
    3.14
    %
    
    
    3.00
    %
    
    
    3.14
    %
    
    
    3.00
    %Average expected life (in years)
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.5
   WeightedAverageExerciseShares
    
    PriceOutstanding, October 3, 2008
    
    
    7,357
    
    
    $
    23.54Granted
    
    
    66
    
    
    
    1.03Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (2,173
    )
    
    
    23.94Outstanding, April 3, 2009
    
    
    5,250
    
    
    
    23.09Shares vested and expected to vest, April 3, 2009
    
    
    5,137
    
    
    
    23.30Exercisable, April 3, 2009
    
    
    4,500
    
    
    $
    24.70
  Directors Stock Plan
  19




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##### Table of Contents



Employee Stock Purchase Plan
   2001 Performance Share Plan and 2004 New Hire Equity Incentive Plan
  Performance Plan
  WeightedAverageGrant DateShares
    
    Fair ValueOutstanding, October 3, 2008
    
    
    400
    
    
    $
    6.49Granted
    
    
    
    
    
    
    Vested
    
    
    (175
    )
    
    
    8.34Forfeited
    
    
    
    
    
    
    Outstanding, April 3, 2009
    
    
    225
    
    
    $
    5.04
  20




---



##### Table of Contents



2004 New Hire Plan
  WeightedAverageGrant DateShares
    
    Fair ValueOutstanding, October 3, 2008
    
    
    74
    
    
    $
    10.59Granted
    
    
    
    
    
    
    Vested
    
    
    (32
    )
    
    
    11.33Forfeited
    
    
    (25
    )
    
    
    13.70Outstanding, April 3, 2009
    
    
    17
    
    
    $
    4.50
  8. Comprehensive Loss
  Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (13,756
    )
    
    $
    (142,004
    )
    
    $
    (31,445
    )
    
    $
    (151,222
    )Other comprehensive (loss) income:Foreign currency translation adjustments
    
    
    (660
    )
    
    
    1,204
    
    
    
    (1,755
    )
    
    
    1,503Unrealized gains on marketable securities
    
    
    664
    
    
    
    
    
    
    
    650
    
    
    
    Unrealized losses on foreign currency forward hedge contracts
    
    
    
    
    
    
    (1,805
    )
    
    
    (153
    )
    
    
    (2,182
    )Unrealized losses on interest rate swap contracts
    
    
    (408
    )
    
    
    
    
    
    
    (2,592
    )
    
    
    Realized loss on impairment of marketable securities
    
    
    
    
    
    
    
    
    
    
    1,986
    
    
    
    Gains on settlement of foreign currency forward hedge contracts
    
    
    
    
    
    
    
    
    
    
    659
    
    
    
    Minimum pension liability adjustments
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    (1,073
    )Other comprehensive loss
    
    
    (404
    )
    
    
    (564
    )
    
    
    (1,205
    )
    
    
    (1,752
    )Comprehensive loss
    
    $
    (14,160
    )
    
    $
    (142,568
    )
    
    $
    (32,650
    )
    
    $
    (152,974
    )
  April 3,
    
    
    October 3,2009
    
    
    2008Foreign currency translation adjustments
    
    $
    (1,447
    )
    
    $
    308Unrealized gains (losses) on marketable securities
    
    
    702
    
    
    
    (1,934
    )Unrealized losses on derivative instruments
    
    
    (2,543
    )
    
    
    (457
    )Accumulated other comprehensive loss
    
    $
    (3,288
    )
    
    $
    (2,083
    )
 21




---



##### Table of Contents



9. Income Taxes
  10. Gain on Sale of Intellectual Property
  11. Special Charges
  Restructuring Charges
   Fiscal 2009 Restructuring Actions
  WorkforceReductionsCharged to costs and expenses
    
    $
    2,216Cash payments
    
    
    (1,784
    )Restructuring balance, April 3, 2009
    
    $
    432
 Fiscal 2008 Restructuring Actions
 22




---



##### Table of Contents



Workforce
    
    
    FacilityReductions
    
    
    and Other
    
    
    TotalCharged to costs and expenses
    
    $
    6,254
    
    
    $
    1,762
    
    
    $
    8,016Cash payments
    
    
    (6,161
    )
    
    
    (731
    )
    
    
    (6,892
    )Restructuring balance, October 3, 2008
    
    
    93
    
    
    
    1,031
    
    
    
    1,124Charged to costs and expenses
    
    
    600
    
    
    
    57
    
    
    
    657Reclassification to other current liabilities and other liabilities
    
    
    
    
    
    
    (175
    )
    
    
    (175
    )Cash payments
    
    
    (667
    )
    
    
    (304
    )
    
    
    (971
    )Restructuring balance, April 3, 2009
    
    $
    26
    
    
    $
    609
    
    
    $
    635
 Fiscal 2007 Restructuring Actions
  Workforce
    
    
    FacilityReductions
    
    
    and Other
    
    
    TotalCharged to costs and expenses
    
    $
    9,477
    
    
    $
    2,040
    
    
    $
    11,517Non-cash items
    
    
    
    
    
    
    4,868
    
    
    
    4,868Cash payments
    
    
    (5,841
    )
    
    
    (268
    )
    
    
    (6,109
    )Restructuring balance, September 28, 2007
    
    
    3,636
    
    
    
    6,640
    
    
    
    10,276Charged to costs and expenses
    
    
    11
    
    
    
    6,312
    
    
    
    6,323Non-cash items
    
    
    
    
    
    
    8,039
    
    
    
    8,039Cash payments
    
    
    (3,631
    )
    
    
    (4,309
    )
    
    
    (7,940
    )Restructuring balance, October 3, 2008
    
    
    16
    
    
    
    16,682
    
    
    
    16,698Charged to costs and expenses
    
    
    (1
    )
    
    
    10,025
    
    
    
    10,024Cash payments
    
    
    (15
    )
    
    
    (2,713
    )
    
    
    (2,728
    )Restructuring balance, April 3, 2009
    
    $
    
    
    
    $
    23,994
    
    
    $
    23,994
 Fiscal 2006 and 2005 Restructuring Actions
 23




---



##### Table of Contents



Workforce
    
    
    FacilityReductions
    
    
    and Other
    
    
    TotalRestructuring balance, October 1, 2005
    
    $
    3,609
    
    
    $
    25,220
    
    
    $
    28,829Charged to costs and expenses
    
    
    1,852
    
    
    
    1,407
    
    
    
    3,259Reclassification from accrued compensation and benefits and other
    
    
    1,844
    
    
    
    55
    
    
    
    1,899Cash payments
    
    
    (5,893
    )
    
    
    (8,031
    )
    
    
    (13,924
    )Restructuring balance, September 29, 2006
    
    
    1,412
    
    
    
    18,651
    
    
    
    20,063Reclassification to other current liabilities and other liabilities
    
    
    
    
    
    
    (2,687
    )
    
    
    (2,687
    )Charged to costs and expenses
    
    
    55
    
    
    
    559
    
    
    
    614Cash payments
    
    
    (1,336
    )
    
    
    (4,007
    )
    
    
    (5,343
    )Restructuring balance, September 28, 2007
    
    
    131
    
    
    
    12,516
    
    
    
    12,647Reclassification from other current liabilities and other liabilities
    
    
    
    
    
    
    3,359
    
    
    
    3,359Charged to costs and expenses
    
    
    (130
    )
    
    
    285
    
    
    
    155Cash payments
    
    
    (1
    )
    
    
    (5,123
    )
    
    
    (5,124
    )Restructuring balance, October 3, 2008
    
    
    
    
    
    
    11,037
    
    
    
    11,037Charged to costs and expenses
    
    
    
    
    
    
    4,106
    
    
    
    4,106Cash payments
    
    
    
    
    
    
    (1,074
    )
    
    
    (1,074
    )Restructuring balance, April 3, 2009
    
    $
    
    
    
    $
    14,069
    
    
    $
    14,069
 12. Other (income) expense, net
  Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Investment and interest income
    
    $
    (451
    )
    
    $
    (2,042
    )
    
    $
    (1,308
    )
    
    $
    (4,813
    )Other-than-temporary
impairment of marketable
securities and cost based
investments
    
    
    135
    
    
    
    
    
    
    
    2,770
    
    
    
    (Increase) decrease in the
fair value of derivative
instruments
    
    
    (1,078
    )
    
    
    6,179
    
    
    
    (596
    )
    
    
    14,543Other
    
    
    (183
    )
    
    
    11
    
    
    
    (148
    )
    
    
    (237
    )Other (income) expense, net
    
    $
    (1,577
    )
    
    $
    4,148
    
    
    $
    718
    
    
    $
    9,493
  24




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##### Table of Contents



13. Related Party Transactions
 Mindspeed Technologies, Inc.
  Lease Agreement
 14. Geographic Information
  Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008United States
    
    $
    4,597
    
    
    $
    6,354
    
    
    $
    9,427
    
    
    $
    12,717Other Americas
    
    
    1,384
    
    
    
    1,588
    
    
    
    3,029
    
    
    
    4,960Total Americas
    
    
    5,981
    
    
    
    7,942
    
    
    
    12,456
    
    
    
    17,677China
    
    
    50,239
    
    
    
    75,268
    
    
    
    104,734
    
    
    
    162,756Taiwan
    
    
    3,641
    
    
    
    5,993
    
    
    
    10,572
    
    
    
    14,299Japan
    
    
    2,821
    
    
    
    4,804
    
    
    
    6,655
    
    
    
    11,882Malaysia
    
    
    2,231
    
    
    
    1,830
    
    
    
    5,696
    
    
    
    5,662Thailand
    
    
    1,944
    
    
    
    3,151
    
    
    
    4,917
    
    
    
    7,299Singapore
    
    
    2,004
    
    
    
    11,738
    
    
    
    4,629
    
    
    
    25,629South Korea
    
    
    744
    
    
    
    2,287
    
    
    
    2,091
    
    
    
    6,260Other Asia-Pacific
    
    
    1,604
    
    
    
    112
    
    
    
    2,396
    
    
    
    301Total Asia-Pacific
    
    
    65,228
    
    
    
    105,183
    
    
    
    141,690
    
    
    
    234,088Europe, Middle East and Africa
    
    
    3,270
    
    
    
    5,393
    
    
    
    6,831
    
    
    
    12,686$
    74,479
    
    
    $
    118,518
    
    
    $
    160,977
    
    
    $
    264,451
  25




---



##### Table of Contents



April 3,
    
    
    October 3,2009
    
    
    2008United States
    
    $
    45,772
    
    
    $
    52,515India
    
    
    3,004
    
    
    
    4,499Other Asia-Pacific
    
    
    4,816
    
    
    
    6,766Europe, Middle East and Africa
    
    
    25
    
    
    
    34$
    53,617
    
    
    $
    63,814
 15. Supplemental Guarantor Financial Information
       26




---



##### Table of Contents



April 3, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCurrent assets:Cash and cash equivalents
    
    $
    86,781
    
    
    $
    
    
    
    $
    23,490
    
    
    $
    
    
    
    $
    110,271Restricted cash
    
    
    9,000
    
    
    
    
    
    
    
    8,500
    
    
    
    
    
    
    
    17,500Receivables, net
    
    
    1,408
    
    
    
    169,158
    
    
    
    35,764
    
    
    
    (169,158
    )
    
    
    37,172Inventories
    
    
    18,042
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,042Other current assets
    
    
    30,718
    
    
    
    3
    
    
    
    6,019
    
    
    
    
    
    
    
    36,740Total current assets
    
    
    145,949
    
    
    
    169,161
    
    
    
    73,773
    
    
    
    (169,158
    )
    
    
    219,725Property and equipment, net
    
    
    11,106
    
    
    
    
    
    
    
    7,342
    
    
    
    
    
    
    
    18,448Goodwill
    
    
    18,911
    
    
    
    89,352
    
    
    
    3,097
    
    
    
    
    
    
    
    111,360Intangible assets, net
    
    
    6,641
    
    
    
    
    
    
    
    385
    
    
    
    
    
    
    
    7,026Other assets
    
    
    34,107
    
    
    
    
    
    
    
    2,298
    
    
    
    
    
    
    
    36,405Investments in subsidiaries
    
    
    273,178
    
    
    
    18,705
    
    
    
    
    
    
    
    (291,883
    )
    
    
    Total assets
    
    $
    489,892
    
    
    $
    277,218
    
    
    $
    86,895
    
    
    $
    (461,041
    )
    
    $
    392,964Current liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Short-term debt
    
    
    
    
    
    
    
    
    
    
    29,721
    
    
    
    
    
    
    
    29,721Accounts payable
    
    
    153,207
    
    
    
    
    
    
    
    34,316
    
    
    
    (169,158
    )
    
    
    18,365Accrued compensation and benefits
    
    
    8,974
    
    
    
    
    
    
    
    2,738
    
    
    
    
    
    
    
    11,712Other current liabilities
    
    
    30,566
    
    
    
    932
    
    
    
    2,963
    
    
    
    
    
    
    
    34,461Total current liabilities
    
    
    192,747
    
    
    
    932
    
    
    
    69,738
    
    
    
    (169,158
    )
    
    
    94,259Long-term debt
    
    
    391,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    391,400Other liabilities
    
    
    70,722
    
    
    
    
    
    
    
    1,560
    
    
    
    
    
    
    
    72,282Total liabilities
    
    
    654,869
    
    
    
    932
    
    
    
    71,298
    
    
    
    (169,158
    )
    
    
    557,941Shareholders (deficit) equity
    
    
    (164,977
    )
    
    
    276,286
    
    
    
    15,597
    
    
    
    (291,883
    )
    
    
    (164,977
    )Total liabilities and equity (deficit)
    
    $
    489,892
    
    
    $
    277,218
    
    
    $
    86,895
    
    
    $
    (461,041
    )
    
    $
    392,964
 27




---



##### Table of Contents



October 3, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCurrent assets:Cash and cash equivalents
    
    $
    69,738
    
    
    $
    
    
    
    $
    36,145
    
    
    $
    
    
    
    $
    105,883Restricted cash
    
    
    18,000
    
    
    
    
    
    
    
    8,800
    
    
    
    
    
    
    
    26,800Receivables
    
    
    
    
    
    
    169,158
    
    
    
    57,584
    
    
    
    (177,745
    )
    
    
    48,997Inventories
    
    
    36,439
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,439Other current assets
    
    
    33,543
    
    
    
    3
    
    
    
    4,991
    
    
    
    
    
    
    
    38,537Total current assets
    
    
    157,720
    
    
    
    169,161
    
    
    
    107,520
    
    
    
    (177,745
    )
    
    
    256,656Property and equipment, net
    
    
    14,366
    
    
    
    
    
    
    
    10,546
    
    
    
    
    
    
    
    24,912Goodwill
    
    
    17,911
    
    
    
    89,404
    
    
    
    3,097
    
    
    
    
    
    
    
    110,412Intangible assets, net
    
    
    8,527
    
    
    
    5,992
    
    
    
    452
    
    
    
    
    
    
    
    14,971Other assets
    
    
    36,955
    
    
    
    
    
    
    
    2,497
    
    
    
    
    
    
    
    39,452Investments in subsidiaries
    
    
    291,511
    
    
    
    19,188
    
    
    
    
    
    
    
    (310,699
    )
    
    
    Total assets
    
    $
    526,990
    
    
    $
    283,745
    
    
    $
    124,112
    
    
    $
    (488,444
    )
    
    $
    446,403Current liabilities:Current portion of long-term debt
    
    $
    17,707
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    17,707Short-term debt
    
    
    
    
    
    
    
    
    
    
    40,117
    
    
    
    
    
    
    
    40,117Accounts payable
    
    
    164,057
    
    
    
    
    
    
    
    48,582
    
    
    
    (177,745
    )
    
    
    34,894Accrued compensation and benefits
    
    
    12,078
    
    
    
    
    
    
    
    2,911
    
    
    
    
    
    
    
    14,989Other current liabilities
    
    
    40,479
    
    
    
    932
    
    
    
    2,974
    
    
    
    
    
    
    
    44,385Total current liabilities
    
    
    234,321
    
    
    
    932
    
    
    
    94,584
    
    
    
    (177,745
    )
    
    
    152,092Long-term debt
    
    
    373,693
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    373,693Other liabilities
    
    
    55,710
    
    
    
    
    
    
    
    1,642
    
    
    
    
    
    
    
    57,352Total liabilities
    
    
    663,724
    
    
    
    932
    
    
    
    96,226
    
    
    
    (177,745
    )
    
    
    583,137Shareholders (deficit) equity
    
    
    (136,734
    )
    
    
    282,813
    
    
    
    27,886
    
    
    
    (310,699
    )
    
    
    (136,734
    )Total liabilities and equity (deficit)
    
    $
    526,990
    
    
    $
    283,745
    
    
    $
    124,112
    
    
    $
    (488,444
    )
    
    $
    446,403
  28




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##### Table of Contents



Fiscal Quarter Ended April 3, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    70,368
    
    
    $
    5,663
    
    
    $
    4,111
    
    
    $
    (5,663
    )
    
    $
    74,479Cost of goods sold
    
    
    31,632
    
    
    
    
    
    
    
    3,741
    
    
    
    
    
    
    
    35,373Gross margin
    
    
    38,736
    
    
    
    5,663
    
    
    
    370
    
    
    
    (5,663
    )
    
    
    39,106Operating expenses:Research and development
    
    
    24,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,468Selling, general and administrative
    
    
    17,393
    
    
    
    
    
    
    
    1,285
    
    
    
    
    
    
    
    18,678Amortization of intangible assets
    
    
    701
    
    
    
    2,150
    
    
    
    34
    
    
    
    
    
    
    
    2,885Special charges
    
    
    1,574
    
    
    
    
    
    
    
    811
    
    
    
    
    
    
    
    2,385Total operating expenses
    
    
    44,136
    
    
    
    2,150
    
    
    
    2,130
    
    
    
    
    
    
    
    48,416Operating income (loss)
    
    
    (5,400
    )
    
    
    3,513
    
    
    
    (1,760
    )
    
    
    (5,663
    )
    
    
    (9,310
    )Loss in income of subsidiaries
    
    
    (1,333
    )
    
    
    (1,023
    )
    
    
    
    
    
    
    2,356
    
    
    
    Interest expense
    
    
    5,488
    
    
    
    
    
    
    
    442
    
    
    
    
    
    
    
    5,930Other expense (income), net
    
    
    2,364
    
    
    
    
    
    
    
    (3,941
    )
    
    
    
    
    
    
    (1,577
    )(Loss) income from continuing operations
before income
taxes and loss on equity method investments
    
    
    (14,585
    )
    
    
    2,490
    
    
    
    1,739
    
    
    
    (3,307
    )
    
    
    (13,663
    )Provision for income taxes
    
    
    (538
    )
    
    
    
    
    
    
    879
    
    
    
    
    
    
    
    341(Loss) income from continuing operations
before loss on
equity method investments
    
    
    (14,047
    )
    
    
    2,490
    
    
    
    860
    
    
    
    (3,307
    )
    
    
    (14,004
    )Loss on equity method investments
    
    
    (835
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (835
    )(Loss) income from continuing operations
    
    
    (14,882
    )
    
    
    2,490
    
    
    
    860
    
    
    
    (3,307
    )
    
    
    (14,839
    )Income (loss) from discontinued operations
    
    
    1,126
    
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    1,083Net (loss) income
    
    $
    (13,756
    )
    
    $
    2,490
    
    
    $
    817
    
    
    $
    (3,307
    )
    
    $
    (13,756
    )
 29




---



##### Table of Contents



Fiscal Quarter Ended March 28, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    110,122
    
    
    $
    7,781
    
    
    $
    8,396
    
    
    $
    (7,781
    )
    
    $
    118,518Cost of goods sold
    
    
    49,130
    
    
    
    
    
    
    
    7,351
    
    
    
    
    
    
    
    56,481Gross margin
    
    
    60,992
    
    
    
    7,781
    
    
    
    1,045
    
    
    
    (7,781
    )
    
    
    62,037Operating expenses:Research and development
    
    
    30,216
    
    
    
    
    
    
    
    434
    
    
    
    
    
    
    
    30,650Selling, general and administrative
    
    
    18,766
    
    
    
    
    
    
    
    1,658
    
    
    
    
    
    
    
    20,424Amortization of intangible assets
    
    
    467
    
    
    
    2,149
    
    
    
    243
    
    
    
    
    
    
    
    2,859Special charges
    
    
    2,080
    
    
    
    
    
    
    
    514
    
    
    
    
    
    
    
    2,594Total operating expenses
    
    
    51,529
    
    
    
    2,149
    
    
    
    2,849
    
    
    
    
    
    
    
    56,527Operating income (loss)
    
    
    9,463
    
    
    
    5,632
    
    
    
    (1,804
    )
    
    
    (7,781
    )
    
    
    5,510Loss in income of subsidiaries
    
    
    (1,591
    )
    
    
    (314
    )
    
    
    
    
    
    
    1,905
    
    
    
    Interest expense
    
    
    7,848
    
    
    
    
    
    
    
    780
    
    
    
    
    
    
    
    8,628Other expense (income), net
    
    
    8,234
    
    
    
    
    
    
    
    (4,086
    )
    
    
    
    
    
    
    4,148(Loss) income from continuting operations
before income
taxes and loss on equity method investments
    
    
    (8,210
    )
    
    
    5,318
    
    
    
    1,502
    
    
    
    (5,876
    )
    
    
    (7,266
    )Provision for income taxes
    
    
    (227
    )
    
    
    
    
    
    
    944
    
    
    
    
    
    
    
    717(Loss) income from continuting operations
before loss on
equity method investments
    
    
    (7,983
    )
    
    
    5,318
    
    
    
    558
    
    
    
    (5,876
    )
    
    
    (7,983
    )Loss on equity method investments
    
    
    (214
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (214
    )(Loss) income from continuing operations
    
    
    (8,197
    )
    
    
    5,318
    
    
    
    558
    
    
    
    (5,876
    )
    
    
    (8,197
    )Loss from discontinued operations
    
    
    (133,807
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (133,807
    )Net (loss) income
    
    $
    (142,004
    )
    
    $
    5,318
    
    
    $
    558
    
    
    $
    (5,876
    )
    
    $
    (142,004
    )
  30




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##### Table of Contents



Six Fiscal Months Ended April 3, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    153,078
    
    
    $
    11,557
    
    
    $
    7,899
    
    
    $
    (11,557
    )
    
    $
    160,977Cost of goods sold
    
    
    68,392
    
    
    
    
    
    
    
    7,329
    
    
    
    
    
    
    
    75,721Gross margin
    
    
    84,686
    
    
    
    11,557
    
    
    
    570
    
    
    
    (11,557
    )
    
    
    85,256Operating expenses:Research and development
    
    
    50,781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,781Selling, general and administrative
    
    
    35,696
    
    
    
    
    
    
    
    2,465
    
    
    
    
    
    
    
    38,161Amortization of intangible assets
    
    
    1,886
    
    
    
    4,302
    
    
    
    68
    
    
    
    
    
    
    
    6,256Gain on sale of intellectual property
    
    
    (12,858
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,858
    )Special charges
    
    
    11,731
    
    
    
    
    
    
    
    863
    
    
    
    
    
    
    
    12,594Total operating expenses
    
    
    87,236
    
    
    
    4,302
    
    
    
    3,396
    
    
    
    
    
    
    
    94,934Operating (loss) income
    
    
    (2,550
    )
    
    
    7,255
    
    
    
    (2,826
    )
    
    
    (11,557
    )
    
    
    (9,678
    )Loss in income of subsidiaries
    
    
    (3,229
    )
    
    
    (484
    )
    
    
    
    
    
    
    3,713
    
    
    
    Interest expense
    
    
    10,962
    
    
    
    
    
    
    
    1,022
    
    
    
    
    
    
    
    11,984Other expense (income), net
    
    
    6,732
    
    
    
    
    
    
    
    (6,014
    )
    
    
    
    
    
    
    718(Loss) income from continuing operations
before income
taxes and loss on equity method investments
    
    
    (23,473
    )
    
    
    6,771
    
    
    
    2,166
    
    
    
    (7,844
    )
    
    
    (22,380
    )Provision for income taxes
    
    
    129
    
    
    
    
    
    
    
    1,124
    
    
    
    
    
    
    
    1,253(Loss) income from continuing operations before
loss on equity method investments
    
    
    (23,602
    )
    
    
    6,771
    
    
    
    1,042
    
    
    
    (7,844
    )
    
    
    (23,633
    )Loss on equity method investments
    
    
    (1,681
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,681
    )(Loss) income from continuing operations
    
    
    (25,283
    )
    
    
    6,771
    
    
    
    1,042
    
    
    
    (7,844
    )
    
    
    (25,314
    )(Loss) gain from discontinued operations
    
    
    (6,162
    )
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    (6,131
    )Net (loss) income
    
    $
    (31,445
    )
    
    $
    6,771
    
    
    $
    1,073
    
    
    $
    (7,844
    )
    
    $
    (31,445
    )
 31




---



##### Table of Contents



Six Fiscal Months Ended March 28, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    230,091
    
    
    $
    18,977
    
    
    $
    34,360
    
    
    $
    (18,977
    )
    
    $
    264,451Cost of goods sold
    
    
    89,353
    
    
    
    
    
    
    
    30,940
    
    
    
    
    
    
    
    120,293Gross margin
    
    
    140,738
    
    
    
    18,977
    
    
    
    3,420
    
    
    
    (18,977
    )
    
    
    144,158Operating expenses:Research and development
    
    
    67,864
    
    
    
    
    
    
    
    609
    
    
    
    
    
    
    
    68,473Selling, general and administrative
    
    
    35,282
    
    
    
    
    
    
    
    5,156
    
    
    
    
    
    
    
    40,438Amortization of intangible assets
    
    
    933
    
    
    
    6,010
    
    
    
    487
    
    
    
    
    
    
    
    7,430Special charges
    
    
    6,057
    
    
    
    
    
    
    
    886
    
    
    
    
    
    
    
    6,943Total operating expenses
    
    
    110,136
    
    
    
    6,010
    
    
    
    7,138
    
    
    
    
    
    
    
    123,284Operating income (loss)
    
    
    30,602
    
    
    
    12,967
    
    
    
    (3,718
    )
    
    
    (18,977
    )
    
    
    20,874(Loss) equity in income of subsidiaries
    
    
    (3,706
    )
    
    
    1,327
    
    
    
    
    
    
    
    2,379
    
    
    
    Interest expense
    
    
    15,507
    
    
    
    
    
    
    
    2,570
    
    
    
    
    
    
    
    18,077Other expense (income), net
    
    
    19,417
    
    
    
    
    
    
    
    (9,924
    )
    
    
    
    
    
    
    9,493(Loss) income from continuing operations
before income
taxes and gain on equity method investments
    
    
    (8,028
    )
    
    
    14,294
    
    
    
    3,636
    
    
    
    (16,598
    )
    
    
    (6,696
    )Provision for income taxes
    
    
    247
    
    
    
    
    
    
    
    1,332
    
    
    
    
    
    
    
    1,579(Loss) income from continuing operations
before gain on
equity method investments
    
    
    (8,275
    )
    
    
    14,294
    
    
    
    2,304
    
    
    
    (16,598
    )
    
    
    (8,275
    )Gain on equity method investments
    
    
    3,559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,559(Loss) income from continuing operations
    
    
    (4,716
    )
    
    
    14,294
    
    
    
    2,304
    
    
    
    (16,598
    )
    
    
    (4,716
    )Loss from discontinued operations
    
    
    (146,506
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146,506
    )Net (loss) income
    
    $
    (151,222
    )
    
    $
    14,294
    
    
    $
    2,304
    
    
    $
    (16,598
    )
    
    $
    (151,222
    )
  32




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##### Table of Contents



Six Fiscal Months Ended April 3, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash (used in) provided by operating activities
    
    $
    (17,087
    )
    
    $
    3,902
    
    
    $
    5,817
    
    
    $
    2,277
    
    
    $
    (5,091
    )Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (151
    )
    
    
    
    
    
    
    (196
    )
    
    
    
    
    
    
    (347
    )Payments for acquisitions
    
    
    (2,578
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,578
    )Purchases of accounts receivable
    
    
    
    
    
    
    
    
    
    
    (124,273
    )
    
    
    124,273
    
    
    
    Proceeds from collection of purchased accounts
receivable
    
    
    
    
    
    
    
    
    
    
    126,550
    
    
    
    (126,550
    )
    
    
    Release of restricted cash
    
    
    9,000
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    9,300Proceeds from sale of intellectual property, net
    
    
    14,548
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,548Net cash provided by investing activities
    
    
    20,819
    
    
    
    
    
    
    
    2,381
    
    
    
    (2,277
    )
    
    
    20,923Cash flows from financing activities:Repayment of short-term debt, net of expenses
    
    
    
    
    
    
    
    
    
    
    (11,297
    )
    
    
    
    
    
    
    (11,297
    )Proceeds from issuance of company stock
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Intercompany, net
    
    
    13,458
    
    
    
    (3,902
    )
    
    
    (9,556
    )
    
    
    
    
    
    
    Interest rate swap security deposit
    
    
    (207
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (207
    )Repayment of shareholder note receivable
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32Net cash provided by (used in) financing activities
    
    
    13,311
    
    
    
    (3,902
    )
    
    
    (20,853
    )
    
    
    
    
    
    
    (11,444
    )Net increase (decrease) in cash and cash equivalents
    
    
    17,043
    
    
    
    
    
    
    
    (12,655
    )
    
    
    
    
    
    
    4,388Cash and cash equivalents at beginning of period
    
    
    69,738
    
    
    
    
    
    
    
    36,145
    
    
    
    
    
    
    
    105,883Cash and cash equivalents at end of period
    
    $
    86,781
    
    
    $
    
    
    
    $
    23,490
    
    
    $
    
    
    
    $
    110,271
 33




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##### Table of Contents



Six Fiscal Months Ended March 28, 2008Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash (used in) provided by operating activities
    
    $
    (28,306
    )
    
    $
    3,122
    
    
    $
    19,924
    
    
    $
    7,293
    
    
    $
    2,033Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (2,094
    )
    
    
    
    
    
    
    (1,595
    )
    
    
    
    
    
    
    (3,689
    )Proceeds from sale of property, plant and equipment
    
    
    574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    574Purchases of equity securites and other assets
    
    
    (755
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (755
    )Purchases of accounts receivable
    
    
    
    
    
    
    
    
    
    
    (264,074
    )
    
    
    264,074
    
    
    
    Proceeds from collection of purchased accounts
receivable
    
    
    
    
    
    
    
    
    
    
    271,367
    
    
    
    (271,367
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    (2,275
    )
    
    
    
    
    
    
    5,698
    
    
    
    (7,293
    )
    
    
    (3,870
    )Cash flows from financing activities:Repayment of short-term debt, net of expenses
    
    
    
    
    
    
    
    
    
    
    (10,022
    )
    
    
    
    
    
    
    (10,022
    )Repayment of long-term debt
    
    
    (53,600
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,600
    )Intercompany, net
    
    
    13,779
    
    
    
    (3,122
    )
    
    
    (10,657
    )
    
    
    
    
    
    
    Interest rate swap security deposit
    
    
    (6,741
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,741
    )Proceeds from common stock
    
    
    707
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    707Net cash used in financing activities
    
    
    (45,855
    )
    
    
    (3,122
    )
    
    
    (20,679
    )
    
    
    
    
    
    
    (69,656
    )Net (decrease) increase in cash and cash equivalents
    
    
    (76,436
    )
    
    
    
    
    
    
    4,943
    
    
    
    
    
    
    
    (71,493
    )Cash and cash equivalents at beginning of period
    
    
    199,263
    
    
    
    
    
    
    
    36,342
    
    
    
    
    
    
    
    235,605Cash and cash equivalents at end of period
    
    $
    122,827
    
    
    $
    
    
    
    $
    41,285
    
    
    $
    
    
    
    $
    164,112
 16. Subsequent Events
 Asset Sale
   34




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
   Critical Accounting Policies
  Goodwill Impairment Testing
  35




---



##### Table of Contents



Discounted Cash Flow Analysis:
   Market Multiple Analysis:
 Interim Goodwill Test:
 Business Enterprise Segments 
 36




---



##### Table of Contents




    
    the nature of their products and services;
    
    the nature of their production processes;
    
    the type or class of customer for their products and services; and
    
    the methods used to distribute their products or provide their services.The Company meets each of the aggregation criteria for the following reasons:
    
    the sale of semiconductor products is the only material source of revenue for each of
the Companys two operating segments;
    
    the products sold by each of the Companys operating segments use the same standard
manufacturing process;
    
    the products marketed by each of the Companys operating segments are sold to similar
customers;
    
    all of the Companys products are sold through its internal sales force and common
distributors;
    
    the operating segments share common research and development resources and core
engineering resources; and
    
    the operating segments share selling, general and administrative resources.
    Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Imaging and PC Media
    
    $
    39,082
    
    
    $
    67,423
    
    
    $
    88,744
    
    
    $
    142,868Broadband Access Products
    
    
    35,397
    
    
    
    51,095
    
    
    
    72,233
    
    
    
    121,583$
    74,479
    
    
    $
    118,518
    
    
    $
    160,977
    
    
    $
    264,451
 Sale of Broadband Access Products Business
 37




---



##### Table of Contents



Results of Operations
 Net Revenues
       38




---



##### Table of Contents



Gross Margin
     Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008E&O reserves at beginning of period
    
    $
    14,604
    
    
    $
    18,545
    
    
    $
    17,579
    
    
    $
    17,139Additions
    
    
    732
    
    
    
    1,274
    
    
    
    1,828
    
    
    
    4,809Release upon sales of product
    
    
    (1,064
    )
    
    
    (713
    )
    
    
    (1,873
    )
    
    
    (1,583
    )Scrap
    
    
    (1,471
    )
    
    
    (37
    )
    
    
    (4,477
    )
    
    
    (1,390
    )Standards adjustments and other
    
    
    135
    
    
    
    (81
    )
    
    
    (121
    )
    
    
    13E&O reserves at end of period
    
    $
    12,936
    
    
    $
    18,988
    
    
    $
    12,936
    
    
    $
    18,988
  39




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Research and Development
    Selling, General and Administrative
    Amortization of Intangible Assets
  40




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Gain on Sale of Intellectual Property
  Special Charges
  Interest Expense
   Other (income) expense, net
  Fiscal Quarter Ended
    
    
    Six Fiscal Months EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Investment and interest income
    
    $
    (451
    )
    
    $
    (2,042
    )
    
    $
    (1,308
    )
    
    $
    (4,813
    )Other-than-temporary impairment of marketable securities and
cost based investments
    
    
    135
    
    
    
    
    
    
    
    2,770
    
    
    
    (Increase) decrease in the fair value of derivative instruments
    
    
    (1,078
    )
    
    
    6,179
    
    
    
    (596
    )
    
    
    14,543Other
    
    
    (183
    )
    
    
    11
    
    
    
    (148
    )
    
    
    (237
    )Other (income) expense, net
    
    $
    (1,577
    )
    
    $
    4,148
    
    
    $
    718
    
    
    $
    9,493
  41




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Provision for Income Taxes
  Liquidity and Capital Resources
       42




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Six Fiscal Months EndedApril 3,
    
    
    March 28,2009
    
    
    2008Net cash (used in) provided by operating activities
    
    $
    (4,091
    )
    
    $
    2,033Net cash provided by (used in) investing activities
    
    
    19,923
    
    
    
    (3,870
    )Net cash used in financing activities
    
    
    (11,444
    )
    
    
    (69,656
    )Net increase (decrease) in cash and cash equivalents
    
    $
    4,388
    
    
    $
    (71,493
    )
    Contractual Commitments
  43




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Off-Balance Sheet Arrangements
   Special Purpose Entities
   Recently Adopted Accounting Pronouncements
    44




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
    
    Level 1: Quoted prices in active markets for identical assets or liabilities.
    
    Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the related assets or liabilities.
    
    Level 3: Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
    Recently Issued Accounting Pronouncements
    45




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
      46




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Carrying Value
    
    Fair ValueCash and cash equivalents
    
    $
    110,271
    
    
    $
    110,271Restricted cash
    
    
    17,500
    
    
    
    17,500Marketable available-for-sale securities
    
    
    1,067
    
    
    
    1,067Other equity securities
    
    
    6,127
    
    
    
    6,127Mindspeed warrant
    
    
    1,141
    
    
    
    1,141Long-term restricted cash
    
    
    6,800
    
    
    
    6,800Short-term debt
    
    
    29,721
    
    
    
    29,721Interest rate swap financial instruments
    
    
    2,543
    
    
    
    2,543Long-term debt: senior secured notes
    
    
    141,400
    
    
    
    140,075Long-term debt: convertible subordinated notes
    
    
    250,000
    
    
    
    50,000
 Exchange Rate Risk
   
 ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 IPO Litigation
 47




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##### Table of Contents



Class Action Suit
 
 ITEM 1A. RISK FACTORS
    We face a risk that capital needed for our business and to repay our debt obligations will not be
available when we need it.
    48




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Our operating and financing flexibility is limited by the terms of our senior notes and our credit
facility.
  If we fail to continue to meet all applicable continued listing requirements of The NASDAQ Global
Market and NASDAQ determines to delist our common stock, the market liquidity and market price of
our common stock could decline.
  The value of our common stock may be adversely affected by market volatility and other factors.
  
    
    our operating and financial performance and prospects;
    
    our ability to repay our debt;
    
    the depth and liquidity of the market for our common stock;
    
    investor perception of us and the industry and markets in which we operate;
 49




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
    
    judgments favorable or adverse to us;
    
    the level of research coverage of our common stock;
    
    changes in earnings estimates or buy/sell recommendations by analysts;
    
    our inclusion in, or removal from, any equity market indices; and
    
    general financial, domestic, international, economic and other market conditions
 We are subject to the risks of doing business internationally.
  
    
    difficulty in obtaining distribution and support;
    
    limitations on our ability under local laws to protect our intellectual property;
    
    currency exchange rate fluctuations;
    
    local economic and political conditions;
    
    disruptions of commerce and capital or trading markets due to or related to terrorist
activity or armed conflict;
    
    restrictive governmental actions, such as restrictions on the transfer or repatriation of
funds and trade protection measures, including export duties and quotas and customs duties
and tariffs;
    
    changes in legal or regulatory requirements;
    
    the laws and policies of the United States and other countries affecting trade, foreign
investment and loans, and import or export licensing requirements; and
    
    tax laws, including the cost of services provided and products sold between us and our
subsidiaries which are subject to review by taxing authorities.
 We operate in the highly cyclical semiconductor industry, which is subject to significant
downturns that may negatively impact our business, financial condition, cash flow and results of
operations.
  50




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We are subject to intense competition.
   
    
    time-to-market;
    
    product quality, reliability and performance;
    
    level of integration;
    
    price and total system cost;
    
    compliance with industry standards;
    
    design and engineering capabilities;
    
    strategic relationships with customers;
    
    customer support;
    
    new product innovation; and
    
    access to manufacturing capacity.
   We own or lease a significant amount of space in which we do not conduct operations and doing so
exposes us to the financial risks of default by our tenants and subtenants.
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Our revenues, cash flow from operations and results of operations have fluctuated in the past and
may fluctuate in the future, particularly given adverse domestic and global economic conditions.
  
    
    changes in end-user demand for the products manufactured and sold by our customers;
    
    the timing of receipt, reduction or cancellation of significant orders by customers;
    
    adverse economic conditions, including the unavailability or high cost of credit to our
customers;
    
    the inability of our customers to forecast demand based on adverse economic conditions;
    
    seasonal customer demand;
    
    the gain or loss of significant customers;
    
    market acceptance of our products and our customers products;
    
    our ability to develop, introduce and market new products and technologies on a timely
basis;
    
    the timing and extent of product development costs;
    
    new product and technology introductions by competitors;
    
    changes in the mix of products we develop and sell;
    
    fluctuations in manufacturing yields;
    
    availability and cost of products from our suppliers;
    
    intellectual property disputes; and
    
    the effect of competitive pricing pressures, including decreases in average selling
prices of our products.
  We have recently incurred substantial losses and may incur additional future losses.
  52




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Our success depends on our ability to timely develop competitive new products and reduce costs.
  
    
    anticipate customer and market requirements and changes in technology and industry
standards;
    
    accurately define new products;
    
    complete development of new products and bring our products to market on a timely basis;
    
    differentiate our products from offerings of our competitors;
    
    achieve overall market acceptance of our products; and
    
    coordinate product development efforts between and among our sites, particularly in India
and China, to manage the development of products at remote geographic locations.
   We have significant goodwill and intangible assets, and future impairment of our goodwill and
intangible assets could have a material negative impact on our financial condition and results of
operations.
  The loss of a key customer could seriously impact our revenue levels and harm our business. In
addition, if we are unable to continue to sell existing and new products to our key customers in
significant quantities or to attract new significant customers, our future operating results could
be adversely affected.
 53




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##### Table of Contents




    
    most of our customers can stop incorporating our products into their own products with
limited notice to us and suffer little or no penalty;
    
    our agreements with our customers typically do not require them to purchase a minimum
quantity of our products;
    
    many of our customers have pre-existing or concurrent relationships with our current or
potential competitors that may affect the customers decisions to purchase our products;
    
    our customers face intense competition from other manufacturers that do not use our
products;
    
    some of our customers offer or may offer products that compete with our products;
    
    some of our customers liquidity may be negatively affected by the recent domestic and
global credit crisis; and
    
    customers perceptions of our liquidity may have a negative impact on their decisions to
incorporate our products into their own products.
      54




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We may not be able to keep abreast of the rapid technological changes in our markets.
  
    
    rapid technological developments;
    
    rapid changes in customer requirements;
    
    frequent new product introductions and enhancements;
    
    short product life cycles with declining prices over the life cycle of the products; and
    
    evolving industry standards.
  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 loss of our
ability to use, make, sell, export or import our products or one or more components comprising our
products.
  
    
    pay substantial damages;
    
    cease the manufacture, use or sale of infringing products, processes or technologies;
    
    discontinue the use of infringing technology;
    
    expend significant resources to develop non-infringing technology; or
    
    license technology from the third party claiming infringement, which license may not be
available on commercially reasonable terms, or at all.
 If OEMs of communications electronics products do not design our products into their equipment, we
will be unable to sell those products. Moreover, a design win from a customer does not guarantee
future sales to that customer.
 55




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Because of the lengthy sales cycles of many of our products, we may incur significant expenses
before we generate any revenues related to those products.
  Uncertainties involving the ordering and shipment of our products could adversely affect our
business.
  We are dependent upon third parties for the manufacture, assembly and test of our products.
    56




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We may experience difficulties in transitioning to smaller geometry process technologies or in
achieving higher levels of design integration, which may result in reduced manufacturing yields,
delays in product deliveries, increased expenses and loss of design wins to our competitors.
  If we are not successful in protecting our intellectual property rights, it may harm our ability
to compete.
  
    
    the steps we take to prevent misappropriation or infringement of our intellectual
property or the intellectual property of our customers will be successful;
    
    any existing or future patents will not be challenged, invalidated or circumvented; or
    
    any of the measures described above would provide meaningful protection.
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Our success depends, in part,
on our ability to effect suitable investments, alliances,
acquisitions and where appropriate, divestitures and restructurings.
   
    
    large initial one-time write-offs of in-process research and development;
    
    the incurrence of substantial debt and assumption of unknown liabilities;
    
    the potential loss of key employees from the acquired company;
    
    amortization expenses related to intangible assets; and
    
    the diversion of managements attention from other business concerns.
  We are required to use proceeds of certain asset dispositions to offer to repurchase our Floating
Rate Senior Secured Notes due November 2010 if we do not use the proceeds within 360 days to
invest in assets (other than current assets), and this requirement limits our ability to use asset
sale proceeds to fund our operations.
  We may not be able to attract and retain qualified management, technical and other personnel
necessary for the design, development and sale of our products. Our success could be negatively
affected if key personnel leave.
  58




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Uncertainties involving litigation could adversely affect our business.
  We currently operate under tax holidays and favorable tax incentives in certain foreign
jurisdictions.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   For
    
    WithheldTerm Expiring in 2010William E. Bendush
    
    
    35,037,173
    
    
    
    2,758,633Term Expiring in 2011Matthew E. Massengill
    
    
    34,986,509
    
    
    
    2,809,296Term Expiring in 2012Dwight W. Decker
    
    
    32,535,556
    
    
    
    5,260,249F. Craig Farrill
    
    
    34,876,025
    
    
    
    2,919,780
  Shares (#)For
    
    
    36,335,628Against
    
    
    1,076,066Abstain
    
    
    388,008Broker non-vote
    
    
    N/A
 59




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##### Table of Contents



Exhibit No.
    
    Description2.1
    
    Asset Purchase Agreement, dated as of April 21, 2009, by and between
Conexant Systems, Inc. and Ikanos Communications, Inc. (incorporated by
reference to Exhibit 2.1 of the Companys Current Report on Form 8-K
filed on April 24, 2009)*10.1
    
    Form of Indemnity Agreement (incorporated by reference to Exhibit 10.1
of the Companys Current Report on Form 8-K filed on February 24, 2009)*10.2
    
    Amendment to Employment Agreement by and between D. Scott Mercer and
Conexant Systems, Inc., dated April 22, 2009 (incorporated by reference
to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on
April 24, 2009)*10.3
    
    Amendment to Employment Agreement between Conexant Systems, Inc. and
Mark Peterson, dated April 22, 2009 (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K filed on April
24, 2009)31.1
    
    Certification of the Chief Executive Officer of Periodic Report
Pursuant to Rule 13a-15(a) or 15d-15(a).31.2
    
    Certification of the Chief Financial Officer of Periodic Report
Pursuant to Rule 13a-15(a) or 15d-15(a).32
    
    Certification by Chief Executive Officer and Chief Financial Officer of
Periodic Report Pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Management contract or compensatory plan or arrangement 60




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##### Table of Contents



SIGNATURE
  CONEXANT SYSTEMS, INC.
(Registrant)Date: May 13, 2009
    By
    /s/ JEAN HUJean HuChief Financial Officer and Senior Vice President,
Business Development
(principal financial officer) 61




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description2.1
    
    Asset Purchase Agreement, dated as of April 21, 2009, by and
between Conexant Systems, Inc. and Ikanos Communications, Inc.
(incorporated by reference to Exhibit 2.1 of the Companys Current
Report on Form 8-K filed on April 24, 2009)*10.1
    
    Form of Indemnity Agreement (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K filed on February
24, 2009)*10.2
    
    Amendment to Employment Agreement by and between D. Scott Mercer
and Conexant Systems, Inc., dated April 22, 2009 (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form
8-K filed on April 24, 2009)*10.3
    
    Amendment to Employment Agreement by and between Mark Peterson,
dated April 22, 2009 (incorporated by reference to Exhibit 10.2 of
the Companys Current Report on Form 8-K filed on April 24, 2009)31.1
    
    Certification of the Chief Executive Officer of Periodic Report
Pursuant to Rule 13a-14(a) or 15d-14(a).31.2
    
    Certification of the Chief Financial Officer of Periodic Report
Pursuant to Rule 13a-15(a) or 15d-14(a).32
    
    Certification by Chief Executive Officer and Chief Financial
Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Management contract or compensatory plan or arrangement 62