CAMD California Micro Devices Corp. (MM)

Revenue and earnings beat high end estimates MILPITAS, Calif., Oct. 19 /PRNewswire-FirstCall/ -- California Micro Devices (NASDAQ:CAMD) today reported financial results for the second quarter of fiscal 2007, which ended September 30, 2006. Revenue was $18.7 million compared to high end guidance of $18.0 million, $16.1 million in the prior quarter, and $18.5 million in the year ago quarter. On a GAAP basis, diluted earnings per share were $0.06 compared to high end guidance of breakeven, a loss of $0.09 in the prior quarter, and earnings of $0.09 in the year ago quarter. On a non-GAAP basis, excluding Arques Technology acquisition costs and employee stock-based compensation expenses, and using a cash basis tax rate, diluted EPS was $0.11 compared to high end guidance of $0.05 and $0.05 in the prior quarter. "I am pleased to report that Q2 revenue, gross margin and earnings all exceeded guidance, driven primarily by strong demand across our product lines," said Robert V. Dickinson, president and CEO. "In addition, bookings were strong and design wins reached the second highest level ever." He noted that personal computer and digital consumer electronics design wins set a new record with low capacitance ESD design wins nearly doubling compared to last quarter. "Due to continuing competitive headwinds in the market for ASIP devices used in mobile handsets, we are taking a cautious position with respect to Q3 guidance and projecting revenue from that market to be down sequentially," added Dickinson. "We believe, however, that we are making good progress on our strategic initiatives to counter competitive inroads and that we continue to have a good opportunity for solid growth in that market in the future." In providing outlook for the third quarter of fiscal 2007, which ends December 31, 2006, Dickinson estimated revenue will be between $16.5 and $18.5 million with diluted EPS of between ($0.02) and $0.01 on a GAAP basis, and between $0.03 and $0.06 on a non-GAAP basis. He added that an update of the third quarter forecast would be presented on December 14th. Conference Call and Webcast Today California Micro Devices will hold a conference call today at 2:00 p.m. Pacific Time to discuss its September quarter results. Within the USA, interested parties can access the conference call by dialing 800-257-7087. International parties may gain access by dialing 303-275-2170. No password is necessary. A replay of the conference call will be available on the company's web site at http://www.cmd.com/ (Investor Relations Link) beginning at approximately 4:00 p.m. Pacific Time today and continuing for about a year. About California Micro Devices Corporation California Micro Devices Corporation is a leading supplier of application specific analog semiconductor products for the mobile handset, personal computer and digital consumer electronics markets. Key products include Application Specific Integrated Passive(TM) (ASIP(TM)) devices and selected high value mixed signal ICs. Detailed corporate and product information may be accessed at http://www.cmd.com/. All statements contained in this press release that are not historical facts are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They are not guarantees of future performance or events. Rather, they are based on current expectations, estimates, beliefs, assumptions, and goals and objectives and are subject to uncertainties that are difficult to predict. As a result, our actual results may differ materially from the statements made. Often such statements can be identified by their use of words such as will, intends, expects, plans, believes, anticipates, and estimates. Forward-looking statements made in this release include our expected revenues, both overall and for certain markets and customers; our expected GAAP and non-GAAP earnings and loss per share; and our expectation for solid growth in ASIP device revenue from the mobile market in the future. These forward- looking statements are based upon our assumptions about and assessment of the future, which may or may not prove true, and involve a number of risks and uncertainties including, but not limited to whether our customers experience the demand we anticipate for their products based in part upon their input and our order backlog, whether the designed performance of our devices satisfies our customers' requirements so that they continue to design our devices into their products, whether our devices perform to their design specification, whether competitors introduce devices at lower prices than our devices causing price erosion and/or loss of market share for us, whether we encounter any difficulty in obtaining the requisite supply of quality product from our contract manufacturers, contract assemblers and test houses without interruption or unanticipated price increases, and whether we incur unexpected operating expenses as well as the risk factors detailed in the company's Form 8K, 10K, and 10Q filings with the Securities and Exchange Commission. Due to these and other risks, the company's future actual results could differ materially from those discussed above. These forward-looking statements speak only as to the date of this release, and, except as required by law, we undertake no obligation to publicly release updates or revisions to these statements whether as a result of new information, future events, or otherwise. NOTE: ASIP(TM) and Application Specific Integrated Passive(TM) are trademarks of California Micro Devices. All other trademarks are property of their respective owners California Micro Devices Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) (Unaudited) September 30, March 31, 2006 2006 ASSETS Current assets: Cash and cash equivalents $16,580 $9,788 Short-term investments 31,977 39,958 Accounts receivable, net 10,253 10,667 Inventories 5,457 5,508 Deferred income taxes 2,561 2,711 Prepaid expenses and other current assets 959 1,078 Total current assets 67,787 69,710 Property, plant and equipment, net 4,514 3,961 Goodwill 5,316 - Purchased intangible assets, net 514 - Other long-term assets 98 61 TOTAL ASSETS $78,229 $73,732 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $8,128 $5,901 Accrued liabilities 3,777 3,185 Deferred margin on shipments to distributors 2,640 2,684 Current maturities of long-term debt and capital lease obligations 82 82 Total current liabilities 14,627 11,852 Other long-term liabilities 214 8 Total liabilities 14,841 11,860 Commitments and contingencies Stockholders' equity: Common stock and additional paid-in capital - $0.001 par value; 50,000,000 shares authorized; shares issued and outstanding: 23,009,031 and 22,855,223 as of September 30, 2006 and March 31, 2006, respectively 112,880 110,673 Accumulated other comprehensive income (loss) 2 (5) Accumulated deficit (49,494) (48,796) Total stockholders' equity 63,388 61,872 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $78,229 $73,732 California Micro Devices Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) (Unaudited) (On a GAAP basis) Three Months Ended Six Months Ended September 30, September 30, 2006 2005 2006 2005 Net sales $18,733 $18,542 $34,805 $33,229 Cost and expenses: Cost of sales 11,228 11,511 21,217 21,131 Research and development 2,171 1,850 4,226 3,284 Selling, general and administrative 4,067 3,406 8,261 6,748 In-process research and development - - 2,210 - Amortization of purchased intangible assets 42 - 76 - Restructuring expense - 3 - 60 Total costs and expenses 17,508 16,770 35,990 31,223 Operating income (loss) 1,225 1,772 (1,185) 2,006 Other income, net 617 326 1,156 574 Income (loss) before income taxes 1,842 2,098 (29) 2,580 Income taxes 465 63 669 77 Net income (loss) $1,377 $2,035 $(698) $2,503 Net income (loss) per share-basic $0.06 $0.09 $(0.03) $0.12 Weighted average common shares outstanding-basic 23,006 21,707 22,953 21,676 Net income (loss) per share-diluted $0.06 $0.09 $(0.03) $0.11 Weighted average common shares and share equivalents outstanding-diluted 23,080 22,606 22,953 22,313 Reconciliation of net income (loss) to non-GAAP net income: Net income (loss) $1,377 $2,035 $(698) $2,503 Reconciling items: In-process research and development - - 2,210 - Amortization of purchased intangible assets 42 - 76 - Stock-based compensation expense under SFAS 123(R), net of tax 732 - 1,576 - Difference between effective tax rate and cash basis tax rate 387 - 554 - Non-GAAP net income $2,538 $2,035 $3,718 $2,503 Non-GAAP: Net income per share-basic $0.11 $0.09 $0.16 $0.12 Net income per share-diluted $0.11 $0.09 $0.16 $0.11 Shares used in calculation of non-GAAP: Weighted average common shares outstanding-basic 23,006 21,707 22,953 21,676 Weighted average common shares and share equivalents outstanding-diluted 23,083 22,606 23,116 22,313 California Micro Devices Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) (Unaudited) (On a non-GAAP basis) Three Months Ended Six Months Ended September 30, September 30, 2006 2005 2006 2005 Net sales $18,733 $18,542 $34,805 $33,229 Cost and expenses: Cost of sales 11,125 11,511 20,983 21,131 Research and development 2,011 1,850 3,878 3,284 Selling, general and administrative 3,598 3,406 7,267 6,748 Restructuring expense - 3 - 60 Total costs and expenses 16,734 16,770 32,128 31,223 Operating income 1,999 1,772 2,677 2,006 Other income, net 617 326 1,156 574 Income before income taxes 2,616 2,098 3,833 2,580 Income taxes 78 63 115 77 Net income $2,538 $2,035 $3,718 $2,503 Net income per share-basic $0.11 $0.09 $0.16 $0.12 Weighted average common shares outstanding-basic 23,006 21,707 22,953 21,676 Net income per share-diluted $0.11 $0.09 $0.16 $0.11 Weighted average common shares and share equivalents outstanding-diluted 23,083 22,606 23,116 22,313 See accompanying reconciliation of GAAP measures to non-GAAP measures. California Micro Devices Corporation RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (Unaudited) Three Months Ended Six Months Ended September 30, September 30, Net income (loss) per share: 2006 2005 2006 2005 Basic: GAAP net income (loss) per share $0.06 $0.09 $(0.03) $0.12 Reconciling items: In-process research and development - - 0.10 - Amortization of purchased intangible assets - - - - Stock-based compensation expense under SFAS 123(R), net of tax 0.03 - 0.07 - Difference between effective tax rate and cash basis tax rate 0.02 - 0.02 - Non-GAAP net income per share $0.11 $0.09 $0.16 $0.12 Diluted: GAAP net income (loss) per share $0.06 $0.09 $(0.03) $0.11 Reconciling items: In-process research and development - - 0.10 - Amortization of purchased intangible assets - - - - Stock-based compensation expense under SFAS 123(R), net of tax 0.03 - 0.07 - Difference between effective tax rate and cash basis tax rate 0.02 - 0.02 - Non-GAAP net income per share $0.11 $0.09 $0.16 $0.11 Shares used in the per share-diluted calculation: GAAP diluted shares 23,080 22,606 22,953 22,313 Add back anti-dilutive shares under a GAAP loss - - 173 - Effect of stock-based compensation expense under SFAS 123(R) 3 - (10) - Non-GAAP diluted shares 23,083 22,606 23,116 22,313 DATASOURCE: California Micro Devices CONTACT: Kevin Berry, Chief Financial Officer, +1-408-934-3144, Web site: http://www.calmicro.com/

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