CAMD California Micro Devices Corp. (MM)

MILPITAS, Calif., May 1 /PRNewswire-FirstCall/ -- California Micro Devices (NASDAQ:CAMD) today announced financial results for the fourth quarter of fiscal 2008, which ended March 31, 2008. At the high end of guidance, revenue was $15.0 million compared to $15.5 million a year ago. Falling short of guidance, the Q4 loss per share on a GAAP basis was $0.05 compared to breakeven a year ago. Also at the high end of guidance, diluted EPS on a non-GAAP basis was $0.02 compared to $0.03 a year ago. For purposes of this release, non-GAAP EPS is calculated excluding Arques Technology acquisition costs and employee stock-based compensation expenses, and using a cash basis tax rate. Fiscal 2008 revenue was $59.2 million compared to $68.0 million posted a year ago. On a GAAP basis, the company reported a loss of $0.06 per share for fiscal 2008 compared to breakeven in fiscal 2007. Non-GAAP diluted EPS was $0.08 compared to $0.25 a year ago. "Q4 was a solid finish to a challenging but productive fiscal 2008," said Robert V. Dickinson, president and chief executive officer. "Revenue was at the high end of our guidance and we saw a sharp sequential increase in our gross margin. Moreover, our bookings were up sequentially with a book-to-bill ratio of 1.06, resulting in the starting backlog for Q1 being the highest in a number of quarters." He noted that fiscal 2008 was the fifth consecutive year in which CMD achieved both non-GAAP profitability and positive operating cash flow. Recapping some of the challenges the company faced in fiscal 2008, Dickinson cited market share loss by a major customer as well as customer concerns about Chip Scale Packaging (CSP), which prompted a shift in the mix of CMD's handset protection products toward plastic packaging. Other challenges included slower than expected adoption of low capacitance ESD protection products by major DTV makers, intense price pressure from customers and competitors, and the impact of that pricing pressure and the mix of handset protection products on the company's gross margin. "We believe that we did an excellent job in responding to these challenges while positioning ourselves to resume growth in fiscal 2009 on both the top and bottom lines," added Dickinson. In particular, he highlighted the following fiscal 2008 achievements: -- Starting production shipments to fourth Top 5 handset maker in Q4 and opening a Northern Europe sales office in Espoo, Finland -- Starting production shipments of CMD's new display controller for CDMA handsets in Q3 with initial shipments to a top 5 handset OEM in Q4 -- Rapid growth in the sales of packaged handset protection products -- Strengthening CMD's position at current handset customers -- Making considerable progress on major cost reduction initiatives -- Growing momentum for CMD's industry leading Praetorian(R) filters plus introducing its Praetorian II product family -- Introducing the XtremeESD(TM) device family that includes architectures optimized for the maximum protection of advanced system ICs as well as for the highest speed data interfaces -- Signs of growing acceptance of CSP by mobile handset customers Looking forward, Dickinson forecast a roughly flat June quarter followed by significant revenue growth in the September quarter. "We expect Q1 revenue to be between $14.0 and $16.0 million with diluted EPS between a loss of $0.04 and a loss of $0.02 on a GAAP basis, and between a loss of $0.01 and a profit of $0.01 on a non-GAAP basis." For fiscal 2009, Dickinson expects protection revenue to grow by 7 to 12 percent, display controller revenue to be as much as 10 percent of total revenue, and total revenue to grow to between $67.0 and $73.0 million. He also expects gross margin on a non-GAAP basis to increase from 33.7 percent to between 35.0 and 36.0 percent for the year, exiting the year above that. "Although we will be investing up to $5.0 million in serial interface display controller and diversified protection R&D, we expect EPS on a non-GAAP basis to grow by up to 100 percent, largely in the second half. We also expect fiscal 2009 operating cash flow to be in the range of $3.0 to $6.0 million." Live Webcast with Presentation Slides California Micro Devices will hold a conference call today at 2:00 p.m. Pacific Time to discuss its financial results. The conference call may be accessed via live webcast (streaming audio accompanied by presentation slides) by connecting to the company's Investor Relations link at http://www.cmd.com/. The call may also be accessed via phone within the USA by dialing 800-218-0204. International parties may gain access by dialing 303-262-2130. No password is necessary. A replay of the conference call will be available on the company's Investor Relations link at http://www.cmd.com/ beginning at approximately 4:00 p.m. Pacific Time on May 1, 2008 and continuing for one year. About California Micro Devices Corporation California Micro Devices Corporation is a leading supplier of application specific analog and mixed signal semiconductor products for the mobile handset, digital consumer electronics and personal computer markets. Key products include protection devices for mobile handsets, digital consumer electronics products such as digital TVs, and personal computers as well as analog and mixed signal ICs for mobile handset displays. 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 and GAAP and non-GAAP earnings and loss per share for the 2009 first fiscal quarter; our anticipated revenue trend for the second quarter of fiscal 2009; and our expectation for GAAP earnings growth and our expected revenue, both overall and for certain markets, our non-GAAP EPS and gross margin, and our operating cash flow, all for fiscal 2009 as a whole; and our plan to make up to a $5.0 million R&D investment during fiscal 2009 in serial interface display controllers and diversified protection. 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, whether we are having success in our R&D programs so that we desire to continue spending at a heightened level, 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. In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the company's earnings release contains non-GAAP financial measures that exclude the effects of employee share-based compensation and the requirements of SFAS No. 123R, "Share-based Payment" ("123R"). The non-GAAP financial measures used by management and disclosed by the company exclude the income statement effects of all forms of employee share-based compensation and the effects of 123R upon the number of diluted shares used in calculating non-GAAP earnings per share. The non-GAAP financial measures also exclude Arques Technology acquisition related costs, including amortization of acquisition-related intangibles and one-time charges during fiscal 2007 for acquired in-process research and development. In addition, these non-GAAP measures utilize a tax rate that is based upon the income taxes the company expects to actually pay relating to the activities and results for the relevant fiscal time period. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding these non-GAAP financial measures, see the Form 8-K dated May 1, 2008, that the company has filed with the Securities and Exchange Commission. California Micro Devices Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) (Unaudited) March 31, March 31, 2008 2007 ASSETS Current assets: Cash and cash equivalents $32,925 $1,908 Short-term investments 18,671 47,116 Accounts receivable, net 6,155 7,514 Inventories 6,434 5,172 Deferred tax assets 1,508 2,201 Prepaid expenses and other current assets 1,188 882 Total current assets 66,881 64,793 Property, plant and equipment, net 5,416 4,840 Goodwill 5,258 5,258 Intangible assets, net 267 432 Other long-term assets 263 560 TOTAL ASSETS $78,085 $75,883 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $6,120 $4,654 Accrued liabilities 2,165 3,269 Deferred margin on shipments to distributors 1,904 1,479 Current maturities of capital lease obligations 132 132 Total current liabilities 10,321 9,534 Other long-term liabilities 350 303 Total liabilities 10,671 9,837 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: 23,302,274 and 23,151,103 as of March 31, 2008 and March 31, 2007, respectively 117,806 114,923 Accumulated other comprehensive income 48 - Accumulated deficit (50,440) (48,877) Total stockholders' equity 67,414 66,046 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $78,085 $75,883 California Micro Devices Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) (Unaudited) (On a GAAP basis) Three Months Twelve Months Ended March 31, Ended March 31, 2008 2007 2008 2007 Net sales $15,016 $15,465 $59,217 $68,006 Cost of sales 9,605 10,179 39,599 42,790 Gross Margin 5,411 5,286 19,618 25,216 Operating expenses: Research and development 2,017 1,848 7,097 7,977 Selling, general and administrative 4,093 4,148 15,264 16,757 In-process research and development - - - 2,210 Amortization of intangible assets 41 41 165 158 Total operating expenses 6,151 6,037 22,526 27,102 Operating loss (740) (751) (2,908) (1,886) Other income, net 479 629 2,390 2,432 Income (loss) before income taxes (261) (122) (518) 546 Income taxes/(benefit) 884 (65) 896 627 Net loss $(1,145) $(57) $(1,414) $(81) Net loss per share-basic and diluted $(0.05) $(0.00) $(0.06) $(0.00) Weighted average common shares outstanding-basic and diluted 23,299 23,141 23,233 23,027 Reconciliation of net loss to non-GAAP net income: Net loss $(1,145) $(57) $(1,414) $(81) Reconciling items: In-process research and development - - - 2,210 Amortization of intangible assets 41 41 165 158 Stock-based compensation expense under SFAS 123(R), net of tax 587 725 2,333 3,071 Difference between effective tax rate and cash basis tax rate 873 (83) 837 449 Non-GAAP net income $356 $626 $1,921 $5,807 Non-GAAP: Net income per share-basic $0.02 $0.03 $0.08 $0.25 Net income per share-diluted $0.02 $0.03 $0.08 $0.25 Shares used in calculation of non-GAAP: Weighted average common shares outstanding-basic 23,299 23,141 23,233 23,027 Weighted average common shares and share equivalents outstanding-diluted 23,306 23,315 23,342 23,191 California Micro Devices Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share data) (Unaudited) (On a non-GAAP basis) Three Months Twelve Months Ended March 31, Ended March 31, 2008 2007 2008 2007 Net sales $15,016 $15,465 $59,217 $68,006 Cost of sales 9,518 10,059 39,251 42,317 Gross Margin 5,498 5,406 19,966 25,689 Operating expenses: Research and development 1,859 1,686 6,497 7,294 Selling, general and administrative 3,751 3,704 13,879 14,841 Total operating expenses 5,610 5,390 20,376 22,135 Operating income (loss) (112) 16 (410) 3,554 Other income, net 479 629 2,390 2,432 Income before income taxes 367 645 1,980 5,986 Income taxes 11 19 59 179 Net income $356 $626 $1,921 $5,807 Net income per share-basic $0.02 $0.03 $0.08 $0.25 Weighted average common shares outstanding-basic 23,299 23,141 23,233 23,027 Net income per share-diluted $0.02 $0.03 $0.08 $0.25 Weighted average common shares and share equivalents outstanding-diluted 23,306 23,315 23,342 23,191 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 Twelve Months Ended March 31, Ended March 31, Net income (loss) per share: 2008 2007 2008 2007 Basic: GAAP net loss per share $(0.05) $(0.00) $(0.06) $(0.00) Reconciling items: In-process research and development - - - 0.09 Amortization of intangible assets - - 0.01 0.01 Stock-based compensation expense under SFAS 123(R), net of tax 0.03 0.03 0.10 0.13 Difference between effective tax rate and cash basis tax rate 0.04 - 0.03 0.02 Non-GAAP net income per share $0.02 $0.03 $0.08 $0.25 Diluted: GAAP net loss per share $(0.05) $(0.00) $(0.06) $(0.00) Reconciling items: In-process research and development - - - 0.09 Amortization of intangible assets - - 0.01 0.01 Stock-based compensation expense under SFAS 123(R), net of tax 0.03 0.03 0.10 0.13 Difference between effective tax rate and cash basis tax rate 0.04 - 0.03 0.02 Non-GAAP net income per share $0.02 $0.03 $0.08 $0.25 DATASOURCE: California Micro Devices CONTACT: Kevin Berry, Chief Financial Officer of California Micro Devices, +1-408-934-3144, Web site: http://www.cmd.com/

Copyright