ISSI (MM)

SAN JOSE, Calif., Jan. 27 /PRNewswire-FirstCall/ -- Integrated Silicon Solution, Inc. (NASDAQ:ISSI) today reported its financial results for its first fiscal quarter ended December 31, 2008. Revenue in the quarter ended December 31, 2008 was $37.7 million, a 31.9% decrease from revenue of $55.3 million in the September 2008 quarter and a 40.5% decrease from revenue of $63.3 million in the December 2007 quarter. Gross margin for the quarter was 20.5%, compared with 24.2% in the September 2008 quarter and 20.8% in the December 2007 quarter. The Company reported a net loss for the December 2008 quarter of $4.1 million or ($0.16) per diluted share. These results compare with a net loss for the September 2008 quarter of $24.7 million, or ($0.92) per share, which included a goodwill charge of $25.3 million. The Company reported net income for the December 2007 quarter of $3.0 million, or $0.08 per diluted share. The Company's cash, cash equivalents and short-term investments totaled $45.7 million at December 31, 2008, compared to $50.0 million at September 30, 2008. In addition, the Company had long-term investments of $21.2 million at December 31, 2008, compared to $19.3 million at September 30, 2008. During the December quarter the Company repurchased 1.4 million shares of its common stock for an aggregate amount of $3.0 million. The Company's inventory at December 31, 2008 totaled $38.0 million, a reduction of $1.2 million from September 30, 2008. "Demand in all of our markets was weak during the December quarter due to the worldwide economic crisis," said Scott Howarth, ISSI's President and CEO. "As we announced in December, we have taken additional actions to reduce our spending and preserve our cash. We are very pleased that, despite the decline in our revenue, we successfully reduced our inventory and had positive cash flow from operations during the quarter. Our balance sheet remains very strong as we had $66.9 million in cash and investments at December 31," added Mr. Howarth. Conference Call A conference call will be held today at 1:30 p.m. Pacific time to discuss this release. To access ISSI's conference call via telephone, dial 1-719-325-4798 by 1:20 p.m. Pacific time. The call will be webcast from ISSI's website at http://www.issi.com/. About the Company ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications, (iv) automotive electronics, and (v) industrial. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets EEPROM, SmartCards and is developing selected non-memory products focused on its key markets. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at http://www.issi.com/. Forward Looking Statements This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning taking actions to reduce our spending and preserve our cash and our very strong balance sheet are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include supply and demand conditions in the market resulting from adverse conditions in the economy, liquidity and credit concerns or other factors, unexpected reductions in average selling prices for our products, our ability to sell our products for key applications and the pricing and gross margins achieved on such sales, our ability to control or reduce operating expenses, changes in manufacturing yields, order cancellations, order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers, or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the period ended September 30, 2008. The Company assumes no obligation to update or revise the forward- looking statements in this release because of new information, future events, or otherwise. Integrated Silicon Solution, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended December 31, 2008 2007 Net sales $37,665 $63,348 Cost of sales 29,932 50,147 Gross profit 7,733 13,201 Operating expenses: Research and development 5,208 4,774 Selling, general and administrative 7,301 7,662 Total operating expenses 12,509 12,436 Operating income (loss) (4,776) 765 Interest and other income, net 582 2,074 Gain on sale of investments - 189 Income (loss) before income taxes and minority interest (4,194) 3,028 Provision (benefit) for income taxes (60) 60 Income (loss) before minority interest (4,134) 2,968 Minority interest in net (income) loss of consolidated subsidiaries 64 (1) Net income (loss) $(4,070) $2,967 Basic net income (loss) per share ($0.16) $0.08 Shares used in basic per share calculation 25,603 36,588 Diluted net income (loss) per share ($0.16) $0.08 Shares used in diluted per share calculation 25,603 36,897 Integrated Silicon Solution, Inc. Condensed Consolidated Balance Sheets (In thousands) December 31, September 30, 2008 2008 (unaudited) (1) ASSETS Current assets: Cash and cash equivalents $40,275 $42,175 Short-term investments 5,375 7,840 Accounts receivable, net 20,721 34,741 Inventories 38,027 39,222 Other current assets 3,003 4,717 Total current assets 107,401 128,695 Property, equipment and leasehold improvements, net 24,082 24,555 Long-term investments 21,203 19,304 Purchased intangible assets, net 1,794 2,000 Other assets 1,407 1,397 Total assets $155,887 $175,951 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $22,991 $35,171 Accrued compensation and benefits 4,018 3,729 Accrued expenses 5,940 8,157 Total current liabilities 32,949 47,057 Other long-term liabilities 679 715 Total liabilities 33,628 47,772 Commitments and contingencies Minority interest 1,029 789 Stockholders' equity: Common stock 3 3 Additional paid-in capital 308,664 310,712 Accumulated deficit (184,501) (180,431) Accumulated comprehensive loss (2,936) (2,894) Total stockholders' equity 121,230 127,390 Total liabilities and stockholders' equity $155,887 $175,951 (1) Derived from audited financial statements. DATASOURCE: Integrated Silicon Solution, Inc. CONTACT: John M. Cobb, Chief Financial Officer, Investor Relations of Integrated Silicon Solution, Inc., +1-408-969-6600, Web site: http://www.issi.com/

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