SAN JOSE, Calif., April 27, 2011 /PRNewswire/ -- Integrated Silicon
Solution, Inc. (Nasdaq: ISSI) today reported its financial results
for the second fiscal quarter ended March
31, 2011.
Fiscal Second Quarter Results and Recent Highlights:
- Reported total revenue of $63.3
million, consisting of SRAM and DRAM revenue of $59.6 million, an increase of 15.6 percent over
the same quarter last year, and analog revenue of $3.7 million in the two months since the
acquisition of Si En;
- Achieved GAAP net income of $5.8
million, or $0.20 per diluted
share, and non-GAAP net income of $7.4
million, or $0.26 per diluted
share;
- Generated $7.6 million in cash
flow from operations during the March quarter;
- Completed the acquisition of Si En Integration Holdings
Limited ("Si En") on January 31,
2011, adding high margin analog and mixed signal products;
and
- Introduced 512Mb DDR SDRAMs and expanded our QUAD and DDR-II
families of SRAMs.
Revenue in the second fiscal quarter ended March 31, 2011 was $63.3
million. SRAM and DRAM revenue was $59.6 million and analog revenue was $3.7 million in the two months since the
acquisition of Si En. SRAM and DRAM revenue declined less
than 1 percent from the December 2010
quarter and increased 15.6 percent from the March 2010 quarter. GAAP gross margin for
the second quarter was 33.1 percent, compared to 34.0 percent in
the December 2010 quarter, and 37.2
percent in the March 2010 quarter.
Non-GAAP gross margin, which excludes the purchase price
adjustments and intangibles amortization related to the Si En
acquisition, was 33.7 percent in the second quarter compared to
34.0 percent in the December 2010
quarter, and 37.2 percent in the March
2010 quarter. A reconciliation of GAAP results to
non-GAAP results is provided in the financial statement tables
following the text of this press release.
GAAP net income in the second quarter of fiscal 2011 was
$5.8 million, or $0.20 per diluted share, compared to GAAP net
income of $7.2 million, or
$0.26 per diluted share, in the
December 2010 quarter and
$7.2 million, or $0.27 per diluted share, in the March 2010 quarter.
Second quarter 2011 non-GAAP net income was $7.4 million, or $0.26 per diluted share, which excludes
$1.1 million in stock-based
compensation expense and $0.5 million
in inventory purchase price adjustments, legal fees, and
amortization of intangibles related to the acquisition of Si En.
This compares to $8.3 million,
or $0.30 per diluted share, in the
December 2010 quarter and
$7.7 million, or $0.29 per diluted share, in the March 2010 quarter.
"Our solid performance and strong cash flow generation in the
March quarter demonstrated the strength of our high quality
specialty memory business during an otherwise seasonally slow
quarter. It also represented the end of the market inventory
correction that began last summer," said Scott Howarth, ISSI's President and CEO.
"In addition to continued design win traction and new product
introductions in our core specialty memory product lines, we also
completed our acquisition of Si En, which has expanded our business
into the high margin analog space. The integration process is
underway, and we are pleased that Si En was immediately accretive
to our earnings per share. "
June Quarter Outlook
Mr. Howarth commented on the June outlook as follows, "The
recent disasters in Japan have
created some uncertainty as to the impact they will have on our
business. While to date there has been little impact on
ISSI's supply chain or on orders from our customers, future orders
could be impacted by constraints on customers to obtain other
components or by a reduction in demand in the Japanese market.
Based on the most recent information available from customers
and suppliers, we are assuming a very limited impact in our current
outlook. We continue to closely monitor the effect of events
in Japan on our business."
The Company expects total revenue for the June quarter to range
between $64.0 and $70.0 million,
consisting of SRAM and DRAM revenue of between $59.0 million and $64.0 million and analog
revenue of between $5.0 and $6.0
million. Gross margin for the June quarter is expected to
range between 33 percent and 35 percent. Operating expenses
are expected to be between $15.0 million and
$15.5 million. GAAP net income is expected to be
between $0.22 and $0.30 per diluted
share, and non-GAAP net income, which excludes stock-based
compensation and the amortization of intangibles related to the
acquisition of Si En, is expected to be between $0.27 and $0.35 per diluted share.
Conference Call Information
A conference call will be held today at 1:30 p.m. Pacific Time to discuss the Company's
second quarter fiscal 2011 financial results. To access ISSI's
conference call via telephone, dial 888-487-0355 by
1:20 p.m. Pacific Time. The
participant passcode is 1510668. The call will also be
webcast from ISSI's website at http://www.issi.com.
Non-GAAP Financial Information
In addition to disclosing results determined in accordance with
GAAP, ISSI discloses its non-GAAP gross margin, operating income
and net income for certain periods that exclude stock based
compensation and inventory purchase price adjustments, legal fees,
and amortization of intangibles related to the acquisition of Si
En. When presenting non-GAAP results, the Company includes a
reconciliation of the non-GAAP results to the results under GAAP.
Management believes that including the non-GAAP results assists
investors in assessing the Company's operational performance and
its performance relative to its competitors. The Company has
presented these non-GAAP results as a complement to its results
provided in accordance with GAAP, and these results should not be
regarded as a substitute for GAAP. Management uses non-GAAP
measures to plan and forecast future periods, to establish
operational goals, to compare with its business plan and individual
operating budgets, to assist the public in measuring the Company's
performance, to allocate resources and, relative to the Company's
historical financial performance, to enable comparability between
periods. Management also considers such non-GAAP results to be an
important supplemental measure of its performance. The economic
substance behind management's decision to use such non-GAAP
measures relates to the non-GAAP measures being a useful measure of
the potential future performance of the Company's business. In line
with common industry practice and to help enable comparability with
other technology companies, the Company's non-GAAP presentation
excludes the impact of stock based compensation and inventory
purchase adjustments, legal fees, and amortization of intangibles
related to the acquisition of Si En. Other companies may calculate
non-GAAP results differently than the Company, limiting its
usefulness as a comparative measure. In addition, such non-GAAP
measures may exclude financial information that some may consider
important in evaluating the Company's performance. Management
compensates for the foregoing limitations of non-GAAP measures by
presenting certain information on both a GAAP and non-GAAP basis
and providing reconciliations of the GAAP and non-GAAP
measures.
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,
medical, and military. The Company's primary products are
high speed and low power SRAM and low and medium density DRAM, and
with its acquisition of Si En, ISSI also designs and markets high
performance analog and mixed signal integrated circuits. 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 the end of the inventory correction, design
win traction, new product introductions, high margin analog space,
uncertain impact from the disasters in Japan, and our outlook for the June 2011 quarter with respect to revenue, SRAM
and DRAM revenue, Si En revenue, gross margin, operating expenses
and GAAP and Non-GAAP net income per share 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 place, 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, our ability to
obtain a sufficient supply of wafers, wafer pricing, our ability to
maintain sufficient inventory of products to satisfy customer
orders, changes in manufacturing yields, order cancellations, order
rescheduling, product warranty claims, competition, the level and
value of inventory held by OEM customers, future developments in
Japan 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 year
ended September 30, 2010 and Form
10-Q for the quarter ended December 31,
2010. 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
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 63,257
|
|
$
66,103
|
|
$ 57,043
|
|
Cost of sales
|
42,322
|
|
43,638
|
|
35,827
|
|
Gross profit
|
20,935
|
|
22,465
|
|
21,216
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Research and
development
|
6,821
|
|
6,750
|
|
5,899
|
|
Selling, general and
administrative
|
8,612
|
|
9,367
|
|
8,550
|
|
Total operating
expenses
|
15,433
|
|
16,117
|
|
14,449
|
|
|
|
|
|
|
|
|
Operating income
|
5,502
|
|
6,348
|
|
6,767
|
|
Interest and other income,
net
|
273
|
|
307
|
|
435
|
|
Gain on sale of
investments
|
-
|
|
560
|
|
-
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
5,775
|
|
7,215
|
|
7,202
|
|
Provision for income
taxes
|
35
|
|
1
|
|
47
|
|
|
|
|
|
|
|
|
Consolidated net
income
|
5,740
|
|
7,214
|
|
7,155
|
|
|
|
|
|
|
|
|
Net (income) loss attributable
to
|
|
|
|
|
|
|
noncontrolling
interests
|
23
|
|
(2)
|
|
(1)
|
|
Equity in net income of
affiliated
|
|
|
|
|
|
|
company
|
18
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
Net income attributable to
ISSI
|
$ 5,781
|
|
$
7,212
|
|
$ 7,154
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$ 0.22
|
|
$
0.27
|
|
$ 0.28
|
|
Shares used in basic per share
calculation
|
26,563
|
|
26,308
|
|
25,310
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
$ 0.20
|
|
$
0.26
|
|
$ 0.27
|
|
Shares used in diluted per share
calculation
|
28,498
|
|
27,865
|
|
26,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to
Non-GAAP Financial Measures
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
GAAP gross
profit
|
$ 20,935
|
|
$
22,465
|
|
$ 21,216
|
|
GAAP gross
margin
|
33.1%
|
|
34.0%
|
|
37.2%
|
|
Adjustments:
|
|
|
|
|
|
|
Si En acquisition
related inventory write up
|
230
|
|
-
|
|
-
|
|
Si En intangible
asset amortization
|
97
|
|
-
|
|
-
|
|
Stock-based
compensation expense
|
57
|
|
39
|
|
29
|
|
Total
adjustments
|
384
|
|
39
|
|
29
|
|
Non-GAAP gross
profit
|
$ 21,319
|
|
$
22,504
|
|
$ 21,245
|
|
Non-GAAP gross
margin
|
33.7%
|
|
34.0%
|
|
37.2%
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
GAAP operating
income
|
$ 5,502
|
|
$
6,348
|
|
$ 6,767
|
|
Adjustments:
|
|
|
|
|
|
|
Si En acquisition
related inventory write up
|
230
|
|
-
|
|
-
|
|
Si En intangible
asset amortization
|
251
|
|
-
|
|
-
|
|
Legal fees related
to Si En acquisition
|
105
|
|
220
|
|
-
|
|
Stock-based
compensation expense
|
1,097
|
|
886
|
|
527
|
|
Total
adjustments
|
1,683
|
|
1,106
|
|
527
|
|
Non-GAAP operating
income
|
$ 7,185
|
|
$
7,454
|
|
$ 7,294
|
|
|
|
|
|
|
|
|
Net income:
|
|
|
|
|
|
|
On a GAAP
basis
|
$ 5,781
|
|
$
7,212
|
|
$ 7,154
|
|
Adjustments:
|
|
|
|
|
|
|
Si En acquisition
related inventory write up
|
230
|
|
-
|
|
-
|
|
Si En intangible
asset amortization
|
251
|
|
-
|
|
-
|
|
Legal fees related
to Si En acquisition
|
105
|
|
220
|
|
-
|
|
Stock-based
compensation expense
|
1,097
|
|
886
|
|
527
|
|
Tax effect of Si En
acquisition related items
|
(79)
|
|
-
|
|
-
|
|
Total
adjustments
|
1,604
|
|
1,106
|
|
527
|
|
Non-GAAP net
income
|
$ 7,385
|
|
$
8,318
|
|
$ 7,681
|
|
|
|
|
|
|
|
|
Non-GAAP net income per
share:
|
|
|
|
|
|
|
Basic
|
$ 0.28
|
|
$
0.32
|
|
$ 0.30
|
|
Diluted
|
$ 0.26
|
|
$
0.30
|
|
$ 0.29
|
|
|
|
|
|
|
|
Integrated
Silicon Solution, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
thousands)
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
|
2011
|
|
2010
|
|
|
(unaudited)
|
|
(1)
|
|
ASSETS
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 62,686
|
|
$
81,665
|
|
Restricted cash
|
7,037
|
|
5,107
|
|
Short-term
investments
|
4,713
|
|
4,837
|
|
Accounts receivable,
net
|
37,331
|
|
41,148
|
|
Inventories
|
61,245
|
|
54,560
|
|
Other current
assets
|
6,812
|
|
4,479
|
|
|
|
|
|
|
Total current assets
|
179,824
|
|
191,796
|
|
Property, equipment and
leasehold improvements, net
|
27,422
|
|
28,078
|
|
Long-term investments
|
6,018
|
|
-
|
|
Purchased intangible assets,
net
|
12,202
|
|
1,294
|
|
Goodwill
|
9,463
|
|
1,301
|
|
Other assets
|
11,336
|
|
11,562
|
|
Total assets
|
$ 246,265
|
|
$
234,031
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$ 30,854
|
|
$
41,586
|
|
Accrued compensation and
benefits
|
4,939
|
|
6,406
|
|
Accrued
expenses
|
5,270
|
|
5,930
|
|
|
|
|
|
|
Total current
liabilities
|
41,063
|
|
53,922
|
|
|
|
|
|
|
Other long-term
liabilities
|
8,393
|
|
2,288
|
|
|
|
|
|
|
Total liabilities
|
49,456
|
|
56,210
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
3
|
|
3
|
|
Additional paid-in
capital
|
322,111
|
|
317,773
|
|
Accumulated
deficit
|
(130,292)
|
|
(143,285)
|
|
Accumulated comprehensive
income (loss)
|
2,624
|
|
(2,286)
|
|
|
|
|
|
|
Total ISSI stockholders'
equity
|
194,446
|
|
172,205
|
|
|
|
|
|
|
Noncontrolling
interest
|
2,363
|
|
5,616
|
|
|
|
|
|
|
Total stockholders'
equity
|
196,809
|
|
177,821
|
|
Total liabilities and
stockholders' equity
|
$ 246,265
|
|
$
234,031
|
|
|
|
|
|
|
|
|
(1) Derived
from audited financial statements.
|
|
|
|
|
|
SOURCE Integrated Silicon Solution, Inc.