SAN JOSE, Calif., Jan. 25, 2012 /PRNewswire/ -- Integrated Silicon
Solution, Inc. (Nasdaq: ISSI) today reported its financial results
for the first fiscal quarter ended December
31, 2011.
Fiscal First Quarter Results and Recent Highlights:
- Reported total revenue of $66.2
million;
- Achieved record quarterly revenue of $44.3 million in specialty DRAM;
- Increased automotive market revenue 44 percent and industrial,
medical and military market revenue 60 percent over the same
quarter last year, and achieved record quarterly revenue in both
markets;
- Achieved GAAP net income of $3.8
million, or $0.13 per diluted
share, and non-GAAP net income of $6.3
million, or $0.22 per diluted
share; and
- Generated $7.6 million in cash
flow from operations during the quarter, ending the quarter with
$102.2 million in cash and
investments.
Revenue in the first fiscal quarter ended December 31, 2011 was $66.2 million, a 7.3 percent decrease from
$71.3 million in the September 2011 quarter and a slight increase over
the $66.1 million in the December 2010 quarter. Gross margin for the
first quarter of fiscal 2012 was 33.5 percent, compared to 33.4
percent in the September 2011 quarter
and 34.0 percent in the December 2010
quarter.
GAAP net income in the first quarter of fiscal 2012 was
$3.8 million, or $0.13 per diluted share, compared to GAAP net
income of $34.9 million, including a
$28.1 million deferred tax asset
valuation benefit, or $1.23 per
diluted share, for the September 2011
quarter and $7.2 million, or
$0.26 per diluted share, in the
December 2010 quarter.
First quarter 2012 non-GAAP net income was $6.3 million, or $0.22 per diluted share, which excludes
$1.2 million in stock-based
compensation expense, $0.4 million in
amortization of intangibles related to the acquisition of Si En,
and $0.9 million in non-cash income
tax expense from the utilization of net deferred tax assets. This
compares to $8.2 million, or
$0.29 per diluted share, for the
September 2011 quarter and
$8.3 million, or $0.30 per diluted share, in the December 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.
"During the quarter, we were pleased with the performance of our
memory products, highlighted by record sales in specialty DRAM,
despite softer demand in consumer and communications end markets.
We believe these results reflect the success of our high quality
specialty memory business particularly in automotive which grew
significantly this quarter," said Scott
Howarth, ISSI's President and CEO. "Our design win momentum
remains strong in the automotive, communications, and industrial,
medical and military markets. We continue to execute our product
strategy and believe we are well positioned with our new memory
product introductions to continue expanding our opportunities
across all of our target markets."
"In regards to our analog products, revenue in the December
quarter was adversely impacted by declining sales of feature cell
phones in the China market. There
is an ongoing transition in demand from feature phones to
smartphones, which we expect will affect this segment of our
business in the short-term. We are working to gain further design
wins in the smartphone market, broaden our analog market
opportunity outside of China and
design additional analog and mixed signal products that will expand
our addressable market in the future," said Mr. Howarth.
"Looking forward, we expect to see normal seasonality with
revenue being flat to down slightly, and this quarter to be the low
point for the year much as we saw in 2011. While we remain
cautious about the macro uncertainty in the near term, we expect
that our design win traction across all of our products, our new
product offerings, and our strong customer relationships position
ISSI for continued revenue growth in 2012."
March Quarter Outlook
ISSI expects total revenue for the March quarter to range
between $62.0 and $66.0 million,
consisting of SRAM and DRAM revenue of between $60.0 million and $63.0 million and analog
revenue of between $2.0 million and $3.0
million. Gross margin for the March quarter is expected to
range between 33 percent and 35 percent. Operating expenses are
expected to be between $16.5 million and
$17.0 million. The Company expects that its GAAP effective
income tax rate in the March quarter will be approximately 30
percent. GAAP net income is expected to be between $0.12 and $0.16 per diluted share, and non-GAAP
net income, which excludes non-cash tax expense related to the
utilization of net deferred tax assets, stock-based compensation,
and the amortization of intangibles related to the acquisition of
Si En, is expected to range between $0.22
and $0.26 per diluted share.
Conference Call Information
A conference call will be held today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company's
first quarter fiscal 2012 financial results. To access ISSI's
conference call via telephone, dial 888-280-4443 by
1:20 p.m. Pacific Time. A
telephone replay will be available for seven days after the event
by dialing 888-203-1112. The participant passcode is
4659684. 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 net income for certain periods
that exclude the non-cash income tax expense related to the
utilization of net deferred tax assets, stock based compensation
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 non-cash income tax expense related to the utilization
of net deferred tax assets, the impact of stock based compensation,
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) automotive, (ii) communications, (iii) industrial, medical, and
military, and (iv) digital consumer. 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, the Company 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 our design win momentum remaining strong,
continuing to execute on our product strategy, being well
positioned to continue expanding our opportunities across our
target markets, ongoing transition in demand which we expect will
affect the analog segment of our business in the short term,
expanding our addressable market in the future, expecting some end
market weakness in the near term, expecting that our design win
traction, our strong customer relationships, our new product
offerings and solid balance sheet position ISSI for continued
revenue growth in 2012, and our outlook for the March 2012 quarter with respect to revenue, SRAM
and DRAM revenue, analog revenue, gross margin, operating expenses,
effective income tax rate, 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 for our products and our
customers' products, 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
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, 2011. In addition, the
financial information in this press release is unaudited and
subject to any adjustments that may be made in connection with the
year-end audit. 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 Income
|
|
(Unaudited)
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2011
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ 66,164
|
|
$ 66,103
|
|
|
$
71,339
|
|
Cost of sales
|
|
43,966
|
|
43,638
|
|
|
47,501
|
|
Gross profit
|
|
22,198
|
|
22,465
|
|
|
23,838
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
7,601
|
|
6,750
|
|
|
7,526
|
|
Selling, general and
administrative
|
|
9,497
|
|
9,367
|
|
|
9,518
|
|
Total operating
expenses
|
|
17,098
|
|
16,117
|
|
|
17,044
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
5,100
|
|
6,348
|
|
|
6,794
|
|
Interest and other income,
net
|
|
213
|
|
307
|
|
|
798
|
|
Gain on sale of
investments
|
|
-
|
|
560
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
5,313
|
|
7,215
|
|
|
7,592
|
|
Provision (benefit) for income
taxes
|
|
1,544
|
|
1
|
|
|
(27,464)
|
|
|
|
|
|
|
|
|
|
|
Consolidated net
income
|
|
3,769
|
|
7,214
|
|
|
35,056
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
|
21
|
|
(2)
|
|
|
(182)
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
ISSI
|
|
$ 3,790
|
|
$ 7,212
|
|
|
$
34,874
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$ 0.14
|
|
$ 0.27
|
|
|
$
1.31
|
|
Shares used in basic per share
calculation
|
|
26,638
|
|
26,308
|
|
|
26,632
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
|
$ 0.13
|
|
$ 0.26
|
|
|
$
1.23
|
|
Shares used in diluted per share
calculation
|
|
28,333
|
|
27,865
|
|
|
28,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
$ 5,100
|
|
$ 6,348
|
|
|
$
6,794
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Si En intangible
asset amortization and charge
|
|
404
|
|
-
|
|
|
402
|
|
|
Legal fees related
to Si En acquisition
|
|
-
|
|
220
|
|
|
-
|
|
|
Stock-based
compensation expense
|
|
1,185
|
|
886
|
|
|
1,076
|
|
|
Total
adjustments
|
|
1,589
|
|
1,106
|
|
|
1,478
|
|
|
Non-GAAP operating
income
|
|
$ 6,689
|
|
$ 7,454
|
|
|
$
8,272
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
ISSI:
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to ISSI
|
|
$ 3,790
|
|
$ 7,212
|
|
|
$
34,874
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Si En intangible
asset amortization and charge
|
|
404
|
|
-
|
|
|
402
|
|
|
Legal fees related
to Si En acquisition
|
|
-
|
|
220
|
|
|
-
|
|
|
Stock-based
compensation expense
|
|
1,185
|
|
886
|
|
|
1,076
|
|
|
Tax effect of Si En
acquisition related items
|
|
(64)
|
|
-
|
|
|
(64)
|
|
|
Tax credit for
valuation allowance release
|
|
987
|
|
-
|
|
|
(28,136)
|
|
|
Total
adjustments
|
|
2,512
|
|
1,106
|
|
|
(26,722)
|
|
|
Non-GAAP net
income
|
|
$ 6,302
|
|
$ 8,318
|
|
|
$
8,152
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.24
|
|
$ 0.32
|
|
|
$
0.31
|
|
|
Diluted
|
|
$ 0.22
|
|
$ 0.30
|
|
|
$
0.29
|
|
|
|
|
|
|
|
|
|
|
|
Integrated
Silicon Solution, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
|
|
2011
|
|
2011
|
|
|
|
(unaudited)
|
|
(1)
|
|
ASSETS
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
90,973
|
|
$
83,863
|
|
Restricted cash
|
|
6,834
|
|
6,786
|
|
Short-term
investments
|
|
4,409
|
|
4,761
|
|
Accounts receivable,
net
|
|
35,357
|
|
39,460
|
|
Inventories
|
|
51,119
|
|
56,796
|
|
Other current
assets
|
|
15,172
|
|
16,369
|
|
|
|
|
|
|
|
Total current assets
|
|
203,864
|
|
208,035
|
|
Property, equipment and
leasehold improvements, net
|
|
29,511
|
|
28,959
|
|
Purchased intangible assets,
net
|
|
10,615
|
|
11,081
|
|
Goodwill
|
|
9,463
|
|
9,463
|
|
Other assets
|
|
36,749
|
|
34,449
|
|
Total assets
|
|
$
290,202
|
|
$
291,987
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
29,319
|
|
$
36,395
|
|
Accrued compensation and
benefits
|
|
5,563
|
|
6,363
|
|
Accrued
expenses
|
|
4,284
|
|
4,711
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
39,166
|
|
47,469
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
|
9,288
|
|
9,272
|
|
|
|
|
|
|
|
Total liabilities
|
|
48,454
|
|
56,741
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock
|
|
3
|
|
3
|
|
Additional paid-in
capital
|
|
323,158
|
|
321,131
|
|
Accumulated
deficit
|
|
(83,538)
|
|
(87,328)
|
|
Accumulated comprehensive
loss
|
|
(608)
|
|
(1,252)
|
|
|
|
|
|
|
|
Total ISSI stockholders'
equity
|
|
239,015
|
|
232,554
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
2,733
|
|
2,692
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
241,748
|
|
235,246
|
|
Total liabilities and
stockholders' equity
|
|
$
290,202
|
|
$
291,987
|
|
|
|
|
|
|
|
|
|
(1) Derived
from audited financial statements.
|
|
|
|
|
|
|
SOURCE Integrated Silicon Solution, Inc.