MILPITAS, Calif., Oct. 29, 2014 /PRNewswire/ -- Integrated
Silicon Solution, Inc. (Nasdaq: ISSI) today reported financial
results for the fourth quarter and fiscal year ended September 30, 2014.
Fourth Fiscal Quarter and Recent Highlights:
- Reported total revenue of $84.2
million, compared to $84.8
million in the third fiscal quarter of 2014 and $78.4 million in the fourth fiscal quarter of
2013;
- Automotive revenue increased 8.7% sequentially;
- Gross margin was 35.3%, compared to 34.5% in the third fiscal
quarter of 2014 and 33.1% in the fourth fiscal quarter of
2013;
- GAAP net income was $0.09 per
diluted share and non-GAAP net income was $0.18 per diluted share – both GAAP and non-GAAP
EPS include a $0.03 per share tax
rate charge;
- Generated $11.4 million in cash
flow from operations and ended the quarter with cash and short-term
investments of $140.0 million;
and
- Executed an agreement with Spansion Inc. to develop and supply
HyperRam™ products.
Fiscal Year 2014 Highlights:
- Revenue grew to $329.0 million,
an increase of 7.0% compared to fiscal 2013;
- Automotive revenue increased 10.8% and IMM revenue increased
33.5% over the prior year;
- GAAP net income was $23.3
million, or $0.74 per diluted
share, and non-GAAP net income was $26.4
million, or $0.83 per diluted
share;
- Announced the industry's first 115C DRAM for automotive
applications, an 8Gb DDR3/DDR3L solution for communications
customers and an expanded high performance Serial NOR Flash product
line;
- Realized aggregate gains of $9.2
million on sales of a portion of the Company's shares of
Nanya Technology Corporation; and
- Announced a quarterly cash dividend program, with a dividend of
$0.06 per share paid on August 15, 2014 and a dividend of $0.06 per share to be paid on November 21, 2014, to stockholders of record as
of November 10, 2014.
"During the fourth quarter, revenue continued to grow in our
automotive and IMM end markets, which represented approximately 70%
of our revenue, while our communications and consumer markets
declined due to greater than anticipated weakness in Asia combined with wafer shortages from one of
our flash foundries," said Scott
Howarth, ISSI's President and CEO. "Over the past year, IMM
revenue grew 34% as key global customers transitioned volume to
ISSI in recognition of our increasing role as a strategic long-term
supplier. We also continued to grow revenue in the automotive
market as we expanded our automotive product offerings with high
density DDR2 and DDR3, plus flash and analog solutions.
"Looking ahead to fiscal 2015, we believe we are well positioned
for growth across our markets. Our expanded specialty memory
portfolio has been a key contributor to increases in market share
and customer penetration, particularly with automotive and
industrial accounts. Although it is too early to predict a rebound
in the communications market, we continue to see strong design
activity that should prove beneficial to ISSI when the market
returns to growth. We remain focused on continued growth, improved
profitability and strong cash generation to support our dividend
program and create increasing value for our stockholders."
Fourth Fiscal Quarter 2014 Results
Revenue in the
fourth fiscal quarter ended September 30,
2014 was $84.2 million,
compared to $84.8 million in the
third quarter of 2014 and $78.4
million in the fourth fiscal quarter of 2013. Revenue in the
fourth fiscal quarter of 2014 consisted of $76.2 million of SRAM and DRAM revenue,
$5.9 million of NOR flash revenue,
and $2.1 million of analog revenue.
SRAM and DRAM revenue increased 9.0% over the September 2013 quarter.
GAAP gross margin in the fourth fiscal quarter was 35.3%,
compared to 34.5% in the June 2014
quarter and 33.1% in the September
2013 quarter.
GAAP net income in the fourth fiscal quarter of 2014 was
$2.8 million, or $0.09 per diluted share, compared to GAAP net
income of $6.2 million, or
$0.19 per diluted share, in the
June 2014 quarter and GAAP net income
of $4.7 million, or $0.15 per share, in the September 2013 quarter.
Non-GAAP net income in the September
2014 quarter was $5.8 million,
or $0.18 per diluted share, compared
to $7.9 million, or $0.25 per diluted share, in the June 2014 quarter and $6.1
million, or $0.20 per diluted
share, in the September 2013
quarter.
Our GAAP and non-GAAP net income per share in the September 2014 quarter were each reduced by
$0.03 per share due to adjustments to
the income tax rate as a result of a greater than expected portion
of profit in higher tax jurisdictions.
Non-GAAP results exclude stock based compensation, amortization
of intangibles related to acquisitions, gains on the sales of
investments, and non-cash tax expense related to the utilization of
previously recorded deferred tax assets. A reconciliation of GAAP
results to non-GAAP results is provided in the financial statement
tables following the text of this press release.
Fiscal 2014 Results:
Revenue for the fiscal year
ended September 30, 2014 was
$329.0 million, an increase of 7.0%
from $307.6 million in fiscal 2013.
DRAM and SRAM revenue in fiscal 2014 was $294.2 million, an increase of 9.2% from fiscal
2013. GAAP gross margin in fiscal 2014 was 34.1%, compared to 33.0%
in fiscal 2013.
GAAP net income in fiscal 2014 was $23.3
million, or $0.74 per share,
compared to GAAP net income in fiscal 2013 of $17.5 million, or $0.59 per diluted share. Non-GAAP net income in
fiscal 2014 was $26.4 million, or
$0.83 per diluted share, compared to
$24.2 million, or $0.81 per diluted share, in fiscal 2013.
Cash, cash equivalents and short-term investments totaled
$140.0 million at September 30, 2014, compared with $141.6 million at September 30, 2013.
Dividend Payment
The ISSI Board of Directors has
approved a dividend of $0.06 per
share to be paid on November 21,
2014, to stockholders of record as of November 10, 2014.
December Quarter Outlook
The Company expects total
revenue for the December quarter to range between $80.0 and $85.0 million, consisting of SRAM and
DRAM revenue of between $73.0 million and
$76.5 million, NOR flash revenue of between $5.5 million and $6.0 million, and analog revenue
of between $1.5 million and $2.5
million. Gross margin for the December quarter is expected
to range between 34.5% and 35.5%. Operating expenses are expected
to range between $23.0 million and $24.0
million. GAAP net income is expected to be between
$0.10 and $0.14 per diluted share and
non-GAAP net income is expected to range between $0.18 and $0.22 per diluted share.
Conference Call Information
A conference call will be
held today at 7:00 a.m. Pacific Time
to discuss the Company's fourth quarter and fiscal 2014 financial
results. To access ISSI's conference call via telephone, dial
800-768-6563 by 6:50 a.m. Pacific
Time. The participant passcode is 5123006. 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 operating income, provision for income taxes
and net income for certain periods that exclude stock based
compensation, the amortization of intangibles related to
acquisitions, gains on sales of investments, and non-cash tax
expense related to the utilization of previously recorded deferred
tax assets. 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 its 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 the items described above. 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 low, medium
and high density DRAM and high speed and low power SRAM. The
Company also designs and markets NOR flash products and 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
increasing role as a strategic supplier, being well positioned for
growth in our markets, strong design activity that should prove
beneficial to ISSI when the market returns to growth, remaining
focused on continued growth, improved profitability and strong cash
generation to support our dividend program and create increasing
value for our stockholders and our outlook for the December 2014 quarter with respect to total
revenue, SRAM and DRAM revenue, NOR flash revenue, analog 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 (especially in the
automotive market and the IMM market), unexpected reductions in
average selling prices for our products, our ability to sell our
products in our key markets (including automotive and IMM) and the
pricing and gross margins achieved on such sales, our ability to
continue 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, our ability to realize the expected benefits of our
acquisitions including maintaining relationships with key
customers, vendors and employees, changes in manufacturing yields,
order cancellations, order rescheduling, product warranty claims,
competition, the level and value of inventory held by OEM
customers, the outcome of any existing or future litigation
involving intellectual property or other matters 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,
2013 and Form 10-Q for the period ended June 30, 2014. 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
|
|
Fiscal Year
Ended
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
84,152
|
|
$
84,834
|
|
$
78,392
|
|
$
328,977
|
|
$
307,570
|
Cost of
sales
|
54,471
|
|
55,538
|
|
52,458
|
|
216,721
|
|
206,109
|
Gross
profit
|
29,681
|
|
29,296
|
|
25,934
|
|
112,256
|
|
101,461
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
12,880
|
|
10,978
|
|
9,925
|
|
45,243
|
|
40,839
|
Selling,
general and administrative
|
11,450
|
|
11,942
|
|
11,316
|
|
46,295
|
|
43,964
|
Impairment of
goodwill
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total operating expenses
|
24,330
|
|
22,920
|
|
21,241
|
|
91,538
|
|
84,803
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
5,351
|
|
6,376
|
|
4,693
|
|
20,718
|
|
16,658
|
Interest and other
income (expense), net
|
204
|
|
99
|
|
(183)
|
|
1,109
|
|
1,146
|
Gain on sale of
investments
|
-
|
|
2,140
|
|
2,878
|
|
11,300
|
|
12,217
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
5,555
|
|
8,615
|
|
7,388
|
|
33,127
|
|
30,021
|
Provision for income
taxes
|
2,697
|
|
2,388
|
|
2,658
|
|
9,638
|
|
12,277
|
|
|
|
|
|
|
|
|
|
|
Consolidated net
income
|
2,858
|
|
6,227
|
|
4,730
|
|
23,489
|
|
17,744
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
(26)
|
|
(41)
|
|
(32)
|
|
(224)
|
|
(196)
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to ISSI
|
$
2,832
|
|
$
6,186
|
|
$
4,698
|
|
$
23,265
|
|
$
17,548
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$
0.09
|
|
$
0.20
|
|
$
0.16
|
|
$
0.77
|
|
$
0.62
|
Shares used in basic
per share calculation
|
30,699
|
|
30,312
|
|
28,928
|
|
30,037
|
|
28,223
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
$
0.09
|
|
$
0.19
|
|
$
0.15
|
|
$
0.74
|
|
$
0.59
|
Shares used in
diluted per share calculation
|
32,383
|
|
31,963
|
|
30,372
|
|
31,623
|
|
29,694
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
$
5,351
|
|
$
6,376
|
|
$
4,693
|
|
$
20,718
|
|
$
16,658
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Chingis intangible asset amortization
|
347
|
|
347
|
|
347
|
|
1,388
|
|
1,352
|
Chingis acquisition related inventory write up
|
-
|
|
-
|
|
-
|
|
-
|
|
492
|
Stock-based compensation expense
|
1,507
|
|
1,539
|
|
1,568
|
|
6,092
|
|
5,941
|
Total
adjustments
|
1,854
|
|
1,886
|
|
1,915
|
|
7,480
|
|
7,785
|
Non-GAAP operating income
|
$
7,205
|
|
$
8,262
|
|
$
6,608
|
|
$
28,198
|
|
$
24,443
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes:
|
|
|
|
|
|
|
|
|
|
On
a GAAP basis
|
$
2,697
|
|
$
2,388
|
|
$
2,658
|
|
$
9,638
|
|
$
12,277
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Non-cash tax expense
|
1,138
|
|
1,204
|
|
1,335
|
|
2,954
|
|
6,691
|
Tax impact of gains on sale of investments
|
-
|
|
749
|
|
1,052
|
|
3,955
|
|
4,357
|
Total
adjustments
|
1,138
|
|
1,953
|
|
2,387
|
|
6,909
|
|
11,048
|
Non-GAAP provision for income taxes
|
$
1,559
|
|
$
435
|
|
$
271
|
|
$
2,729
|
|
$
1,229
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to ISSI:
|
|
|
|
|
|
|
|
|
|
On
a GAAP basis
|
$
2,832
|
|
$
6,186
|
|
$
4,698
|
|
$
23,265
|
|
$
17,548
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Chingis intangible asset amortization
|
347
|
|
347
|
|
347
|
|
1,388
|
|
1,352
|
Chingis acquisition related inventory write up
|
-
|
|
-
|
|
-
|
|
-
|
|
492
|
Stock-based compensation expense
|
1,507
|
|
1,539
|
|
1,568
|
|
6,092
|
|
5,941
|
Gain on sales of investment
|
-
|
|
(2,140)
|
|
(2,878)
|
|
(11,300)
|
|
(12,217)
|
Non-cash tax expense
|
1,138
|
|
1,204
|
|
1,335
|
|
2,954
|
|
6,691
|
Tax impact of gains on sale of investments
|
-
|
|
749
|
|
1,052
|
|
3,955
|
|
4,357
|
Total
adjustments
|
2,992
|
|
1,699
|
|
1,424
|
|
3,089
|
|
6,616
|
Non-GAAP net income
|
$
5,824
|
|
$
7,885
|
|
$
6,122
|
|
$
26,354
|
|
$
24,164
|
|
|
|
|
|
|
|
|
|
|
Shares used in
Non-GAAP net income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
30,699
|
|
30,312
|
|
28,928
|
|
30,037
|
|
28,223
|
Diluted
|
32,383
|
|
31,963
|
|
30,372
|
|
31,623
|
|
29,694
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.19
|
|
$
0.26
|
|
$
0.21
|
|
$
0.88
|
|
$
0.86
|
Diluted
|
$
0.18
|
|
$
0.25
|
|
$
0.20
|
|
$
0.83
|
|
$
0.81
|
Integrated Silicon
Solution, Inc.
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2014
|
|
2013
|
|
|
|
(unaudited)
|
|
(1)
|
ASSETS
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$ 137,534
|
|
$ 119,997
|
Restricted
cash
|
|
|
1,000
|
|
-
|
Short-term
investments
|
|
|
1,477
|
|
21,558
|
Accounts
receivable, net
|
|
|
50,458
|
|
46,088
|
Inventories
|
|
|
85,093
|
|
68,469
|
Other current
assets
|
|
|
18,901
|
|
16,928
|
|
|
|
|
|
|
Total current
assets
|
|
|
294,463
|
|
273,040
|
Property and
equipment, net
|
|
|
58,847
|
|
46,504
|
Purchased intangible
assets, net
|
|
|
5,093
|
|
6,626
|
Goodwill
|
|
|
9,178
|
|
9,178
|
Other
assets
|
|
|
32,761
|
|
26,521
|
Total
assets
|
|
|
$ 400,342
|
|
$ 361,869
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
|
$ 54,554
|
|
$ 50,229
|
Accrued
compensation and benefits
|
|
|
9,875
|
|
8,072
|
Accrued
expenses
|
|
|
11,365
|
|
7,357
|
Current
portion of long-term debt
|
|
|
195
|
|
195
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
75,989
|
|
65,853
|
|
|
|
|
|
|
Long-term
debt
|
|
|
4,339
|
|
4,534
|
Other long-term
liabilities
|
|
|
5,456
|
|
8,712
|
|
|
|
|
|
|
Total
liabilities
|
|
|
85,784
|
|
79,099
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common
stock
|
|
|
3
|
|
3
|
Additional
paid-in capital
|
|
|
364,587
|
|
343,947
|
Accumulated
deficit
|
|
|
(51,076)
|
|
(72,498)
|
Accumulated
other comprehensive income (loss)
|
|
(1,044)
|
|
9,121
|
|
|
|
|
|
|
Total ISSI
stockholders' equity
|
|
|
312,470
|
|
280,573
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
2,088
|
|
2,197
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
314,558
|
|
282,770
|
Total liabilities and
stockholders' equity
|
|
|
$ 400,342
|
|
$ 361,869
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from
audited financial statements.
|
SOURCE Integrated Silicon Solution, Inc.