FOR IMMEDIATE RELEASE
ISSI ANNOUNCES SECOND FISCAL QUARTER 2008 RESULTS
San Jose, Calif.—April 24, 2008--Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported its financial results for the second fiscal quarter ended March 31, 2008.
Revenue in the second fiscal quarter ended March 31, 2008 was $58.0 million, down 8.4% from the $63.3 million reported in the December 2007 quarter, and down 3.3% from the $60.0 million reported in the March 2007 quarter. Net income for the March 2008 quarter was $2.0 million, or $0.07 per diluted share. Net income includes a $0.8 million charge for stock-based compensation expense and a $0.6 million credit for the reversal of previously accrued liabilities for which we are no longer obligated. These results compare with net income for the March 2007 fiscal quarter of $7.1 million, or $0.19 per diluted share, which included a $0.9 million charge for stock-based compensation expense, $1.8 million for legal and accounting fees associated with our stock option investigation, and an $8.5 million gain on sale of assets.
Operating income for the second fiscal quarter ended March 31, 2008 was $0.9 million which included the $0.8 million stock-based compensation expense, and the $0.6 million credit for the reversal of previously accrued liabilities which improved gross margins by 1%. This compares to an operating loss of ($2.4) million for the same quarter in 2007 which included a $0.9 million stock-based compensation expense and a $1.8 million expense for legal and accounting fees associated with our stock option investigation. Gross margins for the second fiscal 2008 quarter were 22.9% compared to 19.0% for the same quarter in fiscal 2007.
The Company’s cash, cash equivalents and short-term investments totaled $41.2 million at March 31, 2008, a decrease of $102.1 million from December 31, 2007. This decrease was primarily due to the completion of our $70 million Tender Offer and stock repurchase, reclassification of $19.1 million in Auction Rate Securities to long-term investment due to failed auctions, and a decrease in our accounts payable. The Company’s inventory at March 31, 2008 totaled $46.8 million, an increase of $8.6 million from December 31, 2007.
“In the March quarter, we missed our revenue goal as the pricing environment for commodity DRAM continued to weaken, and we reduced our commodity revenue,” said Scott Howarth, ISSI’s President and CEO. “Strength in our SRAM business and improved product mix in our target markets allowed us to expand our margins, and announce positive operating earnings as well as net income that exceeded our guidance for the quarter. This is our seventh consecutive quarter of profitability and third consecutive quarter of operating income which demonstrates the success of our strategy,” added Mr. Howarth.
-more-
ISSI Release
April 24, 2008
Page 2
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 719-325-4840 by 1:20 p.m. Pacific time. The call will be webcast from ISSI's website at 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 and (iv) automotive electronics. 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 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 demonstrating the success of our strategy 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, 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 ending September 2007 and our Quarterly Report on Form 10-Q for the period ended December 31, 2007. In addition, the financial information in this press release is unaudited and subject to any adjustments that may be made in connection with the quarterly review. The Company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.
-###-
CONTACT:
Scott Howarth
President & CEO, Acting CFO
Investor Relations
(408) 969-6600
ir@issi.com
Integrated Silicon Solution, Inc. | |
Condensed Consolidated Statements of Operations | |
| (Unaudited) | |
| (In thousands, except per share data) | |
| | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended | |
| | | March 31, | | March 31, | |
| | | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Net sales | | $ | 58,046 | | $ | 59,995 | | $ | 121,394 | | $ | 122,139 | |
| Cost of sales | | | 44,750 | | | 48,601 | | | 94,897 | | | 98,200 | |
| Gross profit | | | 13,296 | | | 11,394 | | | 26,497 | | | 23,939 | |
| | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | |
| Research and development | | | 4,935 | | | 5,140 | | | 9,709 | | | 10,502 | |
| Selling, general and administrative | | | 7,463 | | | 8,675 | | | 15,125 | | | 17,768 | |
| Total operating expenses | | | 12,398 | | | 13,815 | | | 24,834 | | | 28,270 | |
| | | | | | | | | | | | | | |
| Operating income (loss) | | | 898 | | | (2,421 | ) | | 1,663 | | | (4,331 | ) |
| Interest and other income (expense), net | | | 1,105 | | | 1,000 | | | 3,179 | | | 2,552 | |
| Gain on sale of investments | | | - | | | 8,549 | | | 189 | | | 9,147 | |
| Income before income taxes, minority | | | | | | | | | | | | | |
| interest and equity in net loss of | | | | | | | | | | | | | |
| affiliated companies | | | 2,003 | | | 7,128 | | | 5,031 | | | 7,368 | |
| Provision for income taxes | | | 40 | | | 3 | | | 100 | | | 13 | |
| | | | | | | | | | | | | | |
| Income before minority interest and equity | | | | | | | | | | | | | |
| in net loss of affiliated companies | | | 1,963 | | | 7,125 | | | 4,931 | | | 7,355 | |
| | | | | | | | | | | | | | |
| Minority interest in net (income) loss of | | | | | | | | | | | | | |
| consolidated subsidiary | | | 20 | | | (64 | ) | | 19 | | | (72 | ) |
| | | | | | | | | | | | | | |
| Equity in net loss of affiliated companies | | | - | | | - | | | - | | | (92 | ) |
| | | | | | | | | | | | | | |
| Net income | | $ | 1,983 | | $ | 7,061 | | $ | 4,950 | | $ | 7,191 | |
| | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.07 | | $ | 0.19 | | $ | 0.15 | | $ | 0.19 | |
| Shares used in basic per share calculation | | | 28,160 | | | 37,612 | | | 32,374 | | | 37,612 | |
| | | | | | | | | | | | | | |
| Diluted net income per share | | $ | 0.07 | | $ | 0.19 | | $ | 0.15 | | $ | 0.19 | |
| Shares used in diluted per share calculation | | | 28,436 | | | 38,006 | | | 32,668 | | | 37,998 | |
Integrated Silicon Solution, Inc. | |
Condensed Consolidated Balance Sheets | |
| (In thousands) | |
| | | | | | |
| | | March 31, | | September 30, | |
| | | 2008 | | 2007 | |
| | | (unaudited) | | (1) | |
ASSETS | |
| Current assets: | | | | | |
| Cash and cash equivalents | | $ | 37,025 | | $ | 53,722 | |
| Short-term investments | | | 4,212 | | | 80,093 | |
| Accounts receivable, net | | | 39,206 | | | 37,030 | |
| Inventories | | | 46,756 | | | 32,056 | |
| Other current assets | | | 4,262 | | | 6,134 | |
| | | | | | | | |
| Total current assets | | | 131,461 | | | 209,035 | |
| Property, equipment and leasehold improvements, net | | | 24,591 | | | 23,284 | |
| Long-term investments | | | 19,090 | | | - | |
| Goodwill | | | 25,338 | | | 25,338 | |
| Purchased intangible assets, net | | | 2,628 | | | 3,538 | |
| Other assets | | | 1,589 | | | 1,520 | |
| Total assets | | $ | 204,697 | | $ | 262,715 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: | | | | | | | |
| Short-term debt and notes | | $ | - | | $ | 614 | |
| Accounts payable | | | 41,874 | | | 36,509 | |
| Accrued compensation and benefits | | | 3,029 | | | 3,588 | |
| Accrued expenses | | | 6,965 | | | 6,734 | |
| | | | | | | | |
| Total current liabilities | | | 51,868 | | | 47,445 | |
| | | | | | | | |
| Other long-term liabilities | | | 851 | | | 793 | |
| | | | | | | | |
| Total liabilities | | | 52,719 | | | 48,238 | |
| | | | | | | | |
| Commitments and contingencies | | | | | | | |
| | | | | | | | |
| Minority interest | | | 707 | | | 726 | |
| | | | | | | | |
| Stockholders' equity: | | | | | | | |
| Common stock | | | 3 | | | 4 | |
| Additional paid-in capital | | | 308,346 | | | 376,998 | |
| Accumulated deficit | | | (157,718 | ) | | (162,668 | ) |
| Accumulated comprehensive income (loss) | | | 640 | | | (583 | ) |
| | | | | | | | |
| Total stockholders' equity | | | 151,271 | | | 213,751 | |
| Total liabilities and stockholders' equity | | $ | 204,697 | | $ | 262,715 | |
| (1) Derived from audited financial statements. |
