Exhibit 99.1
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SMSC BUYS OUT MINORITY INTEREST IN SMSC JAPAN
100% Ownership Underscores SMSC's Commitment to the Japanese Market
Hauppauge, NY - January 14, 2004 - Standard Microsystems Corporation (Nasdaq:
SMSC) today announced that it has purchased the minority interest in SMSC Japan
from Sumitomo Metal Industries, Ltd. (Sumitomo), resulting in an increase in
SMSC's book value by approximately $0.35 per share. Prior to this purchase,
Sumitomo owned 20% of the issued and outstanding common stock and all of the
non-cumulative, non-voting 6% preferred stock of SMSC Japan. As a result of this
transaction, SMSC Japan has become a wholly owned subsidiary of SMSC.
"The decision to move to 100% ownership of SMSC Japan further strengthens our
global infrastructure," said Steven J. Bilodeau, Chairman, President and Chief
Executive Officer. "SMSC Japan has long been considered a key contributor to our
efforts in building global market share. Completion of this transaction enhances
our ability to capitalize on emerging business opportunities in consumer
applications for networking and USB connectivity, and for PC I/O applications as
the market for desktop and notebook PCs grows in Japan."
"We are pleased to complete the transition of becoming a wholly owned subsidiary
of SMSC," said Yasuo Suzuki, President of SMSC Japan. "Our organization in Japan
has grown to over 40 highly qualified employees and revenues in Japan now
account for nearly 20% of SMSC's consolidated revenues. We believe this change
will enable us to better serve our customers and further our contribution to the
success of SMSC."
The minority interest, which was carried at $11.8 million on SMSC's Consolidated
Balance Sheet, was repurchased from Sumitomo for approximately $5.1 million. The
excess of the carrying value over the purchase price will be reported as a Gain
on Redemption of Preferred Stock of Subsidiary within Net Income Available to
Common Shareholders on the Company's Statement of Operations for the three
months ended February 29, 2004.
About SMSC:
SMSC provides Real World Connectivity(TM) solutions for high-speed communication
and computing applications. Leveraging a broad intellectual property portfolio,
the Company thrives at the intersection of software, silicon and customized OEM
applications. Through the integration of its leading-edge digital, mixed-signal
and analog functionality and software expertise, SMSC delivers complete
solutions that monitor and manage computing systems and connect peripherals to
computers and to one another.
The Company is the world's leading provider of Advanced Input/Output (I/O)
hardware and software solutions ranging from legacy PC I/O to leading-edge
system management functionality. Through high-speed serial interfaces, including
USB 2.0 and embedded Ethernet, SMSC delivers faster and higher-bandwidth
peripheral connections for a wide range of products such as memory card readers,
mass storage devices, digital cameras and keyboards and enables innovative
high-speed networking functionality for consumer electronics, set-top boxes,
printers and copiers, wireless routers, gaming machines, security and
surveillance systems, car navigation systems, and more.
SMSC, a fabless semiconductor supplier, is based in Hauppauge, New York and
maintains offices worldwide, including locations in North America, Taiwan,
Japan, Korea, China and Europe. SMSC operates engineering design centers in
Phoenix, AZ, Tucson, AZ, Hauppauge, NY and Austin, TX. More information about
the Company is available on the World Wide Web at http://www.smsc.com.
Forward Looking Statements:
Except for historical information contained herein, the matters discussed in
this announcement are forward-looking statements about expected future events
and financial and operating results that involve risks and uncertainties. These
include the timely development and market acceptance of new products; the impact
of competitive products and pricing; the effect of changing economic conditions
in domestic and international markets; changes in customer order patterns,
including loss of key customers, order cancellations or reduced bookings; and
excess or obsolete inventory and variations in inventory valuation, among
others. Such statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations and may not reflect the
potential impact of any future acquisitions, mergers or divestitures.
SMSC competes in the semiconductor industry, which has historically been
characterized by intense competition, rapid technological change, cyclical
market patterns, price erosion and periods of mismatched supply and demand. In
addition, sales of many of the Company's products depend largely on sales of
personal computers and peripheral devices, and reductions in the rate of growth
of the PC and Embedded markets could adversely affect its operating results.
SMSC conducts business outside the United States and is subject to tariff and
import regulations and currency fluctuations, which may have an effect on its
business. All forward-looking statements speak only as of the date hereof and
are based upon the information available to SMSC at this time. Such information
is subject to change, and we will not necessarily inform you of such changes,
except as required by law. These and other risks and uncertainties, including
potential liability resulting from pending or future litigation, are detailed
from time to time in the Company's reports filed with the SEC. Investors are
advised to read the Company's Annual Report on Form 10-K and quarterly reports
on Form 10-Q filed with the Securities and Exchange Commission, particularly
those sections entitled "Other Factors That May Affect Future Operating Results"
for a more complete discussion of these and other risks and uncertainties.
Standard Microsystems and SMSC are registered trademarks, and Real World
Connectivity is a trademark, of Standard Microsystems Corporation. Product names
and company names are trademarks of their respective holders.
Contact:
Carolynne Borders
Director of Corporate Communications
Standard Microsystems Corporation
Voice: 631-435-6626
Fax: 631-273-5550
carolynne.borders@smsc.com