Exhibit 99.1
Catalyst Semiconductor Reports Higher Fiscal Third Quarter Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 26, 2004--Catalyst
Semiconductor, Inc. (Nasdaq:CATS), a developer and marketer of
programmable products used in telecommunications, networking systems,
computation, automotive, industrial and consumer markets, today
reported financial results for its fiscal third quarter ended January
31, 2004.
For the quarter ended January 31, 2004, Catalyst had net income of
$2.4 million, or $0.12 per diluted share, on revenues of $16.9
million. The company reported net income of $314,000, or $0.02 per
diluted share, on revenues of $11.2 million in the year-ago quarter
ended January 31, 2003, and net income of $426,000, or $0.02 per
diluted share, on revenues of $16.0 million in the fiscal second
quarter ended October 31, 2003.
As of January 31, 2004, Catalyst had cash, cash equivalents and
short-term investments of $34.9 million, an increase of $4.6 million
versus the previous quarter.
Gross margin for the quarter ended January 31, 2004 was 46.0%,
compared to 31.2% for the previous quarter and 36.7% one year ago.
Without a royalty accrual of $296,000 for settlement with Philips of a
patent dispute, the gross margin for the third quarter would have been
1.8% higher, compared to an impact of 6.3% on the gross margin in the
preceding quarter when adjusted for a $1.0 million royalty accrual in
that period. The increased gross margin was attributable to improved
market conditions and the results of continuing cost reduction
efforts.
Research and development expense increased 17% from the previous
quarter, marking the fifth consecutive quarter of increased R&D
investment for new product development. This increase was part of the
strategy announced by the company last fall of increasing market share
and gaining additional customers with a new line of mixed signal
products, as well as further reducing manufacturing costs.
Nevertheless, overall operating expense remained almost flat as a
percentage of revenues, rising to 29.2% from 28.6%.
Other highlights of the quarter included:
-- Production order shipments of white LED drivers resulting from
design wins in the previous quarter. Third-quarter revenues
from analog mixed signal products grew to 2.6% of total
revenues, compared with 1.5% in the prior quarter.
-- International sales comprising 94% of net revenues, compared
to 89% in the second quarter, reflecting higher demand in all
markets outside the U.S., while demand in the U.S. has
weakened.
-- Settlement of the licensing dispute with Philips by modifying
the licensing agreement and paying a reduced amount for all
past and future liabilities under the license. As a result of
this settlement, $1.0 million was charged to cost of sales in
the second quarter and $296,000 in the third quarter, with the
$234,000 balance of the settlement to be spread over seven
months until the licensing agreement expires in August 2004.
Management Comments & Outlook
"The company attributed the year-over-year increases in revenues
and gross margin to improving market conditions and an increase in
market share for most of our products. We are confident that the
fiscal fourth quarter will continue to reflect the strength that has
marked all of fiscal 2004, but the natural cyclicality of the
semiconductor industry limits our visibility into fiscal 2005," said
Gelu Voicu, president and chief executive officer.
"Catalyst management remains very focused on developing new
products and technologies while continually reducing manufacturing
costs. In addition, we continue our efforts to develop additional
products to strengthen our presence in the solid state illumination
and mobile imaging markets," he added.
9-Month Results
For the nine months ended January 31, 2004, Catalyst had net
income of $3.8 million, or $0.19 per diluted share on revenues of
$46.7 million. This compares with net income of $2.3 million, or $0.13
per share, on revenues of $35.7 million for the first nine months of
last fiscal year. Gross margin for the nine months ended January 31,
2004 was 38.3% compared to 40.7% for the nine months ended January 31,
2003. Gross margin would have been 2.4% higher for the nine months
ended January 31, 2004 without the Philips royalty accruals totaling
$1.3 million.
Investor Conference Call
The Company will conduct a conference call on the third fiscal
quarter results beginning at 2:00 p.m. (Pacific Time) today. The call
will be available to all investors and media via the company's Web
site www.catalyst-semiconductor.com, at www.companyboardroom.com, or
by dialing (800) 865-4425 (domestic only). A replay of the call will
be aired from approximately 4:00 p.m. today until midnight (Pacific)
on March 12 at the company's Web site or by dialing (877) 519-4471
(domestic) or (973)341-3080 (international), entering reservation
number 4509959 and following operator instructions.
About Catalyst Semiconductor
Founded in 1985, Catalyst Semiconductor, Inc. is headquartered in
Sunnyvale, California. The Company designs and markets a broad range
of programmable products including Serial and Parallel EEPROMs with
I2C, SPI and Microwire interfaces, Flash Memories, NVRAM, Digitally
Programmable Potentiometers, Microcontroller Supervisory circuits and
other programmable Mixed Signal products. Catalyst products are used
in telecommunications, networking systems, computation, automotive,
industrial and consumer markets. Typical applications include optical
networks, modems, wireless LANs, network cards, PC BIOS, DIMM modules,
cellular telephones, digital satellite box receivers, set-top boxes
and Internet routers. Catalyst's Quality Management System is ISO 9001
certified. For additional information about Catalyst Semiconductor,
visit our web site at www.catalyst-semiconductor.com
Certain statements in this press release, including statements
regarding the future revenues and earnings, the company's expected
introduction of new products, increasing market share and adding new
customers, reduction of manufacturing costs, are forward looking
statements that are subject to risks and uncertainties. These risks
and uncertainties, which could cause the forward looking statements
and Catalyst's results to differ materially, include, without
limitation: increased competition in the markets for Catalyst's
products leading to decreased average selling prices; the continued
growth of the markets for Catalyst's products; market acceptance and
demand for Catalyst's new products; potential errors, latent defects,
design flaws or other problems with any of Catalyst's products;
volatility in supply and demand for Catalyst's products which would
adversely affect revenues and market prices; price and availability of
foundry services, assembly and test subcontract capacity which are
required to meet Catalyst's financial targets and/or meet backlog
requirements; timing, future development, cost and market acceptance
of our new products and the other risks detailed from time to time in
Catalyst's Securities and Exchange Commission filings and reports,
including, but not limited to, Catalyst's annual report filed on form
10-K and quarterly reports filed on form 10-Q. Catalyst disclaims any
obligation to update information contained in any forward looking
statement.
CATALYST SEMICONDUCTOR, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31, April 30,
2004 2003
------------ ----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,604 $ 7,828
Short-term investments 16,247 20,078
Accounts receivable, net 10,275 7,863
Inventories 6,876 8,423
Deferred tax assets 1,914 1,914
Other assets 844 1,146
---------- -------
Total current assets 54,760 47,252
Property and equipment, net 3,022 3,091
Other assets 271 245
---------- -------
Total assets $ 58,053 $50,588
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,914 $ 3,692
Accrued expenses 3,623 3,126
Deferred gross profit on shipments to
distributors 2,614 1,417
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Total current liabilities 11,151 8,235
Total stockholders' equity 46,902 42,353
---------- -------
Total liabilities and stockholders'
equity $ 58,053 $50,588
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
------------------ ------------------
Jan. 31, Jan. 31, Jan. 31, Jan. 31,
2004 2003 2004 2003
--------- -------- --------- --------
Net revenue $16,875 $11,207 $46,700 $35,711
Cost of revenues 9,108 7,089 28,795 21,182
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Gross profit 7,767 4,118 17,905 14,529
Research and development 1,936 1,269 5,134 3,753
Selling, general and
administration 2,984 2,451 8,515 7,333
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Operating income 2,847 398 4,256 3,443
Net interest income 108 83 282 237
------- ------- ------- -------
Income before taxes 2,955 481 4,538 3,680
Income tax provision 534 167 771 1,363
------- ------- ------- -------
Net income $ 2,421 $ 314 $ 3,767 $ 2,317
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Net income per share:
Basic $ 0.15 $ 0.02 $ 0.23 $ 0.14
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Diluted $ 0.12 $ 0.02 $ 0.19 $ 0.13
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Weighted average common shares
outstanding:
Basic 16,620 16,774 16,487 16,813
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Diluted 19,890 18,176 19,351 18,492
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CONTACT: Catalyst Semiconductor, Inc.
Joan Vargas, 408-542-1051 (Investor Relations)
joan.vargas@catsemi.com