Exhibit 99.1
Alliance Semiconductor Reports Financial Results for the Fourth Quarter and
Fiscal Year Ended March 26, 2005
SANTA CLARA, Calif.--(BUSINESS WIRE)--April 29, 2005--Alliance
Semiconductor Corporation (Nasdaq:ALSC) today reported financial results for the
fourth quarter and fiscal year ended March 26, 2005.
Fourth Quarter 2005 Highlights
-- Increased overall revenue by 6 percent sequentially
-- Increased revenue sequentially across all business units:
-- System Solutions product revenue by 23 percent
-- Analog and Mixed Signal revenues up 6 percent
-- SRAM revenue up 6 percent
-- Increased revenue from non-memory business units by 13 percent
sequentially
-- Released 12 new products both in general purpose EMI reduction
and high performance clocks
-- Secured additional design wins with key original equipment
manufactures (OEMs) such as Texas Instruments, Dell, Canon,
Sharp, Sanyo, Samsung and Panasonic
-- Continued penetration into target markets with design wins in
both the consumer and industrial markets
-- Sampled additional Low Voltage Zero Delay Buffers and Fan Out
Buffers from the analog and mixed signal business unit
Fourth Quarter Results
The Company reported revenues of $5.6 million as compared to $5.3 million
in the previous quarter and $8.9 million in the fourth fiscal quarter of 2004.
Revenue from the analog and mixed signal and system solutions business units
represented approximately 59 percent of total revenue, compared to 55 percent in
the previous quarter.
Net loss for the fourth quarter was $23.2 million, or ($0.65) per fully
diluted share, compared to a net loss of $9.9 million, or ($0.28) per share, for
the previous quarter, and net income of $4.8 million, or $0.13 per fully diluted
share, for the fourth fiscal quarter of 2004. The fourth quarter loss includes a
$16.7 million write down in the value of Tower shares and a $1.6 million
inventory write down.
Operating expenses for the quarter were $9.5 million, compared to $7.7
million reported in the previous quarter and $9.1 million reported in the fourth
quarter of fiscal 2004. Operating expenses include non-cash charges related to
depreciation and amortization of $1.1 million, a one-time charge related to the
write-down of goodwill of $1.5 million and an additional $400,000 for photomask
and engineering prototypes.
Fiscal 2005 Results
For fiscal year 2005, the Company reported revenues of $23.6 million as
compared to $26.7 million reported in fiscal 2004. The net loss for fiscal year
of 2005 is $49.8 million or, ($1.41) per share, compared to a net loss of $19.4
million, or ($0.55) per share, reported in 2004.
"We are pleased with the sequential revenue increases in both our Analog
and Mixed Signal and System Solutions business units," said N.D. Reddy, Alliance
Chairman, President and CEO. "The increases are primarily due to our broadened
relationships with key OEMs, where we have gained additional traction with our
expanded product offerings. We have received several design wins during the past
few quarters from companies such as Dell, Samsung, Texas Instruments and others.
These design wins are expected to contribute additional revenue starting in the
first quarter of fiscal year 2006."
Mr. Reddy concluded by stating, "We anticipate the positive momentum
established during fiscal year 2005 will continue throughout fiscal year 2006 as
we continue to expand our OEM channels, tier-one customer base and product
portfolio."
Sarbanes-Oxley Update
The Company is currently testing its internal control over financial
reporting, as required by the Sarbanes-Oxley (SOX) rules that went into effect
in 2004. Alliance currently expects its testing to be completed by mid-June,
before the Company must file its 2005 annual report with the SEC.
As a result of SOX testing to date, Alliance has concluded that certain
identified control deficiencies and audit adjustments indicate a "material
weakness," as defined by the Public Company Accounting Oversight Board's
Auditing Standard No. 2, in the Company's internal control over financial
reporting. This material weakness relates to the completeness and accuracy of
the Company's accounting for inventory.
As a result of this material weakness, management has concluded that the
Company's internal control over financial reporting was not effective as of
March 31, 2005, and Alliance expects that the Company's auditors will issue an
adverse opinion on the Company's internal control over financial reporting.
Management's assessment of Alliance's internal controls will be included in the
Company's annual report on Form 10-K, which is expected to be filed in June
2005.
Additionally, the Company has identified other control deficiencies and is
in the process of completing certain documentation and additional testing of
controls and evaluating the results, which may result in additional material
weaknesses.
"We are taking appropriate actions to address the internal control
deficiencies identified by the recent testing as expeditiously as possible,"
said Jeff Parsons, Alliance's Chief Financial Officer. "Further, I would like to
underscore that we believe Alliance's consolidated financial statements fairly
present the financial condition and results of the quarter and full year."
Fourth Quarter and Fiscal Year 2005 Financial Results Web Cast and
Conference Call
The Alliance management team will host a live Web cast and conference call
to discuss the fourth quarter and fiscal year 2005 financial results beginning
at 5:00 p.m. Eastern Time on Thursday, April 29, 2005. Investors and other
interested parties may participate in the call by dialing 866-800-8651 at least
fifteen minutes prior to the call and enter pass code 19968913 or listen to the
live Web cast by visiting the investor relations section of the Alliance Web
site at www.alsc.com. A replay of the call will be available for 48 hours
beginning at 7:00 p.m. Eastern Time and can be accessed by dialing 888-286-8010
with the pass code 18994050.
About Alliance
Alliance Semiconductor Corporation (Nasdaq:ALSC) is powering applications
with high performance solutions for the communications, computing and consumer
electronics markets. Utilizing advanced process technologies and design
expertise, Alliance provides leading OEMs with a broad portfolio of
complementary technologies including analog and mixed-signal products,
chip-to-chip connectivity products, networking controllers and high-performance
memories. Alliance addresses the complete needs of system developers by
leveraging its proprietary advances in Electromagnetic Interference (EMI)
reduction, power management and timing technology, HyperTransport(TM) I/O
connectivity and specialized memory solutions for next-generation applications.
Founded in 1985, Alliance is headquartered in Santa Clara, Calif. with design
centers in Bangalore and Hyderabad, India. The company is publicly traded and
included in the S&P 600 Index. Additional information is available on the
Alliance Web site at www.alsc.com.
Forward-Looking Statements
Except for historical information, the above statements of this press
release are forward-looking statements, including, for example, statements
relating to Alliance's revenue outlook and the performance of its business units
and products. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
set forth in the forward looking statements. These risks and uncertainties
include such factors, among others, as further significant price erosion of the
Company's products; continued significantly decreased demand and increased
competitive environment for the Company's products; the possibility of
additional deficiencies in the Company's internal controls over financial
reporting; the Company's potential status as an Investment Act of 1940 reporting
company; obsolescence of the Company's products; further accumulation of excess
inventory or price erosion or obsolescence of existing inventory, any of which
may result in charges against the Company's earnings; inability to timely ramp
up production of and deliver new or enhanced products; inability to successfully
recruit and retain qualified technical and other personnel; adverse developments
in current or future litigation or administrative proceedings; further
diminution in value of investments made by Alliance or by Alliance Venture
Management, LLC; cancellation of orders in the Company's backlog and the risk
factors listed in the Company's Form 10-K filed on June 10, 2004 and Form 10-Q
filed on February 03, 2005, which have been filed with the Securities and
Exchange Commission, and which are available through the Company's home page at
www.alsc.com. These forward-looking statements speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with regard
thereto or to reflect any change in events, conditions or circumstances on which
any such forward-looking statement is based.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net revenues $5,628 $8,934 $23,599 $26,671
Cost of revenues 5,840 8,677 26,174 20,840
--------- --------- --------- ---------
Gross profit (loss) (212) 257 (2,575) 5,831
--------- --------- --------- ---------
Operating expenses:
Research and development 5,037 5,494 19,571 24,653
Selling, general and
administrative 4,452 3,582 13,991 15,621
--------- --------- --------- ---------
Total operating expenses 9,489 9,076 33,562 40,274
--------- --------- --------- ---------
Loss from operations (9,701) (8,819) (36,137) (34,443)
Gain (loss) on investments 1,076 11,274 7,713 29,287
Writedown of marketable
securities
and venture investments (16,652) (574) (19,811) (5,787)
Loss in investees accounted
for under the equity method (5,191) (1,550) (16,935) (15,355)
Other expense, net (157) (2,338) (1,632) (7,893)
--------- --------- --------- ---------
Loss before income taxes and
minority interest in
consolidated
subsidiaries (30,624) (2,007) (66,802) (34,191)
Provision (benefit) for income
taxes (7,407) (6,748) (16,707) (14,083)
--------- --------- --------- ---------
Income (loss) before minority
interest in consolidated
subsidiaries (23,217) 4,741 (50,095) (20,108)
Minority interest in
consolidated subsidiaries 63 51 284 697
--------- --------- --------- ---------
Net income (loss) ($23,154) $4,792 ($49,811) ($19,411)
========= ========= ========= =========
Net income (loss) per share:
Basic ($0.65) $0.14 ($1.41) ($0.55)
========= ========= ========= =========
Diluted ($0.65) $0.13 ($1.41) ($0.55)
========= ========= ========= =========
Weighted average number of
common shares:
Basic 35,515 35,208 35,401 35,093
========= ========= ========= =========
Diluted 35,515 35,897 35,401 35,093
========= ========= ========= =========
ALLIANCE SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in
thousands)
(unaudited)
March March
2005 2004
---------------------
ASSETS
Current assets:
Cash and cash equivalents $2,397 $6,107
Short term investments 82,444 159,778
Accounts receivable, net 1,677 4,081
Inventory 7,319 11,609
Related Party receivable 344 264
Other current assets 5,829 2,847
---------------------
Total current assets 100,011 184,686
Property and equipment, net 4,316 6,161
Investment in Tower Semiconductor Corporation 8,780 21,208
(excluding short term portion)
Alliance Ventures LP and other investments 24,865 36,082
Other non-current assets 19,185 12,665
----------- ---------
Total assets $157,157 260,802
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $6,920 $12,287
Income taxes payable 34,854 33,766
Deferred income taxes 17,352 38,921
Short term borrowings and current portion
of long term obligations 4 33
----------- ---------
Total current liabilities 59,131 85,007
Long term liabilities:
Long term obligations 164 241
----------- ---------
Total liabilities 59,295 85,248
----------- ---------
Minority interest in consolidated subsidiaries 441 832
----------- ---------
Stockholders' equity:
Common stock 438 435
Additional paid-in capital 133,027 132,146
Retained earnings (43,712) 6,099
Accumulated other comprehensive income 7,668 36,042
----------- ---------
Total stockholders' equity 97,421 174,722
----------- ---------
$157,157 $260,802
=========== =========
CONTACT: Alliance Semiconductor Corporation, Santa Clara
Jeff Parsons, 408-855-4933
jparsons@alsc.com
or
Investor Contact:
Shelton Investor Relations
Lynette Stein, 972-239-5119 Ext 115
lstein@sheltongroup.com