Exhibit 99.1
Catalyst Semiconductor Reports 1st Quarter Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 5, 2006--Catalyst
Semiconductor, Inc. (Nasdaq:CATS), a developer and marketer of programmable and
analog/mixed signal products used in telecommunications, networking systems,
computation, automotive, industrial and consumer markets, today reported
financial results for its first fiscal quarter ended July 31, 2006.
For the first fiscal quarter ended July 31, 2006, Catalyst had a net loss
of $228,000, or ($0.01) per share, on net revenue of $15.2 million. This
compares with net income of $495,000, or $0.03 per diluted share, on net revenue
of $14.7 million in the first quarter ended July 31, 2005. For the fourth
quarter ended April 30, 2006, Catalyst reported net income of $270,000, or $0.02
per diluted share, on net revenue of $14.2 million.
The first quarter net loss results from lower gross margins and the impact
of stock option compensation expense. Total stock option related compensation
expense was $478,000, and is a result of the adoption of FAS123R in the first
fiscal quarter ended July 31, 2006.
Net revenue from analog/mixed signal products increased to $1.4 million, or
9.4% of net revenue, in the quarter ended July 31, 2006, compared to $1.1
million, or 7.3% of net revenue, in the quarter ended July 31, 2005 and $1.2
million, or 8.2% of net revenue, in the quarter ended April 30, 2006.
Gross margin for the quarter ended July 31, 2006 was 32.2%, compared with
39.0% for the quarter ended July 31, 2005 and 34.9% for the quarter ended April
30, 2006. The gross margin decrease from the previous quarter is primarily
attributable to a decline in average selling prices due to product mix and sales
of more expensive inventory acquired in previous quarters.
Research & Development expense was $1.8 million for the quarter ended July
31, 2006, unchanged from $1.8 million for the quarters ended July 31, 2005 and
April 30, 2006. Sales, General and Administrative expense was $3.9 million for
the quarter ended July 31, 2006, compared to $3.4 million for the quarters ended
July 31, 2005 and April 30, 2006. The increase from the previous quarters is
principally attributable to compensation expense associated with outstanding
stock option grants to sales, marketing and administrative personnel and the
annual program grant to directors.
Catalyst recorded a tax benefit of $240,000, or 51.2% of loss before taxes
during the quarter ended July 31, 2006. This compares to a tax provision of
$247,000 in the quarter ended July 31, 2005 and a tax benefit of $216,000 in the
quarter ended April 30, 2006.
As of July 31, 2006, Catalyst had cash, cash equivalents and short-term
investments of $26.3 million, compared to $29.1 million as of April 30, 2006.
The decrease of $2.8 million was primarily due to the purchase of $1.5 million
of additional inventory and the acquisition of $1.0 million in fixed assets
including $560,000 for refurbishment of the company's new owned headquarters
facility located in Santa Clara, California, to which Catalyst relocated in
August.
Management Comments & Outlook
"We continue to see competitive pressure on our product margins,
particularly in the memory product lines. We believe that our ongoing transition
to .35 micron products and other cost cutting measures will have a positive
effect on our margins when more fully implemented. It is noteworthy that the
stock option expenses of $478,000 adversely impacted our operating results,"
said Gelu Voicu, president and chief executive officer.
"Another sign of progress is that analog product sales reached $1,425,000,
or 9.4% of our net revenue in this quarter. We are encouraged that net revenue
for our EEPROM memory products is also increasing and hope to see this trend
continue," he added.
Additional Events
Catalyst recently formed a new wholly owned subsidiary, Catalyst
Semiconductor Thailand, Ltd. to serve as its operating center for the management
of its inventory and other key activities. Additionally, the Board of Directors
of Catalyst announced that Dr. Roland Duchatelet, a member of the board since
1999, has joined the Company's audit committee as its fourth member.
Investor Conference Call
Catalyst will conduct a conference call regarding the first 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 website at www.catsemi.com, at
www.companyboardroom.com, or by dialing (800) 811-0667 (domestic). International
callers may dial (913) 981-4901. A replay of the call will be aired from
approximately 5:00 p.m. today until midnight (Pacific Time) on September 12,
2006 at the company's Web site or by dialing (888) 203-1112 (domestic) or (719)
457-0820 (international), entering reservation number 3345350 and following
operator instructions.
About Catalyst Semiconductor
Founded in 1985, Catalyst Semiconductor, Inc. is headquartered in Santa
Clara, California. The Company is a leading supplier of high performance
analog/mixed-signal solutions and nonvolatile memory products used in
automotive, aircraft, telecommunications, computation, industrial and consumer
markets. The Company designs and markets a broad range of analog/mixed-signal
products such as LED Drivers, DC-DC Converters, GPI/O Expanders, Digitally
Programmable Potentiometers (DPP(TM)), Microcontroller Supervisory circuits and
other analog/mixed-signal products. Programmable products include Serial and
Parallel EEPROMs with I2C, SPI and Microwire interfaces, as well as NVRAM and
low density Flash Memories. Typical applications include LCD displays, digital
cameras, cell phones, automotive instrumentation, modems, wireless LANs, network
cards, DIMM modules, digital satellite box receivers, set-top boxes and Internet
routers. Catalyst's Quality Management System is ISO 9001:2000 certified. For
additional information about Catalyst Semiconductor, visit our web site at
www.catsemi.com.
Forward-Looking Statements
This earnings release contains forward-looking statements, including
statements regarding the expected reduction of manufacturing costs, pressure on
product margins, Catalyst's transition to .35 micron products, cost cutting
measures and net revenue. These risks and uncertainties, which could cause
Catalyst's results to differ materially from the forward-looking statements and
include, without limitation: increased competition in the markets for Catalyst's
products leading to decreased average selling prices; declining growth of the
markets for Catalyst's products; declining market acceptance and demand for
Catalyst's 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
Catalyst's new products; increased regulatory requirements and costs of
compliance; difficulties in implementation of a supply chain management system
or failures in, or problems resulting from, Catalyst's newly-implemented
enterprise resource management system; 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)
July 31, 2006 April 30, 2006
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $12,503 $ 7,730
Short-term investments 13,797 21,409
Accounts receivable, net 10,148 9,502
Inventories 15,075 14,262
Other assets 3,424 3,255
-------------- --------------
Total current assets 54,947 56,158
Property and equipment, net 9,942 9,408
Deferred tax assets 4,759 4,759
Other assets 95 95
-------------- --------------
Total assets $69,743 $70,420
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,207 $ 7,596
Accrued expenses 2,572 3,002
Deferred gross profit on
shipments to distributors 2,166 2,292
-------------- --------------
Total current liabilities 11,945 12,890
Total stockholders' equity 57,798 57,530
-------------- --------------
Total liabilities and
stockholders' equity $69,743 $70,420
============== ==============
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
-------------------------------
July 31, April 30, July 31,
2006 2006 2005
-------------------------------
Net revenue $15,225 $14,187 $14,676
Cost of revenues 10,318 9,241 8,958
--------- ---------- ---------
Gross profit 4,907 4,946 5,718
Research and development 1,834 1,883 1,822
Selling, general and administration 3,860 3,446 3,364
--------- ---------- ---------
Operating income (loss) (787) (283) 532
Net interest income 319 337 210
--------- ---------- ---------
Income (loss) before income taxes (468) 54 742
Income tax provision (benefit) (240) (216) 247
--------- ---------- ---------
Net income (loss) $ (228) $ 270 $ 495
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Net income (loss) per share:
Basic $ (0.01) $ 0.02 $ 0.03
========= ========== =========
Diluted $ (0.01) $ 0.02 $ 0.03
========= ========== =========
Weighted average common shares:
outstanding:
Basic 16,350 16,432 16,650
Diluted 16,350 17,880 18,152
========= ========== =========
CONTACT: Catalyst Semiconductor
Rosa Vasquez, 408-542-1051
Facsimile: 408-542-1405
rosa.vasquez@catsemi.com