Exhibit 99.1
Catalyst Semiconductor Reports 2nd Quarter Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 30, 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 second quarter ended October 31, 2006.
For the second quarter ended October 31, 2006, Catalyst had net
income of $176,000, or $0.01 per diluted share, on net revenues of
$16.3 million. This compares with net income of $927,000, or $0.05 per
diluted share, on net revenues of $16.9 million in the second quarter
ended October 31, 2005. For the first quarter ended July 31, 2006,
Catalyst reported a net loss of ($259,000), or ($0.02) per share, on
net revenues of $15.2 million.
Net revenues from analog/mixed signal products were $1.3 million,
or 7.9% of net revenues, in the second quarter ended October 31, 2006,
compared to $1.2 million, or 7.3% of net revenues, in the second
quarter ended October 31, 2005 and $1.4 million, or 9.4% of net
revenues, in the first quarter ended July 31, 2006.
Gross margin for the second quarter ended October 31, 2006 was
35.5%, compared with 38.0% for the second quarter ended October 31,
2005 and 32.2% for the first quarter ended July 31, 2006. The gross
margin increase from the previous quarter is primarily attributable to
sales of lower cost inventory and increased manufacturing efficiency
due to the higher product volume shipped.
Research & Development expense was $1.9 million for the second
quarter ended October 31, 2006, compared to $2.0 million and $1.9
million for the quarters ended October 31, 2005 and July 31, 2006,
respectively. Research & Development expenses included stock option
related compensation expense of $176,000 and $183,000 for the second
and first quarters of 2007, respectively.
Sales, General and Administrative expense was $3.8 million for the
second quarter ended October 31, 2006, compared to $3.4 million and
$3.9 million for the quarters ended October 31, 2005 and July 31,
2006, respectively. The increase from the year ago quarter is
principally attributable to compensation expense of $339,000
associated with stock option grants to sales, marketing and
administrative personnel while the first quarter included compensation
expense for options of $413,000.
Total stock option related compensation expense was $528,000 for
the second quarter ended October 31, 2006 as compared to $608,000 in
the first quarter ended July 31, 2006. The reduction is primarily due
to the $107,000 expense recorded in the first quarter for the annual
grant of stock options to the board of directors. This is a new cost
in the company's statement of operations in fiscal 2007, which is a
result of the adoption of FAS123R effective at the beginning of this
fiscal year.
Catalyst recorded a tax provision of $171,000, or 49.2% of income
before taxes during the quarter ended October 31, 2006. This compares
to a tax provision of $449,000 in the quarter ended October 31, 2005
and a tax benefit of $339,000 in the quarter ended July 31, 2006.
As of October 31, 2006, Catalyst had cash, cash equivalents and
short-term investments of $24.0 million as compared to $29.1 million
as of April 30, 2006. The decrease of $5.1 million was primarily due
to an increase of $1.8 million in accounts receivable, the purchase of
$831,000 of additional inventory, stock repurchases of $417,000 and
the acquisition of $2.9 million in fixed assets, including $1.9
million for refurbishment of the company's headquarters facility
located in Santa Clara, California, to which Catalyst relocated in
August of 2006.
Management Comments & Outlook
"We are encouraged to see that our product margins increased over
the previous quarter, particularly in the memory product lines. We
believe this is attributable to our ongoing transition to .35 micron
products and other cost cutting measures that we hope to see have a
further positive effect on our margins in the future," said Gelu
Voicu, president and chief executive officer.
"Another sign of progress is that during the quarter, Catalyst
introduced its first series of proprietary analog products, the Quad
Mode(TM) LED drivers. This innovative product series brings a new
level of efficiency to battery operated displays while saving
manufacturing costs over competitive designs," he added.
Additional Events
The board of directors of Catalyst authorized the repurchase of
1,000,000 additional shares under the company's stock repurchase
program. During the second quarter ended October 31, 2006, a total of
118,800 shares were repurchased under the company's continuing stock
repurchase program for a total repurchase cost of $417,000, an average
of $3.51 per share.
Investor Conference Call
Catalyst will conduct a conference call regarding the second
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, or by dialing (877) 754-9851
(domestic). International callers may dial (706) 643-1107. A replay of
the call will be aired from approximately 5:00 p.m. today until
midnight (Pacific Time) on December 7, 2006 at the company's website
or by dialing (800) 642-1687 (domestic) or (706) 645-9291
(international), entering reservation number 2952211 and following
operator instructions.
About Catalyst Semiconductor
Founded in 1985, Catalyst Semiconductor, Inc. is headquartered in
Santa Clara, California. Catalyst 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 website
at www.catsemi.com.
Forward-Looking Statements
This earnings release contains forward-looking statements,
including statements regarding increased product margins attributable
to Catalyst's ongoing transition to .35 micron products and other cost
cutting measures, and new levels of efficiency in connection with the
release of the Quad Mode(TM) LED drivers. 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)
October 31, 2006 April 30, 2006
---------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $9,142 $7,730
Short-term investments 14,870 21,409
Accounts receivable, net 11,257 9,502
Inventories 14,684 14,262
Other assets 3,388 3,255
---------------- --------------
Total current assets 53,341 56,158
Property and equipment, net 11,331 9,408
Deferred tax assets 4,759 4,759
Other assets 60 95
---------------- --------------
Total assets $69,491 $70,420
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,288 $7,596
Accrued expenses 2,947 3,002
Deferred gross profit on shipments
to distributors 2,053 2,292
---------------- --------------
Total current liabilities 11,288 12,890
Total stockholders' equity 58,203 57,530
---------------- --------------
Total liabilities and stockholders'
equity $69,491 $70,420
================ ==============
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
----------------------- -----------------------
October 31, October 31, October 31, October 31,
2006 2005 2006 2005
----------------------- -----------------------
Net revenues $16,310 $16,931 $31,535 $31,607
Cost of revenues 10,523 10,493 20,844 19,451
----------- ----------- ----------- -----------
Gross profit 5,787 6,438 10,691 12,156
Operating expenses:
Research and
development 1,937 1,976 3,826 3,801
Selling, general and
administration 3,828 3,352 7,760 6,716
----------- ----------- ----------- -----------
Income (loss) from
operations 22 1,110 (895) 1,639
Interest income, net 325 266 644 479
----------- ----------- ----------- -----------
Income (loss) before
income taxes 347 1,376 (251) 2,118
Income tax provision
(benefit) 171 449 (168) 696
----------- ----------- ----------- -----------
Net income (loss) $176 $927 $(83) $1,422
=========== =========== =========== ===========
Net income (loss) per
share:
Basic $0.01 $0.05 $(0.01) $0.08
=========== =========== =========== ===========
Diluted $0.01 $0.05 $(0.01) $0.08
=========== =========== =========== ===========
Weighted average common
shares: outstanding:
Basic 16,284 16,919 16,317 16,785
=========== =========== =========== ===========
Diluted 17,118 18,274 16,317 18,214
=========== =========== =========== ===========
CONTACT: Catalyst Semiconductor, Inc.
Rosa Vasquez, 408-542-1051 (Investor Relations)
Facsimile: 408-542-1405
rosa.vasquez@catsemi.com