Xicor Reports 1999 Results
MILPITAS, Calif.--(BUSINESS WIRE)--Jan. 27, 2000--Xicor, Inc.
(NASDAQ - NMS: XICO) today reported results for the fourth quarter and
year ended December 31, 1999.
Sales for the thirteen-week fourth quarter of 1999 were
$30,938,000, up fifteen percent compared to $26,919,000 for the
fourteen-week fourth quarter of 1998. Fourth quarter 1999 net profit
excluding restructuring charges was $2,106,000 or $0.09 per share on a
fully diluted basis, in contrast to the fourth quarter 1998 loss of
$6,237,000 ($0.32 per share) excluding restructuring charges.
Including restructuring charges in accordance with generally
accepted accounting principles, the fourth quarter 1999 loss was
$21,613,000 ($1.05 per share) which included a restructuring charge of
$23,719,000 compared to a fourth quarter 1998 loss of $9,955,000
($0.51 per share) which included a restructuring charge of $3,718,000.
The 1999 restructuring charge principally relates to the planned
closure of Xicor's own Milpitas, California wafer fabrication plant
due to Xicor's adoption of a fabless business model. Approximately
$16.3 million of the restructuring charge relates to the non-cash
write-down of the wafer fabrication plant assets.
Sales for 1999 were $114,887,000, up eight percent compared to
1998. The 1999 net loss excluding restructuring charges was $3,210,000
($0.16 per share), a significant improvement compared to the 1998 loss
of $24,546,000 ($1.27 per share) excluding restructuring charges.
Including restructuring charges in accordance with generally
accepted accounting principles, in 1999 Xicor incurred a loss of
$26,929,000 ($1.32 per share) which included a restructuring charge of
$23,719,000. This compares to a net loss of $29,531,000 ($1.53 per
share) in 1998, which included $7,205,000 ($0.37 per share) related to
restructuring charges and an inventory write-down.
Bruce Gray, President, commented, "During 1999 Xicor executed
well on each of the major strategic thrusts designed to strengthen and
reposition the company as we move into the new century and millennium:
- Xicor's strengthened management team returned the company to
operating profitability
- Xicor's manufacturing outsourcing program gained significant
momentum
- Xicor's activity in reprogrammable mixed signal products expanded
"A key driver in Xicor's return to operating profitability was
the improvement in the gross profit percentage from 15% in 1998 to 30%
in 1999, with the fourth quarter of 1999 reaching 38%. A significantly
increased percentage of sales of product built on lower cost wafers
manufactured by Yamaha in Japan, a higher percentage of high margin
mixed signal product sales, cost reduction programs and higher average
selling prices all contributed to the gross profit percentage
improvement.
"Our outsourcing program toward becoming a fabless company made
good progress in 1999. Xicor now has three foundry agreements in
place, and based on the solid performance in 1999 of Yamaha in Japan
as a wafer foundry and with the successful initial delivery of wafers
from two additional wafer foundries, Sanyo in Japan and ZMD in
Germany, Xicor is positioned to become completely fabless and cease
in-house wafer fabrication by the middle of 2000. Accordingly, Xicor's
Board of Directors approved the planned disposition of our wafer
fabrication plant and, therefore, the Company recorded the related
restructuring charge in the fourth quarter of 1999. A significant
portion of the restructuring charge relates to the non-cash write-down
of the wafer fabrication plant assets.
"Sales of Digitally Controlled Potentiometers (XDCPTM), the most
established product line in our Mixed Signal Product Group, grew well
in 1999, driven by the rapidly growing wireless communication and
fiber optic market segments. In 1999 we expanded the XDCP line with
products targeted at the fiber optic market. In addition, we announced
a product to replace the widely used cost-sensitive single-turn
mechanical potentiometers.
"In the System Management area of our Mixed Signal Product Group,
we introduced our initial timekeeping products that are the first in
the industry to offer adjustable alarms. Additionally, Xicor's CPU
Supervisor product line was expanded with the introduction of field
programmable devices.
"Consumers and manufacturers of cellular phones and laptop PC's
are affected by battery performance. Both the length of time between
battery recharges and the useful life of expensive Lithium Ion
batteries are major customer satisfaction issues. After extensive
discussions with leading suppliers of batteries, cellular phones and
laptop PC's, we concluded that Xicor could develop products to improve
the utilization of these batteries. We are now sampling our first
battery management product that was jointly designed with Yamaha. We
plan to expand this product line in 2000.
"We believe that in 1999 we were a leading supplier of
nonvolatile memory chips encapsulated in tiny "chip scale packages"
that enable further reduction in the size and weight of cellular
telephones. We plan to increase the number of Xicor products that use
this packaging technology in 2000.
"The development of higher density serial products for use in the
rapidly growing cellular telephone market was the R & D focus of our
memory product line in 1999.
"We believe our efforts provide a strong foundation as we strive
to increase profit and sales in 2000 while continuing to provide our
customers with more benefits and value from our new products."
concluded Mr. Gray.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, including statements regarding
the expectation of Xicor becoming completely fabless and ceasing wafer
fabrication at its wafer fabrication plant by the middle of 2000, the
ability to benefit from the announced product to replace widely used
cost-sensitive single- turn mechanical potentiometers, Xicor
developing products to improve the utilization of Lithium Ion
batteries, Xicor expanding the battery management product line in
2000, increasing the number of Xicor products that use chip scale
packaging technology in 2000, Xicor's new products providing more
benefits and value to its customers and the expectation that Xicor's
efforts will lead to increasing profit and sales in 2000.
Factors that could cause actual results to differ materially
include the following: general economic conditions and conditions
specific to the semiconductor industry; fluctuations in customer
demand, including loss of key customers, order cancellations or
reduced bookings; competitive factors such as pricing pressures on
existing products and the timing and market acceptance of new product
introductions (both by Xicor and its competitors); Xicor's ability to
have available an appropriate amount of low cost foundry production
capacity in a timely manner; our foundry partners' timely ability to
successfully manufacture products for Xicor using Xicor's proprietary
technology; any disruptions of our foundry relationships;
manufacturing efficiencies; the ability to continue effective cost
reductions; currency fluctuations; the timely development and
introduction of new products and submicron processes, and the risk
factors listed from time to time in Xicor's SEC reports, including but
not limited to the Annual Report on Form 10-K for the year ended
December 31, 1998 and the Quarterly Reports on Form 10-Q for the
quarters ended April 4, 1999, July 4, 1999 and October 3, 1999
(Management's Discussion and Analysis of Financial Condition and
Results of Operations, Factors Affecting Future Results section).
Xicor assumes no obligation to update the information included in this
press release.
Xicor Corporate Information
Xicor designs, develops, manufactures and sells nonvolatile
in-the-system programmable products which retain information even when
the system is turned off or power is inadvertently lost. Xicor's
product line includes digitally controlled potentiometers (DCP's),
system management IC's, and secure and standard nonvolatile memory
IC's.
Xicor product, corporate and financial information is readily
accessible on the World Wide Web at xicor.com.
XICOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Thirteen weeks Fourteen weeks
Ended Ended Year Ended
December 31, December 31, December 31,
1999 1998 1999 1998
(Unaudited)
---------
Net sales $ 30,938,000 $ 26,919,000 $114,887,000 $106,147,000
Cost of sales 19,328,000 22,952,000 80,474,000 89,844,000
Gross profit 11,610,000 3,967,000 34,413,000 16,303,000
Operating expenses:
Research and
development 3,737,000 3,931,000 14,560,000 17,429,000
Selling, general
and administrative 5,681,000 6,068,000 22,360,000 22,634,000
Restructuring
charge 23,719,000 3,718,000 23,719,000 4,985,000
33,137,000 13,717,000 60,639,000 45,048,000
Income (loss)
from operations (21,527,000) (9,750,000) (26,226,000) (28,745,000)
Interest expense (302,000) (428,000) (1,407,000) (1,872,000)
Interest income 216,000 223,000 704,000 1,086,000
Income (loss) before
income taxes (21,613,000) (9,955,000) (26,929,000) (29,531,000)
Provision for
income taxes - - - -
------------ ------------ ------------ ------------
Net income (loss) $(21,613,000)$ (9,955,000)$(26,929,000)$(29,531,000)
============ ============ ============ ============
Net income (loss)
per common share:
Basic $ (1.05)$ (0.51)$ (1.32)$ (1.53)
============ ============ ============ ============
Diluted $ (1.05)$ (0.51)$ (1.32)$ (1.53)
============ ============ ============ ============
Shares used in per
share calculations:
Basic 20,500,000 19,689,000 20,324,000 19,262,000
Diluted 20,500,000 19,689,000 20,324,000 19,262,000
Note: Xicor's fiscal year ends on the Sunday nearest December 31. For
purposes of financial statement presentation each fiscal year is
deemed to have ended on December 31. Fiscal years 1999 and 1998
consisted of 52 weeks and 53 weeks, respectively.
XICOR, INC.
PRO FORMA INFORMATION EXCLUDING RESTRUCTURING CHARGES
(Unaudited)
---------
The following pro forma supplemental information excludes the effect
of restructuring charges. This pro forma information is not prepared
in accordance with generally accepted accounting principles.
Thirteen weeks Fourteen weeks
Ended Ended Year Ended
December 31, December 31, December 31,
1999 1998 1999 1998
Net sales $ 30,938,000 $ 26,919,000 $114,887,000 $106,147,000
Cost of sales 19,328,000 22,952,000 80,474,000 89,844,000
Gross profit 11,610,000 3,967,000 34,413,000 16,303,000
Operating expenses:
Research and
development 3,737,000 3,931,000 14,560,000 17,429,000
Selling, general
and administrative 5,681,000 6,068,000 22,360,000 22,634,000
9,418,000 9,999,000 36,920,000 40,063,000
Pro Forma Income(loss)
from operations 2,192,000 (6,032,000) (2,507,000) (23,760,000)
Interest expense (302,000) (428,000) (1,407,000) (1,872,000)
Interest income 216,000 223,000 704,000 1,086,000
Pro Forma Income
(loss) before
income taxes 2,106,000 (6,237,000) (3,210,000) (24,546,000)
Provision for
income taxes - - - -
------------ ------------ ------------ ------------
Net income (loss)
excluding
Restructuring
charges $ 2,106,000 $ (6,237,000)$ (3,210,000)$(24,546,000)
============ ============ ============ ============
Net income (loss)
per common share:
Basic $ 0.10 $ (0.32)$ (0.16)$ (1.27)
============ ============ ============ ============
Diluted $ 0.09 $ (0.32)$ (0.16)$ (1.27)
============ ============ ============ ============
Shares used in per
share calculations:
Basic 20,500,000 19,689,000 20,324,000 19,262,000
Diluted 22,720,000 19,689,000 20,324,000 19,262,000
Note: Xicor's fiscal year ends on the Sunday nearest December 31. For
purposes of financial statement presentation each fiscal year is
deemed to have ended on December 31. Fiscal years 1999 and 1998
consisted of 52 weeks and 53 weeks, respectively.
XICOR, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, December 31,
1999 1998
Current assets:
Cash and cash equivalents $ 22,233,000 $ 17,881,000
Accounts receivable 8,508,000 8,835,000
Inventories 13,003,000 12,770,000
Prepaid expenses and other
current assets 380,000 1,016,000
Total current assets 44,124,000 40,502,000
Property, plant and equipment, at
cost less accumulated depreciation 8,835,000 38,074,000
Other assets 1,835,000 286,000
$ 54,794,000 $ 78,862,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,018,000 $ 9,279,000
Accrued expenses 14,343,000 9,504,000
Deferred income on shipments
to distributors 12,828,000 9,121,000
Current portion of
long-term obligations 5,362,000 7,216,000
Total current liabilities 40,551,000 35,120,000
Long-term obligations 9,794,000 13,137,000
Shareholders' equity:
Preferred stock; 5,000,000
shares authorized - -
Common stock; 75,000,000 shares
authorized; 20,595,261 and
20,134,427 shares outstanding 129,005,000 128,232,000
Accumulated deficit (124,556,000) (97,627,000)
------------- -------------
4,449,000 30,605,000
$ 54,794,000 $ 78,862,000
*T
CONTACT:
Morgen Walke Associates
Rich Schineller or Victor Shalom
212/850-5600
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