Xicor Reports 2000 Fourth Quarter and Year End Results
Mixed-Signal Sales Increase 44 percent Year-Over-Year
MILPITAS, Calif.--(BUSINESS WIRE)--Jan. 24, 2001--Xicor®, Inc. (NASDAQ/NMS: XICO - news), a leading fabless manufacturer of programmable mixed-signal integrated circuits, today reported results for the fourth quarter and year ended December 31, 2000.
The Company continued to progress with its transition to a differentiated product strategy and completed the year with mixed-signal product sales of over $43 million, or 35 percent of total net sales, and mixed-signal sales growth of 44 percent over the prior year.
``Our outlook for mixed-signal product sales in 2001 is for continued robust growth, an expansion of our account base and new penetration at major networking and communications companies. Our immediate sales effort is to maximize the potential of the product introductions we made last year and accelerate design wins,'' noted newly appointed president and CEO Lou DiNardo.
Fourth quarter sales totaled $29.5 million compared to $30.9 million in the fourth quarter of 1999. Excluding restructuring activity, net income for the quarter was $2.3 million, or $0.10 per share. This compares to $2.1 million, or $0.09 per share, in the comparable year-ago period and $0.08 per share for the most recent third quarter. For the year 2000, sales totaled $122.8 million, compared to $114.9 million for 1999. Excluding restructuring activity, Xicor reported net income for 2000 of $9.3 million, or $0.40 per share, compared to a loss of $3.2 million, or ($0.16) per share, for 1999. All per share amounts in this release are stated on a diluted basis.
During the fourth quarter the Company completed the sale of its Milpitas wafer fabrication assets to Standard MEMS, Inc. for a gross sales price of $12.8 million. Under a related agreement, Standard MEMS has become Xicor's fourth foundry. The Company is amortizing the $5.0 million net gain related to the sale of the fab over the two-year term of the foundry agreement. The restructuring credit for the quarter and year ended December 31, 2000 resulted principally from completion of the restructuring plan at amounts lower than previously anticipated due primarily to the Company's ability to sell its fab.
Mr. DiNardo commented, ``Although industry-wide issues concern us, Xicor is a company committed to its transition and we are pleased with our progress. We believe that these industry issues are a reflection of inventory and supply-chain adjustments, particularly as they relate to subcontract manufacturers who support major networking and communication companies and that these perturbations will continue through the first half of 2001 as the industry settles into a more balanced supply-demand environment.''
``Xicor is a focused company in the midst of a transition to a fabless manufacturing model and to a differentiated product offering,'' continued Mr. DiNardo. ``We are executing a programmable mixed signal strategy that is predicated on innovation, value pricing and diversity. Our products allow system designers to digitally control analog functions in networking, communications and industrial applications. This is an enabling technology in both traditional and emerging markets. High-performance electronic systems require calibration and tuning for signal processing and monitoring and control of system functions and power. Our mixed-signal products and nonvolatile technology provide significant value in addressing these challenging problems. As we continue to introduce new mixed-signal products, we are placing a new focus on the scope of our technology and the value of our products.''
Fourth quarter gross margin was 42.1 percent, an improvement from the 37.5 percent reported in the 1999 fourth quarter and 40.1 percent in the 2000 third quarter. The Company expects the gross margin percentage for the first quarter of 2001 to improve modestly compared to the fourth quarter, reflecting an expected improvement from a higher percentage of mixed-signal product sales and being fabless, partially offset by pricing pressure on memory products.
Research and development expenses, representing 13 percent of sales, were $3.9 million in the fourth quarter. This is an increase of 4 percent in comparison to the prior year period and is consistent with that of the third quarter. The amount of research and development expenses is forecast to be flat in the first quarter while recruitment efforts proceed aggressively to increase new product development in the future.
Selling, general and administrative expenses, representing 22 percent of sales, were $6.4 million in the fourth quarter of 2000, compared to $6.8 million in the previous quarter and $5.7 million in the prior year period. The amount of SG&A expense is forecast to increase in the first quarter of 2001 due to increased marketing and sales activities.
Organizational Announcements
The Company also announced several organizational changes designed to support the realignment of skills and competency with the requirements of a new manufacturing model and product strategy.
Ralph Griffin has been appointed to the position of Vice President, Operations reporting to Mr. DiNardo. Mr. Griffin will assume responsibility for all manufacturing operations including process development, foundry relationships, assembly and test services as well as production control. Haren Joshi has been promoted to Vice President, Assembly and Test Operations, reporting to Mr. Griffin, and William Owen III, Vice President, Technology and Intellectual Properties, will now report directly to Mr. DiNardo.
Bruce Gray, acting president during the search for a president and CEO, will remain with the company until January 31, 2001 to assist in completing the transition. ``I would like to personally extend my thanks to Bruce for his many contributions to the company,'' said Mr. DiNardo. ``His efforts in moving Xicor to a fabless model of operation have been exemplary.''
Mr. DiNardo concluded, ``We anticipate that these organizational changes will provide additional strength to Xicor's infrastructure as the Company continues its process of aligning its workforce and skills to be commensurate with the needs of our transition to an outsourced model of manufacturing and a differentiated mixed-signal product offering.''
Product Highlights of the Quarter
During the quarter, Xicor became the first-to-market with a line of 1024 tap nonvolatile digitally controlled potentiometers. The X9110, X9118, X9111 and X9119 are designed for applications requiring high-precision trimming and calibration such as precision gain and attenuation amplifiers for communications systems and wireless RF power settings. These devices can also be used in high-resolution data acquisition systems for industrial control, test instrumentation and medical equipment. The X92xx series devices offer 8-bit resolution and can replace mechanical potentiometers and provide higher resolution for more accurate adjustments or calibration in laser diode control for fiber optic module applications.
The Company also announced two 64-tap single supply nonvolatile digital potentiometers. The X9421 and X9429 feature four 6-bit EEPROM registers per potentiometer for storage of tap settings and system parameters. This allows a system designer to automatically save resistance value during power down and to preset resistor values as required by specific system demands. These devices are targeted at applications in fiber optic modules for laser diode adjustment, LCD displays for contrast levels and brightness control, RF power amplifier voltage settings and a wide variety of gain and offset adjustment in electronic equipment for communication, networking and industrial applications.
The Company expanded its complete line of integrated CPU Supervisors with the announcement of the X4163/5, X4323/5, X4643/5 and X4283/5 advanced single voltage monitoring, 2-wire CPU supervisors. These products' integrated memories enable monitoring and regulation of a single voltage level on a board, allowing designers to orderly power their systems up or down and save any critical parameter and system configuration data. They integrate a low voltage reset, power-on-reset, watchdog timer and various memory configurations including 16K, 32K, 64K and 128Kbit nonvolatile memory, depending upon the device.
In November, Xicor and Cal-Bay Systems, Inc. announced the release of their jointly developed LabVIEW(TM) software drivers, which support Xicor's family of programmable mixed signal products. The Xicor Development Tool driver is built using the industry-standard LabVIEW integrated development environment, which accelerates the evaluation and analysis of test and measurement applications worldwide. The LabVIEW driver is designed specifically for use on a high-volume manufacturing line, and helps customers to quickly evaluate or program Xicor programmable mixed signal devices in a bread boarding, prototyping or manufacturing environment.
Xicor Corporate Information
Xicor designs, develops, manufactures and markets a wide variety of programmable mixed-signal integrated circuits and nonvolatile memory products used in networking, computing, communication and industrial applications. The Company's products include digitally controlled potentiometers and system management IC's that allow system designers to digitally control analog functions in signal processing, microprocessor monitoring and power management.
Xicor product, corporate and financial information is readily available on the World Wide Web at xicor.com.
``Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995
The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties. 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 continued robust growth of mixed-signal product sales in 2001; an expansion of our mixed-signal account base and new penetration of mixed-signal products at major networking and communications companies; that industry issues are a reflection of inventory and supply-chain adjustments, particularly as they relate to subcontract manufacturers who support major networking and communication companies and that these perturbations will continue through the first half of 2001 as the industry settles into a more balanced supply-demand environment; a modest improvement in the gross margin percentage for the first quarter of 2001 compared to the fourth quarter, reflecting an expected improvement from a higher percentage of mixed-signal product sales and being fabless, partially offset by pricing pressure on memory products; that the amount of research and development expenses is forecast to be flat in the first quarter while recruitment efforts proceed aggressively to increase new product development in the future; and that the amount of SG&A expense will increase in the first quarter of 2001 due to increased marketing and sales activities.
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; product mix; 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, 1999 and the Quarterly Reports on Form 10-Q for the quarters ended April 2, 2000, July 2, 2000 and October 1, 2000 (Management's Discussion and Analysis of Financial Condition and Results of Operations, Factors Affecting Future Results section). Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Xicor undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. |
