SSTI ($8) P/E 9...beats by 2 cents, rev's higher than expected.
SST Reports Results for Third Quarter 2001
Revenue Grew 18 Percent From 2Q01 With Pre-charge EPS at 2 Cents
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 17, 2001--SST (Silicon Storage Technology, Inc.) (Nasdaq:SSTI - news) today announced results for the third quarter ended Sept. 30, 2001.
Net revenues for the third quarter were $74.2 million, compared with $62.7 million in the second quarter of 2001 and with $163.7 million in the third quarter a year ago.
SST incurred a charge to inventory in the third quarter of $44.5 million, comprised of $1.4 million relating to lower of cost or market issues, $16.2 million relating to replacement valuation adjustments and $26.9 million relating to potential obsolescence reserves. In addition, SST incurred a period charge to other expense of approximately $755,600 relating to a building lease, as the company expects to sub-lease the building for less than the current lease rate paid by SST.
Net profit for the third quarter of 2001, excluding the charges to inventory and other expense, was $1.6 million, or a net profit of $0.02 per share, based on approximately 96.0 million diluted shares outstanding.
Including the charges to inventory and other expense, net loss for the third quarter was $26.5 million, or a net loss of $0.29 per share, based on approximately 91.2 million shares outstanding.
This compares with a net profit of $1.1 million in the second quarter of 2001, or a profit of $0.01 per share, based on approximately 96.0 million diluted shares outstanding and with a net profit for the third quarter of 2000 of $36.3 million, or a net profit of $0.37 per share, based on approximately 97.6 million diluted shares outstanding.
``Despite difficult market conditions, our unit shipments were up by approximately 17 percent over the previous quarter,'' said Bing Yeh, president & CEO. ``This improvement was driven by the renewed order activities in the digital consumer segment since August, especially DVD players, CD-RW drives, PDAs and video games, as well as the continued strong shipment from second quarter in desktop PCs and graphics cards. By comparison, unit shipments in these segments were very weak in the first half of the year. We believe this may indicate that the channel inventories in the digital consumer and Internet computing segments have been worked off during the past two quarters. Our unit shipment in the networking and wireless communication segments continued to be weak across the board, except the cordless telephone sub-segment.
``Overall, we believe our business has bottomed during the second quarter and has begun to recover. However, the economic uncertainty fueled by the September 11 terrorist attack has caused the mood in our customer base to become more cautious. Therefore, we expect that the industry-wide recovery is likely to be gradual.
``As we work through the current climate, our focus continues to be to gain market share, to actively reduce our inventory levels and aggressively push 0.25u and 0.18u product development while we continue to improve our overall quality in product, delivery performance, infrastructure and customer service.
``We continue to believe that our product diversification strategy, coupled with our technology licensing strategy and a focus on managing our cost structure, will help us to weather this downturn and allow us to re-emerge as an even stronger competitor in the next up cycle.''
Fourth Quarter 2001 Outlook
For the fourth quarter of 2001, the company expects revenue to have a moderate improvement of two to five percent compared with the third quarter. The tax rate is expected to remain at 38 percent. Profitability is expected to be in the range of break-even to a net profit of $0.02 per share.
Conference Call
SST's quarterly conference call will be held today, Oct. 17 at 1:30 p.m. PDT. Those wishing to participate in the conference should dial 800/230-1093 using the password ``SST'' at approximately 1:20 p.m. PDT. A replay of the call will be available for two weeks by dialing 800/475-6701 using the access code ``606610.'' A webcast of the conference call will be available on www.ssti.com and on www.streetevents.com. Both webcasts will be available until the next earnings conference call.
Securities and Exchange Commission's Regulation Fair Disclosure
In adhering to the Securities and Exchange Commission's Regulation Fair Disclosure, SST will provide its investors and analysts with information and some forward-looking guidance each quarter in its earnings news releases and in its conference call. SST will not provide any further guidance or updates on its performance during the quarter unless it does so in a news release, conference call or SEC filing in compliance with Regulation Fair Disclosure. |
