Catalyst Semiconductor Reports 3rd Fiscal Quarter Results
BUSINESS WIRE - February 20, 2003 16:11
SUNNYVALE, Calif., Feb 20, 2003 (BUSINESS WIRE) -- Catalyst Semiconductor, Inc. (NASDAQ:CATS), a developer and marketer of programmable products used in telecommunications, networking systems, computation, automotive, industrial and consumer markets, announced today the results for its third fiscal quarter.
For the third fiscal quarter ended January 31, 2003, Catalyst reported net income of $314,000, or $0.02 per diluted share, on revenues of $11.2 million. This compares with a net income of $164,000, or $0.01 per diluted share, on revenues of $10.7 million in the third fiscal quarter last year and net income of $843,000, or $0.05 per diluted share, on revenues of $12.0 million in the previous quarter.
As of January 31, 2003, Catalyst had cash, cash equivalents and short-term investments of $29.9 million, an increase of $1.8 million from the previous quarter. During the third fiscal quarter, the Company repurchased 22,000 shares of its common stock for $51,000 as part of its previously announced open market repurchase program. From the current program's inception in September 2001 through February 14, 2003, the Company has paid a total of $2,750,000 for an aggregate of 1,111,900 shares at an average cost of $2.47 per share. In total, Catalyst has purchased 2,612,000 shares for $7.4 million, which includes the previously announced block purchase of 1.5 million shares.
Stockholders' equity increased during the third fiscal quarter by $3.4 million to $39.5 million or $2.35 per share outstanding at the end of the quarter, as a combined result of net income of $314,000 and, more significantly, the recording of the tax benefit of $3.1 million from stock option deductions.
The company continues to see competitive pressures on product prices and weak but generally stable overall demand in the markets served. During the third quarter, the Company depended upon substantial turns business (bookings scheduled to ship within the same quarter), and operated with a relatively reduced backlog,
Catalyst began product development and engineering operations at its new wholly owned subsidiary in Romania on February 1st. The Bucharest facility now has 33 employees, including 25 engineers dedicated to further development of Catalyst products.
The company has begun to move its EEPROM memories product line to a new, more efficient process that should improve Catalyst's cost structure even further and strengthen the company's production efficiency and competitive position over the next few quarters.
As previously disclosed, Philips Export B.V. and U.S. Philips Corporation notified Catalyst in 2001 that they believe additional royalties are owing on a technology license entered into in 1989. Catalyst paid royalties under this license through 1993, at which point Catalyst believed that the license became fully paid-up and no further royalties were owed. In January 2003, Philips again stated that it did not believe that the license was paid-up and that royalties had continued to accrue. Catalyst believes that Philips' position is without merit and that, even if a current royalty obligation is demonstrated, it does not extend retroactively back as far as Philips contends. Nonetheless, if Philips' position is ultimately demonstrated to be correct, Catalyst may be required to pay back royalties of two per cent on sales of certain products, potentially as far back as 1994, which could aggregate $3.5 million plus interest.
Outlook
Gelu Voicu, president and chief executive officer, said "We are not seeing or expecting any firming in average selling prices during the current quarter and we are reluctant to forecast when pricing will improve. At the same time, we do not expect to see further price degradation. While we have made a serious commitment in recent months to grow the business through expanded engineering and development of new embedded and application-specific products, it would not be reasonable to expect these steps to have much of an impact in the current quarter. Nevertheless, we expect fourth quarter revenues to equal or surpass the level attained in the third quarter and we expect to continue to be profitable on a quarterly operating basis as we continue our tight rein on operating expenses."
Nine-Month Results
For the first nine months of fiscal 2003, Catalyst reported net income of $2.3 million, or $0.13 per diluted share, on revenues of $35.7 million. This compares with a net loss of $442,000, or ($0.02) per diluted share, on revenues of $30.3 million, for the first nine months of fiscal 2002.
Investor Conference Call
As previously announced, the Company will conduct a conference call on third fiscal quarter results beginning at 2:00 p.m. (Pacific) today. The call will be available to all investors and media via the Company's web site www.catalyst-semiconductor.com, at www.companyboardroom.com, or by dialing 888-353-7307 (domestic only). A replay of the call will be aired from approximately 4:00 p.m. today until 4:00 p.m. (Pacific) on February 28th at the company's Web site or by dialing (800) 633-8284 (domestic) or (402)977-9140 (international) entering reservation number 21125525 and following operator instructions. |
