SST Reports First Quarter 2004 Financial Results
Wednesday April 21, 4:09 pm ET
Revenue Increases 9.7 Percent Sequentially and 69.2 Percent Year-Over-Year
SUNNYVALE, Calif., April 21 /PRNewswire-FirstCall/ -- SST (Silicon Storage Technology, Inc.) (Nasdaq: SSTI - News), a leader in flash memory technology, today announced financial results for the first quarter ended March 31, 2004.
ADVERTISEMENT
Net revenues for the first quarter were $104.4 million, up 9.7 percent compared with $95.2 million in the fourth quarter of 2003 and up 69.2 percent compared with $61.7 million in the first quarter a year ago.
Net income for the first quarter of 2004 was $14.2 million, or $0.14 per share, based on approximately 100.3 million diluted shares outstanding. By comparison, the company recorded net income of $9.1 million, or $0.09 per share on approximately 100.0 million shares outstanding in the fourth quarter of 2003, and a net loss of $10.7 million, or a loss of $0.11 per share on 94.2 million shares outstanding in the first quarter of 2003.
SST finished the first quarter with $153.0 million in cash, cash equivalents and short-term investments.
"While unit shipments declined slightly from the prior quarter, improved average selling prices across all densities as well as increased shipments of higher density products allowed us to report our highest quarterly revenue in more than three years," said Bing Yeh, president and chief executive officer. "Also contributing to our strong results were improved manufacturing costs associated with our transition to 0.25-micron process of our 2Mbit to 8Mbit products at the wafer foundries at Sanyo, Seiko Epson and Grace Semiconductor.
"During the first quarter of 2004, we began the production shipment of a 32Mbit product manufactured at TSMC. We have also completed our qualification and released to production a 32Mbit and a 16Mbit product at Vanguard. In addition, we are in the process of qualifying a 64Mbit product at Vanguard and a 32Mbit and a 16Mbit product at Grace. All these products are based on our 0.18-micron second-generation SuperFlash process. We expect the volume ramp of these products to drive our revenue in the second half of 2004 and beyond.
"We were pleased to report in March that we participated in Grace's financing with an equity investment of $33 million. We believe that Grace will be an excellent development site for SST's technology roadmap as well as a key manufacturing facility. During the first quarter, we began the volume production of 2Mbit, 4Mbit and 8Mbit products based on our 0.25-micron second-generation SuperFlash process at Grace. With these 0.25-micron products, and the 0.18-micron products currently under qualification, we expect to ramp our production volume at Grace to more than 3000 wafers per week by the end of 2004. The incremental production output from Grace will allow us to meet expected demand in the DVD player, Bluetooth, digital camera, set-top box, notebook PC and cellular phone markets. This investment is another step in developing SST's presence globally in areas that are strategically important to our long-term goals.
"On the licensing front, we were pleased to announce that we have signed an agreement to license SST's SuperFlash technology to EM Microelectronic. Under the terms of the agreement, EM Microelectronic will license SST's 0.25-micron SuperFlash technology for use in its smart card IC products in exchange for licensing fees and royalties. The world-wide smart card market is rapidly growing, because of the need for more secure consumer transactions and identification. Due to the flexibility and reliability of our SuperFlash technology, we are rapidly gaining momentum in this market.
"Looking ahead, we are excited about the growth opportunities presented by our higher density products in markets such as cell phones, wireless LANs, digital still cameras and DVD recorders. We expect that the pricing environment will continue to strengthen and that our transition to finer geometries will allow us to reduce our manufacturing costs further. These factors, combined with our leadership in the low density flash memory market give us every confidence that 2004 will be a strong year for SST."
Second Quarter 2004 Outlook
The company expects its second quarter product revenue to grow more than 15 percent sequentially due to the improved availability of its higher density products. The company believes that its second quarter revenues will be between $115 million and $130 million, assuming no drastic changes occur in the U.S. and international economies. Gross margin is expected to be between 32 and 34 percent, which takes into consideration the risks associated with the company's production ramp of higher density products. R&D spending is expected to be approximately 15 percent higher than the prior quarter due to the mask-set costs for bringing up production at new foundries. The income tax rate is expected to be approximately 10 percent, primarily due to foreign withholding taxes. With these revenue and expense levels, SST expects to achieve earnings per share of between $0.15 and $0.18 in the second quarter.
biz.yahoo.com |
