SIMTEK REPORTS POSITIVE NET INCOME FOR FOURTH QUARTER
AND EX-ITEM PROFIT FOR FISCAL YEAR 2006
• GAAP Net Income – $598 thousand for Q4 2006
• Ex-item Net Income – $319 thousand for FY 2006
• Record Revenue for Fourth Quarter and FY 2006
• Gross Margins Improve 500 Basis Points from Q3 2006
COLORADO SPRINGS, Colorado – February 22, 2007 – Simtek Corporation (NASDAQ:
SMTK), the inventor, pioneer, and world’s premier supplier of nonvolatile static random access
memory (nvSRAM) integrated circuits, today announced its financial results for the fourth quarter
and year ended December 31, 2006.
Key Highlights
• Product revenue of $9.1 million for Q4 2006, a 227% increase over Q4 2005
• Product revenue of $28.6 million for the full year 2006, a 175% increase over 2005
• Total revenue of $30.6 million for 2006, a 195% increase over 2005
• Booking of new orders in 2006 were a record $35.2 million, with a book-to-bill ratio
of 1.23
• Gross product margin increased to 45% for Q4 2006 from 25% a year ago and 40%
in Q3 2006
• Net income of $598 thousand, or $0.04 per share for Q4 2006 versus a loss from
continuing operations of $1.8 million or $(0.25) per share for Q4 2005. First time in
23 quarters the Company has reported positive net income.
• Ex-item profit for the year of $319 thousand compared to a $7.5 million loss from
continuing operations in 2005
• Over 100 new design wins
• Company applied for NASDAQ listing (subsequently approved in 2007)
• Hired Ron Sartore as Executive Vice President to spearhead new product
development
Financial Results
Total revenue for the fourth quarter of 2006 was $9.7 million, consisting of $9.1 million of product
revenue and $552 thousand of royalty revenue. Product revenue represents a 227% increase
over $2.8 million in Q4 2005. The Company reported net income for Q4 2006 of $598 thousand,
or $0.04 per share, compared to a net loss from continuing operations of $1.8 million, or ($0.25)
per share for Q4 2005. Excluding the effects of stock options and amortization of acquisition
related costs, the Company generated ex-item (non-GAAP) net profit of $1.2 million, or $0.07 per
share, for Q4 2006. There were no such charges in the 2005 period.
Total revenue for 2006 was a record $30.6 million, consisting of $28.6 million of product revenue
and $2.0 million of royalty revenue. Product revenue represents a 175% increase over $10.4
million, and inclusive of royalty revenue, total revenue represents a 195% increase over $10.4
million reported in 2005. The Company reported a GAAP net loss for the year ended December
31, 2006 of $2.0 million, or a ($0.13) per share, compared to a net loss from continuing operations
of $7.5 million, or ($1.09) per share in 2005. Ex-item net profit was $319 thousand or $0.02 per
share for 2006. All per share amounts reflect the effect of the 1 for 10 reverse stock split that was
completed on October 5, 2006.
"Team Simtek did a phenomenal job in creating and supporting growth and operational
improvements during 2006,” stated Harold Blomquist, Simtek President and CEO. “We are proud
of the significant strides we have made as a company, and look forward to continuing to progress
and grow in 2007. Looking ahead we anticipate continued strong top-line growth in 2007, as well
as continued improvement in gross margins and positive net income for 2007 as a whole. We
look forward to delivering on these goals in the upcoming quarters.”
Outlook for 2007
For 2007, Simtek expects product revenue growth in the range of 60% to 75% year over year,
and anticipates that Q1 2007 as compared to Q1 2006 will be in this range. The Company does
not expect any royalty revenue in 2007. Gross margins are projected to increase to
approximately 50% by the end of 2007. Investment in engineering and product development is
expected to increase nearly 100% from 2006 levels. Ex-item profit for 2007 is expected to be in
the range of $0.18-$0.21 per share.
“Simtek has under-invested in engineering, research and development for several years and in
2006 began a somewhat more aggressive investment plan to fuel a stronger platform of
intellectual property and products. In 2007 we plan to increase investment in baseline product
development by as much as $3 million over 2006 focusing on the launch of the 4 megabit family
of products. We also anticipate investing in engineering R&D to go beyond baseline products. To
that end we are tremendously excited to have set up a business development and design center
in San Diego, California under the leadership of Ron Sartore. We anticipate investing up to an
additional $3 million in products and technologies that we believe can place the company on track
to serve far larger markets than ever before,” concluded Blomquist.
Conference Call
Simtek management will host a conference call at 5:00 p.m. ET (2:00 p.m. PT) today to discuss
these results. The call can be accessed by dialing 800-257-3401 and giving the company name,
"Simtek." Participants are asked to call the assigned number approximately 10 minutes before
the conference call begins. A replay of the conference call will be available two hours after the
call for the following five business days by dialing 800-405-2236 and entering the following pass
code: 11084026#. Also, the conference call together with supplemental financial information will
be available over the Internet at simtek.com
in the Investor Info area of the site or by going to mkr-group.com. |
