Hey hey , that's not so bad, good big picture and good long picture
Friday, February 27, 1998
Mosaid dodges that Asian red ink
By JILL VARDY
Technology Reporter The Financial Post
OTTAWA - Mosaid Technologies Inc. said yesterday it didn't succumb to the Asian flu during its third quarter.
But the computer chip designer barely wrested out a profit amid a dismal market for its chip designs and testing systems.
Mosaid, which sells most of its products to chip manufacturers in Asia, reported net income of $1.1 million (16› a share) in the quarter ended Jan. 30 on revenue of $9.3 million.
That's up from a net profit of $439,000 (6›) on revenue of $8.7 million in the third quarter of 1997.
But half of that net income was the result of Mosaid's sale of a portion of its holdings in Semtech Corp., a California company that bought a semiconductor firm in which Mosaid owned
a stake. Mosaid reported a pretax gain of $1 million for that sale.
Still, the increase in revenue is a welcome relief for a company that's been hammered by the slump in Asian economies.
"At a time when many in our industry have developed a full-blown case of the Asian flu, recording significant losses, we've managed to stay profitable and grow our business," said
Mosaid president and chief executive George Cwynar. "We've done better than people expected."
Mosaid issued a warning in January that its prospects were being hurt by the crisis in the Asian economies.
Sales of Mosaid's chip testing systems have indeed been hammered by the drop in semiconductor manufacturing in South Korea and Japan. But the company said its memory design
business had one of its best quarters ever, with record bookings as chip makers try and get new higher-margin designs into production.
Mosaid isn't letting the industry-wide slump slow its research and development, Cwynar said. Its investment in R&D during the first three quarters of the year was $9.8 million, 43%
higher than the same period last year.
The Asian flu has, however, increased the amount of bad debt sitting on Mosaid's balance sheet. Mosaid has written off $738,000 of debt owed by a troubled Korean customer.
The results were released after the close of markets yesterday. Mosaid shares (MSD/TSE) closed up 30› at $9.25.
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