Quality Semiconductor Reports Fiscal Fourth Quarter and Year-End Results
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Business Wire - November 05, 1998 16:15
SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 5, 1998--Quality Semiconductor Inc. (Nasdaq:QUAL) today announced results for the fiscal fourth quarter and year ended September 30, 1998.
The company reported net revenues of $12.2 million for the fourth quarter, as compared to fourth quarter fiscal 1997 net revenues of $20.5 million. The company also reported a net loss of $6.7 million,
which compares to a net loss of $1.2 million for the comparable period a year ago, and a net loss per diluted share of $0.89, which compares with a net loss of $0.16 per diluted share in the fourth quarter of
fiscal 1997.
Average weighted common shares outstanding for the fourth quarter ended September 30, 1998 were 7,502,000 (diluted) versus 7,322,000 (diluted) for the fourth quarter of fiscal 1997.
For the year ended September 30, 1998, net revenues reached $60.8 million, as compared to net revenues of $62.7 million for the prior fiscal year. Net loss for the fiscal year 1998 was $15.3 million, or a
$2.06 net loss per share (diluted), compared to net income of $210,000, or $0.03 per share (diluted), for the same period one year ago. Average weighted common shares outstanding for the twelve months
ending September 30, 1998 were 7,428,000 (diluted) versus 7,053,000 (diluted) for the previous fiscal year.
"We believe the decline in revenue for the quarter reflects continued slower worldwide demand for semiconductor products, as well as intense pricing competition," commented R. Paul Gupta, president and
chief executive officer. "However, we also believe the revenue decline is flattening and we are pleased that our new product development, particularly in networking, continues to advance in accordance with
our long-term business plan. Our expense reductions during the quarter are reflected in lower operating expenses and we expect further improvement in the foreseeable future.
"The company is very enthusiastic about our recently announced signing of a definitive agreement to merge with Integrated Device Technology, which we expect to close during the first calendar quarter of
1999. We believe the combined companies represent a great opportunity, with marketing and technological synergies that will benefit our shareholders and customers," Gupta concluded.
The company also announced that, in connection with its recently announced merger with Integrated Device Technology (Nasdaq:IDTI), the company has cancelled its previously announced common stock
repurchase program.
Except for historical information contained herein, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results
to differ materially from those projected, including, among others, risks associated with the proposed merger including, but not limited to, disruption in distribution channels, competition, product demand,
employee relations, ability to obtain required consents to the merger and to the assignment of certain contracts, patent and other intellectual property rights of third parties, timely development and supply of
new products and manufacturing processes, availability of capital, cash flow, the challenges involved with integrating the two companies, and other operational risks of the company, including, but not limited to
the impact of competitive products and pricing, general economic conditions and conditions specific to the semiconductor industry, fluctuations in customer demand, the timing and market acceptance of new
product introductions, the timely development and qualification of new products and other risk factors listed in the company's filings with the Securities and Exchange Commission. Quality Semiconductor
assumes no obligation to update the information included in this press release.
Quality Semiconductor Inc. (QSI) designs, develops and markets high-performance logic and networking semiconductor products. The company targets systems manufacturers principally in the networking,
personal computer and workstation markets. The company's logic products include the 3.3-volt and 5-volt QSFCT families of high-speed, low-noise interface logic devices, the QuickSwitch family of
high-speed, low-resistance bus switches, a family of low-skew clock management products, a family of analog switch devices, and new JTAG products designed to allow board-level testing of complex
products. QSI's networking products include two Fast Ethernet CMOS transceivers that provide high integration solutions for the adapter, repeater, switch and card bus markets.
Quality Semiconductor Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
September 30, September 30,
1998 1997 1998 1997
Net revenues $ 12,173 $ 20,502 $ 60,818 $ 62,691
Cost of revenues 10,622 15,659 48,324 40,073
Gross Margin 1,551 4,843 12,494 22,618
Operating expenses:
Research and development 2,509 2,742 10,462 9,281
Sales and marketing 2,134 2,520 9,295 8,323
General and administrative 1,060 1,267 5,045 4,294
Total operating expenses 5,703 6,529 24,802 21,898
Operating income (loss) (4,152) (1,686) (12,308) 720
Interest, net (125) (130) (642) (398)
Income (loss) before taxes (4,277) (1,816) (12,950) 322
Provision (benefit) for taxes 2,384 (636) 2,384 112
Net income (loss) $ (6,661) $ (1,180) $(15,334) $ 210
Net income (loss) per share
- Basic $ (0.89) $ (0.16) $ (2.06) $ 0.03
Net income (loss) per share
- Diluted $ (0.89) $ (0.16) $ (2.06) $ 0.03
Weighted shares outstanding
- Basic 7,502 7,322 7,428 6,989
Weighted shares outstanding
- Diluted 7,502 7,322 7,428 7,053
Quality Semiconductor Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
Sept. 30 Sept. 30,
1998 1997
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 7,838 $13,059
Accounts receivable, net 5,852 8,748
Inventories 8,210 17,689
Other current assets 1,190 5,327
Total current assets 23,090 44,823
Property and equipment, net 21,787 22,859
Other assets 1,436 2,150
Total assets $46,313 $69,832
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable, accrued liabilities
and deferred income $11,179 $11,382
Current portion of long-term obligations 2,866 5,666
Total current liabilities 14,045 17,048
Long-term liabilities 5,146 7,202
Deferred tax liabilities 832 1,945
Shareholders equity 26,290 43,637
Total liabilities and shareholders equity $46,313 $69,832
CONTACT: Quality Semiconductor Inc.
R. Paul Gupta, 408/450-8000
or
Morgen-Walke Associates Inc.
Jim Byers, Carolyn Bass, Doug Sherk, 415/296-7383
Patricia Walsh, Mark Owen, 212/850-5698 |
