C-Cube Reports Record Fourth Quarter and 1998 Revenues
Business Editors
MILPITAS, Calif.--(BUSINESS WIRE)--Jan. 21, 1998--C-Cube
Microsystems Inc. (Nasdaq: CUBE), the leading provider of digital
video technology, today announced financial results for its fourth
quarter and year ended December 31, 1998.
Revenues for the fourth quarter were $95.8 million, compared with
$86.2 million in the third quarter of 1998, and $90.1 million reported
in the fourth quarter of 1997. Total revenues for 1998 were $351.8
million, compared with $337.0 million in 1997.
Net income for the fourth quarter was $12.4 million, or $0.31
diluted earnings per share. This compares with net income of $13.0
million, or $0.34 diluted earnings per share, in the third quarter of
1998, and $11.6 million, or $0.30 diluted earnings per share in the
fourth quarter of 1997. Net income for 1998 was $46.3 million, or
$1.19 diluted earnings per share, compared with $44.3 million, or
$1.15 diluted earnings per share in 1997.
During 1998, C-Cube repurchased $63.5 million of convertible
long-term debt. This represents a 74% reduction to the $86.3 million
in the original face value of the convertible notes. The repurchase
reduced fully diluted shares outstanding by 2.1 million shares, or
approximately 5%. This repurchase resulted in an extraordinary gain of
$.06 per diluted share during the third quarter, and $.09 per diluted
share for the year ended December 31, 1998.
"The TV/com acquisition materially strengthens our already strong
commitment to the digital video communications segment and serves to
complement our industry-leading MPEG set-top product portfolio," said
Alex Balkanski, president and CEO of Cube Microsystems.
Semiconductor highlights for the quarter included:
-- Semiconductor introduced DVxplore(TM), the world's first
single-chip consumer MPEG-2 and DV codec.
-- Semiconductor launched the first set-top silicon platform to
bring digital TV and the Internet to the consumer-priced digital
set-top. Market leading set-top manufacturers and service
providers, including Pioneer (NYSE: PIO) and Pace Micro
Technology have adopted C-Cube's AViA@tv new platform.
-- Pace utilized the AViA@tv technology to drive the digital set-top
box for NTL's two-way digital cable service.
-- Semiconductor announced the ZiVA-3 DVD decoder, a third
generation device for consumer DVD players. The first three major
manufacturers to adopt ZiVA-3 include JVC, Samsung, and LG
Electronics.
-- C-Cube announced the CL8830 Chaoji VCD processor with advanced
audio capabilities. Leading manufacturers of Chaoji VCD players
including BBK, Beijing Philips, Malata, Nintaus, Samsung, SAST
and Xiamin will use the CL8830 with RealSonic Audio technology in
their next generation designs.
DiviCom highlights for the quarter included:
-- DiviCom was selected by NTL to help launch its new digital video
cable service. NTL offers residential cable telephony and
television services for 25 percent of the U.K., covering more
than 5.2 million homes.
-- DiviCom joined with Alcatel, COCOM, Hughes Network Systems,
Nokia, Sagem, Simac, Thomson Broadcast Systems and Thomson
Multimedia to create the DVB/DAVIC Interoperability Consortium.
This consortium will develop and implement the necessary
mechanisms to verify interoperability between products. Their
efforts will allow cable operators to choose from a number of
interoperable, multi-vendor solutions.
-- DiviCom will supply standard definition and high definition
encoders to COMARK, through its CDS (Complete Digital Solutions)
unit, who will in turn provide these encoders to all LIN
Television Corporation stations.
DiviCom and Semiconductor highlights for the quarter included:
-- DiviCom and Semiconductor joined four other leading vendors of
digital television service solutions for a CableNET'98
demonstration at the Western Cable Show to showcase digital
television, web access and interactive services. Also included
were 3Com (Nasdaq: COMS), MoreCom, Pioneer and Zenith.
About C-Cube Microsystems
C-Cube Microsystems Inc. is the industry leader in the
development and delivery of highly integrated digital video silicon
solutions that address the consumer electronics, communications and
convergence markets. C-Cube is headquartered in Milpitas, California
with offices in North America, Europe and Asia. Its stock is traded on
the NASDAQ National Market System under the symbol CUBE. C-Cube can be
reached at +1-408/490-8000 or on the World Wide Web at
c-cube.com.
About DiviCom Inc.
DiviCom develops and integrates products that make digital video
networking possible. Products include audio/video encoding, data
broadcast solutions, network management systems, consulting and
integration services. Based on the MPEG-2, DVB and ATSC international
standards, DiviCom's products enable digital video broadcasting over a
variety of networks including satellite, wireless, fiber, copper and
cable. DiviCom is a wholly owned subsidiary of C-Cube Microsystems
Inc. (Nasdaq: CUBE), based in Milpitas, California. DiviCom can be
reached at +1-408/944-6700 or on the World Wide Web at
divi.com.
+ This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Actual results could
differ materially from those projected in the forward-looking
statements as a result of the risk factors set forth in the Company's
Forms 10-K and 10-Q reports. The Company has attempted to identify
forward-looking statements in this press release by placing
a plus symbol (+) following each sentence containing such statements.
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C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
1998 1997
---- ----
ASSETS
Current assets:
Cash and equivalents $108,224 $145,034
Short-term investments 99,603 21,316
Receivables -- net 36,980 40,606
Inventories 16,073 15,270
Deferred taxes and
other current assets 31,147 26,162
-------- --------
Total current assets 292,027 248,388
Property and equipment -- net 29,622 23,561
Production capacity rights 12,600 18,200
Distribution rights -- net 1,483 1,648
Purchased technology -- net 5,921 9,408
Other assets 1,518 2,903
-------- --------
Total $343,171 $304,108
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,942 $ 9,221
Accrued liabilities 44,558 26,273
Deferred revenue 6,706 3,895
Current portion of
long-term obligations 355 608
--------- ---------
Total current liabilities 71,561 39,997
Long-term obligations 28,207 88,331
--------- ---------
Total liabilities 99,768 128,328
--------- ---------
Minority interest in subsidiary 28 365
Stockholders' equity:
Common stock 225,265 203,728
Accumulated translation
adjustments (1,928) (1,969)
Unrealized gain (loss)
on investments 76 (17)
Accumulated
earnings (deficit) 19,962 (26,327)
--------- ---------
Total stockholders'
equity 243,375 175,415
--------- ---------
Total $ 343,171 $ 304,108
========= =========
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended December 31, Year Ended December 31,
1998 1997 1998 1997
Net revenues $ 95,800 $ 90,065 $ 351,797 $ 337,012
Costs and expenses:
Cost of revenues 44,071 42,330 160,839 151,333
Research and
development 18,897 16,344 74,031 64,204
Selling, general
and administrative 16,756 13,767 60,512 52,732
--------- --------- --------- ---------
Total 79,724 72,441 295,382 268,269
--------- --------- --------- ---------
Income from
operations 16,076 17,624 56,415 68,743
Other income
(expense), net 1,692 (122) 4,239 (1,757)
--------- --------- --------- ---------
Income before
income taxes,
minority
interest and
extraordinary item 17,768 17,502 60,654 66,986
Income tax expense 5,327 6,030 18,196 22,895
--------- --------- --------- ---------
Income before
minority
interest and
extraordinary
item 12,441 11,472 42,458 44,091
Minority interest
in net income
(loss) of
subsidiary 17 (125) (337) (248)
--------- --------- --------- ---------
Income before
extraordinary item 12,424 11,597 42,795 44,339
Extraordinary
gain on buyback of
convertible
notes -- -- 3,494 --
--------- --------- --------- ---------
Net income $ 12,424 $ 11,597 $ 46,289 $ 44,339
========= ========= ========= =========
Income per
diluted share
before
extraordinary
item $ 0.31 $ 0.30 $ 1.11 $ 1.15
Extraordinary item
per diluted share -- -- 0.09 --
--------- --------- --------- ---------
Net income per
diluted share $ 0.31 $ 0.30 $ 1.19 $ 1.15
========= ========= ========= =========
Shares used in
computation 40,708 42,023 40,754 41,683
========= ========= ========= =========
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--30--eb/sf*
CONTACT: C-Cube Microsystems
Walt Walczykowski, 408/490-8000 (CFO)
Steven Horwitz, 408/490-8561 (IR)
Molly McCarthy, 408/490-8017 (PR) |
