"Estimate was .17/share" --- reporting .37/share, .32 after charges.
Stock is down 10 because CEO is "cautious" short term....I see buying
opportunity!!!
SIPEX Corporation Reports Record Fourth Quarter and Fiscal Year 1998 Results
BILLERICA, Mass., Feb. 18 /PRNewswire/ -- SIPEX Corporation (Nasdaq: SIPX - news) today reported record sales of $17.0 million for the fourth quarter ended December 31, 1998, compared to the $14.9 million reported for the same quarter in 1997. Net income and diluted earnings per share for the fourth quarter of 1998 were $7.0 million and $0.37 per share before facility exit costs associated with the relocation of its' Milpitas fabrication facility and other charges versus $6.0 million and $0.32 per share reported for the same period in 1997. Facility exit costs and other charges totaled $1.6 million; $1.1 million relating to facility exit costs, primarily consisting of fixed asset write-off and lease termination costs, and $0.5 million relating to other charges. Included in other charges are royalty payments arising from the Lemelson Medical, Education and Research Foundation patent infringement settlement, which covers prior and current years' sales. Including these charges, net income and diluted earnings per share were $6.0 million and $0.32 per share respectively. Net income and diluted earnings per share for the fourth quarter and fiscal year included a net income tax benefit of $2.8 million and $1.0 million for fiscal year 1998 and 1997 respectively, relating to the Company's current and expected future utilization of net operating loss carryforwards.
Total revenue for 1998 was $65.6 million compared to $51.2 million in 1997, a 28% increase. Gross margin increased to 50.9% of sales in 1998 versus 47.9% in 1997. Net income and diluted earnings per share for fiscal 1998 were $19.8 million and $1.06 per share including facility exit costs and other charges versus $13.2 million and $0.71 per share reported for the same period in 1997. Excluding these charges, net income and diluted earnings per share for fiscal 1998 were $20.8 million and $1.11 per share, respectively.
''1998 was a good year for SIPEX Corporation,'' commented James E. Donegan, Chairman, President and Chief Executive Officer. ''Sales, gross margin and profits all grew substantially in a generally difficult semiconductor market. After spending $6.0 million in capital equipment acquisitions, cash increased $10.0 million year over year. Net bookings remained solid and exceeded revenue. Inventory remained flat and Days Sales Outstanding (DSO's) were down versus the prior quarter. We opened our Belgian Design Center in 1998 and we continue to increase its' staffing. We also introduced into the market, our new power management products.''
Mr. Donegan continued, ''as we enter 1999, we look forward to bringing our new wafer fabrication facility on-line during the second quarter. This facility will provide us with the improvements in productivity and yields, which are essential in competing in today's analog market, which is still relatively soft overall and with continued price pressure. Our ability to grow in this market will be dependent upon a higher level of orders received and shipped in the same quarter than has historically been our experience. The continued uncertainty in the world markets are impacting our customers' ability to predict demand for their products. As a result of these factors, we remain cautious about our short-term revenue outlook.''
Mr. Donegan commented further, ''we believe our competitive position is strong. Our new products continue to expand our customer base across all major geographic regions in the world. SIPEX is committed to being a leading international supplier of quality analog products.''
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Forward-looking statements in this news release involve risk and uncertainty. There are numerous factors that could cause the Company's actual results to differ materially from results predicted or implied in this news release.
Important factors affecting the Company's ability to achieve future revenue growth include whether, and the extent to which, demand for the Company's products increases and reflects real end-user demand; whether customer cancellations and delays of outstanding orders increase, and whether the Company is able to manufacture in the correct mix to respond to orders on hand and new orders received in the future; whether the Company is able to achieve its new product development and introduction goals, including, without limitation, goals for conceiving and introducing timely new products that are well received in the marketplace; and whether the Company is able to successfully implement its new Fab in a timely fashion and its ability to design and introduce new products based on new technologies.
Other important factors that could cause actual results to differ materially from those predicted include overall economic conditions, such as currency and other economic issues affecting Asian and other countries, demand for electronic products and semiconductors generally, demand for the end-user products for which the Company's semiconductors are suited, timely availability of raw material, equipment, supplies and services, unanticipated manufacturing problems, technological and product development risks, competitors' actions, and other risk factors described in the Company's filings with the Securities and Exchange Commission.
All forward-looking statements included in this document are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward- looking statement.
SIPEX Corporation is a leading manufacturer of high performance, high value-added analog integrated circuits. SIPEX serves the broad analog signal processing market with single, dual and multiprotocol interface circuits, low power and high voltage application specific circuits, electroluminescent driver, data converters and power management products. Applications for the Company's products include telecommunications including personal computers and peripherals, battery powered hand-held devices, cellular telephones, test equipment factory automation, networking, process controls and satellites.
For further information, contact Frank R. DiPietro, Executive Vice President & CFO at SIPEX Corporation, 22 Linnell Circle, Billerica, MA 01821, Telephone (978) 671-1909.
Condensed Consolidated Statements Of Operations
(In thousands, except per share data)
Quarter Ended Year Ended
(unaudited) (audited)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1998 1997 1998
Net sales $14,928 $16,972 $51,210 $65,557
Cost of sales 7,503 8,248 26,670 32,213
Gross profit 7,425 8,724 24,540 33,344
Operating expenses:
Research and
development 1,430 1,834 5,448 6,717
Marketing and selling 1,387 1,689 5,216 6,552
General and
administrative 840 1,340 3,047 3,720
Facilities Exit Costs --- 1,138 --- 1,138
Total operating
expenses 3,657 6,001 13,711 18,127
Income from operations 3,768 2,723 10,829 15,217
Other income, net 446 440 1,441 1,812
Income before taxes 4,214 3,163 12,270 17,029
Income tax benefit (1,748) (2,801) (975) (2,801)
Net income $5,962 $5,964 $13,245 $19,830
Net income per common
share-basic(A) $0.34 $0.33 $0.76 $1.11
Net income per common share-
assuming dilution(A) $0.32 $0.32 $0.71 $1.06
Weighted average common shares
outstanding-basic 17,644 17,944 17,427 17,831
Weighted average common shares
outstanding-assuming
dilution 18,739 18,907 18,581 18,723
NOTE(A): Reflects 2:1 Stock Split of August 18, 1997
Condensed Consolidated Balance Sheets
(In thousands)
December 31, 1997 December 31, 1998
ASSETS
Current assets:
Cash and short-term
investments $39,986 $50,052
Accounts receivable, net 8,693 12,862
Inventories 13,988 16,682
Other current assets 1,842 4,747
Total current assets 64,509 84,343
Property, plant and
equipment, net 8,345 10,306
Other assets 128 4,847
Total assets $72,982 $99,496
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt $45 $7
Accounts payable 2,771 3,578
Accrued expenses 2,290 3,201
Total current liabilities 5,106 6,786
Long-term debt 8 0
Total liabilities 5,114 6,786
Shareholders' equity 67,868 92,710
Total liabilities and
shareholders' equity $72,982 $99,496 |
