C-Cube Reports Record Revenues, Improved Earnings in First Quarter
Digital Video Momentum Drives Wins in Systems, Semiconductor Businesses
MILPITAS, Calif.--(BUSINESS WIRE)--April 15, 1999--C-Cube
Microsystems Inc. (Nasdaq:CUBE - news) today reported record first
quarter revenues of $96.5 million, compared with $87.3 million for
the same period in 1998, and $95.8 million for the fourth quarter
1998. Net income for the first quarter reached $13.0 million, or
$0.32 diluted earnings per share. This compares with net income of
$10.2 million, or $0.27 a share a year ago; and $12.4 million, or
$0.31 a share in the prior quarter.
''We're gratified to have posted record revenues again this quarter,
and to improve our earnings from fourth quarter 1998 -- normally the
strongest quarter for our company,'' said Alex Balkanski, president
and CEO of C-Cube Microsystems. ''We're further encouraged by recent
wins in both semiconductor and headend businesses, and their impact
on C-Cube Semiconductor and DiviCom later this year and into 2000, as
digital video becomes a mainstream medium.(1)
''With this quarter's MediaOne win, DiviCom has now broken through to
the formerly closed U.S. cable market with its Open Architecture
approach to headend development. The semiconductor business has
consistently won at the high end of the encode and decode business,
as exemplified by our dominance of the emerging MPEG-2 non-linear
editing market and the build-to-order computer market for DVD-ROM.''
Current Business highlights include:
-- MediaOne selects DiviCom/C-Cube Semiconductor for its planned
digital cable headend installation - the first U.S. cable system
design compliant with new OpenCable standards. The ''headend to the
home'' system consisting of DiviCom's encoders, multiplexers and
InterSect(TM) controllers as well as C-Cube's advanced decode/encode
silicon systems in set-top boxes will enable exciting new interactive
services for MediaOne customers.
-- C-Cube's AViA@TV(TM) silicon platform selected to power next
generation set-top boxes for Canal+ and betaresearch, a subsidiary of
KirchGroup of Germany. C-Cube's solution will enable internet-over-TV
services for European subscribers.
-- LIN Television - owner of 12 television stations throughout the
country - selects DiviCom's new MV400TM High Definition MPEG-2
encoder. The MV400 is the world's first high quality HD encoder that
fits into a single rack.
-- C-Cube's DVxpress(TM) silicon incorporated into MPEG-2 video
editing systems by Pinnacle, FAST and Matrox, with more announcements
expected at next week's National Associations of Broadcasters meeting
in Las Vegas.
-- C-Cube and Microsoft announce plans to co-develop advanced digital
video applications for PC platforms using the C-Cube's DVxplore(TM)
consumer MPEG codec.
About C-Cube Microsystems
C-Cube Microsystems Inc. is the industry leader in the development
and delivery of highly integrated digital video silicon and systems
solutions. C-Cube's Semiconductor Division delivers highly integrated
digital video silicon and systems solutions for the communications
and consumer electronics markets, including digital set-top boxes,
VCD and DVD. C-Cube's DiviCom Division is a leader in the deployment
of digital video networks. DiviCom's products include audio/video
encoding, data broadcast solutions, network management systems,
consulting and integration services. C-Cube is headquartered in
Milpitas, California with offices in North America, Europe and Asia.
Its stock is traded on the Nasdaq under the symbol CUBE. C-Cube can
be reached at +1-408/490-8000 or on the World Wide Web at
c-cube.com. C-Cube's DiviCom Division is based in
Milpitas, California and can be reached at +1.408.490.6700 or on the
World Wide Web at divi.com.
Hear C-Cube's Earnings Conference Call Live at www.c-cube.com.
Note to Editors: C-Cube and the C-Cube logo are registered trademarks
of C-Cube Microsystems Inc. All other trademarks and registered
trademarks are property of their respective companies.
(1) 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 an (1) following
each sentence containing such statements.
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
1999 1998
---------- ------------
ASSETS
Current assets:
Cash and equivalents $ 163,493 $ 108,224
Short-term investments 66,273 99,603
Receivables - net 50,859 36,980
Inventories 12,766 16,073
Deferred taxes and other current assets 31,359 31,147
--------- ---------
Total current assets 324,750 292,027
Property and equipment - net 29,685 29,622
Production capacity rights 3,938 12,600
Distribution rights - net 1,442 1,483
Purchased technology - net 7,470 5,921
Other assets 1,345 1,518
--------- ---------
Total $ 368,630 $ 343,171
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 22,343 $ 19,942
Accrued liabilities 52,938 51,264
Current portion of long-term obligations 366 355
--------- ---------
Total current liabilities 75,647 71,561
Long-term obligations 23,244 28,207
--------- ---------
Total liabilities 98,891 99,768
--------- ---------
Minority interest in subsidiary -- 28
Stockholders' equity:
Common stock 238,936 225,265
Accumulated other comprehensive loss (2,119) (1,852)
Accumulated earnings 32,922 19,962
--------- ---------
Total stockholders' equity 269,739 243,375
--------- ---------
Total $ 368,630 $ 343,171
========= =========
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended March 31,
1999 1998
----------- ---------
Net revenues $ 96,459 $ 87,317
Costs and expenses:
Cost of revenues 43,885 41,014
Research and development 19,904 17,671
Selling, general and administrative 16,360 14,586
-------- --------
Total 80,149 73,271
-------- --------
Income from operations 16,310 14,046
Other income, net 2,117 273
-------- --------
Income before income taxes, minority
interest and extraordinary item 18,427 14,319
Income tax expense 5,528 4,296
-------- --------
Income before minority interest and
extraordinary item 12,899 10,023
Minority interest in net loss of subsidiary (28) (141)
-------- --------
Income before extraordinary item 12,927 10,164
Extraordinary gain on buyback of convertible
notes 33 --
-------- --------
Net income $ 12,960 $ 10,164
======== ========
Income per diluted share before
extraordinary item $ 0.32 $ 0.27
Extraordinary gain per diluted share -- --
-------- --------
Net income per diluted share $ 0.32 $ 0.27
======== ========
Shares used in computation 41,344 41,137
======== ========
--------------------------------------------------------------------------------
Contact:
C-Cube Microsystems Inc.
Alan Markow, 408/490-8707 (Public Relations)
alan.markow@c-cube.com
or
Steven Horwitz, 408/490-8561 (Investor Relations)
steven.horwitz@c-cube.com
--------------------------------------------------------------------------------
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