Earnings are out! They did not beat whisper number of (0.13), 2c shy! But revenues were higher and future looking up!
Tuesday July 13, 4:02 pm Eastern Time
Company Press Release
SST Announces Second Quarter Financial Results
Revenue up 25%, Loss down 46% from Q1 of 1999
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 13, 1999--SST (Silicon Storage Technology, Inc.) (Nasdaq:SSTI - news) today announced results for the second quarter ended June 30, 1999.
Net revenues for the second quarter were $23.0 million, compared with $18.3 million in the first quarter, and with $16.8 million in the second quarter a year ago. Unit shipments this quarter were the highest in the company's history, growing 21% from the record shipment of the first quarter of 1999 and 79% from the second quarter a year ago.
The company had a net loss for the second quarter of $3.6 million, or a loss of $0.15 per share on a diluted basis, based on approximately 23.7 million weighted average shares outstanding. This loss includes an in-process R&D charge of $2.0 million related to the acquisition of Linvex Technology. Without this one-time charge, the per share loss would have been $0.07. By comparison, in the first quarter, there was a net loss of $6.6 million, or $0.28 per share on a diluted basis, based on approximately 23.0 million weighted average shares outstanding. In the second quarter of 1998, the company reported a net loss of $1.2 million, or $0.05 per share on a diluted basis, based on approximately 22.9 million weighted average shares outstanding.
There was an operating loss of $3.8 million in the second quarter of this year, compared with an operating loss of $6.8 million in the first quarter, and an operating loss of $3.5 million in the same period of the prior year. G&A expenses were significantly lower than the first quarter due to the reversal of legal accruals as a result of settling the infringement lawsuit with Intel.
''We continue to execute our segmentation and diversification strategy by introducing various products with optimized feature sets, performance and cost structure to serve each segment of the nonvolatile memory market. '' said Bing Yeh, president and chief executive officer. ''In April, we took an industry leadership position by introducing a 16Mbit flash memory with 55ns access time at 3.0Volt supply voltage. Last month, we expanded this low-power, high-performance 39LH series MPF (Multi-Purpose Flash) family to include four new devices, ranging in densities from 512 Kbit to 4 Mbit with 45ns and 55ns access speed. We expect these products to enable SST to penetrate the rapidly growing communications market including broadband networking and wireless communications. Our customers can now benefit from the easy density upgrade without the need for a system board layout change.
''On the technology licensing front, we continue to score great success in positioning SuperFlash as the technology-of-choice for embedded applications. In May, we announced a new licensing agreement with Motorola. Under that agreement, Motorola will use SST's 0.5 micron and 0.25 micron generations of SuperFlash technology to address market requirements in the networking and computing, consumer, transportation and wireless markets. We were very pleased to add Motorola to our distinguished list of technology licensees, which includes Analog Devices, IBM, Samsung, TSMC, Sanyo and Seiko Epson.
''Last week, we announced our expanded relationship with Sanyo. Under the terms of the licensing agreement, Sanyo is licensed to use 0.25 micron SuperFlash technology for embedded applications. Sanyo and SST will also co-develop high-functionality, application-specific flash memory products targeting cellular phone and Internet appliance applications. Under the terms of the OEM agreement Sanyo will second-source SST's MPF and MTP (Many-Time Programmable) product lines. We expect that Sanyo's resale of SST products under this agreement will expand our presence in the Japanese market starting in year 2000.
''At TSMC, the number of embedded flash designs is growing. With TSMC's recent announcement of acquisition of 30% of ASMI (Acer Semiconductor Manufacturing Inc.), SST will assist TSMC in bringing up the 0.33 micron flash process at ASMI in the third quarter to help alleviate the ever tightening wafer capacity at TSMC.
''To further expand our ability to serve the wireless communication market, in May we announced the acquisition of Linvex Technology, a specialty memory design house for low power, high performance SRAM products. This acquisition allows us to combine Linvex's SRAM design expertise with our proven SuperFlash technology to significantly reduce our time-to-market to serve the rapidly growing cellular handset market.
''With more than twenty new products introduced since mid-1998, the foundry capacity we put in place and the strategic technology licensing for embedded applications, we believe that SST is on a definitive course to take advantage of the industry upturn and return the company back to profitability,'' he said.
SST's quarterly conference call will be held today, July 13th at 1:30pm PST. To participate in the call please call (312) 470-0029 a 48 hour replay will be available by calling (402) 280-1639 and keying in 7869272.
About Silicon Storage Technology, Inc.
Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of nonvolatile memory solutions, based on proprietary, patented SuperFlash technology, for the computer, communications and consumer markets.
SST's product families include low-cost, high-functionality flash memory components, CompactFlash card mass storage products and 8-bit microcontrollers with on-chip flash memory. SST also offers its SuperFlash technology for embedded applications through its world-class manufacturing partners and technology licensees Acer Semiconductor Manufacturing, Inc., IBM, Motorola, Samsung Electronics Co. Ltd., SANYO Electric Co., Ltd., Seiko Epson Corp., and
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). Further information on SST can be found on the company's website at ssti.com.
Note to Editors: The SST logo and SuperFlash are registered trademarks of Silicon Storage Technology, Inc. MTP and MPF are trademarks of SST.
Forward-Looking Statements
Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. These risks may include timely development, acceptance and pricing of new products, the terms and conditions associated with licensees' royalty payments, the impact of competitive products and pricing, and general economic conditions as they affect the company's customers, as well as other risks detailed from time to time in the company's SEC reports, including the report on Form 10-K for the year ended December 31, 1998 and reports on Form 10-Q for the quarter ended March 31, 1999.
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Silicon Storage Technology, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(in thousands except per share data)
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
(unaudited) (unaudited)
Revenues:
Product $20,433 $16,422 $38,226 $32,176
License 2,558 402 3,093 1,013
-------- --------- -------- ---------
Net revenues 22,991 16,824 41,319 33,189
-------- --------- -------- ---------
Costs and expenses:
Cost of revenues 18,025 13,406 35,004 27,796
Research and development 4,479 3,447 9,213 6,502
Sales and marketing 2,268 1,716 4,465 3,335
General and administrative 39 1,768 1,245 2,935
Other non-recurring charge 2,011 - 2,011 -
-------- --------- -------- ---------
26,822 20,337 51,938 40,568
-------- --------- -------- ---------
Income (loss) from
operations (3,831) (3,513) (10,619) (7,379)
Interest and other
income (expense), net 226 468 477 1,009
-------- --------- -------- ---------
Income (loss) before
provision for (benefit
from) income taxes (3,605) (3,045) (10,142) (6,370)
Provision for (benefit
from) income taxes 25 (1,803) 65 (2,803)
------- --------- -------- ---------
Net income (loss) ($3,630) ($1,242) ($10,207) ($3,567)
======= ========= ======== =========
Net income (loss) per
share - basic and diluted ($0.15) ($0.05) ($0.44) ($0.16)
======= ========= ======== =========
Shares used in per share
calculation 23,656 22,863 23,425 22,912
======= ========= ======== =========
Silicon Storage Technology, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS
June 30, Dec. 31,
1999 1998
--------- ----------
(unaudited)
Current assets:
Cash, cash equivalents and short-term
investments $17,518 $23,858
Accounts receivable, net 13,314 9,249
Accounts receivable from related parties 3,489 2,838
Inventories 12,709 8,297
Other current assets 2,686 2,615
----------- ---------
Total current assets 49,716 46,857
Furniture, fixtures, and equipment, net 9,245 6,847
Other assets 5,196 2,434
--------- --------
Total assets $64,157 $56,138
========= ========
LIABILITIES
Current liabilities:
Trade accounts payable 21,374 10,309
Accrued expenses and other liabilities 4,544 5,309
Deferred revenue 4,079 1,827
--------- --------
Total current liabilities 29,997 17,445
Other liabilities 587 663
--------- -------
Total liabilities 30,584 18,108
--------- --------
SHAREHOLDERS' EQUITY
Common stock and deferred stock compensation 59,319 53,569
Retained earnings (accumulated deficit) (25,746) (15,539)
--------- --------
Total shareholders' equity 33,573 38,030
--------- --------
Total liabilities and shareholders' equity $64,157 $56,138
========= ========
Contact:
Silicon Storage Technology, Inc.
Jeffrey L. Garon, 408/735-9110
jgaron@ssti.com
or
Stapleton Communications Inc.
Leslie Green, 650/470-0200
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