C-Cube Reports Improved Second Quarter Earnings
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Growth in U.S., Japan and Korea Offsets Seasonal Impact
MILPITAS, Calif.--(BUSINESS WIRE)--July 15, 1999--C-Cube Microsystems Inc.
(Nasdaq:CUBE - news) today reported second quarter revenues of $94.1 million, compared with $82.5 million for the same
period in 1998 and $96.5 million for the first quarter of 1999.
Net income for the second quarter reached $11.7 million, or $0.28 diluted earnings per share. This compares with net income
of $10.7 million, or $0.28 per share ($0.25 excluding extraordinary gain) a year ago; and $13.0 million, or $0.32 per share in
the prior quarter.
''We are very pleased with our second quarter performance, which set a revenue record for this historically low period,'' said
Alexandre Balkanski, president and CEO of C-Cube. ''We successfully offset normal seasonal downturns in our Asian-based
VCD business with strong growth in the DVD marketplace -- particularly in Korea and Japan -- and continued growth at our
DiviCom® subsidiary.''
C-Cube's shipments of DVD chips in Q2 set an industry record -- exceeding one million units. The company leads the world in
the delivery of MPEG silicon, according to industry analysts Dataquest and Cahners In-Stat.
''DiviCom, which is already a leading supplier in Direct to Home satellites, European cable and U.S. telco markets, clearly
established itself as a top-tier player in the U.S. digital cable marketplace. The head-end encoder win at Time-Warner's New
York broadcast center coupled with the MediaOne contract announced in Q1 builds an impressive base from which we expect
continued growth,'' said Balkanski.
Current business highlights include:
-- DiviCom becomes the first digital video company to deliver its
5,000th encoder. The record-breaking unit was installed in a
MediaOne digital cable headend system during the second quarter
of this year.
-- C-Cube semiconductor ships record one million plus MPEG decoder
chips in Q2 for the DVD market.
-- DiviCom chosen to supply the digital uplink for Mega Media of
Taiwan Direct-to-Home (DTH) satellite system and the digital
headend for Telegeneve, the cable operator for the city of
Geneva, Switzerland.
-- C-Cube's AViA(TM) platform selected by Pace Micro Technology, the
UK's leading provider of digital set-top boxes, to power
approximately 90% of the digital cable set-tops in the UK. Pace
will rely on C-Cube's AViA silicon solutions to deliver
interactive services such as Internet content and e-commerce to
consumer television.
-- DiviCom earns three awards for technical excellence at this
year's NAB show in Las Vegas, including the editors' "Pick of
Show" award for the MV400 high definition encoder.
-- C-Cube Silicon selected for next generation HD encoders by
DiviCom, General Instrument and NDS.
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. The company's stock is traded on the Nasdaq exchange under the
symbol CUBE. C-Cube may 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 may 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. DiviCom is a
registered trademark of DiviCom, Inc. All other trademarks and registered trademarks are property of their respective
companies.
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
1999 1998
----------- -----------
ASSETS
Current assets:
Cash and equivalents $139,982 $108,224
Short-term investments 99,239 99,603
Receivables - net 65,679 36,980
Inventories 12,014 16,073
Deferred taxes and other
current assets 30,968 31,147
-------- --------
Total current assets 347,882 292,027
Property and equipment - net 30,751 29,622
Production capacity rights 3,375 12,600
Distribution rights - net 1,400 1,483
Purchased technology - net 6,084 5,921
Other assets 1,309 1,518
-------- --------
Total $390,801 $343,171
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,534 $ 19,942
Accrued liabilities 46,667 51,264
Current portion of long-term
obligations 366 355
--------- ---------
Total current
liabilities 72,567 71,561
Long-term obligations 24,573 28,207
--------- ---------
Total liabilities 97,140 99,768
--------- ---------
Minority interest in subsidiary 261 28
Stockholders' equity:
Common stock 251,107 225,265
Accumulated other
comprehensive loss (2,294) (1,852)
Accumulated earnings 44,587 19,962
--------- ---------
Total stockholders'
equity 293,400 243,375
--------- ---------
Total $ 390,801 $ 343,171
========= =========
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
--------- --------- --------- ---------
Net revenues $ 94,095 $ 82,518 $ 190,554 $ 169,835
Costs and expenses:
Cost of revenues 41,852 36,997 85,737 78,011
Research and development 20,661 18,596 40,565 36,267
Selling, general and
administrative 16,855 13,963 33,215 28,549
--------- --------- --------- ---------
Total 79,368 69,556 159,517 142,827
--------- --------- --------- ---------
Income from operations 14,727 12,962 31,037 27,008
Other income, net 2,310 638 4,427 911
--------- --------- --------- ---------
Income before income taxes
minority interest and
extraordinary item 17,037 13,600 35,464 27,919
Income tax expense 5,111 4,083 10,639 8,379
--------- --------- --------- ---------
Income before minority
interest and
extraordinary
item 11,926 9,517 24,825 19,540
Minority interest in net
income (loss) of
subsidiary 261 (28) 233 (169)
--------- --------- --------- ---------
Income before
extraordinary item 11,665 9,545 24,592 19,709
Extraordinary gain on
buyback of convertible
notes -- 1,138 33 1,138
--------- --------- --------- ---------
Net income $ 11,665 $ 10,683 $ 24,625 $ 20,847
========= ========= ========= =========
Income per diluted share
before extraordinary
item $ 0.28 $ 0.25 $ 0.59 $ 0.52
Extraordinary gain per
diluted share -- 0.03 -- 0.03
--------- --------- --------- ---------
Net income per diluted
share $ 0.28 $ 0.28 $ 0.59 $ 0.54
========= ========= ========= =========
Shares used in computation 42,925 41,485 42,144 41,311
========= ========= ========= =========
Contact:
C-Cube Microsystems Inc.
Alan Markow, 408/490-8707 (Public Relations)
alan.markow@c-cube.com
Steven Horwitz, 408/490-8561 (Investor Relations)
steven.horwitz@c-cube.com |
