Good Times Ahead for XICO!
Thursday July 22, 9:09 am Eastern Time
Company Press Release
Xicor Reports Improved Second Quarter Results
MILPITAS, Calif.--(BUSINESS WIRE)--July 22, 1999--Xicor, Inc. (NASDAQ - NMS: XICO) today reported results for the second quarter and first half of 1999.
Sales for the second quarter of 1999 were $28,751,000 compared to $26,787,000 for the second quarter of 1998. In the second quarter of 1999, Xicor incurred a loss of $1,993,000 or $0.10 per share, compared to a loss of $9,184,000, or $0.48 per share, for the second quarter of 1998. For the first half of 1999 Xicor had sales of $54,407,000 and a loss of $6,390,000 or $0.32 per share, compared to sales of $54,533,000 and a loss of $11,538,000 or $0.60 per share for the comparable 1998 period. The 1998 second quarter and first half losses included an inventory write-down of $2,220,000.
According to Bruce Gray, president, ''Second quarter 1999 sales grew about 12% sequentially relative to the first quarter of 1999 driven by strong shipments into wireless communications and networking applications. The average selling price of our products declined at a slower rate than anticipated as well. Increased sales, product mix and more stable prices all resulted in a reduced loss and improved gross margin when compared to the first quarter of 1999. Additionally, shipments of product from lower cost wafers produced by our first foundry partner, Yamaha Corp., contributed to the gross margin improvement.
Mr. Gray continued, ''Previous semiconductor industry upturns were characterized by increased demand and firming of prices. Industry experts believe that they are seeing the beginning of the next upturn. If the upturn continues and Xicor benefits from the historical pattern of improved demand and average selling prices, together with an increasing supply of lower cost foundry wafers, we can see the path of returning Xicor to profitability.
''Our outsourcing program continued to gain momentum as we made significant progress in developing additional sources for lower cost wafers during the second quarter with the signing of agreements with Sanyo Electric Co., Ltd. in Japan and ZMD GmbH in Germany to fabricate wafers for us. These agreements complement our wafer foundry agreement with Yamaha in Japan and will provide diversified sources of wafers utilizing our proprietary processes.
''During the second quarter we enhanced our system management product line by announcing two new products and two development tools, as well as commencing sampling of our first sophisticated timekeeping product. We also expanded our broad digitally controlled potentiometer product line (XDCP's) with three new products and added a secure memory product,'' concluded Mr. Gray.
''Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995
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, including statements regarding an upturn in the semiconductor industry, Xicor benefiting from the historical patterns of improved demand and average selling prices associated with such semiconductor industry upturn and from an increasing supply of lower cost foundry wafers, seeing the path of returning Xicor to profitability and the expectation that Sanyo Electric Co. Ltd. and ZMD GmbH will provide diversified sources of wafers using Xicor's proprietary processes.
Factors that could cause actual results to differ materially include the following: general economic conditions and conditions specific to the semiconductor industry, fluctuations in customer demand, competitive factors such as pricing pressures on existing products and the timing and market acceptance of new product introductions, Xicor's ability to have available an appropriate amount of low cost foundry production capacity in a timely manner, our foundry partners' timely ability to successfully manufacture products for Xicor using Xicor's proprietary technology, manufacturing efficiencies, the ability to continue effective cost reductions, the timely development and introduction of new products and submicron processes, and the risk factors listed from time to time in Xicor's SEC reports, including but not limited to the Annual Report on Form 10- K for the year ended December 31, 1998 and the Quarterly Report on Form 10-Q for the quarter ended April 4, 1999 (Management's Discussion and Analysis of Financial Condition and Results of Operations, Factors Affecting Future Results section). Xicor assumes no obligation to update the information included in this press release.
Xicor Corporate Information
Xicor designs, develops, manufactures and sells nonvolatile in- the-system programmable products which retain information even when the system is turned off or power is inadvertently lost. Xicor's product line includes digitally controlled potentiometers (XDCP's), system management IC's, and secure and standard nonvolatile memory IC's.
Xicor product, corporate and financial information is readily accessible on the World Wide Web at xicor.com.
XICOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
July 4, 1999 June 28, 1998
Net sales $ 28,751,000 $ 26,787,000
Cost of sales 21,305,000 25,521,000
Gross profit 7,446,000 1,266,000
Operating expenses:
Research
and development 3,683,000 4,628,000
Selling, general and
administrative 5,553,000 5,620,000
9,236,000 10,248,000
Income (loss)
from operations (1,790,000) (8,982,000)
Interest expense (359,000) (481,000)
Interest income 156,000 279,000
Income (loss)
before income taxes (1,993,000) (9,184,000)
Provision
for income taxes - -
Net income (loss) $ (1,993,000) $ (9,184,000)
Net income (loss)
per common share:
Basic $ (0.10) $ (0.48)
Diluted $ (0.10) $ (0.48)
Shares used in per
share calculations:
Basic 20,257,000 19,108,000
Diluted 20,257,000 19,108,000
Six Months Ended
July 4,1999 June 28, 1998
Net sales $54,407,000 $ 54,533,000
Cost of sales 42,306,000 45,413,000
Gross profit 12,101,000 9,120,000
Operating expenses:
Research
and development 7,242,000 9,194,000
Selling, general and
administrative 10,815,000 11,118,000
18,057,000 20,312,000
Income (loss)
from operations (5,956,000) (11,192,000)
Interest expense (751,000) (981,000)
Interest income 317,000 635,000
Income (loss)
before income taxes (6,390,000) (11,538,000)
Provision
for income taxes - -
Net income (loss) $(6,390,000) $(11,538,000)
Net income (loss)
per common share:
Basic $ (0.32) $ (0.60)
Diluted $ (0.32) $ (0.60)
Shares used in per
share calculations:
Basic 20,215,000 19,099,000
Diluted 20,215,000 19,099,000
XICOR, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
July 4, December 31,
1999 1998
(Unaudited)
Current assets:
Cash and cash equivalents $ 13,939,000 $ 17,881,000
Accounts receivable 10,989,000 8,835,000
Inventories 10,509,000 12,770,000
Prepaid expenses and
other current assets 671,000 1,016,000
Total current assets 36,108,000 40,502,000
Property, plant and equipment,
at cost less accumulated
depreciation 32,127,000 38,074,000
Other assets 288,000 286,000
$ 68,523,000 $ 78,862,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,560,000 $ 9,279,000
Accrued expenses 8,244,000 9,504,000
Deferred income on
shipments to distributors 10,722,000 9,121,000
Current portion of
long-term obligations 5,969,000 7,216,000
Total current liabilities 33,495,000 35,120,000
Long-term obligations 10,575,000 13,137,000
Shareholders' equity:
Preferred stock;
5,000,000 shares authorized - -
Common stock;
75,000,000 shares authorized;
20,310,593 and 20,134,427 shares
outstanding 128,470,000 128,232,000
Accumulated deficit (104,017,000) (97,627,000)
24,453,000 30,605,000
$ 68,523,000 $ 78,862,000
Contact:
Investor Contact:
Rich Schineller or Victor Shalom
Morgen Walke Associates
212 850-5600
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