99/10/21 Market News Publishing Inc. No: 000034
GENESIS MICROCHIP INC ("GNSS-Q")
- Financial Results For Second Quarter Fiscal
Genesis Microchip Inc., a leading provider of digital display and
video/graphics-processing integrated circuit products, reported results for
its second quarter fiscal 2000, which ended September 30, 1999.
Revenues for the quarter were $16.4 million, rising 145% over the
year-ago August 1998 quarter and up modestly over revenues in the June 1999
quarter. The modest sequential revenue growth is primarily attributable to
the continued short-term supply constraints of LCD panels and the effect of
the September 21 Taiwan earthquake on business in the last two weeks of the
quarter. Overall gross margins increased to 69.4% in the September quarter
from 67.7% in the June quarter, primarily as a result of customer
transition to newer, cost-reduced products.
Net income of $4.0 million for the quarter increased substantially over
the $617,000 reported in August 1998 and over net income of $1.3 million,
after merger-related costs, in the quarter ended June 30, 1999.
Diluted earnings per share for the quarter was $0.20, up from the $0.03
recorded in the August 1998 quarter. In the quarter ended June 1999, the
company reported diluted earnings per share of $0.06, which reflected
merger-related charges.
Unit shipments of chipsets into the LCD monitor market grew to more than
640,000 in the quarter, an increase of 80,000 units or 14%, over unit
shipments reported in the June 1999 quarter.
"We are pleased with our results in the quarter given the challenges of
ongoing LCD panel supply constraints and the tragic earthquake in Taiwan,"
said Paul M. Russo, Chairman and Chief Executive Officer.
"We are continuing to assess the effect of the earthquake on our
business and anticipate tight supply from our Taiwanese supplier, TSMC, in
the December quarter. In the September quarter we derived approximately
one-third of our revenues from products supplied by TSMC. We believe that
we can obtain adequate supply from our other manufacturers, including
Taiwan-based UMC, for our other products in this quarter."
Current and prior period results reflect the company's merger with
Paradise Electronics in May 1999. Because of the change in its fiscal year
to March from May, the company is using the most closely aligned fiscal
periods of the prior year for financial comparisons in fiscal 2000. For
example, the period ended September 1999 is compared to the equivalent
period ended August 1998. Historical amounts have been restated to include
the results of Paradise as required in pooling-of-interest accounting.
Genesis Microchip Inc. -- an ISO9001-registered company -- is a leader
in digital video/graphics-processing technologies. Genesis designs,
produces and markets highly integrated semiconductors for a variety of
imaging and digital display applications. You can find Genesis chips in
products from Acer, Apple, Dell, Fujitsu, Hitachi, IBM, In Focus Systems,
LG Electronics, Mitsubishi, Philips, Samsung Electronics, SGI, Sharp,
Siemens, Sony, Texas Instruments, ViewSonic and more than 200 other
companies.
Parts of this release, including comments discussing the potential
impact of the Taiwanese earthquake on the business of the Company, contain
"forward-looking" information within the meaning of the United States
securities laws that involve risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. Potential risks and uncertainties include, without limitation,
the growth rate of the markets into which the Company sells its products;
market acceptance of and demand for the products of the Company and those
of the Company's customers; unanticipated delays or problems in the
introduction of the Company's products; the Company's ability to introduce
new products in accordance with OEM design requirements and design cycles;
new product announcements or product introductions by the Company and the
Company's competitors; availability and cost of manufacturing sources for
the Company's products; supply constraints for components incorporated into
the Company's customers' products; changes in the mix of sales to OEMs and
distributors; incorrect forecasting of future revenues; the volume of
orders that are received and can be filled in a quarter; the rescheduling
or cancellation of orders by customers; costs associated with protecting
the Company's intellectual property; changes in product mix; changes in
product costs and pricing; and currency exchange rate fluctuations. These
and other important risk factors are more fully detailed in the Company's
SEC filings. Statements contained herein are made as of the date hereof and
the Company assumes no responsibility for updating such information.
Genesis is headquartered in Thornhill, Ontario, Canada, while its U.S.
subsidiaries are located in San Jose and Mountain View, California. Further
information is available at: genesis-microchip.com.
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GENESIS MICROCHIP INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands of U.S. dollars,
except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
September 30, August 31, September 30, August 31,
1999 1998 1999 1998
Revenues $ 16,362 $ 6,672 $ 32,668 $ 12,442
Cost of revenues 5,002 2,170 10,266 4,103
Gross profit 11,360 4,502 22,402 8,339
Operating expenses: Research and
development 3,741 2,187 7,141 4,380
Selling, general and
administrative 3,112 2,117 6,385 3,947
Merger-related
costs -- -- 3,455 --
Total operating
expenses 6,853 4,304 16,981 8,327
Income from
operations 4,507 198 5,421 12
Interest income 515 419 932 933
Income before
income taxes 5,022 617 6,353 945
Provision for
income taxes 996 -- 1,054 --
Net income $ 4,026 $ 617 $ 5,299 $ 945
Earnings per share:
Basic $ 0.22 $ 0.04 $ 0.29 $ 0.06
Diluted $ 0.20 $ 0.03 $ 0.27 $ 0.05
Weighted average number of common shares outstanding (in thousands):
Basic 18,499 16,192 18,437 16,008
Diluted 19,784 18,455 19,808 18,455
GENESIS MICROCHIP INCORPORATED
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands of U.S. dollars)
(unaudited)
ASSETS
September 30, 1999 March 31, 1999
Current assets:
Cash and cash equivalents $ 43,366 $ 38,479
Accounts receivable trade 10,176 9,413
Investment tax credits
recoverable 904 1,221
Inventory 5,216 6,963
Other 853 2,958
Total current assets 60,515 59,034
Capital assets 6,633 3,871
Deferred income taxes 1,834 1,830
Other 1,180 80
Total assets $ 70,162 $ 64,815
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Bank indebtedness $ -- $ 145
Accounts payable 3,479 2,428
Accrued liabilities 3,337 4,865
Current portion of
loans payable 97 1,465
Total current
liabilities 6,913 8,903
Long-term
liabilities:
Loans payable 519 504
Total liabilities 7,432 9,407
Shareholders' equity:
Share capital 71,750 69,740
Cumulative other
comprehensive loss (94) (94)
Deferred compensation (313) (326)
Deficit (8,613) (13,912)
Total shareholders'
equity 62,730 55,408
Total liabilities
and shareholders'
equity $ 70,162 $ 64,815
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