SILICON STORAGE TECHNOLOGY INC files 12/31/99 10-K. Reports $124.7
mil tot rev $-4 mil NI $(0.17) EPS.
IFN Smart Edgar News - February 24, 2000 08:40
Excerpted from 10-K405 filed on 02/24 by SILICON STORAGE TECHNOLOGY INC:
SILICON STORAGE TECHNOLOGY INC files 12/31/99 10-K. Reports $124.7 mil tot rev, $-4 mil NI, $(0.17) EPS.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE
BASED ON INFORMATION AVAILABLE TO US ON THE DATE HEREOF, AND WE ASSUME NO
OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED
BELOW UNDER THE HEADING "BUSINESS RISKS", AS WELL AS THOSE DISCUSSED ELSEWHERE
IN THIS REPORT.
OVERVIEW
We are a leading supplier of flash memory semiconductor devices for the
digital consumer, networking, wireless communication and Internet computing
markets.
Historically, the semiconductor industry has been cyclical, alternately
experiencing periods of over supply and increased demand. During 1999, the
semiconductor industry transitioned from a period of over-supply to a period of
increased demand against the available capacity, resulting in an industry-wide
shortage of flash memory product. From late 1996 through mid-1999, selling
prices of our products declined significantly. Selling prices of semiconductor
products have generally declined over time and are expected to continue to
decline over the long term, principally due to increased market competition.
Specifically, during 1999 and 1998, industry over-capacity resulted in higher
than normal price declines in our markets, which unfavorably impacted our
revenues, gross margins, and profitability. During the second half of 1999, we
were able to increase the selling price of some of our products as the industry
shifted to a period of industry-wide shortage. This trend may not continue and
prices may not remain stable. In addition, the current market environment may
constrain our ability to obtain wafers to manufacture our products, which may
also impair our profitability.
We derived 81% of our product revenues during 1999 from product shipments to
Asia. Additionally, our major wafer suppliers and packaging and testing
subcontractors are all located in Asia. During 1998 and 1997, several Asian
countries where we do business, including Japan, Taiwan and Korea, experienced
severe currency fluctuation and economic deflation, which negatively impacted
our revenues and our ability to collect payments from these customers. In
September 1999, Taiwan experienced a major earthquake. The resulting disruption
to the manufacturing operations in the wafer foundries and assembly and testing
subcontractors that we use in Taiwan negatively impacted our revenues and
operating results during the fourth and third quarter of 1999.
(End of item excerpt.)
----------FINANCIAL DATA SCHEDULE--------
MULTIPLIER 1,000
PERIOD-TYPE YEAR
FISCAL-YEAR-END DEC-31-1999
PERIOD-START JAN-01-1999
PERIOD-END DEC-31-1999
CASH 1,223
SECURITIES 0
RECEIVABLES 39,393
ALLOWANCES 535
INVENTORY 29,766
CURRENT-ASSETS 73,188
DEPRECIATION 4,859
TOTAL-ASSETS 88,806
CURRENT-LIABILITIES 47,345
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 60,570
OTHER-SE (19,555)
TOTAL-LIABILITY-AND-EQUITY 88,806
SALES 118,242
TOTAL-REVENUES 124,794
CGS 94,652
TOTAL-COSTS 129,238
OTHER-EXPENSES 0
LOSS-PROVISION 0
INTEREST-EXPENSE 214
INCOME-PRETAX (3,928)
INCOME-TAX 88
INCOME-CONTINUING (4,016)
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME (4,016)
EPS-BASIC (0.17)
EPS-DILUTED (0.17)
------------------------------------------------------------------------
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