Subject:
VLSI Technology Reports Record Revenues and Profits
Date:
Thu, 15 Jan 1998 13:40:49 -0800
From:
owner-pressreleases@infamous.vlsi.com
San Jose, Calif., January 15, 1998 - VLSI Technology, Inc. (NASDAQ:VLSI)
today reported its second consecutive quarter of record revenues and
profits. Fourth quarter revenues were $193.0 million, an increase of 10.9%
from $174.0 million for the same quarter one year ago and an increase of
6.5% over the $181.2 million revenues in the third quarter of 1997.
Revenues for fiscal year 1997 were $712.7 million, up from $669.0 million
for fiscal year 1996. All revenue figures exclude the revenues of COMPASS
Design Automation, Inc., which was sold in September, 1997.
Net income for the fourth quarter reached $22.0 million, or $0.45 per
share, compared to a loss from continuing operations of $61.7 million, or
$1.33 per share for the fourth quarter 1996, which included a pre-tax
charge associated with the San Jose wafer fab closure. In the third
quarter of 1997, the company reported income from continuing operations of
$20.8 million, or $0.42 per share. Income from continuing operations for
fiscal year 1997 was $66.6 million as compared to a loss from continuing
operations of $46.0 million for fiscal year 1996. All per share amounts
are diluted earnings per share under the new calculation methodology
prescribed by financial reporting requirements.
"We are extremely pleased with VLSI's performance in our fourth quarter and
for all of 1997. We focused the company on designing and manufacturing
custom semiconductors for specific, high-growth markets, while maintaining
leadership in our traditional ASIC business. As a consequence, we
consistently delivered positive results in every quarter with significant
improvement in our gross margins and operating profits," said Alfred J.
Stein, chairman and CEO. "In addition, we sold a non-strategic and
unprofitable business, COMPASS Design Automation, and removed an
underperforming asset by ending production at the San Jose fab. We also
re-purchased 2.5 million shares of our stock at a cost of $49.8 million
while strengthening our cash position by adding $78 million to our cash
reserves."
"1997 was a pivotal year for VLSI. We began by putting in place a new
business strategy and financial model with aggressive goals and objectives.
We executed successfully on our overall strategy, and we have made
excellent progress toward reaching our long-term strategic and financial
goals," said Richard M. Beyer, president and chief operating officer. "Our
communications businesses are growing strongly as we broaden our product
capabilities and establish new customer relationships. At the same time,
we are investing and developing relationships in other high-potential
target markets. Our manufacturing organization continues to perform
exceptionally well, while at the same time upgrading to more advanced
processes."
In the past quarter, VLSI made a number of significant announcements,
including:
OneC GSM -- A highly integrated, customizable, single-chip baseband silicon
solution which gives GSM mobile-phone manufacturers a powerful framework to
more quickly leverage their innovations into market-leading wireless
products. OneC allows high volume mobile phone manufacturers to
differentiate their products more quickly by customizing its standard
semiconductor design for their specific requirements. The OneC chip
eliminates the usual tradeoff manufacturers must make between flexibility
and time-to-market.
VeNET GEM -- VLSI's second generation gigabit Ethernet Media Access
Controller (MAC) device. Implemented in 0.35-micron CMOS technology, this
controller provides a highly integrated solution that combines high
performance and low power consumption at a very competitive price; key
elements for the development of the gigabit Ethernet market.
VMS235 data security processor -- VLSI's new VMS235 data security
processor chip will be integrated as a standard feature into high-speed
cable modems sold by Toshiba America Information Systems, Inc. (TAIS). The
design win at Toshiba further positions VLSI as a leading provider of data
security chips for the fast growing Multimedia Cable Network System (MCNS)
cable modem market.
VISTA '98=81 -- The second generation of VLSI's set-top architecture provide=
s
a new, comprehensive development platform that combines standard and custom
IC products, application development boards and extensive software support.
Stressing low costs and design flexibility, the VISTA '98 platform targets
consumer digital set-top box end products anticipated for introduction in
1998.
Process Update -- VLSI has released design libraries supporting the
company's advanced 0.25-micron (0.2-micron L-effective) generation VSC9
manufacturing process and will begin shipments of libraries for its
0.20-micron (0.15-micron L-effective) VSC10 process in January 1998. The
on-schedule release of the libraries has enabled VLSI customers to begin
designing 0.25 and 0.20-micron class circuits, and signals smooth progress
in the company's plans to begin manufacturing of chips based on the new
processes in 1998.
"VLSI exits the year knowing where it wants to go and how to get there,"
said Stein. "With more product differentiation taking place inside the
silicon and as the 'system-on-chip' product area continues to evolve, we
are well-positioned to serve the needs of our customers by helping them be
faster to market with more highly differentiated products."
Certain statements in this press release are forward looking. Actual
results could differ materially. Among the factors that could cause actual
results to differ are the following: slowing growth or decline in the
demand for the company's semiconductors; product pricing pressures and the
impact of competitive forces; loss of one or more major customers,
particularly in the communications market; failure to develop and introduce
new products in a timely manner; lower factory utilization and excess
capacity leading to unfavorable gross margins; and unanticipated problems
experienced in ramping up production of a new process or facility. For a
more detailed discussion of these and other risk factors, see the company's
SEC reports, including but not limited to the Annual Report on Form 10-K
for the year ended December 27, 1996 and the Quarterly Report on Form 10Q
for the third quarter ended September 26, 1997. The Company disclaims any
duty to update the forward-looking statements contained herein, except as
may be required by law.
About VLSI Technology, Inc.
VLSI Technology, Inc. designs and manufactures System-Level Silicon=81
integrated circuits based on its FSB=81 functional system blocks=81 library.
Targeting its offerings
toward the wireless communications, networking, consumer digital
entertainment and computing markets, the company offers its customers
advanced system-level integration capabilities. The company is based in
San Jose, California, with 1997 revenues from continuing operations of
$712.7 million, and approximately 2,600 employees worldwide. Visit VLSI's
homepage at vlsi.com.
# # #
=46SB, functional system blocks, and System-Level Silicon are trademarks of
VLSI Technology, Inc. All other brand or product names are trademarks
and/or registered trademarks of their respective owners.
=46or Media Inquiries: David Harrah
Director, Public Relations
408-434-3070
david.harrah@sanjose.vlsi.com
=46or Financial Inquiries: Bala Iyer
Chief Financial Officer
408-434-3073
bala.iyer@sanjose.vlsi.com
Danielle Borel
Public Relations Specialist
VLSI Technology, Inc.
1109 McKay Drive, M/S 28
San Jose, Ca 95131-1706
e-mail: danielle.borel@sanjose.vlsi.com
Phone: 408-474-5570
=46ax: 408-922-5245 |
