MILPITAS, Calif.--(BUSINESS WIRE)--Jan. 22, 1998--C-Cube Microsystems Inc.
CUBE , the leading provider of digital video technology, today announced financial results
for its fourth quarter and 1997 year end, which ended Dec. 31, 1997. Revenues for the
fourth quarter were $90.1 million, compared with $81.7 million in the third quarter of 1997
and $95.5 million reported in the fourth quarter of 1996. Total revenues for 1997 were
$337.0 million, compared with $319.8 million in 1996. Net income for the fourth quarter
was $11.6 million or $0.30 diluted earnings per share. This compares with net income of
$9.7 million, or $0.25 diluted earnings per share in the third quarter of 1997 and $17.3
million or $0.44 diluted earnings per share in the fourth quarter of 1996. Net income for
1997 was $44.3 million, or $1.15 diluted earnings per share, compared with $60 million, or
$1.59 diluted earnings per share before charges related to the DiviCom acquisition in 1996.
During the fourth quarter, the Company adopted Statement of Financial Accounting
Standards No. 128, which requires a dual presentation of basic and diluted earnings per
share. Prior period earnings per share amounts have been restated accordingly. "New
volume markets in digital video are gaining momentum as the fundamental shift to digital
begins to impact every aspect of consumer video entertainment," stated Alexandre
Balkanski, president and CEO of C-Cube Microsystems. During the fourth quarter,
C-Cube continued to drive the adoption of its products in key markets as evidenced by
several announcements, including: - Bell South's Americast Program - C-Cube and
DiviCom announced the deployment of Bell South's Americast program in New Orleans
based on a complete end-to-end C-Cube/DiviCom solution. DiviCom is providing the
headend system for 160+ channel wireless service to deliver Americast programming to
subscribers. C-Cube's settop silicon and production-ready design provide the core for
Zenith's consumer settops that allow Americast subscribers to receive the digital video
services in the home.
- MediaView 5.0 - DiviCom introduced the MediaView System 5.0, a complete solution
for implementing digital headend operations. Building on DiviCom's systems and integration
expertise, the MediaView System 5.0 offers service providers the ability to monitor
network operations from remote locations, simplifying management of the complete
network. This new solution also allows multiple networks to share a single multiplexer,
significantly reducing a service provider's hardware investment.
- Toshiba Tecra - C-Cube announced that Toshiba, the leading notebook supplier, selected
ZiVA for its Tecra DVD notebooks. The power efficiency of C-Cube's ZiVA DVD
decoder enables the Tecra 750DVD and 750CDM to playback an entire movie on a single
battery.
- Dell Computer - C-Cube announced that Dell has selected C-Cube's ZiVA DVD
decoder for its new Dimension XPS DVD PCs.
About C-Cube Microsystems
C-Cube Microsystems Inc. is the industry leader in the development and delivery of highly
integrated digital video silicon solutions that address the consumer electronics,
communications and convergence markets. C-Cube is headquartered in Milpitas, with
offices in North America, Europe and Asia. Its stock is traded on the NASDAQ National
Market System under the symbol CUBE. C-Cube can be reached at 408/490-8000 or on
the World Wide Web at c-cube.com . 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. Actual results could differ
materially from those projected in the forward-looking statements as a result of the risk
factors set forth in the Company's Forms 10-K and 10-Q reports.
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Year Ended
Dec. 31, Dec. 31,
1997 1996 1997 1996
Net revenues $ 90,065 $ 95,520 $337,012 $319,758
Costs and expenses:
Cost of revenues 42,330 42,017 151,333 144,985
Research and development 16,344 15,327 64,204 44,177
Selling, general and
administrative 13,769 12,123 52,732 39,002
Purchased in-process
technology -- -- -- 131,349
------- ------- ------- -------
Total 72,443 69,467 268,269 359,513
------- ------- ------- -------
Income (loss) from
operations 17,622 26,053 68,743 (39,755)
Other income
(expense),net (122) (677) (1,757) (28)
------- ------- ------- -------
Income (loss) before income
taxes and minority interest 17,500 25,376 66,986 (39,783)
Income tax expense 6,028 8,454 22,895 32,944
------- ------- ------- -------
Income (loss) before
minority interest 11,472 16,922 44,091 (72,727)
Minority interest in net
income (loss) of subsidiary (125) (363) (248) 318
------- ------- ------- -------
Net income (loss)$ $ 11,597 $ 17,285 $ 44,339 $(73,045)
======== ======== ======== =========
Diluted income (loss)
per share $0.30 $0.44 $1.15 $(2.15)
======== ======== ======== =========
Shares used in computation 42,023 41,511 41,683 33,928
======== ======== ======== =========
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Dec. 31, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and equivalents $145,034 $ 76,241
Short-term investments 21,316 6,005
Receivables -- net 40,606 40,706
Inventories 15,270 28,056
Deferred taxes and other
current assets 26,992 41,669
-------- --------
Total current assets 249,218 192,677
Property and equipment -- net 23,561 22,653
Production capacity rights 18,200 46,200
Distribution rights -- net 1,648 1,812
Purchased technology -- net 9,408 12,895
Other assets 3,903 3,278
-------- --------
Total $305,938 $279,515
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $-- $ 24,500
Accounts payable 9,221 18,320
Accrued liabilities 29,367 24,533
Current portion of
long-term obligations 608 837
-------- ---------
Total current liabilities 39,196 68,190
Long-term obligations 90,962 92,140
-------- ---------
Total liabilities 130,158 160,330
-------- ---------
Minority interest in subsidiary 365 613
Stockholders' equity:
Common stock 203,728 191,044
Deferred stock compensation -- (250)
Notes receivable from stockholders -- (305)
Accumulated translation adjustments (1,969) (1,238)
Unrealized loss on investments (17) (13)
Accumulated deficit (26,327) (70,666)
Total stockholders' equity 175,415 118,572
--------- ---------
Total $305,938 $279,515
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