(BSNS WIRE) C-Cube Reports Revenue and Profits for Third Quarter of 1998
C-Cube Reports Revenue and Profits for Third Quarter of 1998
Business Editors/Technology Writers
MILPITAS, Calif.--(BUSINESS WIRE)--Oct. 12, 1998--C-Cube
Microsystems Inc. (Nasdaq:CUBE), the leading provider of digital video
technology, today announced financial results for its third quarter,
which ended September 30, 1998.
Revenue for the third quarter was $86.2 million, which represents
an increase of 5.4% from the $81.7 million reported in the third
quarter of 1997. Net income and earnings per share for the third
quarter was $13 million and $0.34 per diluted share, which represents
an increase of 35% and 36%, respectively, from the from $9.7 million
and $0.25 per diluted share in the third quarter of 1997. Third
quarter results included a $0.06 per diluted share extraordinary gain
from the repurchase of convertible notes.
"Our communications business reached 60% of revenue for the first
time this quarter and we continued to execute well in a difficult
environment,"(a) said Alexandre Balkanski, president and CEO of C-Cube
Microsystems.
During the quarter, C-Cube repurchased $42.8 million of
convertible long-term debt. The total amount of debt retired since the
repurchase began in the second quarter is $63.4 million. This
represents a 74% reduction to the $86.3 million in the original face
value of the convertible notes. The repurchase reduced fully diluted
shares outstanding by 2.1 million shares, or approximately 5%.
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DiviCom highlights for the quarter included:
-- DiviCom was selected by DIRECTV to provide encoders,
multiplexers, system controllers and system integration for their
state-of-the-art Los Angeles Broadcast Center.
-- DiviCom was selected by DIRECTV Japan to supply encoders,
multiplexers and controllers.
-- DiviCom announced an interactive cable product called InterSect
for cable operators. This product allows for interactive two-way
communication over cable networks, enabling interactive
applications such as web-browsing, e-mail, stock ticker and
electronic program guides.
-- DiviCom announced a DVB-SimulCrypt solution to provide increased
security for the Direct-To-Home market.
Semiconductor highlights for the quarter included:
-- Semiconductor announced DVxpress-MX(tm), the world's first
all-digital, mixed-format video production solution to allow MPEG
and DV to co-exist in broadcast and studio environments.
-- Semiconductor encoder chips were selected by NDS for their
digital broadcast encoders.
-- Semiconductor announced wins with JVC and Sharp for set-top
silicon for SKY PerfecTV! Service in Japan.
DiviCom and Semiconductor highlights for the quarter included:
-- DiviCom and Semiconductor are working with Pioneer and CANAL+ on
digital cable systems for the U.S. market.
-- DiviCom and Semiconductor announced wins with GTE - Oahu to
provide systems and silicon, respectively.
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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 economic conditions, competition, the rate of the transition
from analog to digital video, digital video acceptance and management
changes in addition to the risk factors set forth in the company's
Forms 10-K and 10-Q reports. The company has attempted to identify
forward-looking statements in this press release by placing a note
"(a)" following each sentence containing such statements.
About C-Cube Microsystems Inc.
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 under the symbol CUBE. C-Cube can be reached at
408/490-8000 or on the World Wide Web at c-cube.com.
About DiviCom Inc.
DiviCom develops and integrates products that make digital video
networking possible. Products include audio/video encoding, data
broadcast solutions, network management systems, consulting and
integration services. Based on the MPEG-2, DVB and ATSC international
standards, DiviCom's products enable digital video broadcasting over a
variety of networks including satellite, wireless, fiber, copper and
cable. DiviCom is a wholly owned subsidiary of C-Cube Microsystems
Inc. (Nasdaq:CUBE), based in Milpitas. DiviCom can be reached at
408/944-6700 or on the World Wide Web at divi.com.
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C-Cube Microsystems Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Nine Months Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
Net revenues $ 86,162 $ 81,717 $255,997 $246,947
Costs and expenses:
Cost of revenues 38,757 36,750 116,768 109,003
Research and development 18,867 16,798 55,134 47,860
Selling, general and
administrative 15,207 13,555 43,756 38,965
Total 72,831 67,103 215,658 195,828
Income from operations 13,331 14,614 40,339 51,119
Other income (expense), net 1,636 (33) 2,547 (1,635)
Income before income taxes,
minority interest and
extraordinary item 14,967 14,581 42,886 49,484
Income tax expense 4,490 4,958 12,869 16,865
Income before minority interest
and extraordinary item 10,477 9,623 30,017 32,619
Minority interest in
net loss of subsidiary (185) (40) (354) (123)
Income before extraordinary item 10,662 9,663 30,371 32,742
Extraordinary gain on buyback
of convertible notes 2,356 -- 3,494 --
Net income $ 13,018 $ 9,663 $ 33,865 $ 32,742
Income per diluted share before
extraordinary item $ 0.28 $ 0.25 $ 0.79 $ 0.85
Extraordinary item per
diluted share 0.06 -- 0.09 --
Net income per diluted share $ 0.34 $ 0.25 $ 0.88 $ 0.85
Shares used in computation 39,686 42,055 40,769 41,521
C-Cube Microsystems Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
1998 1997
Assets
Current assets:
Cash and equivalents $ 147,795 $ 145,034
Short-term investments 30,694 21,316
Receivables -- net 33,011 40,606
Inventories 16,549 15,270
Deferred taxes and other current assets 28,519 26,162
Total current assets 256,568 248,388
Property and equipment -- net 28,709 23,561
Production capacity rights 14,000 18,200
Distribution rights -- net 1,524 1,648
Purchased technology -- net 6,792 9,408
Other assets 1,075 2,903
Total $ 308,668 $ 304,108
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 16,864 $ 9,221
Accrued liabilities 47,632 30,168
Current portion of long-term obligations 568 608
Total current liabilities 65,064 39,997
Long-term obligations 26,199 88,331
Total liabilities 91,263 128,328
Minority interest in subsidiary 11 365
Stockholders' equity:
Common stock 211,697 203,728
Accumulated translation adjustments (1,911) (1,969)
Unrealized gain (loss) on investments 70 (17)
Accumulated earnings (deficit) 7,538 (26,327)
Total stockholders' equity 217,394 175,415
Total $ 308,668 $ 304,108
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CONTACT: C-Cube Microsystems Inc.
Walt Walczykowski, 408/490-8000 (CFO)
Nick Kormeluk, 408/490-8561 (director of IR)
Mary Giani, 408/490-8628 (press contact)
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
EARNINGS
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