Alliance Semiconductor Reports Financial Results for the Quarter Ended September 26, 1998
Business Editors & Computer Writers
SPECIAL ADVISORY: Except for historical information contained
herein, the following material constitutes forward looking
statements: actual results could differ materially from those
projected in the forward looking statements, as set forth in the
last paragraph of this communication.
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 20, 1998--Alliance Semiconductor Corporation (Nasdaq:ALSC - news) today reports net revenues of $10.5 million and net loss of $5.9 million, or $0.14 per share for the second quarter of fiscal year 1999 ended September 26, 1998.
The net loss includes a pre-tax charge of $2.9 million to adjust the valuation of the Company's inventory to reflect a decline in market value of inventory in each of the product lines. Also included in the results is a net profit of $3.7 million, or $0.09 per share attributable to recognition of the Company's share of income from United Semiconductor Corporation (USC), based on approximately 15.5% ownership. In the quarter, SRAMs accounted for 61% of revenues and DRAMs 38%.
These results compare to net revenues $29.0 million for the same quarter last year and net loss of $4.6 million, or $0.12 per share, including a net profit of $2.7 million, or $0.07 per share attributable to recognition of the Company's share of income from USC. For the prior quarter ended June 27, 1998, revenues were $10.2 million and net loss of $14.7 million, or $0.36 per share.
''Business conditions have not changed much in the quarter compared to the business conditions in quarter ended June 27, 1998. Average selling prices (ASP) are still soft in SRAM and DRAM product lines,'' said N. D. Reddy, Chairman, President and CEO of Alliance. ''The Company is aggressively incorporating the leading edge technologies in its SRAM and DRAM product lines. This enables the Company to introduce low cost SRAM and DRAM products having higher speeds and smaller die sizes. As a result, the Company expects improved gross margin in the future quarters.''
''During the quarter, to achieve a stronger balance sheet, the Company reduced inventory by 33%, improved cash position and reduced accounts payable from $20.1 million to $6.2 million. Our goal is to further lower inventory and maintain operating expenses at or below present level for the quarter ending December 1998. Furthermore, the Company has invested an additional $3.1 million in United Semiconductor Incorporated (USIC).''
Mr. Reddy continued to state, ''Major progress has been achieved in our Bangalore (India) Design Center during the quarter. Presently, over 25 design engineers are employed at the Design Center. The focus of the Design Center is to develop memory and memory intensive logic products for networking and computing markets. The first product out of the Design Center was designed in less than six months.''
Company Information
Alliance Semiconductor Corporation is a leading worldwide supplier of high performance memory and memory intensive logic products. Alliance's product lines include Static Random Access Memory (SRAM), Dynamic Random Access Memory (DRAM), Flash memory and embedded memory and logic technologies. Alliance designs, develops and markets its products to the desktop and portable computing, networking, telecommunications and instrumentation markets. Alliance manufactures its products through independent and joint venture manufacturing facilities, using advanced CMOS process technologies with line widths as narrow as 0.25 microns. Alliance was founded in 1985 with headquarters in San Jose, California. Additional Company information can be found on our home page: alsc.com.
Except for historical information, the above statements of this press release (including, without limitation, expressions of expectation, belief, anticipation or estimation of the Company or its management) are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. These risks and uncertainties include such factors, among others, as the potential for continued price erosion of the Company's products; decreased demand or increased competitive environment for the Company's products, including, without limitation, changes in the status of the SRAM, DRAM, Flash memory and embedded memory and logic markets and the demand for the Company's SRAM, DRAM, Flash memory and embedded memory and logic products; inability of the Company to obtain necessary capacity, timely delivery or acceptable yields from the entities that provide wafer fabrication, wafer sort, assembly and/or test services to the Company; increases in prices such entities charge the Company for wafer fabrication, wafer sort, assembly and/or test services; obsolescence of the Company's products; accumulation of excess inventory or price erosion or obsolescence of existing inventory, any of which may result in charges against the Company's earnings; inability to timely ramp up production of and deliver new or enhanced SRAM or DRAM products; inability to successfully develop and introduce Flash and embedded memory and logic products; inability to successfully recruit and retain qualified technical and other personnel; adverse effects of the recent financial and economic crisis in Asia; adverse developments in current or future litigation or administrative proceedings, including without limitation liquidation of antidumping duties imposed on the Company's importation of Taiwan-manufactured SRAMs; and the risk factors listed under Item 1: Business and Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the fiscal year ended March 28, 1998 which has been filed with the Securities and Exchange Commission and each of which are available through the Company's home page, alsc.com. These forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based, in whole or in part.
ALLIANCE SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Six Months
Ended Ended
September 30, September 30,
-------- --------
1998 1997 1998 1997
-------- -------- -------- --------
Net revenue $ 10,472 $ 28,998 $ 20,622 $ 65,337
Cost of revenue 13,544 31,693 41,035 61,308
-------- -------- -------- --------
Gross profit (3,072) (2,695) (20,413) 4,029
-------- -------- -------- --------
Operating expenses:
Research and development 3,511 3,558 7,727 7,665
Selling, general and
administrative 2,797 4,885 6,808 8,940
-------- -------- -------- --------
Total operating
expenses 6,308 8,443 14,535 16,605
-------- -------- -------- --------
Income (loss) from
operations (9,380) (11,138) (34,948) (12,576)
Other income (expense),
net (180) 54 15,560 243
-------- -------- -------- --------
Income (loss) before
income taxes and equity
in income of USC (9,560) (11,084) (19,388) (12,333)
Expense (benefit) for
income taxes -- (3,879) 8,397 (4,316)
-------- -------- -------- --------
Income (loss) before
equity in income of USC (9,560) (7,205) (27,785) (8,017)
Equity in income of USC 3,691 2,654 7,237 4,574
-------- -------- -------- --------
Net income (loss) ($ 5,869) ($ 4,551) ($20,548) ($ 3,443)
======== ======== ======== ========
Net income (loss)
per share:
Basic ($ 0.14) ($ 0.12) ($ 0.50) ($ 0.09)
======== ======== ======== ========
Diluted ($ 0.14) ($ 0.12) ($ 0.50) ($ 0.09)
======== ======== ======== ========
Weighted average number of
common shares:
Basic 41,456 39,175 41,209 39,087
======== ======== ======== ========
Diluted 41,456 39,175 41,209 39,087
======== ======== ======== ========
Alliance Semiconductor Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, March 31,
1998 1998
ASSETS
Current assets:
Cash and cash equivalents $ 12,873 $ 9,522
Accounts receivable, net 6,063 15,716
Inventory 18,508 32,375
Other current assets 3,325 27,214
Total current assets 40,769 84,827
Property and equipment, net 10,801 11,123
Investment in Chartered Semiconductor 51,596 51,596
Investment in United Semiconductor Corp. 77,333 85,935
Investment in United Silicon, Inc. 16,799 13,701
Other assets 1,379 1,083
--------- ---------
$ 198,677 $ 248,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,238 $ 35,714
Accrued liabilities 7,498 7,771
Current portion of long term obligations 1,047 1,463
Total current liabilities 14,783 44,948
Long term obligations 740 1,276
Total liabilities 15,523 46,224
Stockholders' equity
Common stock 415 404
Additional paid-in capital 184,749 183,099
Retained earnings (2,010) 18,538
Total stockholders' equity 183,154 202,041
--------- ---------
$ 198,677 $ 248,265
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