Here is the full announcement:
*************************************
The following was released to the media today, January 20, 1999 at 4:30pm
(EST).
VLSI Technology Reports Fourth Quarter Results
San Jose, California, January 20, 1999 - VLSI Technology, Inc. (NASDAQ:
VLSI) today reported fourth quarter revenues of $137.9 million, an increase
of 5.4 percent from the $130.8 million in the third quarter of 1998 and a
decrease of 28.5 percent from $193.0 million for the same quarter a year
ago. Fiscal year 1998 revenues were $547.8 million, a decrease of 23.1
percent from the $712.7 million reported in 1997.
Net income for the fourth quarter was $14.8 million or $0.31 per share (all
per share amounts diluted), which included a gain of $22.4 million
associated with the sale of a portion of the Company's shares in ARM
Holdings Limited. Without the gain, net income would have been $1.0 million
or $0.02 per share. Net income for the fourth quarter of 1997 was $22.0
million or $0.45 per share. In the third quarter of 1998 the Company
reported a net loss of $3.6 million or $0.08 per share. Without the special
charge and gains, third quarter net income would have been $1.2 million or
$0.03 per share.
Net income for 1998 was $20.9 million or $0.44 per share. Excluding the
special charge and gains, net income would have been $8.5 million or $0.18
per share. Income from continuing operations for 1997 was $66.6 million or
$1.36 per share.
"We are pleased that during this year's semiconductor slowdown VLSI remained
profitable," said Alfred J. Stein, chairman and CEO. "Revenues in the
Communications business increased, reflecting the growth in this market and
the sharpening of VLSI's strategic focus. Our balance sheet remains strong,
and we continue to invest prudently in leading-edge process technology and
advanced products that will be our key drivers for success going forward."
"VLSI is a strong competitor in its target markets, with a set of core
competencies that are second-to-none, and that have shown themselves to be
critical in decreasing our customers' time to market and enhancing their
competitiveness. Everything we do is designed to make our customers more
competitive," Stein said.
An excellent example of this focus is Velocity(tm). Announced in the third
quarter of 1998, the Velocity(tm) family of rapid silicon prototyping
products is designed to cut development time significantly in all of its
target markets. During the four months since that announcement, there has
been strong interest that continues to build momentum. The Company has
already won several significant designs from large customers, and expects to
win additional designs during 1999 and beyond.
"We believe that the business outlook for the semiconductor sector will show
steady improvement over the next two years," Stein said. To prepare for
this recovery, the company has begun converting its San Antonio wafer
fabrication facility to 8-inch capability. The conversion will result in
reduced production costs and the ability to quickly add additional capacity
as needed.
VLSI announced several key developments during the past four months:
* 3Com Partnership - (Communications Market) VLSI entered into a
strategic technology partnership with 3Com Corporation that will
revolutionize how data is secured from the desktop to the network. VLSI
will supply a custom data security coprocessor chip to 3Com that will be
designed into several of the company's network product offerings, including
network interface card (NIC) products for client and server applications.
* CDMA+* 13 QCELP Vocoder - (Communications Market) VLSI's CDMA+ * 13
QCELP Vocoder (voice coder) was the first to be successfully tested using
the Modified-Methodology IS-736 Minimum Performance Standard. Passing this
test is a critical step in demonstrating and delivering a high-voice-quality
CDMA solution. All cellular standards including CDMA, GSM, TDMA and PDC use
a vocoder algorithm to compress and decompress the speech being transmitted
over the air. The particular algorithm chosen for each standard has a major
impact on its voice quality. The 13 QCELP Vocoder was specifically
developed for CDMA to provide a wireline level of quality.
* Vega+* Single-Chip DECT Solution - (Communications Market) A
new-generation baseband processor for cost-sensitive DECT applications, the
Vega+ family delivers best-in-class DECT performance for handset and
residential base-station applications at a lower-than-ever price point.
Implemented in VLSI's leading edge 0.25µm process technology for low power
consumption, the new processor combines on-chip memory, additional signal
processing capabilities and lower-pin-count packages. Vega+'s on-chip
features include high-performance voice compression for digital answering
machines, full support for three-way calls, integrated Caller ID algorithms
and DTMF detection, allowing remote control of an answering machine.
* ViSTA* '99 Product Line - (Consumer Market) ViSTA(tm) '99 is the
first complete open-market silicon solution for design and implementation of
set-top boxes that intend to meet OpenCable industry specifications. The
new chips and associated software development tools also enable consumer
electronics manufacturers to build digital interactive multimedia set-top
boxes compatible with the world's diverse digital TV technical standards and
delivery models.
* ThunderBird PCI* - (Consumer Market) VLSI introduced two new members
of the ThunderBird PCI* audio integrated circuit (IC) family. The
ThunderBird SD* chips are the first independent audio accelerators offering
EAX standards compatibility and stereo-to-quad conversion from various
sources.
* Technical Relationship With Wind River Systems - (Advanced Computing
Market) VLSI strengthened the Velocity* Rapid Silicon Prototyping
initiative's credentials as an innovative solution for embedded
hardware/software co-design by establishing a technical linkage with Wind
River Systems' Tornado* development environment and VxWorks® embedded
operating system. Hardware/software co-design makes big contributions to
Rapid Silicon Prototyping's ability to cut embedded system-on-a-chip design
cycles by 50 percent or more. Support for industry-leading software from
Wind River Systems marks an important milestone in the emergence of the
Velocity initiative as an industrial-strength alternative for
time-to-market-critical embedded product design and development programs.
Certain statements in this press release are forward-looking. Actual
results may differ materially. Among the factors that could cause actual
results to differ are the following: weakness in the semiconductor industry
in general and in the wireless communications and consumer entertainment
markets in particular; further deterioration in Asian economic markets;
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; inability to hire
and retain top management personnel to fill vacated positions; low 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 26, 1997 and the
Quarterly Report on Form 10-Q (A) for the quarter ended September 25, 1998.
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 custom and semicustom
integrated circuits for leading firms in the wireless communications,
networking, consumer digital entertainment and computing markets. VLSI's
value proposition is based on full-service customer support, deep libraries
of vertical market-focused IC intellectual property, unparalleled custom
circuit design expertise enabled through the Velocity* Rapid Silicon
Prototyping design style, and one of the world's most flexible and efficient
custom circuit manufacturing facilities in San Antonio, Texas. The company
is based in San Jose, California with 1998 revenues from continuing
operations of $547.8 million, and approximately 2,200 employees worldwide.
For more information, visit the VLSI homepage, www.vlsi.com.
# # #
Velocity, Vega+, CDMA+, ViSTA, ThunderBird PCI and ThunderBird SD are
trademarks of VLSI Technology, Inc. Other brand or product names are
registered trademarks or trademarks of their respective companies.
* A Summary of Consolidated Financial Statements is available on VLSI's
homepage: www.vlsi.com
|
