Alliance Semiconductor Reports Financial Results for the Quarter and Fiscal Year Ended April 3, 1999
Business Wire - April 27, 1999 17:58
SAN JOSE, Calif.--(BUSINESS WIRE)--April 27, 1999--Alliance Semiconductor Corporation (Nasdaq: ALSC) today reported that revenue for the fourth quarter of 1999 ended April 3, 1999, was $13.9 million, up 4% from the prior quarter's revenue of $13.3 million and down 51% from the year ago quarter's revenue of $28.3 million.
Alliance closed its fiscal year with revenues of $47.8 million, a decrease of 60% from 1998's revenue of $118.4 million. Revenues for 1998 included approximately $8 million related to the graphics accelerator product line discontinued during the 2nd quarter of fiscal year 1999.
Net income for the fourth quarter was $0.6 million, resulting in basic and diluted net income per share of $0.01, compared with last quarter's net loss of $2.1 million and a net loss per share of $0.05 and the year ago quarter's net income of $0.1 million and break even net income per share.
The net income for the fourth quarter includes a net profit of $1.6 million, or $0.04 per share attributable to recognition of the Company's share of net income from United Semiconductor Corporation (USC), based on approximately 15.1% ownership and a loss of $0.7 million or $0.02 per share related to writing-off the remaining investment in Maverick Networks in recognition of the Company's share of their net loss. The Company previously announced on January 27, 1999, that it approved the merger of Maverick Networks by Broadcom Corporation, and the Company is expected to receive approximately 584,000 shares of Broadcom Corporation (Nasdaq: BRCM) stock at closing. This transaction is expected to close within the next thirty days, however, Broadcom shares are subject to restrictions, including a restriction which prevents the Company from selling its shares until Broadcom first publicly reports thirty days of combined operating results for the new entity.
Alliance CEO, President & Chairman, N. D. Reddy said, "After a number of disappointing quarters the performance of the Company continues to improve. Market prices for high performance SRAMs and DRAMs remained stable again last quarter and overall demand seems to be increasing based on current bookings and sales activity. The sales order backlog for this quarter's shipments is approximately $8 million as of April 26th."
Mr. Reddy commented, "The gross profit margins improved again for the second consecutive quarter, increasing from 18% in the third quarter to 40% in the fourth quarter. This was due to a variety of factors including; stable and higher average selling prices and sale of inventory which was written-down to the current market value in prior quarters. Given the current market environment, the gross profit margins are expected to remain in the 30-35% range this quarter."
Mr. Reddy continued to comment, "Visibility has improved and we believe that an upturn in the semiconductor industry cycle is emerging. Based on this, I am hopeful the Company's revenues will grow over last fiscal year because of introduction of advanced technology based products in SRAM, DRAM, Flash and Networking. Some new products are in production ramp-up. Based on this, the majority of the technology mix is moving towards 0.3um and below geometrics."
"This quarter, the Company expects to introduce the first product of an Internet Protocol Routing Processor (IPRP) family that leverages Alliance's logic and embedded memory technology, to enable hardware accelerated wire speed routing of IP packets, in multi-ported Gigabit and Terabit routers. These IPRP devices should become integral components in mission critical and multimedia enhanced high-end routers, which are being deployed to build the next generation Internet infrastructure. The company has achieved working silicon of the first product of IPRP family during the quarter ended April 3, 1999."
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 products. Alliance designs, develops and markets its products to the desktop and portable computing, networking, telecommunications, instrumentation, and consumer 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 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, networking and embedded memory and logic markets and the demand for the Company's SRAM, DRAM, Flash, networking 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 or networking 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 and Latin America; year 2000 issues of the Company, its suppliers, and its customers; adverse developments in current or future litigation or administrative proceedings, including; the on-going anti-dumping investigation concerning importation of DRAMs from Taiwan as well as 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 and Form 10Q for quarter ended January 2, 1999, which have been filed with the Securities and Exchange Commission and 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 Ended Year Ended
March 31, March 31,
1999 1998 1999 1998
Net revenue $ 13,879 $ 28,295 $ 47,783 $118,400
Cost of revenue 8,332 29,756 60,231 117,400
--------- --------- --------- ---------
Gross profit 5,547 (1,461) (12,448) 1,000
Operating expenses:
Research and
development 3,087 4,313 14,099 15,254
Selling, general and
administrative 2,853 4,851 12,524 18,666
--------- --------- --------- ---------
Total operating
expenses 5,940 9,164 26,623 33,920
Loss from operations (393) (10,625) (39,071) (32,920)
Other income (expense),
net (476) (127) 14,697 287
Loss before income
taxes and equity in
income of USC (869) (10,752) (24,374) (32,633)
Expense (benefit) for
income taxes 128 (3,763) 8,525 (11,421)
Loss before equity in
income of USC (997) (6,989) (32,899) (21,212)
Equity in income of USC 1,555 7,068 10,856 15,475
Net income (loss) $ 558 $ 79 ($22,043) ($ 5,737)
Net income (loss)
per share:
Basic $ 0.01 $ 0.00 ($ 0.53) ($ 0.15)
Diluted $ 0.01 $ 0.00 ($ 0.53) ($ 0.15)
Weighted average number
of common shares:
Basic 41,573 40,016 41,378 39,493
Diluted 41,840 42,720 41,378 39,493
ALLIANCE SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
March 31, March 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $11,394 $9,522
Accounts receivable, net 8,943 15,716
Inventory 12,927 32,375
Other current assets 3,524 27,214
---------- ----------
Total current assets 36,788 84,827
Property and equipment, net 9,943 11,123
Investment in Chartered Semiconductor 51,596 51,596
Investment in United Semiconductor Corp. 80,953 85,935
Investment in United Silicon, Inc. 16,799 13,701
Other assets 1,121 1,083
---------- ----------
$197,200 $248,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,046 $ 35,714
Accrued liabilities 5,325 7,771
Current portion of long term obligations 1,315 1,463
---------- ----------
Total current liabilities 14,686 44,948
Long term obligations 578 1,276
---------- ----------
Total liabilities 15,264 46,224
Stockholders' equity
Common stock 416 404
Additional paid-in capital 185,025 183,099
Retained earnings (deficit) (3,505) 18,538
---------- ----------
Total stockholders' equity 181,936 202,041
---------- ----------
$197,200 $248,265
CONTACT: Alliance Semiconductor
Dave Eichler, 408/383-4900
investor@alsc.com |
