ISSI Announces Fourth Quarter and Fiscal Year 2005 Results
SANTA CLARA, Calif., Nov. 3, 2005 -- Integrated Silicon Solution, Inc. today reported its financial results for the fourth fiscal quarter and year ended September 30, 2005.
Revenue in the fourth quarter was $61.5 million, compared with $31.1 million in the prior year period. The Company reported a GAAP net loss for the fourth quarter of ($6.3) million or ($0.17) per diluted share, compared with a net loss of ($15.6) million or ($0.43) per diluted share, in the prior year period. The fourth quarter GAAP net loss includes a charge for impairment on investments of ($4.9) million, charges related to the purchase accounting for the acquisition of Integrated Circuit Solution, Inc. (ICSI) of ($1.1) million, a charge to allowance for doubtful accounts for amounts due primarily from Delphi Electronics in regards to their bankruptcy filing totaling ($0.9) million and a gain on the sale of investments of $1.6 million. The total impact of these items was to increase the net loss by ($5.3M) or ($0.14) per diluted share.
For the fiscal year ended September 30, 2005, revenue totaled $181.4 million compared to $181.0 million for fiscal year 2004. The net loss for the year ended September 30, 2005 totaled ($38.1) million or ($1.04) per diluted share compared to a net profit of $3.5 million or $0.10 per diluted share in fiscal year 2004.
"As a result of our acquisition of ICSI, we began consolidating their financial results with ours as of May 1, 2005. The net effect is that our first full quarter of consolidating ICSI -- the September 2005 quarter -- has revenue increasing 97% over the quarter ending September 2004," said Jimmy Lee, Chairman and CEO. "We have strengthened our operating capabilities and we believe we are now well positioned to compete in the low and medium density DRAM market and the full range of the SRAM market. We have also made good progress in non-memory product lines."
The statement of operations for the quarter ended September 30, 2005 currently includes an estimated charge for impairment of investments of $4.9 million. The Company is still analyzing the impairment of its investments and has engaged a qualified valuation analyst to assist in this assessment. The investment impairment is the Company's best estimate and may be subject to adjustment as the Company finalizes its valuation assessment. The Company expects to complete its assessment prior to filing its Form 10-K for the year ended September 30, 2005.
Conference Call
ISSI will host a conference call today, November 3, 2005, beginning at 1:30 p.m. Pacific time. To access the call, dial 719-457-2619. The call will be simulcast over the Internet at www.com/call. The webcast will be available for replay until November 28, 2005.
About the Company
ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications and (iv) automotive electronics. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets EEPROM, SmartCards and is developing selected non-memory products focused on its key markets. ISSI is headquartered in Silicon Valley with worldwide offices in China, Europe, Hong Kong, India, Korea and Taiwan. Visit our web site at www.issi.com.
Safe Harbor Statement
Certain statements in this news release may be considered forward-looking statements, including statements related to strengthened operating capabilities, being well positioned to compete in the DRAM and SRAM markets, the estimated charge for impairment of investments, and our belief that we are making good progress in non-memory product lines. Such statements are subject to risks and uncertainties. Actual results may differ materially from current expectations due to many factors, including completion of the fiscal 2005 year-end audit, completion of the analysis of impairments on investments, a reduction in average selling prices for the Company's products and a resultant decrease in the Company's gross profit margin, changes in demand for the Company's products or the products in which the Company's products are used, changes in market conditions, inability to expand revenue, inability to effectively reduce expenses, inability to add new products or diversify product lines, order cancellations, and order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers or the Company, the Company's ability to secure manufacturing capacity from its foundries, or other factors. Further information that could affect the Company's results is detailed in ISSI's periodic filings with the Securities and Exchange Commission, including its Annual Report on Form 10K for the fiscal year ended September 30, 2004 and its most recent Quarterly Report on Form 10Q for the quarter ended June 30, 2005.
Integrated Silicon Solution, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Year Ended
September 30, September 30,
2005 2004 2005 2004
Net sales $61,467 $31,124 $181,438 $181,012
Cost of sales 51,772 39,103 165,693 154,315
Gross profit (loss) 9,695 (7,979) 15,745 26,697
Operating expenses:
Research and development 4,551 5,302 19,340 20,838
Selling, general and
administrative 7,640 3,971 23,308 16,403
In-process technology 849 -- 2,764 --
Total operating expenses 13,040 9,273 45,412 37,241
Operating loss (3,345) (17,252) (29,667) (10,544)
Other income (expense), net (4,891) 108 (2,548) 1,238
Gain on sale of investments 1,597 2,134 5,002 10,874
Income (loss) before income taxes,
minority interest and equity in
net income (loss) of
affiliated companies (6,639) (15,010) (27,213) 1,568
Provision (benefit) for income
taxes (293) (9) (267) 488
Income (loss) before minority
interest and equity in net
income (loss) of
affiliated companies (6,346) (15,001) (26,946) 1,080
Minority interest in net loss of
consolidated subsidiaries 136 -- 767 --
Equity in net income (loss) of
affiliated companies (137) (560) (11,913) 2,405
Net income (loss) $(6,347) $(15,561) $(38,092) $3,485
Basic net income (loss) per share $(0.17) $(0.43) $(1.04) $0.10
Shares used in basic per share
calculation 37,038 36,061 36,663 33,444
Diluted net income (loss) per share $(0.17) $(0.43) $(1.04) $0.10
Shares used in diluted per share
calculation 37,038 36,061 36,663 36,121
Integrated Silicon Solution, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended
September 30, 2005
Net sales $61,467
Cost of sales 51,772 Includes charge of $273K
for ICSI purchase
accounting
Gross profit (loss) 9,695
Operating expenses:
Research and development 4,551
Selling, general and administrative 7,640 Includes charge of $882K
to allowance for doubtful
accounts for amounts due
primarily from Delphi
Electronics
In-process technology 849 Write-off of in-process
technology from purchase
accounting
Total operating expenses 13,040
Operating loss (3,345)
Other income (expense), net (4,891) Includes $4,856K charge
for the impairment of
investments
Gain on sale of investments 1,597 Gain on the sale of
investments
Income (loss) before income taxes,
minority interest and equity in
net income (loss) of affiliated
companies (6,639)
Provision (benefit) for income taxes (293)
Income (loss) before minority
interest and equity in net
income (loss) of
affiliated companies (6,346)
Minority interest in net loss of
consolidated subsidiaries 136
Equity in net income (loss) of
affiliated companies (137)
Net income (loss) $(6,347)
Basic and diluted net loss per share $(0.17)
Shares used in per share calculation 37,038
Integrated Silicon Solution, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, September 30,
2005 2004
(unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $27,484 $17,015
Restricted cash 301 1,500
Short-term investments 96,427 120,450
Accounts receivable, net 27,508 26,733
Inventories 60,468 44,718
Other current assets 3,594 1,541
Total current assets 215,782 211,957
Property, equipment, and leasehold
improvements, net 21,725 5,622
Other assets 45,409 83,285
Total assets $282,916 $300,864
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and notes $6,628 $--
Accounts payable 35,705 30,493
Accrued compensation and benefits 2,467 2,431
Accrued expenses 7,029 4,903
Total current liabilities 51,829 37,827
Other long-term liabilities 1,793 --
Total liabilities 53,622 37,827
Minority interest 6,566 --
Stockholders' equity:
Common stock 4 4
Additional paid-in capital 340,567 336,524
Accumulated deficit (131,935) (93,843)
Unearned compensation (17) (218)
Accumulated comprehensive income 14,109 20,570
Total stockholders' equity 222,728 263,037
Total liabilities and stockholders'
equity $282,916 $300,864
(1) Derived from audited financial statements.