ISSI Announces First Fiscal Quarter 2014 Results

ISSI Announces First Fiscal Quarter 2014 Results

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Integrated Silicon Solution, Inc.

MILPITAS, Calif., Jan. 29, 2014 /PRNewswire/ -- Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported financial results for the first fiscal quarter ended December 31, 2013.

First Fiscal Quarter Highlights:

  • Reported record revenue of $79.1 million, compared to $78.4 million in the fourth fiscal quarter of 2013 and $76.4 million in the first fiscal quarter of 2013;
  • DRAM revenue increased 4.2% and SRAM revenue increased 8.6% over the prior year periods;
  • Industrial, medical, and military (IMM) revenue increased 38.8% year-over-year;
  • Automotive revenue grew 9.0% year-over-year;
  • GAAP net income was $0.18 per diluted share and non-GAAP net income was $0.18 per diluted share;
  • Realized $3.1 million in gains on sales of a portion of the Company's shares of Nanya Technology Corporation ("Nanya");
  • Ended the quarter with cash and short-term investments of $136.8 million; and
  • Achieved multiple design wins for DDR2, DDR3, SDR and mobile DRAM in automotive and industrial applications as well as QUAD and RLDRAM3® design wins with communications customers.  

"First quarter 2014 set a quarterly revenue record, driven by strong growth in IMM and consistent performance in our automotive business," said Scott Howarth, ISSI's President and CEO. "Our IMM growth was fueled by continued strong orders across our expanded customer base, which is increasingly relying on ISSI for both new and legacy products. While automotive revenue was flat sequentially, we continued to expand our pipeline of design wins as we capitalize on the growing semiconductor content in cars, including multiple wins for our new higher density DDR2 and DDR3 products. We anticipate increasing shipment volumes in the coming quarters, driving further growth in our new products."

First Fiscal Quarter 2014 Results
Revenue in the first fiscal quarter ended December 31, 2013 was $79.1 million, compared to $78.4 million in the fiscal fourth quarter of 2013 and $76.4 million in the first fiscal quarter of 2013. Revenue in the first fiscal quarter of 2014 consisted of $69.3 million of SRAM and DRAM revenue, $7.9 million of NOR flash revenue, and $1.9 million of analog revenue. SRAM and DRAM revenue increased 5.5% from the December 2012 quarter.

Gross margin in the first fiscal quarter was 32.3%, compared to 33.1% in the September 2013 quarter, and 32.1% in the December 2012 quarter.

During the December 2013 quarter, the Company continued to sell a portion of the Nanya shares it purchased in September 2012, realizing a gain of $3.1 million. The remaining tradable Nanya shares are classified as short-term investments since the Company intends to sell such shares within one year.

GAAP income tax expense in the first fiscal quarter was $1.6 million, compared to $2.7 million in the September 2013 quarter and $1.2 million in the December 2012 quarter.

GAAP net income in the first fiscal quarter of 2014 was $5.4 million, or $0.18 per diluted share, compared to GAAP net income of $4.7 million, or $0.15 per diluted share, in the September 2013 quarter and GAAP net income of $2.5 million, or $0.09 per diluted share, in the December 2012 quarter.

First quarter non-GAAP net income was $5.4 million, or $0.18 per diluted share, compared to $6.1 million, or $0.20 per diluted share, in the September 2013 quarter and $5.3 million, or $0.18 per diluted share, in the December 2012 quarter.

Non-GAAP results exclude stock based compensation, amortization of intangibles related to acquisitions, gains on the sales of investments, and non-cash tax expense. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

March Quarter Outlook
The Company expects total revenue for the March quarter to range between $77.0 and $82.0 million, consisting of SRAM and DRAM revenue of between $67.5 million and $71.0 million, NOR flash revenue between $7.5 million and $8.5 million, and analog revenue of between $2.0 million and $2.5 million. Gross margin for the March quarter is expected to range between 32.5 percent and 33.5 percent. Operating expenses are expected to range between $21.5 million and $22.5 million.  The Company expects to realize additional gains on the Nanya shares in the March quarter.  However, it is difficult to predict the total gains for the quarter and, as such, these gains have been excluded from the GAAP and non-GAAP net income guidance. GAAP net income is expected to be between $0.10 and $0.14 per diluted share and non-GAAP net income, which excludes stock based compensation, amortization of intangibles related to acquisitions, gains on the sales of Nanya shares and non-cash tax expense related to the utilization of deferred tax assets, is expected to range between $0.18 and $0.22 per diluted share.

Conference Call Information
A conference call will be held today at 7:00 a.m. Pacific Time to discuss the Company's first fiscal quarter financial results. To access ISSI's conference call via telephone, dial 877-638-9067 by 6:50 a.m. Pacific Time. The participant passcode is 9991991. The call will also be webcast from ISSI's website at http://www.issi.com.

Non-GAAP Financial Information
In addition to disclosing results determined in accordance with GAAP, ISSI discloses its non-GAAP   operating income, provision for income taxes and net income for certain periods that exclude stock based compensation, the amortization of intangibles related to acquisitions, gains on sales of investments, and non-cash tax expense. When presenting non-GAAP results, the Company includes a reconciliation of the non-GAAP results to the results under GAAP. Management believes that including the non-GAAP results assists investors in assessing the Company's operational performance and its performance relative to its competitors. The Company has presented its non-GAAP results as a complement to its results provided in accordance with GAAP, and these results should not be regarded as a substitute for GAAP. Management uses non-GAAP measures to plan and forecast future periods, to establish operational goals, to compare with its business plan and individual operating budgets, to assist the public in measuring the Company's performance, to allocate resources and, relative to the Company's historical financial performance, to enable comparability between periods. Management also considers such non-GAAP results to be an important supplemental measure of its performance. The economic substance behind management's decision to use such non-GAAP measures relates to the non-GAAP measures being a useful measure of the potential future performance of the Company's business. In line with common industry practice and to help enable comparability with other technology companies, the Company's non-GAAP presentation excludes the impact of the items described above. Other companies may calculate non-GAAP results differently than the Company, limiting its usefulness as a comparative measure. In addition, such non-GAAP measures may exclude financial information that some may consider important in evaluating the Company's performance. Management compensates for the foregoing limitations of non-GAAP measures by presenting certain information on both a GAAP and non-GAAP basis and providing reconciliations of the GAAP and non-GAAP measures.

About the Company
ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) automotive, (ii) communications, (iii) industrial, medical, and military, and (iv) digital consumer. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets NOR flash products and high performance analog and mixed signal integrated circuits. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at http://www.issi.com/.

Forward Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning expanded customer base, which is increasingly relying on ISSI for both new and legacy products, expanding our pipeline of design wins as we capitalize on the growing semiconductor content in cars, increasing shipment volumes in the coming quarters, driving further growth in our new products, intending to sell more Nanya shares within one year and our outlook for the March 2014 quarter with respect to revenue, SRAM and DRAM revenue, NOR flash revenue, analog revenue, gross margin, operating expenses, expecting additional gains on sales of Nanya shares, and GAAP and Non-GAAP net income per share are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include supply and demand conditions in the market place (especially in the automotive market), unexpected reductions in average selling prices for our products, our ability to sell our products in our key markets (including automotive and IMM) and the pricing and gross margins achieved on such sales, our ability to control or reduce operating expenses, our ability to obtain a sufficient supply of wafers, wafer pricing, our ability to maintain sufficient inventory of products to satisfy customer orders, our ability to realize the expected benefits of our acquisitions including maintaining relationships with key customers, vendors and employees, changes in manufacturing yields, order cancellations, order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended September 30, 2013. In addition, the financial information in this press release is unaudited and subject to any adjustments that may be made in connection with the year-end audit. The Company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

Integrated Silicon Solution, Inc.  

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)














Three Months Ended


Three Months Ended




December 31,


September 30,




2013


2012



2013






















Net sales



$    79,123


$    76,399



$    78,392


Cost of sales



53,594


51,908



52,458


Gross profit



25,529


24,491



25,934












Operating expenses:










  Research and development



10,558


10,023



9,925


  Selling, general and administrative



11,434


11,089



11,316


    Total operating expenses



21,992


21,112



21,241












Operating income



3,537


3,379



4,693


Interest and other income (expense), net



431


268



(183)


Gain on sale of investments



3,121


-



2,878












Income before income taxes



7,089


3,647



7,388


Provision for income taxes



1,643


1,159



2,658












Consolidated net income



5,446


2,488



4,730












  Net (income) loss attributable to










     noncontrolling interests



(11)


11



(32)












Net income attributable to ISSI



$      5,435


$      2,499



$      4,698












Basic net income per share



$       0.19


$       0.09



$       0.16


Shares used in basic per share calculation



29,318


27,696



28,928












Diluted net income per share



$       0.18


$       0.09



$       0.15


Shares used in diluted per share calculation



30,717


29,106



30,372






















Reconciliation of GAAP to Non-GAAP Financial Measures















Operating income:










    GAAP operating income



$      3,537


$      3,379



$      4,693


Adjustments:










    Chingis acquisition related inventory write up

-


492



-


    Chingis intangible asset amortization



347


339



347


    Stock-based compensation expense



1,491


1,440



1,568


       Total adjustments



1,838


2,271



1,915


    Non-GAAP operating income



$      5,375


$      5,650



$      6,608












Provision for income taxes:










    On a GAAP basis



$      1,643


$      1,159



$      2,658


Adjustments:










    Non-cash tax expense



203


490



1,335


    Tax impact of gains on sale of investments

1,092


-



1,052


       Total adjustments



1,295


490



2,387


    Non-GAAP provision for income taxes



$        348


$        669



$        271












Net income attributable to ISSI:









    On a GAAP basis



$      5,435


$      2,499



$      4,698


Adjustments:










    Chingis acquisition related inventory write up

-


492



-


    Chingis intangible asset amortization



347


339



347


    Stock-based compensation expense



1,491


1,440



1,568


    Gain on sales of investment



(3,121)


-



(2,878)


    Non-cash tax expense



203


490



1,335


    Tax impact of gains on sale of investments

1,092


-



1,052


       Total adjustments



12


2,761



1,424


    Non-GAAP net income



$      5,447


$      5,260



$      6,122












Non-GAAP net income per share:









    Basic



$       0.19


$       0.19



$       0.21


    Diluted



$       0.18


$       0.18



$       0.20




Integrated Silicon Solution, Inc.

Condensed Consolidated Balance Sheets

(In thousands)










December 31,


September 30,




2013


2013




(unaudited)


(1)

ASSETS

Current assets:






  Cash and cash equivalents



$  123,399


$  119,997

  Short-term investments



13,366


21,558

  Accounts receivable, net



47,487


46,088

  Inventories



76,287


68,469

  Other current assets



18,390


16,928







Total current assets



278,929


273,040

Property and equipment, net



50,977


46,504

Purchased intangible assets, net



6,217


6,626

Goodwill



9,178


9,178

Other assets



25,991


26,521

Total assets



$  371,292


$  361,869







LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:






  Accounts payable



$    54,832


$    50,229

  Accrued compensation and benefits



8,284


8,072

  Accrued expenses



8,265


7,357

  Current portion of long-term debt



195


195







Total current liabilities 



71,576


65,853







Long-term debt



4,485


4,534

Other long-term liabilities



6,859


8,712







Total liabilities



82,920


79,099







Commitments and contingencies












Stockholders' equity:






  Common stock



3


3

  Additional paid-in capital



348,132


343,947

  Accumulated deficit



(67,063)


(72,498)

  Accumulated other comprehensive income



5,266


9,121







Total ISSI stockholders' equity



286,338


280,573







  Noncontrolling interest



2,034


2,197







Total stockholders' equity



288,372


282,770

Total liabilities and stockholders' equity



$  371,292


$  361,869













(1) Derived from audited financial statements.

 

 

©2012 PR Newswire. All Rights Reserved.