| << Back |
| Zilog Announces Second Quarter Fiscal 2009 Financial Results |
SAN JOSE, Calif., Oct. 30 /PRNewswire-FirstCall/ -- Zilog(R), Inc. (Nasdaq: ZILG), a leading supplier of embedded system-on-chip (SoC) solutions for consumer and industrial applications, and an industry leader in remote control and universal IR database solutions, today reported results for its 2009 fiscal year, second quarter ended September 27, 2008. Sales for the three month and six month periods ended September 27, 2008 were $19.0 million and $37.2 million, respectively, versus $16.7 million and $33.5 million for the comparable periods a year ago. Sales for the second fiscal quarter increased sequentially five percent and were at the high end of the previously announced guidance range. The sales growth reflected an increase in new product revenues. New products consist of universal remote controls, Zatara(TM) 32-bit secured transaction processors and 8-bit embedded flash microcontrollers. New product sales increased sequentially and comprised 63 percent of total sales in the quarter compared to 61 percent in the previous quarter and 50 percent as compared to the second fiscal quarter a year ago. The GAAP net loss for the three month period ended September 27, 2008 was $1.6 million or 9 cents per share as compared to $1.9 million or 11 cents per share for the same period a year ago. The GAAP net loss for the six month period ended September 27, 2008 was $3.3 million or 19 cents per share versus $5.0 million or 30 cents per share for the comparable six month period a year ago. The net loss for the quarter, as compared to the same quarter a year ago, includes higher gross margin contribution from higher sales, partially offset by costs associated with a proxy challenge, an ongoing strategic alternatives review and higher employee incentive compensation expenses. On a non-GAAP basis adjusted EBITDA, as defined below, was positive $0.5 million and positive $0.9 million for the three and six months ended September 27, 2008, respectively, compared to negative $0.2 million and negative $1.1 million for the comparable periods a year ago. "We were pleased with the growth in sales for the quarter which follows the previous quarter's positive growth trend led by our new products. Our product development investments have been focused on these new product portfolios and we are now starting to see positive results from these efforts," said Darin Billerbeck, Zilog's president and chief executive officer. "We achieved positive adjusted EBITDA for the second consecutive quarter and in October we essentially completed our production test transfer activities and we made a successful transition to a fully outsourced manufacturing model," added Billerbeck. "The global financial crisis and growing recessionary concerns are creating significant difficulties in the semiconductor industry," said Billerbeck. "The current uncertainty in the market has disrupted new order patterns by customers, especially in the consumer related markets. Estimating near term demand levels in this current environment is difficult. As such we have implemented aggressive expense and inventory management programs to reduce our costs and manage our cash flow. These programs include but are not limited to work place temporary shutdowns, discretionary and travel spending reductions along with aligning our product inventory purchases to our expected demand. Currently we expect sales for the December, 2008 quarter will decline sequentially by as much as 16 to 23 percent." NON-GAAP FINANCIAL INFORMATION (Unaudited) The Company may make reference to certain Non-GAAP financial measures. Management believes that these Non-GAAP measures are useful measures of operating performance and liquidity because they may exclude the impact of certain items, such as amortization of intangible assets, stock-based compensation, depreciation, non-operating interest, income taxes and special charges. However, these Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net income (loss) and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP.
Three Months Ended
Sept. 27, June 28, March 31, Dec. 29, Sept. 29,
2008 2008 2008 2007 2007
(in millions)
Reconciliation of Non-GAAP
Net Loss to GAAP Net Loss
Non-GAAP net loss ($0.5) ($0.5) ($1.3) ($1.4) ($0.8)
Non-GAAP adjustments:
Special charges and
credits 0.5 0.6 0.5 0.6 0.4
Amortization of
intangible assets 0.2 0.2 0.2 0.3 0.3
Non-cash stock-based
compensation COS 0.1 - - - -
Non-cash stock-based
compensation R&D 0.1 0.1 0.1 0.1 0.1
Non-cash stock-based
compensation SG&A 0.2 0.3 (0.2) - 0.3
Total non-GAAP
adjustments 1.1 1.2 0.6 1.0 1.1
GAAP Net loss ($1.6) ($1.7) ($1.9) ($2.4) ($1.9)
Non-GAAP Net Loss (Unaudited) Non-GAAP net loss excludes special charges and non-cash charges relating to the amortization of intangible assets and stock-based compensation. We believe that Non-GAAP net loss is a useful measure as it excludes certain special charge items as well as certain non-cash charges, which facilitates a comparison of the Company's operating performance. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, the net loss measured in accordance with GAAP.
Three Months Ended
Reconciliation of Net Loss and Sept. June March Dec. Sept.
Cash Flows From Operating 27, 28, 31, 29, 29,
Activities to EBITDA 2008 2008 2008 2007 2007
(in millions)
Reconciliation of net loss
to EBITDA:
Net loss ($1.6) ($1.7) ($1.9) ($2.4) ($1.9)
Depreciation and
amortization 1.1 1.1 0.9 1.0 1.0
Interest income - (0.1) (0.1) (0.2) (0.2)
Provision for income taxes 0.1 0.1 0.1 0.6 0.1
EBITDA ($0.4) ($0.6) ($1.0) ($1.0) ($1.0)
Reconciliation of EBITDA to net
cash provided by (used in)
operating activities:
EBITDA ($0.4) ($0.6) ($1.0) ($1.0) ($1.0)
Provision for income
taxes (0.1) (0.1) (0.1) (0.6) (0.1)
Interest income - 0.1 0.1 0.2 0.2
Non-cash stock-based
compensation 0.4 0.4 (0.1) 0.1 0.4
Loss on disposition of
operating assets - - 0.1 - 0.1
Changes in other
operating assets and
liabilities (0.5) 0.6 3.0 (0.6) 1.3
Net cash provided by (used
in) operating activities ($0.6) $0.4 $2.0 ($1.9) $0.9
Non-GAAP EBITDA (Unaudited) Management believes that Non-GAAP EBITDA ("EBITDA"), that is Earnings or loss Before Interest, Taxes, Depreciation and Amortization, is a useful measure of financial performance. We believe that the disclosure of EBITDA helps investors more meaningfully evaluate our liquidity position by the elimination of non-cash related items such as depreciation and amortization. We believe that our investor base regularly uses EBITDA as a measure of the liquidity of our business. Our management uses EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital.
Three Months Ended
Reconciliation of Net Loss and Sept. June March Dec. Sept.
Cash Flows From Operating 27, 28, 31, 29, 29,
Activities to Adjusted EBITDA 2008 2008 2008 2007 2007
(in millions)
Reconciliation of net loss
to Adjusted EBITDA:
Net loss ($1.6) ($1.7) ($1.9) ($2.4) ($1.9)
Depreciation and
amortization 1.1 1.1 0.9 1.0 1.0
Interest income - (0.1) (0.1) (0.2) (0.2)
Provision for income
taxes 0.1 0.1 0.1 0.6 0.1
Special charges and
credits 0.5 0.6 0.5 0.6 0.4
Non-cash stock-based
compensation 0.4 0.4 (0.1) 0.1 0.4
Adjusted EBITDA $0.5 $0.4 ($0.6) ($0.3) ($0.2)
Reconciliation of Adjusted
EBITDA to net cash provided
by (used in) operating
activities:
Adjusted EBITDA $0.5 $0.4 ($0.6) ($0.3) ($0.2)
Special charges
and credits (0.5) (0.6) (0.5) (0.6) (0.4)
Provision for
income taxes (0.1) (0.1) (0.1) (0.6) (0.1)
Interest income - 0.1 0.1 0.2 0.2
Loss on
disposition of
operating assets - - 0.1 - 0.1
Changes in other
operating assets
and liabilities (0.5) 0.6 3.0 (0.6) 1.3
Net cash provided by
(used in) operating
activities ($0.6) $0.4 $2.0 ($1.9) $0.9
Non-GAAP Adjusted EBITDA (Unaudited) EBITDA reflects our Earnings or loss Before Interest, Taxes, Depreciation and Amortization. Additionally, management uses separate "Adjusted EBITDA" calculations for purposes of determining certain employees' incentive compensation and, subject to meeting specified Adjusted EBITDA amounts, for accelerating the vesting of EBITDA-linked stock options. Adjusted EBITDA, as we define it, excludes interest, income taxes, effects of changes in accounting principles and non-cash charges such as depreciation, amortization, in-process research and development, and stock-based compensation expense. It also excludes cash and non-cash charges associated with reorganization items and special charges and credits, which represent operational restructuring charges, including asset write-offs, employee termination costs, relocation costs and lease termination costs. Adjusted EBITDA also excludes changes in operating assets and liabilities, which are included in net cash provided by (used in) operating activities. Our management uses Adjusted EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. This Non-GAAP Adjusted EBITDA measure allows management to monitor cash generated from the operations of the business. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net loss and net cash provided or used in operating activities prepared in accordance with GAAP. About Zilog, Inc. Founded in 1974, Zilog is a global supplier of 8, 16 and 32-bit microcontroller and microprocessor "system-on-a-chip" (SoC) solutions that allow design engineers the freedom and creativity required for continued innovation in embedded design. The company won international acclaim for designing one of the first architectures in the microprocessors and microcontrollers industry. Today, Zilog designs, develops and markets a broad portfolio of devices for embedded control and communication applications used in consumer electronics, home appliances, security systems, point of sales terminals, personal computer peripherals, as well as industrial and automotive applications. Zilog is headquartered in San Jose, California, and employs approximately 400 people worldwide with sales offices throughout Asia, Europe and North America. For more information about Zilog and its products, visit the Company's website at: http://www.zilog.com. EZ80ACCLAIM!, CRIMZON, Zatara, Zilog, Z8, Z80, eZ80, Z8 ENCORE!, Encore!XP and Zneo are registered trademarks of Zilog, Inc. in the United States and in other countries. Other product and or service names mentioned herein may be trademarks of the companies with which they are associated. Cautionary Statements This release contains forward-looking statements (including those related to our expectations for our December 2008 quarter and the impact of the global financial crisis and recessionary concerns) relating to expectations, plans or prospects for Zilog, Inc. that are based upon the current expectations and beliefs of Zilog's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For example, delay in customer ramps of our 32-bit products or weakness in our 8-bit classic products could negatively impact our December 2008 quarter. The current financial market volatility and the impact of the recession on our customers make it especially difficult to predict our results for the December 2008 quarter. Our expense and inventory management programs may not be sufficient to manage our cash flows. Additionally, our ability to attract and retain technical employees may be negatively impacted by uncertainties relating to potential future changes in the ownership and control of the Company. Design wins are defined as the projected one-year net sales for a customer's new product design for which the Company has received at least a $1,000 purchase order for its devices. Design win estimates are determined based on projections from customers and may or may not be realized. Whether or not Zilog achieves anticipated revenue from design wins can be dependant on the timeliness of customers to ramp and whether or not the project in question is as commercially successful as the customers anticipated. Notwithstanding changes that may occur with respect to customer matters relating to the forward-looking statements, Zilog does not expect to, and disclaims any obligation to update such statements until release of its next quarterly earnings announcement or in any other manner. Zilog, however, reserves the right to update such statement, or any portion thereof, at any time for any reason. The financial information presented herein is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Form 10-Q for the period ended September 27, 2008. For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2008, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov or from the Company's website at http://www.Zilog.com.
Contact:
Stew Chalmers
Director Corporate Communications
(818) 681-3588
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions except per share data and percentages)
Three Months Ended Six Months Ended
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
2008 2007 2008 2007
Net sales $19.0 $16.7 $37.2 $33.5
Cost of sales 10.2 9.0 19.8 18.4
Gross margin 8.8 7.7 17.4 15.1
Gross margin % 46% 46% 47% 45%
Operating expenses:
Research and development 4.0 3.9 7.9 8.4
Selling, general and
administrative 5.9 5.1 11.6 10.1
Special charges and credits 0.5 0.4 1.1 0.9
Amortization of intangible
assets 0.2 0.3 0.4 0.5
Total operating expenses 10.6 9.7 21.0 19.9
Operating loss (1) (1.8) (2.0) (3.6) (4.8)
Other income :
Other income (expense) 0.3 - 0.4 (0.1)
Interest income - 0.2 0.1 0.5
Loss before provision for
income taxes (1.5) (1.8) (3.1) (4.4)
Provision for income taxes 0.1 0.1 0.2 0.6
Net loss $(1.6) $(1.9) $(3.3) $(5.0)
Basic and diluted net loss
per share $(0.09) $(0.11) $(0.19) $(0.30)
Weighted-average shares used
in computing basic and
diluted net loss per share 17.0 16.9 16.9 16.9
(1) Includes FAS 123R and
incentive stock-based
compensation charges as
follows:
Cost of sales $0.1 $- $0.1 $0.1
Research and
development 0.1 0.1 0.2 0.2
Selling, general
and administrative 0.2 0.3 0.5 0.5
Total stock-based
compensation
included in
operating loss $0.4 $0.4 $0.8 $0.8
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
Sept. 27, March 31,
2008 2008
ASSETS
Current assets:
Cash and cash equivalents $16.9 $16.6
Accounts receivable, net 7.3 6.8
Inventories 7.6 8.4
Deferred tax asset 0.3 0.3
Prepaid expenses and
other current assets 1.6 1.7
Total current assets 33.7 33.8
Long term investments 1.4 1.9
Property, plant and
equipment, net 7.7 6.6
Goodwill 2.2 2.2
Intangible assets, net 2.1 2.5
Other assets 0.9 0.8
Total assets $48.0 $47.8
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term debt $1.0 $0.7
Accounts payable 8.3 7.3
Other short-term
liabilities, license
agreements 1.2 0.5
Income taxes payable 0.2 0.5
Accrued compensation and
employee benefits 3.4 2.4
Other accrued liabilities 2.2 2.1
Deferred income on
shipments to
distributors 5.0 5.9
Total current
liabilities 21.3 19.4
Deferred tax liability 0.3 0.3
Other long-term liabilities,
license agreements 1.6 0.6
Other non-current tax
liabilities 0.7 0.7
Total liabilities 23.9 21.0
Stockholders' equity:
Common stock 0.2 0.2
Additional paid-in
capital 126.4 125.8
Treasury stock (7.5) (7.5)
Other comprehensive
income 0.1 0.1
Accumulated deficit (95.1) (91.8)
Total stockholders'
equity 24.1 26.8
Total liabilities and
stockholders' equity $48.0 $47.8
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Three Months Ended Six Months Ended
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
2008 2007 2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1.6) $(1.9) $(3.3) $(5.0)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation and
amortization 0.9 0.7 1.7 1.5
Disposition of operating
assets - 0.1 - 0.2
Non-cash stock-based
compensation 0.4 0.4 0.8 0.8
Amortization of fresh-start
intangible assets 0.2 0.3 0.4 0.5
Changes in operating assets and
liabilities:
Accounts receivable, net 0.2 1.2 (0.4) 0.1
Inventories 1.1 (0.4) 0.8 (0.1)
Prepaid expenses and other
current and non-current
assets - 0.5 (0.1) 1.4
Accounts payable (0.6) 1.0 1.0 0.8
Accrued compensation and
employee benefits (0.1) (0.1) 0.6 (0.4)
Deferred income on shipments
to distributors (0.4) (0.1) (0.9) (0.5)
Accrued and other current
and non-current liabilities (0.7) (0.8) (0.8) (1.1)
Net cash provided by
(used in) operating
activities (0.6) 0.9 (0.2) (1.8)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Disposal of assets held for
sale - MOD II property - - - 3.2
Redemption of long term
investments 0.1 - 0.5 -
Capital expenditures (0.1) (0.6) (0.4) (0.9)
Net cash provided by
(used in) investing
activities - (0.6) 0.1 2.3
CASH FLOWS FROM FINANCING
ACTIVITIES:
Short term debt (0.3) - 0.3
Repurchase of restricted
shares (0.3) - (0.3)
Proceeds from issuance of
common stock under
employee stock purchase
and stock option plans - 0.1 0.1 0.3
Net cash provided by
(used in) financing
activities (0.3) (0.2) 0.4 -
Increase (decrease) in cash and
cash equivalents (0.9) 0.1 0.3 0.5
Cash and cash equivalents at
beginning of period 17.8 19.8 16.6 19.4
Cash and cash equivalents at end
of period $16.9 $19.9 $16.9 $19.9
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Purchase of a development
license through a long term
payment arrangement $- $- $2.4 $-
Zilog, Inc.
SELECTED UNAUDITED TRENDED FINANCIAL INFORMATION
(Amounts in millions except percentages, selected key metrics and
per share amounts)
Three Months Ended
Sept. 27, June 28, Mar. 31, Dec. 29, Sept. 29,
2008 2008 2008 2007 2007
Sales & Expenses Information:
Net sales $19.0 $18.2 $16.7 $17.0 $16.7
Cost of sales 10.2 9.6 9.0 9.0 9.0
Gross margin 8.8 8.6 7.7 8.0 7.7
Gross margin % 46% 47% 46% 47% 46%
Operating expenses:
Research and development 4.0 3.9 3.9 4.1 3.9
Selling, general and
administrative 5.9 5.7 4.9 4.9 5.1
Special charges and
credits 0.5 0.6 0.5 0.6 0.4
Amortization of
intangible assets 0.2 0.2 0.2 0.3 0.3
Total operating
expenses 10.6 10.4 9.5 9.9 9.7
Operating loss (1.8) (1.8) (1.8) (1.9) (2.0)
Interest income - 0.1 0.1 0.2 0.2
Other income (expense) 0.3 0.1 (0.1) (0.1) -
Loss before provision for
income taxes (1.5) (1.6) (1.8) (1.8) (1.8)
Provision for income taxes 0.1 0.1 0.1 0.6 0.1
Net loss ($1.6) ($1.7) ($1.9) ($2.4) ($1.9)
Weighted average basic and
diluted shares 17.0 16.9 16.9 16.9 16.9
Basic and diluted net loss
per share ($0.09) ($0.10) ($0.11) ($0.14) ($0.11)
Net Sales Information:
Net Sales - by type
New products (1) $12.0 $11.1 $9.1 $9.8 $8.3
8-bit classic products 7.0 7.1 7.6 7.2 8.4
Total net sales $19.0 $18.2 $16.7 $17.0 $16.7
(1) New products include 32-bit
Zatara, universal remote
control solutions and 8-bit
embedded flash microcontrollers
Net Sales - by channel
Direct $9.4 $9.1 $8.1 $7.6 $6.7
Distribution 9.6 9.1 8.6 9.4 10.0
Total net sales $19.0 $18.2 $16.7 $17.0 $16.7
Net Sales - by region
America's $6.1 $5.7 $6.0 $5.7 $4.9
Asia (including Japan) 10.6 9.6 8.3 9.0 9.5
Europe 2.3 2.9 2.4 2.3 2.3
Total net sales $19.0 $18.2 $16.7 $17.0 $16.7
Selected Key Metrics (as
defined in our Form 10-Q
and 10-K)
Days sales outstanding 34 37 37 45 43
Net sales to inventory ratio
(annualized) 10.0 8.4 8.0 7.3 7.7
Weeks of inventory at
distributors 10 11 12 12 12
Current ratio 1.6 1.5 1.7 2.0 2.1
Other Selected Financial Metrics
Depreciation and amortization
(excluding intangibles) $0.9 $0.9 $0.7 $0.7 $0.7
Amortization of fresh-start
intangibles $0.2 $0.2 $0.2 $0.3 $0.3
Stock based compensation $0.4 $0.4 ($0.1) $0.1 $0.4
Capital expenditures $0.1 $0.3 $2.4 $0.0 $0.6
Cash and cash equivalents $16.9 $17.8 $16.6 $18.1 $19.9
Long term investments $1.4 $1.5 $1.9 - -
Cash and long term
investments $18.3 $19.3 $18.5 $18.1 $19.9
Short term debt $1.0 $1.4 $0.7 - -
SOURCE Zilog, Inc.
|
| Could not find file '\\irnetapdr01l\Content\IRXMLDATA\10\107835\Disclaimers.xml'. |