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.
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Integrated Silicon Solution, Inc. | |||||||||
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Condensed Consolidated Statements of Income | |||||||||
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(Unaudited) | |||||||||
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(In thousands, except per share data) | |||||||||
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Three Months Ended |
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Three Months Ended | ||||
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December 31, |
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September 30, | ||||
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2013 |
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2012 |
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2013 |
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Net sales |
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$ 79,123 |
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$ 76,399 |
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$ 78,392 |
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Cost of sales |
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53,594 |
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51,908 |
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52,458 |
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Gross profit |
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25,529 |
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24,491 |
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25,934 |
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Operating expenses: |
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Research and development |
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10,558 |
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10,023 |
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9,925 |
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Selling, general and administrative |
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11,434 |
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11,089 |
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11,316 |
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Total operating expenses |
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21,992 |
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21,112 |
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21,241 |
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Operating income |
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3,537 |
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3,379 |
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4,693 |
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Interest and other income (expense), net |
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431 |
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268 |
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(183) |
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Gain on sale of investments |
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3,121 |
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- |
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2,878 |
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Income before income taxes |
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7,089 |
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3,647 |
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7,388 |
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Provision for income taxes |
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1,643 |
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1,159 |
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2,658 |
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Consolidated net income |
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5,446 |
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2,488 |
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4,730 |
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Net (income) loss attributable to |
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noncontrolling interests |
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(11) |
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11 |
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(32) |
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Net income attributable to ISSI |
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$ 5,435 |
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$ 2,499 |
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$ 4,698 |
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Basic net income per share |
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$ 0.19 |
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$ 0.09 |
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$ 0.16 |
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Shares used in basic per share calculation |
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29,318 |
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27,696 |
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28,928 |
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Diluted net income per share |
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$ 0.18 |
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$ 0.09 |
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$ 0.15 |
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Shares used in diluted per share calculation |
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30,717 |
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29,106 |
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30,372 |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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Operating income: |
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GAAP operating income |
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$ 3,537 |
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$ 3,379 |
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$ 4,693 |
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Adjustments: |
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Chingis acquisition related inventory write up |
- |
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492 |
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- |
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Chingis intangible asset amortization |
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347 |
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339 |
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347 |
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Stock-based compensation expense |
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1,491 |
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1,440 |
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1,568 |
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Total adjustments |
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1,838 |
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2,271 |
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1,915 |
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Non-GAAP operating income |
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$ 5,375 |
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$ 5,650 |
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$ 6,608 |
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Provision for income taxes: |
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On a GAAP basis |
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$ 1,643 |
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$ 1,159 |
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$ 2,658 |
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Adjustments: |
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Non-cash tax expense |
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203 |
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490 |
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1,335 |
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Tax impact of gains on sale of investments |
1,092 |
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- |
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1,052 |
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Total adjustments |
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1,295 |
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490 |
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2,387 |
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Non-GAAP provision for income taxes |
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$ 348 |
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$ 669 |
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$ 271 |
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Net income attributable to ISSI: |
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On a GAAP basis |
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$ 5,435 |
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$ 2,499 |
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$ 4,698 |
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Adjustments: |
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Chingis acquisition related inventory write up |
- |
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492 |
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- |
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Chingis intangible asset amortization |
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347 |
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339 |
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347 |
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Stock-based compensation expense |
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1,491 |
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1,440 |
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1,568 |
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Gain on sales of investment |
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(3,121) |
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- |
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(2,878) |
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Non-cash tax expense |
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203 |
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490 |
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1,335 |
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Tax impact of gains on sale of investments |
1,092 |
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- |
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1,052 |
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Total adjustments |
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12 |
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2,761 |
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1,424 |
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Non-GAAP net income |
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$ 5,447 |
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$ 5,260 |
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$ 6,122 |
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Non-GAAP net income per share: |
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Basic |
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$ 0.19 |
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$ 0.19 |
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$ 0.21 |
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Diluted |
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$ 0.18 |
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$ 0.18 |
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$ 0.20 |
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Integrated Silicon Solution, Inc. | |||||
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Condensed Consolidated Balance Sheets | |||||
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(In thousands) | |||||
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December 31, |
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September 30, |
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2013 |
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2013 |
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(unaudited) |
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(1) |
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ASSETS | |||||
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Current assets: |
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Cash and cash equivalents |
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$ 123,399 |
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$ 119,997 |
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Short-term investments |
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13,366 |
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21,558 |
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Accounts receivable, net |
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47,487 |
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46,088 |
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Inventories |
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76,287 |
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68,469 |
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Other current assets |
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18,390 |
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16,928 |
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Total current assets |
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278,929 |
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273,040 |
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Property and equipment, net |
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50,977 |
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46,504 |
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Purchased intangible assets, net |
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6,217 |
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6,626 |
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Goodwill |
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9,178 |
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9,178 |
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Other assets |
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25,991 |
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26,521 |
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Total assets |
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$ 371,292 |
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$ 361,869 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
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Current liabilities: |
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Accounts payable |
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$ 54,832 |
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$ 50,229 |
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Accrued compensation and benefits |
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8,284 |
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8,072 |
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Accrued expenses |
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8,265 |
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7,357 |
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Current portion of long-term debt |
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195 |
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195 |
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Total current liabilities |
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71,576 |
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65,853 |
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Long-term debt |
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4,485 |
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4,534 |
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Other long-term liabilities |
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6,859 |
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8,712 |
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Total liabilities |
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82,920 |
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79,099 |
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Commitments and contingencies |
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Stockholders' equity: |
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Common stock |
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3 |
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3 |
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Additional paid-in capital |
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348,132 |
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343,947 |
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Accumulated deficit |
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(67,063) |
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(72,498) |
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Accumulated other comprehensive income |
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5,266 |
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9,121 |
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Total ISSI stockholders' equity |
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286,338 |
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280,573 |
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Noncontrolling interest |
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2,034 |
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2,197 |
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Total stockholders' equity |
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288,372 |
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282,770 |
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Total liabilities and stockholders' equity |
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$ 371,292 |
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$ 361,869 |
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(1) Derived from audited financial statements. | |||||
