ISSI Announces First Fiscal Quarter 2010 Results

Jan 28, 2010, 16:10 ET from Integrated Silicon Solution, Inc.

SAN JOSE, Calif., Jan. 28 /PRNewswire-FirstCall/ -- Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported its financial results for the first fiscal quarter ended December 31, 2009.

Revenue in the first fiscal quarter ended December 31, 2009 was $50.6 million, an 8.9% increase from revenue of $46.4 million in the September 2009 quarter and a 34.2% increase from revenue of $37.7 million in the December 2008 quarter.  Gross margin for the first quarter was 39.8%, which included a 7.7 percentage point net benefit from sales of previously reserved inventory.  This compares with 36.5% in the September 2009 quarter, which included a 10.8 percentage point net benefit from sales of previously reserved inventory, and 20.5% in the December 2008 quarter.

The Company's net income in the first quarter of fiscal 2010 was $7.2 million, or $0.28 per diluted share. This compares with net income for the September 2009 quarter of $4.8 million, or $0.19 per diluted share, and a net loss for the December 2008 quarter of $4.1 million, or $(0.16) per diluted share.

The Company's cash, cash equivalents and short-term investments totaled $85.2 million at December 31, 2009, compared to $83.5 million at September 30, 2009.  The Company's inventory at December 31, 2009 totaled $27.6 million, an increase of $8.3 million from September 30, 2009.  The Company generated $2.5 million in cash flow from operations in the first quarter of fiscal 2010.

"We are very pleased with our financial results in the December quarter.  Demand was strong in our target markets, DRAM pricing continued to improve, and our product mix was richer resulting in our highest quarterly gross margin since 1996," said Scott Howarth, ISSI's President and CEO.  "In addition, we reported out highest quarterly operating income in nine years," added Mr. Howarth.

March Quarter Outlook

The Company currently expects its revenue for the March quarter to be between $48 million and $52 million and gross margin to be between 28 percent and 32 percent. The March quarter operating expenses are expected to be in the range of $12.4 million to $13.0 million.  The Company expects net income per share to be between $0.08 and $0.12 per diluted share.

Conference Call

A conference call will be held today at 1:30 p.m. Pacific time to discuss the Company's first quarter fiscal 2010 financial results. To access ISSI's conference call via telephone, dial 1-800-768-6569 by 1:20 p.m. Pacific time. The participant passcode is 4680863. The call will also be webcast from ISSI's website at http://www.issi.com.

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, (iv) automotive electronics, and (v) industrial. The Company's primary products are high speed and low power SRAM and low and medium density DRAM.  Through its Giantec business unit, the Company also designs and markets EEPROM, SmartCards and analog power management devices focused on its key markets. 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 our outlook for the March 2010 quarter with respect to revenue, gross margin, operating expenses and 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, unexpected reductions in average selling prices for our products, our ability to sell our products for key applications 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, 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 period ended September 30, 2009. 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 Operations   
                                    (Unaudited)                     
                       (In thousands, except per share data)        
                                                          
                                                           Three Months Ended      
                                                              December 31,   
                                                              ------------   
                                                              2009     2008 
                                                              ----     ---- 
                                                          
                                                          
    Net sales                                               $50,555  $37,665 
    Cost of sales                                            30,434   29,932 
                                                             ------   ------ 
    Gross profit                                             20,121    7,733 
                                                             ------    ----- 
                                                          
    Operating expenses:                                   
      Research and development                                4,989    5,208 
      Selling, general and administrative                     7,626    7,301 
                                                              -----    ----- 
        Total operating expenses                             12,615   12,509 
                                                             ------   ------ 
                                                          
    Operating income (loss)                                   7,506   (4,776)
    Interest and other income, net                              336      582 
                                                                ---      --- 
                                                          
    Income (loss) before income taxes                         7,842   (4,194)
    Provision (benefit) for income taxes                        644      (60)
                                                                ---      --- 
                                                          
    Consolidated net income (loss)                            7,198   (4,134)
                                                          
      Less: Net (income) loss attributable to             
       noncontrolling interests                                  (2)      64 
                                                                 --       -- 
                                                          
    Net income (loss)                                        $7,196  $(4,070)
                                                             ======  ======= 
                                                          
    Basic net income (loss) per share                         $0.29   ($0.16)
                                                              =====   ====== 
    Shares used in basic per share calculation               25,013   25,603 
                                                             ======   ====== 
                                                          
    Diluted net income (loss) per share                       $0.28   ($0.16)
                                                              =====   ====== 
    Shares used in diluted per share calculation             25,708   25,603 
                                                             ======   ====== 
    
    
    
                      Integrated Silicon Solution, Inc.                  
                    Condensed Consolidated Balance Sheets                
                                (In thousands)                           
                                                                         
                                               December 31,   September 30, 
                                                   2009           2009 
                                                   ----           ---- 
                                               (unaudited)        (1)
                                    ASSETS                               
    Current assets:                                                      
      Cash and cash equivalents                   $55,993        $54,944 
      Short-term investments                       29,162         28,542 
      Accounts receivable, net                     28,860         26,501 
      Inventories                                  27,617         19,275 
      Other current assets                          3,443          2,922 
                                                    -----          ----- 
                                                                         
    Total current assets                          145,075        132,184 
    Property, equipment and leasehold                                    
     improvements, net                             23,068         23,218 
    Long-term investments                           1,927          1,408 
    Purchased intangible assets, net                2,045          2,313 
    Goodwill                                        1,251          1,251 
    Other assets                                    1,336          1,556 
                                                    -----          ----- 
    Total assets                                 $174,702       $161,930 
                                                 ========       ======== 
                                                                         
                     LIABILITIES AND STOCKHOLDERS' EQUITY                
    Current liabilities:                                                 
      Accounts payable                            $30,329        $26,825 
      Accrued compensation and benefits             4,201          4,364 
      Accrued expenses                              6,703          5,368 
                                                    -----          ----- 
                                                                         
    Total current liabilities                      41,233         36,557 
                                                                         
    Other long-term liabilities                       715            797 
                                                      ---            --- 
                                                                         
    Total liabilities                              41,948         37,354 
                                                                         
    Commitments and contingencies                                        
                                                                         
    Stockholders' equity:                                                
      Common stock                                      3              2 
      Additional paid-in capital                  309,146        309,649 
      Accumulated deficit                        (178,285)      (185,481)
      Accumulated comprehensive loss                   76         (1,344)
      Noncontrolling interest                       1,814          1,750 
                                                    -----          ----- 
                                                                         
    Total stockholders' equity                    132,754        124,576 
                                                  -------        ------- 
    Total liabilities and stockholders' equity   $174,702       $161,930 
                                                 ========       ======== 
                                                                         
                                                                         
    (1) Derived from audited financial statements.           

SOURCE Integrated Silicon Solution, Inc.



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