Zoran Corporation Reports First Quarter 2001 Results

Apr 18, 2001, 01:00 ET from Zoran Corporation

    SANTA CLARA, Calif., April 18 /PRNewswire/ --
 Zoran Corporation (Nasdaq:   ZRAN), a leading provider of digital
 solutions-on-a-chip for applications in the growing multimedia and consumer
 electronics markets, today reported results for its first quarter ended
 March 31, 2001.
     Revenues for the first quarter of 2001 were $19.6 million compared with
 $17.6 million for the same quarter in 2000 and $19.2 million last quarter.
 Pro forma net income for the first quarter was $208,000 or $0.01 per share on
 a diluted basis.  For the same quarter last year, the company reported pro
 forma net income of $3.5 million, or $0.23 per share on a diluted basis, and
 $584,000 million, or $0.03 per share for the fourth quarter of 2000.
     Pro forma net income excludes acquisition-related costs included in
 operating expenses such as amortization of goodwill and the write-off of
 in-process research and development.  Including these acquisition-related
 costs, the company reported a net loss for the first quarter of $10.6 million,
 or $0.61 per share.
     "During the first quarter we saw a significant channel inventory reduction
 in the China market and according to industry analysts, DVD sales remained
 strong," said Dr. Levy Gerzberg, Zoran's president and chief executive
 officer.  "Zoran is designed into over fifty new models of Chinese
 manufacturers that will be coming to market throughout the remainder of the
 year."
 
     Future Outlook
     The following statements are based on current expectations.  These
 statements are forward-looking, and actual results may differ materially.
 
     Second Quarter 2001 Outlook
     Consistent with previous years, the second quarter revenue is expected to
 be flat to slightly up from the first quarter.  Product gross margin is
 expected to be  between 35 and 37 percent for the second quarter of 2001 due
 to product mix factors and production ramp costs associated with new products.
 Overall gross margin is expected to be between 41 and 44 percent.  Operating
 expenses, excluding acquisition related costs, are expected to be flat while
 earnings per share, on a pro forma basis, are expected to range between a loss
 of $0.02 and income of $0.01 for the quarter.
 
     Earnings Conference Call
     Zoran Corporation has scheduled a conference call for 5:00 p.m. EDT today
 to discuss first quarter results.  To listen to the call, please call
 212-896-6135 approximately five minutes prior to the start of the call.  For
 those who are not available to listen to the live conference call, a replay
 will be available via telephone from approximately 4:00 p.m. PDT on April 18
 until 4:00 p.m. PDT on April 20.  The access number for the replay is
 800-633-8284; confirmation number 18497647.
     Additionally, the conference call will be broadcast live over the Internet
 and can be accessed by all interested parties through the investor relations
 section of Zoran's website at www.zoran.com.  Please access the website at
 least fifteen minutes prior to the start of the call to register, download,
 and install any necessary audio software.
 
     Company Profile
     Zoran Corporation, based in Santa Clara, California, is a leading provider
 of digital solutions-on-a-chip for applications in the growing multimedia and
 consumer electronics markets.  With almost two decades of expertise developing
 and delivering digital compression technologies, Zoran has pioneered
 high-performance processing into various audio, video, and imaging
 technologies.  Zoran's proficiency in integration delivers major benefits for
 OEM customers, including greater capabilities within each product generation,
 reduced system costs, and shorter time to market.  Zoran is a leading supplier
 in the rapidly expanding DVD and digital camera markets and in related digital
 audio and video applications. With headquarters in the U.S. and operations in
 Canada, China, Israel, Japan, and Taiwan, Zoran may be contacted on the World
 Wide Web at www.zoran.com or at 408-919-4111.
 
     Forward-Looking Statements
     This press release includes a number of forward-looking statements which
 reflect the Company's current view with respect to future events and financial
 performance.  These forward-looking statements are subject to a variety of
 risks and uncertainties that could cause actual results to differ materially
 from those projected in the forward-looking statements including risks
 associated with:  rapidly evolving markets for the Company's products and
 uncertainty regarding the development of these markets; new product
 development, the ongoing introduction of new and enhanced products by the
 Company and its competitors and the transition from older products; intensive
 competition in markets in which the Company competes; the Company's reliance
 on independent foundries and contractors for its wafer supplies and product
 assembly and testing and its ability to ramp up manufacturing capacity to meet
 changing customer requirements; the effects of changes in revenue and product
 mix on the Company's gross margins; the Company's historic dependence on sales
 to a limited number of large customers and fluctuations in customer and
 product mix among those customers; the ability of the Company to successfully
 complete the integration of its recently-acquired Nogatech, Inc. subsidiary as
 well as other businesses it may acquire; the dependence on key Company
 personnel; the reliance on international sales and operations, particularly
 the Company's operations in Israel; and the effects of general business and
 economic conditions on the markets that the Company serves.  Further
 information regarding these and other risks and uncertainties can be found in
 the Company's annual report on Form 10-K for the year ended December 31, 2001
 and other filings that have been made with the SEC.
 
 
                                 ZORAN CORPORATION
             PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001              2000
 
     Revenues:
         Product sales                               $17,315           $14,222
         Software, licensing and
          development                                  2,278             3,420
            Total revenues                            19,593            17,642
 
     Costs and expenses:
         Cost of product sales                        10,876             8,136
         Research and development                      5,968             3,269
         Selling, general and administrative           5,243             4,137
            Total costs and expenses                  22,087            15,542
 
     Operating income (loss)                          (2,494)            2,100
     Interest & other income (expense), net            2,745             2,006
     Income before income taxes                          251             4,106
     Provision for income taxes                           43               616
     Net income                                         $208            $3,490
 
     Basic net income per share                        $0.01             $0.25
     Diluted net income per share                      $0.01             $0.23
     Shares used in computing per share amounts:
         Basic                                        17,314            13,988
         Diluted                                      17,876            15,486
 
 
                                 ZORAN CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001               2000
 
     Revenues:
         Product sales                               $17,315           $14,222
         Software, licensing and development           2,278             3,420
            Total revenues                            19,593            17,642
 
     Costs and expenses:
         Cost of product sales                        10,876             8,136
         Research and development                      5,968             3,269
         Selling, general and administrative           5,243             4,137
         Amortization of goodwill and
          other intangibles                           10,808                --
            Total costs and expenses                  32,895            15,542
 
     Operating income (loss)                         (13,302)            2,100
     Interest & other income (expense),
      net                                              2,745             2,006
     Income (loss) before income taxes               (10,557)            4,106
     Provision for income taxes                           43               616
     Net income (loss)                              $(10,600)           $3,490
 
     Basic net income (loss) per share                $(0.61)            $0.25
     Diluted net income (loss) per share              $(0.61)            $0.23
     Shares used in computing per share
      amounts:
         Basic                                        17,314            13,988
         Diluted                                      17,314            15,486
 
 
                                 ZORAN CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (in thousands)
                                    (unaudited)
 
                                                  March 31,        December 31,
                                                     2001              2000
     ASSETS
        Current assets:
           Cash and short-term investments         $137,567          $175,638
           Accounts receivable, net                  28,003            27,065
           Inventory                                 18,324            17,453
           Prepaid expenses & other
            current assets                            5,735             5,575
              Total current assets                  189,629           225,731
 
        Property & equipment, net                     7,139             6,972
        Other investments                            41,193            13,899
        Goodwill and other intangibles              102,192           112,864
 
                                                   $340,153          $359,466
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
        Current liabilities:
           Accounts payable                         $10,174           $11,156
           Accrued expenses and other
            liabilities                              14,244            16,856
              Total current liabilities              24,418            28,012
 
        Stockholders' equity:
           Common Stock                                  17                17
           Additional paid-in capital               384,921           388,655
           Warrants                                     717               717
           Deferred stock-based
            compensation                               (783)             (919)
           Accumulated other comprehensive
            income                                     (412)            1,109
           Accumulated deficit                      (68,725)          (58,125)
              Total stockholders' equity            315,735           331,454
 
                                                   $340,153          $359,466
 
 
 

SOURCE Zoran Corporation
    SANTA CLARA, Calif., April 18 /PRNewswire/ --
 Zoran Corporation (Nasdaq:   ZRAN), a leading provider of digital
 solutions-on-a-chip for applications in the growing multimedia and consumer
 electronics markets, today reported results for its first quarter ended
 March 31, 2001.
     Revenues for the first quarter of 2001 were $19.6 million compared with
 $17.6 million for the same quarter in 2000 and $19.2 million last quarter.
 Pro forma net income for the first quarter was $208,000 or $0.01 per share on
 a diluted basis.  For the same quarter last year, the company reported pro
 forma net income of $3.5 million, or $0.23 per share on a diluted basis, and
 $584,000 million, or $0.03 per share for the fourth quarter of 2000.
     Pro forma net income excludes acquisition-related costs included in
 operating expenses such as amortization of goodwill and the write-off of
 in-process research and development.  Including these acquisition-related
 costs, the company reported a net loss for the first quarter of $10.6 million,
 or $0.61 per share.
     "During the first quarter we saw a significant channel inventory reduction
 in the China market and according to industry analysts, DVD sales remained
 strong," said Dr. Levy Gerzberg, Zoran's president and chief executive
 officer.  "Zoran is designed into over fifty new models of Chinese
 manufacturers that will be coming to market throughout the remainder of the
 year."
 
     Future Outlook
     The following statements are based on current expectations.  These
 statements are forward-looking, and actual results may differ materially.
 
     Second Quarter 2001 Outlook
     Consistent with previous years, the second quarter revenue is expected to
 be flat to slightly up from the first quarter.  Product gross margin is
 expected to be  between 35 and 37 percent for the second quarter of 2001 due
 to product mix factors and production ramp costs associated with new products.
 Overall gross margin is expected to be between 41 and 44 percent.  Operating
 expenses, excluding acquisition related costs, are expected to be flat while
 earnings per share, on a pro forma basis, are expected to range between a loss
 of $0.02 and income of $0.01 for the quarter.
 
     Earnings Conference Call
     Zoran Corporation has scheduled a conference call for 5:00 p.m. EDT today
 to discuss first quarter results.  To listen to the call, please call
 212-896-6135 approximately five minutes prior to the start of the call.  For
 those who are not available to listen to the live conference call, a replay
 will be available via telephone from approximately 4:00 p.m. PDT on April 18
 until 4:00 p.m. PDT on April 20.  The access number for the replay is
 800-633-8284; confirmation number 18497647.
     Additionally, the conference call will be broadcast live over the Internet
 and can be accessed by all interested parties through the investor relations
 section of Zoran's website at www.zoran.com.  Please access the website at
 least fifteen minutes prior to the start of the call to register, download,
 and install any necessary audio software.
 
     Company Profile
     Zoran Corporation, based in Santa Clara, California, is a leading provider
 of digital solutions-on-a-chip for applications in the growing multimedia and
 consumer electronics markets.  With almost two decades of expertise developing
 and delivering digital compression technologies, Zoran has pioneered
 high-performance processing into various audio, video, and imaging
 technologies.  Zoran's proficiency in integration delivers major benefits for
 OEM customers, including greater capabilities within each product generation,
 reduced system costs, and shorter time to market.  Zoran is a leading supplier
 in the rapidly expanding DVD and digital camera markets and in related digital
 audio and video applications. With headquarters in the U.S. and operations in
 Canada, China, Israel, Japan, and Taiwan, Zoran may be contacted on the World
 Wide Web at www.zoran.com or at 408-919-4111.
 
     Forward-Looking Statements
     This press release includes a number of forward-looking statements which
 reflect the Company's current view with respect to future events and financial
 performance.  These forward-looking statements are subject to a variety of
 risks and uncertainties that could cause actual results to differ materially
 from those projected in the forward-looking statements including risks
 associated with:  rapidly evolving markets for the Company's products and
 uncertainty regarding the development of these markets; new product
 development, the ongoing introduction of new and enhanced products by the
 Company and its competitors and the transition from older products; intensive
 competition in markets in which the Company competes; the Company's reliance
 on independent foundries and contractors for its wafer supplies and product
 assembly and testing and its ability to ramp up manufacturing capacity to meet
 changing customer requirements; the effects of changes in revenue and product
 mix on the Company's gross margins; the Company's historic dependence on sales
 to a limited number of large customers and fluctuations in customer and
 product mix among those customers; the ability of the Company to successfully
 complete the integration of its recently-acquired Nogatech, Inc. subsidiary as
 well as other businesses it may acquire; the dependence on key Company
 personnel; the reliance on international sales and operations, particularly
 the Company's operations in Israel; and the effects of general business and
 economic conditions on the markets that the Company serves.  Further
 information regarding these and other risks and uncertainties can be found in
 the Company's annual report on Form 10-K for the year ended December 31, 2001
 and other filings that have been made with the SEC.
 
 
                                 ZORAN CORPORATION
             PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001              2000
 
     Revenues:
         Product sales                               $17,315           $14,222
         Software, licensing and
          development                                  2,278             3,420
            Total revenues                            19,593            17,642
 
     Costs and expenses:
         Cost of product sales                        10,876             8,136
         Research and development                      5,968             3,269
         Selling, general and administrative           5,243             4,137
            Total costs and expenses                  22,087            15,542
 
     Operating income (loss)                          (2,494)            2,100
     Interest & other income (expense), net            2,745             2,006
     Income before income taxes                          251             4,106
     Provision for income taxes                           43               616
     Net income                                         $208            $3,490
 
     Basic net income per share                        $0.01             $0.25
     Diluted net income per share                      $0.01             $0.23
     Shares used in computing per share amounts:
         Basic                                        17,314            13,988
         Diluted                                      17,876            15,486
 
 
                                 ZORAN CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
                                    (unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001               2000
 
     Revenues:
         Product sales                               $17,315           $14,222
         Software, licensing and development           2,278             3,420
            Total revenues                            19,593            17,642
 
     Costs and expenses:
         Cost of product sales                        10,876             8,136
         Research and development                      5,968             3,269
         Selling, general and administrative           5,243             4,137
         Amortization of goodwill and
          other intangibles                           10,808                --
            Total costs and expenses                  32,895            15,542
 
     Operating income (loss)                         (13,302)            2,100
     Interest & other income (expense),
      net                                              2,745             2,006
     Income (loss) before income taxes               (10,557)            4,106
     Provision for income taxes                           43               616
     Net income (loss)                              $(10,600)           $3,490
 
     Basic net income (loss) per share                $(0.61)            $0.25
     Diluted net income (loss) per share              $(0.61)            $0.23
     Shares used in computing per share
      amounts:
         Basic                                        17,314            13,988
         Diluted                                      17,314            15,486
 
 
                                 ZORAN CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (in thousands)
                                    (unaudited)
 
                                                  March 31,        December 31,
                                                     2001              2000
     ASSETS
        Current assets:
           Cash and short-term investments         $137,567          $175,638
           Accounts receivable, net                  28,003            27,065
           Inventory                                 18,324            17,453
           Prepaid expenses & other
            current assets                            5,735             5,575
              Total current assets                  189,629           225,731
 
        Property & equipment, net                     7,139             6,972
        Other investments                            41,193            13,899
        Goodwill and other intangibles              102,192           112,864
 
                                                   $340,153          $359,466
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
        Current liabilities:
           Accounts payable                         $10,174           $11,156
           Accrued expenses and other
            liabilities                              14,244            16,856
              Total current liabilities              24,418            28,012
 
        Stockholders' equity:
           Common Stock                                  17                17
           Additional paid-in capital               384,921           388,655
           Warrants                                     717               717
           Deferred stock-based
            compensation                               (783)             (919)
           Accumulated other comprehensive
            income                                     (412)            1,109
           Accumulated deficit                      (68,725)          (58,125)
              Total stockholders' equity            315,735           331,454
 
                                                   $340,153          $359,466
 
 
 SOURCE  Zoran Corporation