SUNNYVALE, Calif., July 29 CA-SST-Q2-Financials
SUNNYVALE, Calif., July 29 /PRNewswire-FirstCall/ -- SST (Silicon Storage
Technology, Inc.) (Nasdaq: SSTI), a leader in flash memory technology, today
announced results for the second quarter ended June 30, 2008.
Net revenues for the second quarter were $83.7 million compared with $81.1
million in the first quarter of 2008 and with $99.3 million in the second
quarter of 2007. Product revenues for the second quarter of 2008 were $71.1
million, compared with $69.7 million in the first quarter of 2008 and with
$90.3 million in the second quarter of 2007. Revenues from technology
licensing for the second quarter were $12.6 million, up from $11.4 million in
the first quarter of 2008. Technology licensing revenues in the second
quarter of 2007 were $9.1 million.
Net loss from operations for the second quarter was $5.9 million compared
with $4.6 million in the first quarter of 2008 and with $7.1 million in the
second quarter of 2007.
Net loss for the second quarter of 2008 was $9.6 million, or $0.09 per
share, based on approximately 101.8 million diluted shares. By comparison, the
company recorded a net income of $1.5 million, or $0.01 per share in the first
quarter of 2008, based on approximately 104.0 million diluted shares. For the
second quarter of 2007, SST reported a net loss of $7.5 million, or a net loss
of $0.07 per share on approximately 104.2 million diluted shares.
SST finished the second quarter of 2008 with $148.9 million in cash, cash
equivalents, short-term investments, and long-term securities with maturities
greater than 12 months, down approximately $13.5 million from $162.5 million
on March 31, 2008 and down $13.3 million from $162.2 million on December 31,
2007. During the first half of 2008, common stock repurchases totaling 4.1
million shares at an aggregate cost of approximately $11.9 million accounted
for most of this difference.
Management Qualitative Comments
"The softening of the market that we began to see in the first quarter
continued through the second quarter, particularly in the cell phone market in
China," said Bing Yeh, president and CEO. "However, our focus on regaining
market share and positive results in our licensing area enabled us to achieve
revenues and EPS numbers at the high end of our guidance range for the
quarter. Our core business, which includes our NOR memory products and
technology licensing, continues to perform well, considering the current
difficult economic environment. We were also pleased by our accomplishments
in our non-memory business, which we expect will drive our growth as those
products and markets develop. In particular, shipments of our NANDrive
products increased in the second quarter, albeit from a small base. And while
we expect that the start-up nature of launching a significant new product
family could result in large fluctuations quarter to quarter, we believe that
the NANDrive products, as well as other non-memory products, will be an
important growth driver for SST."
Third Quarter 2008 Outlook
As SST enters the seasonally stronger second half of the year it expects
revenue to grow sequentially, somewhat offset by softness in the macroeconomic
environment. As such, SST expects its third quarter revenues to be between
$87 million and $95 million. Gross margin is expected to be between 26 and 28
percent, subject to the risk of changing market conditions. Total operating
expenses are expected to be between $30 million and $32 million, including
stock option expense. Net loss per share is expected to be between ($0.05) and
($0.10).
Conference Call Dial-in Information
SST will hold a conference call to discuss its financial results today at
1:30 p.m. PDT. Those wishing to participate in the conference call should
dial (888) 423-3275, international participants please dial (612) 332-0335,
using the password "SST" at approximately 1:20 p.m. PT. A replay of the call
will be available for one week by dialing (800) 475-6701, international
participants dial (320) 365-3844, using the access code 954152. A Webcast
replay of the conference call will be available until the company's third
quarter conference call on the company's Web site at
http://www.sst.com/events.
About Silicon Storage Technology, Inc.
Headquartered in Sunnyvale, California, SST designs, manufactures and
markets a diversified range of memory and non-memory products for high volume
applications in the digital consumer, networking, wireless communications and
Internet computing markets. Leveraging its proprietary, patented SuperFlash
technology, SST is a leading provider of nonvolatile memory solutions with
product families that include various densities of high functionality flash
memory components and flash mass storage products. The Company also offers
its SuperFlash technology for embedded applications through its broad network
of world-class manufacturing partners and technology licensees, including
TSMC, which offers it under its trademark Emb-FLASH. SST's non-memory
products include NAND controller-based products, smart card ICs and modules,
flash microcontrollers and radio frequency ICs and modules. Further
information on SST can be found on the company's Web site at
http://www.sst.com.
Forward-Looking Statements
Except for the historical information contained herein, this news release
contains forward-looking statements regarding memory and non-memory market
conditions, SST's future financial performance, the launch, design cycle and
performance of new products, SST's licensing business, SST's ability to
diversify its business, the transition of SST's products to smaller
geometrics, and SST's ability to bring new products to market, all of which
involve risks and uncertainties. These risks may include timely development,
acceptance and pricing of new products, the terms, conditions and revenue
recognition issues associated with licensees' royalty payments, the impact of
competitive products and pricing, and general economic conditions as they
affect SST's customers, as well as other risks detailed from time to time in
the Company's periodic reports, including the Annual Report on Form 10-K for
the year ended December 31, 2007 and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2008. These forward-looking statements are not
guarantees of future performance and speak only as of the date hereof, and,
except as required by law, SST disclaims any obligation to update these
forward-looking statements to reflect future events or circumstances.
For more information about SST and the company's comprehensive list of
product offerings, please call 1-888/SST-CHIP. Information can also be
requested via email to literature@sst.com or through SST's Web site at
http://www.sst.com. SST's head office is located at 1171 Sonora Court,
Sunnyvale, Calif.; telephone: 408/735-9110; fax: 408/735-9036.
The SST logo and SuperFlash are registered trademarks, and NANDrive is a
trademark of Silicon Storage Technology, Inc. All other trademarks or
registered trademarks are the property of their respective holders.
For More Information Contact:
Leslie Green
Green Communications Consulting, LLC,
(650) 312-9060
-- FINANCIAL TABLES TO FOLLOW --
Silicon Storage Technology, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
-------------------------------------------
2007 2008 2007 2008
-------- ---------------- --------
Net revenues:
Product revenues$ 90,277 $ 71,073$ 178,488$ 140,771
Technology licensing 9,066 12,627 18,379 24,014
-------- ---------------- --------
Total net revenues 99,343 83,700 196,867 164,785
Cost of revenues73,750 59,751 144,753 115,127
-------- ---------------- --------
Gross profit25,593 23,949 52,114 49,658
-------- ---------------- --------
Operating expenses:
Research and
development 13,837 15,222 27,328 30,835
Sales and marketing7,5386,919 14,303 14,401
General and
administrative7,3077,721 14,345 14,904
Other non-recurring
charges 4,005-4,005-
-------- ---------------- --------
Total operating
expenses 32,687 29,862 59,981 60,140
-------- ---------------- --------
Loss from operations (7,094) (5,913) (7,867) (10,482)
Other income (expense),
net 1,924 9763,6451,850
-------- ---------------- --------
Loss before provision
for (benefit from)
income taxes and pro
rata share of loss
from equity
investments (5,170) (4,937) (4,222) (8,632)
Provision for (benefit
from) income taxes4182,3911,164 (4,660)
-------- ---------------- --------
Loss before pro rata
share of loss from
equity investments(5,588) (7,328) (5,386) (3,972)
Pro rata share of loss
from equity investments 1,9312,2403,4474,137
-------- ---------------- --------
Net loss $ (7,519)$ (9,568)$ (8,833)$ (8,109)
======== ================ ========
Net loss per share -
basic and diluted$ (0.07) $ (0.09) $ (0.08) $ (0.08)
======== ================ ========
Shares used in per
share calculation 104,198 101,793 104,071 102,698
-------- ---------------- --------
Silicon Storage Technology, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
December 31,June 30,
2007 2008
----------------------
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $162,224 $124,122
Trade accounts receivable, net 56,313 37,393
Inventories 50,178 64,843
Other current assets 6,055 6,166
----------------------
Total current assets 274,770232,524
Equipment, furniture and fixtures, net 18,247 19,658
Long-term marketable securities 36,160 59,410
Other assets63,067 59,923
Goodwill11,221 11,221
----------------------
Total assets $403,465 $382,736
======================
LIABILITIES
Current liabilities:
Trade accounts payable $42,067$45,456
Accrued expenses and other
liabilities28,293 17,934
Deferred revenue 3,004 3,895
----------------------
Total current liabilities 73,364 67,285
Other liabilities7,548 8,828
----------------------
Total liabilities 80,912 76,113
----------------------
SHAREHOLDERS' EQUITY
Common stock 434,905427,130
Accumulated other comprehensive
income 31,239 31,193
Accumulated deficit (143,591) (151,700)
----------------------
Total shareholders' equity 322,553306,623
----------------------
Total liabilities and
shareholders' equity $403,465 $382,736
----------------------
Silicon Storage Technology, Inc. and Subsidiaries
Supplemental Data
Percentage of Change in
Gross Product Revenue Revenue
--------------------- --------------
2Q07 to 1Q08 to
2Q07 1Q08 2Q08 2Q08 2Q08
--------------------- --------------
Product Revenue By Ship-To Location
North America 4% 8% 5%(5%) (36%)
Total International96%92%95% (21%)6%
Europe 6% 8% 7% (10%) (4%)
Japan 7% 8% 9% (10%)2%
Korea 10% 8% 4% (66%) (45%)
China 35%29%32% (27%) 14%
Taiwan 28%29%38% 7%34%
Other Far East 10%10% 5% (57%) (46%)
Product Revenue by Application
Digital Consumer 35%27%32% (29%) 17%
Internet Computing 24%23%21% (29%) (3%)
Networking 9%12%12% 1% 4%
Wireless Communications32%38%35% (13%) (6%)
Licensing Revenue as a % of Total
Revenue 9%14%15%39%11%
SOURCE Silicon Storage Technology, Inc.
