C-Cube Reports Stockholder Approval of DiviCom-Harmonic Merger, First Quarter Earnings.Business Editors/High-tech Writers MILPITAS Milpitas (mĭl'pē`təs), city (1990 pop. 50,686), Santa Clara co., W Calif., a suburb of San Jose, southeast of San Francisco; inc. 1954. Manufactures include computers and paint. , Calif.--(BUSINESS WIRE)--April 24, 2000 C-Cube C-Cube Microsystems was pioneer in video compression technology and the implementation of that technology into cost-effective semiconductors. C-Cube was the first company to deliver on the market opportunity presented by the conversion of image and video data from analog to digital Microsystems Inc. (Nasdaq:CUBE) today announced the stockholder approval of the merger of C-Cube's DiviCom business with Harmonic harmonic. 1 Physical term describing the vibration in segments of a sound-producing body (see sound). A string vibrates simultaneously in its whole length and in segments of halves, thirds, fourths, etc. , a manufacturer of fiber-optic See fiber optics. solutions for cable television companies, which will be preceded by the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of C-Cube's semiconductor business into a stand-alone company stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. that, following the merger, will continue the C-Cube Microsystems name. "We are very pleased to have obtained stockholder approval today," said Alex (language) Alex - 1. A polymorphic language being developed by Stephen Crawley <sxc@itd.dtso.oz.au> of Defence Science & Tech Org, Australia. Alex has abstract data types, type inference and inheritance. 2. Due to the approval of the merger with Harmonic, we are reporting revenue from our semiconductor division only. Our reported financials will reflect DiviCom as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Additionally, as a result of the merger, we also incurred extraordinary one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. taxes in the semiconductor division. Revenue for the first quarter revenues was $61 million. Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the (semiconductor division), which included a $3.4 million tax related to extraordinary options exercises as a condition of the merger of DiviCom with Harmonic, for the first quarter was $7.1 million. Net income for C-Cube Microsystems, Inc. was $1.3 million, or $0.03 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , which includes the net income from discontinued operations and the loss on disposal of DiviCom, equaling $5.8 million. There were significant expenses related to the transaction included in the sum, such as taxes and consulting. The DiviCom-Harmonic merger creates a broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). networking company that will provide open solutions for voice, video and data infrastructure. C-Cube Semiconductor, a pure play audio/video company, is expected to build on its strength of designing and manufacturing silicon solutions for DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. and digital VHS (Video Home System) A half-inch, analog videocassette recorder (VCR) format introduced by JVC in 1976 to compete with Sony's Betamax, introduced a year earlier. players, personal video recorders See DVR. , digital set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , video production equipment and television broadcasting systems.* "We are excited about the spin-off of the semiconductor business," said Umesh Padval, who will take over as C-Cube CEO after the merger closes in early May. "We have made significant progress globally with our customers and strategic partners in our expansion platforms: DVD, Set-top box and CODEC."
Other first-quarter achievements include:
-- C-Cube announced collaboration with Sony Corporation to develop
MPEG CODEC solutions for professional VTRs (Video and Tape
Recorders).
-- Digital video hardware and software leaders Matrox and Pinnacle
selected C-Cube silicon for new nonlinear editing products.
-- C-Cube CEO and co-founder Dr. Alex Balkanski was named one of the
21 most influential DVD executives for his seminal contribution to
the development of MPEG, the standard at the very heart of the DVD
format.
About C-Cube C-Cube Semiconductor Inc. is the industry leader in the development and delivery of highly integrated digital video silicon. C-Cube's delivers digital video silicon and systems solutions for the communications and consumer electronics markets. C-Cube is headquartered in Milpitas, California Milpitas (IPA pronunciation: mɪlpitʌs; inhabitants are called 'Milpitans') is a city in Santa Clara County, California. It is located with San Jose to its south and Fremont to its north, at the eastern end of Highway 237 and generally between Interstate freeways 680 and with offices in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , and Asia.
Its stock is traded on the Nasdaq under the symbol CUBE. C-Cube can be
reached at +1.408.490.8000 or at http://www.c-cube.com.
This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth in the Company's Forms 10-K and 10-Q reports and in C-Cube Semiconductor Inc.'s Registration Statement on Form S-1. The Company has attempted to identify forward-looking statements in this press release by placing an asterisk (1) See Asterisk PBX. (2) In programming, the asterisk or "star" symbol (*) means multiplication. For example, 10 * 7 means 10 multiplied by 7. The * is also a key on computer keypads for entering expressions using multiplication. (*) following each sentence containing such statements The Company assumes no obligation to update any forward-looking statements.
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2000 1999
--------- ---------
ASSETS
Current assets:
Cash and equivalents $ 213,557 $ 123,145
Short-term investments 89,795 167,403
Receivables - net 6,799 12,516
Inventories 19,824 8,966
Deferred income taxes 49,549 7,095
Other current assets 11,217 13,132
--------- ---------
Total current assets 390,741 332,257
Property and equipment - net 19,607 20,355
Production capacity rights 24,629 4,985
Distribution rights - net 1,277 1,318
Purchased technology - net 2,070 2,307
Other assets 4,578 2,393
Net assets of discontinued operations 104,815 98,325
--------- ---------
Total $ 547,717 $ 461,940
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,966 $ 24,138
Accrued liabilities 16,602 17,925
Income taxes payable 2,686 2,855
Current portion of long-term obligations 1,471 727
--------- ---------
Total current liabilities 36,725 45,645
Long-term obligations 2,027 16,842
--------- ---------
Total liabilities 38,752 62,487
--------- ---------
Minority interest in subsidiary 478 471
Stockholders' equity:
Common stock 426,679 323,756
Accumulated other comprehensive loss (2,159) (2,014)
Accumulated earnings 83,967 77,240
--------- ---------
Total stockholders' equity 508,487 398,982
--------- ---------
Total $ 547,717 $ 461,940
========= =========
C-CUBE MICROSYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended March 31,
2000 1999
-------- --------
Net revenues $ 61,002 $ 58,287
Costs and expenses:
Cost of revenues 26,754 23,646
Research and development 14,154 13,313
Selling, general and administrative 10,749 9,419
Taxes related to stock options (see Note 1) 3,412 --
-------- --------
Total 55,069 46,378
-------- --------
Income from operations 5,933 11,909
Other income, net 3,775 1,725
-------- --------
Income from continuing operations
before income taxes and minority interest 9,708 13,634
Income tax expense for continuing operations 2,621 3,935
-------- --------
Income from continuing operations
before minority interest 7,087 9,699
Minority interest in net income
(loss) of subsidiary 7 (28)
-------- --------
Income from continuing operations 7,080 9,727
Discontinued operations:
Income from operations of DiviCom
business (net of taxes) 1,552 3,233
Loss on disposal of DiviCom
business (net of taxes) (7,348) --
-------- --------
Net income $ 1,284 $ 12,960
======== ========
Diluted earnings per share amounts:
Income from continuing operations $ 0.14 $ 0.24
Income (loss) from discontinued operations (0.12) 0.08
-------- --------
Net income $ 0.03 $ 0.31
======== ========
Diluted shares used in computation 49,449 41,344
======== ========
Note 1: Represents taxes related to extensive stock option exercises
as a condition of the merger.
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