California Micro Devices Reports Fourth Quarter and Fiscal 1999 Results.

MILPITAS, Calif.--(BUSINESS WIRE)--April 29, 1999--

California Micro Devices Corporation (Nasdaq NMS: CAMD) today reported a net loss of $529,000 or $0.05 per share, on revenues of $8.5 million, for the quarter ended March 31, 1999, the fourth quarter of its fiscal year 1999. This compares with a net loss of $1,620,000, or $0.16 per share, on revenues of $8.7 million, for the quarter ended March 31, 1998. Average share and share equivalents outstanding were 10,082,000, compared to 9,939,000 share and share equivalents for the quarter ended March 31, 1998.

For the year ended March 31, 1999, the Company reported a net loss of $2,771,000, or $0.28 per share, on revenues of $33.6 million. This compares with a net loss of $3,005,000, or $0.30 per share, for the year ended March 31, 1998, on revenues of $33.0 million. Fiscal year 1998 revenues included $0.6 million of technology related revenues versus none in fiscal 1999.

According to Jeffrey Kalb, CMD's president and chief executive officer, "Product revenues were essentially flat compared to last year's fourth quarter and this year's third quarter. The quarter started out with a strong order rate but that slowed down towards the middle of the quarter due to weakness in the personal computer market. This was offset by some strength in telecommunications and other areas. For the year, product sales increased about 3.5%. This compares to the 8-12% year over year declines in the semiconductor and passive components areas, the industries in which we participate. Revenues from our Integrated Passive Devices (IPD) increased by 14%, and the momentum seems to be building in this area. Unit volumes of IPD's increased 24% year over year and the average complexity of each unit increased another 20%. These increases were offset by declines in our old semiconductor products, which are now becoming less significant in our overall revenue picture.

"We continue to see increased unit volume offset by average selling price declines. Unit sales increased sequentially by about 1.5% over the prior quarter while average selling prices decreased by about 1.5% compared to the same period. Despite this, gross margins on product sales increased sequentially from 29% in the third quarter to 31% in the fourth quarter, primarily due to continuing cost reductions in manufacturing. We have now seen five consecutive quarters of improving gross margins."

Kalb continued, "Investment in research and development continued at the high level of $1,005,000 in the fourth quarter compared to $1,004,000 in the third quarter and $719,000 a year ago. This reflects the large number of new products and process technologies in development. Among the new products released this quarter are the PWR-100, the PAC KBM, the PAC-TF series, the PAC GAME-1, and the PAC AC97. These further broaden our standard product offerings to the PC motherboard market, and even more so into the PC peripherals markets. There were also a number of custom products delivered. We anticipate continuing to announce new products at a high rate, increasing both the breadth and depth of our product offering. The recent announcement of our first entry into micro-power operational amplifiers for mobile communications is a good example. Our customer base is expanding and we have large numbers of design wins which should ramp for the seasonally strong fall PC markets."

Also, Kalb stated, "The selling, marketing and administrative expense for the fiscal 1999 fourth quarter is about the same level as in the previous quarter and in the same quarter last year. Further segmented, increased marketing and sales activity was offset by reduced administrative expenses. The decease in selling, marketing and administrative on a year-to-date basis is due to receipt of a one-time insurance settlement in June, 1998."

The Company's cash position at March 31, 1999 was $4.9 million compared to $5.6 million on March 31, 1998, reflecting primarily capital expenditures of $1.5 million and a reduction in accounts receivable.

The Company also offered some forward-looking guidance with regard to the course of its business. Kalb noted, "The book-to-bill for the fourth fiscal quarter was 1 to 1. Some of our newer products have begun to ramp up and should see strong momentum towards the end of the June 1999 quarter, which would imply a sequential increase in sales. On the other hand, the personal computer market has not been as strong as was anticipated a few months ago, and many of the newest products will probably not hit full stride until the September quarter. We continue to get about 6 weeks average lead time from our customers, so forecasting is difficult. We expect to see continued increases in unit volumes particularly towards the end of this quarter and into next, being partially offset, for now, by continuing average selling price declines. New products are our future, so we will continue to invest heavily in new product development and the people to sell them, while continuing to take appropriate steps to reduce costs and conserve cash. We have also been restructuring our sales and marketing efforts, getting more people in front of customers on a full time basis, so we expect to see some increases from these efforts as well."

All statements contained in this press release, which are not historical facts, are forward looking statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, product demand, pricing, unit volumes, market acceptance, competition, risk of dependence on third party suppliers, intellectual property rights and litigation, risks in product and technology development, expense reductions and other risk factors detailed in the Company's Form 10K and Form 10Q filings with the Securities and Exchange Commission. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Due to the risk factors discussed herein, the Company's future actual results could differ materially from those discussed above. These forward-looking statements speak only as to the date hereof, and the Company undertakes no obligation to publicly release updates or revisions to these statements.

Headquartered in Milpitas, California, California Micro Devices (CMD) designs, manufactures and markets integrated thin film, silicon-based termination and filtering components and active electronic circuitry. Built in ISO 9000-registered quality system environments, CMD's products target the requirements of computer, networking and communication-based system manufacturers for smaller, high-density devices that operate at high frequencies with superior performance and functionality.

For further information on the Company, please visit our web site at http://www.camd.com or call Interactive Shareholder Information Services on 888/209-7223. -0-

                 California Micro Devices Corporation
                       Statements of Operations
             (Amounts in thousands, except per share data)

                             Three Months Ended         Year Ended
                                  March 31,              March 31,
                                 (Unaudited)
                               1999       1998       1999       1998

Revenues:
Net product sales           $  8,528   $  8,711   $ 33,617   $ 32,474
Technology related revenues     --           38       --          569
                            --------   --------   --------   --------
Total revenues                 8,528      8,749     33,617     33,043

Cost and expenses:
 Cost of sales                 5,870      7,616     24,730     24,701
 Research and development      1,005        719      3,685      3,017
 Selling, marketing
  and administrative           2,004      2,000      7,300      7,900
                            --------   --------   --------   --------
Total costs and expenses       8,879     10,335     35,715     35,618
                            --------   --------   --------   --------

Operating (loss)                (351)    (1,586)    (2,098)    (2,575)

Other (income) expense, net      178         34        673        430
                            --------   --------   --------   --------
(Loss) before income taxes      (529)    (1,620)    (2,771)    (3,005)

Income taxes                    --         --         --         --
                            --------   --------   --------   --------
Net (loss)                  $   (529)  $ (1,620)  $ (2,771)  $ (3,005)
                            ========   ========   ========   ========
Net (loss) per share        $  (0.05)  $  (0.16)  $  (0.28)  $  (0.30)
                            ========   ========   ========   ========
Weighted average
common shares and share
 equivalents outstanding      10,082      9,939     10,018      9,971
                            ========   ========   ========   ========


                 California Micro Devices Corporation
                            Balance Sheets
                        (Amounts in thousands)

                                              March 31,    March 31,
                                                 1999       1998

ASSETS:
Current assets:
 Cash and short-term securities               $  4,933   $  5,590
 Accounts receivable, less allowance for
  doubtful accounts of $224 and $380             4,471      5,086
 Inventories                                     8,438      8,092
 Prepaid expenses and other assets                 592
                                                              987
                                              --------   --------
Total current assets                            18,434     19,755

Property, plant & equipment, net                11,540     12,925
Restricted cash(a)                               2,900      2,909
Other long-term assets                             770        405
                                              --------   --------
 Total assets                                 $ 33,644   $ 35,994
                                              ========   ========

LIABILITIES & SHAREHOLDERS' EQUITY:
Current liabilities:

 Accounts payable                             $  3,239   $  3,328
 Accrued salaries and benefits                     999      1,008
 Other accrued liabilities                         554        802
 Deferred margin on
  shipments to distributors                        576        581
 Current maturities of
  long-term debt and capital
  lease obligations                                685        489
                                              --------   --------
Total current liabilities                        6,053      6,208

Long-term debt, less current maturities          7,503      7,185
Other long-term liabilities                        918        974
                                              --------   --------
Total liabilities                               14,474     14,367

Shareholders' equity:
Common stock - no par value;
 authorized 25,000,000;
 issued and outstanding
 10,116,144 and 9,978,351                       53,330     53,011
  shares, respectively
 Accumulated deficit                           (34,160)   (31,384)
                                              --------   --------
Total shareholders' equity                      19,170     21,627
                                              --------   --------
  Total liabilities and shareholders' equity  $ 33,644   $ 35,994
                                              ========   ========

Note: (a)Includes $2 million in restricted cash which serves as the Company's guarantee for the CVR included in the settlement of shareholder class actions.