Catalyst Semiconductor, Inc. announces first quarter results.

SUNNYDALE, Calif.,--(BUSINESS WIRE)--Aug. 21, 1996-- CATALYST SEMICONDUCTOR, INC. (NASDAQ: CATS) today announced its financial results for its first quarter ended July 31, 1996.

Revenues for the first quarter were $15.8 million, up 14 percent from revenues of $13.9 million in the fourth quarter a year ago. Net income for the first quarter was $1.2 million, or $0.13 per share, up 58 percent from net income of $0.7 million or $0.10 per share in the first quarter a year ago. This quarter was the Company's ninth consecutive quarter of net income growth.

Michael Powell, the Company's Chairman and CEO, said "We are pleased by the results of the past quarter, especially in light of relatively poor, general market conditions. We are also pleased by the progress being made on designs of our new Flash memory products. Business conditions, however, are characterized by short lead-times and therefore decreased visibility. If poor general market conditions persist, our short term operating results could be adversely affected."

The Company has received first silicon of 0.6 micron Flash memory product from its primary production foundry, Oki Electric, as well as its new foundry, United Microelectronics Corporation (UMC). All of the Company's Flash memory products are currently produced on a 0.7 micron process run at Oki. The conversion to a 0.6 micron process is expected to reduce costs and enhance performance. First revenues from the 0.6 micron devices are expected in the third fiscal quarter. Catalyst recently moved its headquarters to a newly leased facility in Sunnyvale, nearly doubling the space in which the Company operates. The larger space is necessary for the additional engineering staff required to develop its expanding line of Flash memory products. In addition, the Company is enhancing its worldwide sales and marketing organization to support and expand its customer base.

Except for those statements that report the Company's historical results, the statements being made are forward looking statements. Actual results could differ materially from those projected in the forward looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained under the heading "Certain Factors That May Affect the Company's Future Results of Operations" listed from time to time in Catalyst's periodic SEC reports, including but not limited to its annual report on Form 10-K for the year ended April 30, 1996.

Catalyst Semiconductor, Inc. designs and markets a broad range of nonvolatile semiconductor memory products, including Flash Memories, Parallel EEPROMs, and Serial EEPROMs. Its headquarters are in Sunnyvale, California.

(Tables Follow) CATALYST SEMICONDUCTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)

Three Months Ended

July 31, 1996 June 30, 1995

Net revenues $ 15,832 $ 13,942 Cost of revenues 11,121 9,629 Gross Profit 4,711 4,313 Research and development 1,273 1,109 Selling, general and administrative 2,261 2,331 Income from operations 1,177 873 Interest income (expense), net 28 (128) Income before income taxes 1,205 745 Income tax provision 46 11 Net Income $ 1,159 $ 734 Net income per share $ 0.13 $ 0.10 Shares used in per share calculation 8,881 7,661 -0-

CATALYST SEMICONDUCTOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

July 31 April 30,

1996 1995 ASSETS Current Assets:

Cash and cash equivalents $ 2,737 $ 2,966

Restricted cash 5,250 5,250

Accounts receivable,

net of allowances 11,561 10,470

Inventories 16,166 16,193

Other assets 1,407 1,347

Total current assets 37,121 36,225 Property and equipment, net 3,539 3,050

$ 40,660 $ 39,275 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:

Bank debt $ 2,430 $ 130

Accounts payable 15,450 17,310

Accrued expenses 1,740 2,133

Deferred gross profit on

shipments to distributors 1,152 1,109

Current portion of capital

lease obligations 418 513

Total current liabilities 21,190 21,194

Long-term portion of capital

lease obligations 450 571

Total liabilities 21,640 21,765

Total stockholders' equity 19,020 17,510

$ 40,660 $ 39,275



CONTACT: Kathryn Beaulieu, Investor Relations

Catalyst Semiconductor, Inc.

408/542-1051; 408/542-1405 (fax)

URL: http:/www.catsemi.com

or

Mona J. Walsh

Susan T. Bolen (Media)

Wolfe Axelrod Associates

212/370-4500; 212/370-4505 (fax)

email: [e-mail]