Catalyst Semiconductor Reports 3rd Quarter Net Income of $0.01 Per Share On First Revenue Increase in 4 Quarters.Business Editors/High-Tech Writers SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 28, 2002 Catalyst Semiconductor, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CATS) said today that it returned to profitability on higher revenues in its third fiscal quarter. For the quarter ended January 31, 2002, Catalyst had net income of $164,000, or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenues of $10.7 million, a 16 percent increase over the prior quarter. This compares with a net loss of $1.0 million, or a loss of $0.05 per diluted share, on revenues of $9.2 million in the second fiscal quarter of 2002. In the third fiscal quarter a year ago, Catalysts earned $7.0 million, or $0.35 per diluted share, on revenues of $23.6 million. As of January 31, 2002, Catalyst had cash and cash equivalents of $29.0 million, an increase of $0.7 million versus the previous quarter. During the quarter, the Company repurchased 63,700 shares of its common stock for $155,000. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was unchanged, remaining at $38.3 million, or $2.17 per basic share at the end of the quarter, as a combined result of the net income and the stock buy back program. "We have completed a quarter that, as seen by some other semiconductor companies, may ultimately indicate that the markets in which we participate have stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. and possibly are rebounding," said Radu Vanco, Chairman and Chief Executive Officer. "During the third quarter we have seen bookings, which we earlier reported were becoming more regular with minimal cancellations and push-outs, continuing to improve and resulting in a positive book to bill for the quarter. This trend appears to be continuing so far during the current quarter. This correlates with our earlier estimates that the inventory reduction measures taken by our customers may have been completed and we are now moving into a lower but more normal level of business activity. "A significant portion of the improvement in revenue and booking activity during the third quarter did not reflect increased bookings from existing customers or ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). Increases, but are the result of new accounts. We regard this as positive, since we believe it will provide us with additional upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside opportunities when the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. business in which we participate moves into the positive territory. We have seen additional positive signs of small ASP increases for our principal revenue generators since the beginning of the current quarter, although there is no certainty this will continue. "At the same time, as we announced earlier, we are now taking full advantage of the reduced costs negotiated earlier in the fiscal year with our principal contractors. Additional cost reductions, which we negotiated more recently, are expected to result in further improvement of our cost structure. As reflected in the numbers, we have continued to manage the overall operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. very tightly, resulting in a $111,000 reduction versus the previous quarter while, at the same time, the R&D portion of the expenses were actually increased from $985,000 to $1,140,000," he said. During the third quarter we introduced two new members of the digital potentiometer family at 100 tap level -- CAT5111 and CAT5113. We also introduced a high speed Micro-Wire bus serial memory -- CAT93HC46 -- and four new members of our Motorola SPI (1) (Stateful Packet Inspection) See stateful inspection. (2) (Service Provider Interface) The programming interface for developing Windows drivers under WOSA. bus interface family -- CAT25C01/02 and CAT25010/20. A significant number of other new products, including various types of analog and mixed signal products, are at various stages of development and scheduled for future introduction. Outlook "While we are pleased to see revenues and bookings increase after four quarters of decline, coupled with some recent signs of possible strengthening in ASPs, it is still too early to say that a new trend has been established. It is, therefore, difficult to project revenue and earnings ranges for future quarters. We continue to maintain a cautious attitude, but we have started to strengthen our organization by making selective hires, particularly in the R&D area, to support our increased commitment to new product development and introduction, particularly in the analog and mixed signal area," Vanco said. Nine Month Results For the first nine months of fiscal 2002, Catalyst reported a net loss of $442,000, or a loss of $0.02 per diluted share, on revenues of $30.3 million. In the same period last year, the Company reported a net income of $25.6 million, or a profit of $1.25 per diluted share, on revenues of $80.9 million. Investor Conference Call The Company will conduct a conference call on fiscal third quarter results beginning at 2:00 p.m. (Pacific Time) today. The call will be available to all investors and media via the company's Web site www.catalyst-semiconductor.com, at www.companyboardroom.com, or by dialing 800-252-8295 (domestic only). A replay of the call will be aired from approximately 4:00 p.m. today until 4:00 p.m. on March 13th at the company's Web site or by dialing (800) 633-8284, entering reservation number 20310163 and following operator instructions. About Catalyst Semiconductor Founded in 1985, Catalyst Semiconductor, Inc. is headquartered in Sunnyvale, Calif. The Company designs and markets a broad range of programmable products including Flash Memories, Serial and Parallel EEPROMs with I2C I2C Inter-Integrated Circuit I2C Intelligent Interface Controller I2C Intelligent Controller , SPI and Microwire interfaces, NVRAM (Non-Volatile RAM) May refer to dynamic RAM (DRAM) and static RAM (SRAM) chips that are backed up by a battery or to non-volatile chips such as flash memory. See non-volatile memory, dynamic RAM, static RAM and solid state disk. , Digitally Programmable Potentiometers, Microcontroller A single chip that contains the processor (the CPU), non-volatile memory for the program (ROM or flash), volatile memory for input and output (RAM), a clock and an I/O control unit. Supervisory circuits Supervisory circuits are semiconductor devices that detect and monitor voltage levels in power supplies, microprocessors, and other systems. They are protection circuits that monitor one or more system parameters. and other programmable Mixed Signal products. Catalyst products are used in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , networking systems, computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. , automotive, industrial and consumer markets. Typical applications include optical networks, modems, wireless LANs A local area network that transmits over the air typically in the 2.4 GHz or 5 GHz unlicensed frequency band. It does not require line of sight between sender and receiver. Wireless base stations (access points) are wired to an Ethernet network and transmit a radio frequency over an area , network cards, PC BIOS See BIOS. , DIMM (Dual In-Line Memory Module) A printed circuit board that holds memory chips and plugs into a DIMM socket on the motherboard. See memory module. DIMM - Dual In-Line Memory Module modules, cellular telephones, digital satellite box receivers, 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. and Internet routers (1) A router in the Internet that forwards IP packets between local, regional and national providers. Same as "IP router." (2) (InterNet Router) Macintosh software from Apple that internetworks different access methods (LocalTalk, EtherTalk, TokenTalk, etc. . Catalyst's Quality Management System is ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certified See certification. . For additional information about Catalyst Semiconductor, visit our web site at www.catalyst-semiconductor.com Except for those statements that report the Company's historical results, the statements being made are 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. . Actual results could differ materially from those projected in the forward-looking statements. Factors which could cause actual results to differ from expectations include the following: economic conditions in the market generally and in the semiconductor industry specifically, volatility in supply and demand affecting revenues and market prices, price and availability of silicon foundry See foundry. , assembly and test subcontract sub·con·tract n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts capacity required to meet financial targets and/or meet backlog requirements, risks and delays associated with bringing up new production capabilities with deliveries from subcontractors, timing and market acceptance of new products, increased expenses associated with new product introductions or process changes, delays in developing or achieving volume production of new products, which can result in delays or failure to contribute to revenues and profits, ability of the Company to maintain its customer and vendor base and delays in and/or inability in raising additional capital. 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 SEC reports, including but not limited to the report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended April 30, 2001 and Form 10-Q Form 10-Q See 10-Q. for the quarters ended July 31, 2001 and October 31, 2001.
CATALYST SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Jan. 31, 2002 April 30, 2001
------------- --------------
ASSETS (unaudited) (audited)
Current assets:
Cash and cash equivalents $29,019 $30,534
Accounts receivable, net 7,944 10,811
Inventories 9,381 8,349
Other assets 568 895
------- -------
Total current assets 46,912 50,589
Property and equipment, net 2,243 2,589
------- -------
$ 49,155 $53,178
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ -- $ 2,025
Accounts payable 4,139 4,261
Accrued expenses 5,128 5,749
Deferred gross profit on
shipments to distributors 1,544 1,972
Capital lease obligation -- 58
------- -------
Total liabilities 10,811 14,065
Total stockholders' equity 38,344 39,113
------- -------
$49,155 $53,178
======= =======
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share data)
Three Months Ended Nine Months Ended
------------------- -------------------
Jan. 31, Jan. 31, Jan. 31, Jan. 31,
2002 2001 2002 2001
------------------- -------------------
Net revenue $10,654 $23,579 $30,336 $80,854
Cost of revenues 6,892 12,543 19,877 40,122
------- ------- ------- -------
Gross profit 3,762 11,036 10,459 40,732
Research and development 1,140 1,182 3,190 3,323
Selling, general and
administration 2,584 2,766 8,251 9,796
------- ------- ------- -------
Operating income (loss) 38 7,088 (982) 27,613
Net interest income 126 293 589 484
------- ------- ------- -------
Income (loss) before taxes 164 7,381 (393) 28,097
Income tax provision -- 370 49 2,470
------- ------- ------- -------
Net income (loss) $ 164 $ 7,011 $ (442) $25,627
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Net income (loss) per share:
Basic $ 0.01 $ 0.41 $ (0.02) $ 1.55
======= ======= ======= =======
Diluted $ 0.01 $ 0.35 $ (0.02) $ 1.25
======= ======= ======= =======
Weighted average common
shares outstanding:
Basic 17,669 16,950 17,704 16,546
======= ======= ======= =======
Diluted 20,417 20,204 17,704 20,517
======= ======= ======= =======
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