Chips and Technologies, Inc. Posts Fourth Quarter Increases; Net and Operating Income Growth Quadruple Revenues Hike; Portable PC Graphics and Video Market Leader Also Posts Fiscal Year Gains; Net Surges 174% on 44% Revenues Boost; Gross Margins Improve to Over 40%.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--July 16, 1996--Chips and Technologies, 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 :CHPS CHPS Collaborative for High Performance Schools CHPS Certified in Healthcare Privacy and Security CHPS Center for Health Policy Studies (healthcare consulting firm with offices in New York, Maryland, and Illinois) CHPS Combat Hybrid Power System ) today reported sales of $38.8 million and net income of $5.9 million, or $0.27 per share, for its fourth fiscal quarter ended June June: see month. 30, 1996. Chips and Technologies Chips and Technologies (C&T) was the first fabless semiconductor company, a model developed by its founder Gordon Campbell. Its first product was an EGA IBM compatible graphics chip. This was followed by chipsets for PC motherboards and other computer graphics chips. , Inc. is a leading supplier of highly integrated semiconductor and software solutions which provide graphics, video and other capabilities to portable and desktop computers. At a time when many PC and semiconductor industry companies are pre-announcing "shortfalls from expectations" or have reported results that "have not been stellar," Jim Stafford James Wayne "Jim" Stafford (b. 16 January 1944, Eloise, Florida) is an American comedian and musician, who was prominent in the 1970s. Stafford had semi-novelty hits with the songs "Spiders and Snakes", "Swamp Witch", "Wildwood Weed", the controversial "My Girl, Bill", and "Turn , Chips' President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said: "I am proud to announce Chips and Technologies' fiscal 1996 and fourth quarter results exceeded consensus estimates." "Our revenues for fiscal 1996 were up 44% to $151 million," stated Mr. Stafford Stafford, city (1991 pop. 60,915) and district, Staffordshire, W central England, on the Sow River, above its junction with the Trent. Stafford's chief industry is the manufacture of electrical goods; other products are concrete, shoes and shoe-repairing machinery, , "and our operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , excluding one time gains, increased 134% to $19.5 million from $8.3 million last fiscal year." "We are pleased with our continued progress in posting significant, steady increases in revenues, income and gross margins," Mr. Stafford said. "We continue to make appropriate levels of investment in research and development to bring leading-edge products to our customers which will enable us to sustain and potentially extend our market share leadership." "Chips and Technologies has an increasingly bright future as we establish new standards-setting industry initiatives such as Zoomed Video, and support for Intel Corp.'s new Accelerated Graphics Port See AGP. (hardware, graphics) Accelerated Graphics Port - (AGP) A bus specification by Intel which gives low-cost 3D graphics cards faster access to main memory on personal computers than the usual PCI bus. (AGP (Accelerated Graphics Port) A high-speed 32-bit port from Intel for attaching a display adapter to a PC. It provides a direct connection between the card and memory, and only one AGP slot is on the motherboard. ) architecture." "The strategic partnership announced this Spring with Lockheed Martin's Real 3D(R) organization, to provide integrated 2D, 3D and video graphics controllers for the desktop, portable PC and emerging Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the markets," Mr. Stafford continued, "establishes Chips as a major player in the explosive real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. 3D graphics and multimedia arenas. As part of that accord, Chips and Technologies will provide the 2D portion of the technology embedded Inserted into. See embedded system. in the 3D graphics chip Real 3D is jointly developing with Intel. This alignment with the leader in real-time 3D technology, whose intellectual property and content, coupled with our new HiQVideo(TM) LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. controller product family, will lead to new generations of highly-optimized, yet cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. , PC-tailored solutions based on proven hardware and software architectures." Revenues for the quarter ended June 30, 1996 increased 14.6% from $33.9 million in the quarter ended a year ago, and increased 6.3% from $36.5 million in the third fiscal quarter ended March 31, 1996. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $6.0 million for the quarter ended June 30, 1996 increased 58.4% compared to $3.8 million posted in the year-ago quarter, and increased 47.4% from $4.0 million reported in the prior quarter. Net income for the fourth quarter ended June 30, 1996 increased 62.3% compared to $3.7 million, or $0.18 per share, posted in the year-ago quarter, and decreased 39.4% from $9.8 million, or $0.45 per share, reported in the prior quarter when the company's results were inclusive of inclusive of prep. Taking into consideration or account; including. a $5.6 million, or $0.26 per share, gain from the sale of shares of Advanced Micro Devices, Inc. Revenues for fiscal 1996 of $150.8 million were 44.0% above the $104.7 million posted in fiscal 1995. Net income of $25.8 million, or $1.18 per share, for fiscal 1996 was 174.3% above the $9.4 million, or $0.47 per share, in fiscal 1995. Exclusive of the gain from the sale of AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. shares and $0.9 million gain from a sale of land in the second quarter of 1996 and a $1.4 million restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). credit for the first and second quarters of fiscal 1995, earnings per share increased 126% to $0.88 for fiscal 1996 compared to $0.39 for fiscal 1995. Gross margins for the quarter ended June 30, 1996 were 44.2% compared to 38.4% in the quarter ended a year ago and 39.6% in the quarter ended March 31, 1996. 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. were $11.2 million, compared to $9.2 million in the quarter ended June 30, 1995, and $10.4 million in the quarter ended March 31, 1996. Operating expenses as a percent of sales were 28.9%, compared to 27.3% in the quarter ended a year ago and compared to 28.5% in the quarter ended March 31, 1996. Gross margins for all of fiscal 1996 were 40.4% compared to 38.1% for all of fiscal 1995. -0-
Chips and Technologies, Inc.
Unaudited Condensed Consolidated State of Operations
(Dollars in thousands except share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30,
1996 1995 1996 1995
Net sales $38,796 $33,850 $150,788 $104,731
Cost of sales 21,636 20,856 89,852 64,875
------ ------ ------ ------
Gross margin 17,160 12,994 60,936 39,856
Operating expenses Research and development 5,299 3,834 19,837 13,344 Selling, general and administrative 5,897 5,395 21,604 18,193
Restructuring recovery -- -- -- (1,429)
------ ----- ------ ------
Total operating expenses 11,196 9,229 41,441 30,108
Income from operations 5,964 3,765 19,495 9,748
Interest income and
other, net 624 293 9,116 597
----- ----- ------ ------
Income before taxes 6,588 4,058 28,611 10,345
Provision for income taxes 659 406 2,861 957
------ ------ ------- ------
Net Income $5,929 $3,652 $25,750 $9,388
Net income per share $0.27 $0.18 $1.18 $0.47 Shares used in per share calculation 21,631 20,614 21,791 20,182
Chips and Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands except share amounts)
JUNE 30, 1996 JUNE 30, 1995
Assets Current assets: Cash and cash equivalents $23,989 $22,385 Short-term investments 35,356 23,644 Accounts receivable, net of allowance for doubtful accounts of $1,203 and $1,032, respectively 12,189 14,696 Inventory 10,197 11,667
Prepaid and other assets 2,574 2,549
------ ------
Total current assets 84,305 74,941
Property and equipment, net 11,223 10,550
Other assets 12,543 276
------- -------
Total assets $108,071 $85,767
Liabilities and Stockholders' Equity Current liabilities: Accounts payable $12,820 $8,072 Current capital lease obligations 1,630 689
Other accrued liabilities 9,436 9,585
------ ------
Total current liabilities 23,886 18,346
Long-term capital lease obligations 796 849
Notes payable -- 876
------ ------
Total liabilities 24,682 20,071
Stockholders' equity: Common stock, 20,620,000 and 19,744,000 shares issued and outstanding 206 197 Capital in excess of par value 77,769 73,016 Note receivable from officer (80) (107) Unrealized gain on investments 3,421 16,267
Retained earnings (deficit) 2,073 (23,677)
------ ------
Total stockholders' equity 83,389 65,696
Total liabilities and stockholders' equity $108,071 $85,767 -0- Note to Editors: HiQVideo is a trademark of Chips and Technologies, Inc. All other products or service names mentioned herein are trademarks of their respective owners. CONTACT: Chips & Technologies, Inc. Tim Christoffersen, 408/434-0600 |
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