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CHIPS AND TECHNOLOGIES REPORTS NET SALES OF $31.3 MILLION AND A LOSS FOR FISCAL THIRD QUARTER

 CHIPS AND TECHNOLOGIES REPORTS NET SALES OF $31.3 MILLION
 AND A LOSS FOR FISCAL THIRD QUARTER
 SAN JOSE, Calif., April 21 /PRNewswire/ -- Chips and Technologies Inc. (NASDAQ/NMS: CHPS) today reported net sales of $31.3 million and a net loss of $10.3 million, or $0.70 per share, for the quarter ended March 31, 1992, (third quarter 1992). Third quarter 1992 results compare to net sales of $55.6 million and a net loss of $4.8 million, or $0.37 per share, for the quarter ended March 31, 1991 (third quarter 1991).
 For the nine months ended March 31, 1992, Chips reported net sales of $108 million and a net loss of $48.6 million, or $3.47 per share. This compares to net sales of $176.2 million and a net loss of $4.3 million, or $0.34 per share, for the nine months ended March 31, 1991.
 Gordon Campbell, Chips' president and chief executive officer said, "The chipset market continues to be characterized by intense competition and continued price erosion. Unit volume shipments declined in third quarter 1992 as compared to second quarter 1992 and third quarter 1991. Additionally, we have experienced further sales price declines on many of the CHIPset products that currently account for a large portion of our shipments. Finally, there appeared to be a general softness in the PC market in January and February 1992.
 "The reduction in force is completed and the restructuring efforts started last quarter are progressing. The company's cost control and cutting measures have resulted in decreased operating expenses over the prior quarter. The company continues to focus its resources on new products.
 "Despite the results for third quarter 1992, Chips remains cautiously optimistic about our future. Chips continues to design and introduce innovative new products, such as our recently announced flat panel display controller (Vampire) and our Windows accelerator chip (Wingine). Our math coprocessors began shipping in the prior quarter and continue to ramp in volume. PC/CHIP commenced shipping in third quarter 1992. Our family of microprocessors will commence shipping in the quarter ending June 30, 1992. However, the new products will not impact financial results until they are shipping in volume and account for a significant portion of net sales. Our available cash at March 31, 1992, of $20 million, coupled with our $13 million in unused lines of credit, remains sufficient to fund operations through the remainder of the current fiscal year. Additionally, the company expects to receive a federal income tax refund of approximately $20 million in the first half of fiscal 1993."
 Chips and Technologies Inc. is the world's leading supplier of integrated silicon, software, and design services to the worldwide microcomputer industry. The company's products include microprocessor-based solutions, VLSI CHIPSets, software accelerators, networking solutions, firmware and design services. Chips' common stock is traded over the counter and is listed on the NASDAQ National Market System under the symbol "CHPS."
 CHIPS AND TECHNOLOGIES INC.
 Consolidated Balance Sheets
 (Dollars in thousands)
 March 31, June 30,
 1992 1991
 (Unaudited)
 ASSETS:
 Cash & Cash Equivalents $ 19,996 $ 37,603
 Accounts Receivable (Net) 25,153 34,323
 Finished Goods Inventory 17,986 35,147
 Prepaid Income Taxes 23,721 6,816
 Prepaid Expenses 2,000 2,375
 Total Current Assets 88,856 116,264
 Property, Plant and Equipment (Net) 27,956 32,735
 Other Assets (Net) 7,424 9,522
 Total Assets $124,236 $158,521
 LIABILITIES & STOCKHOLDERS' EQUITY:
 Accounts Payable $ 17,066 $ 15,892
 Other Accrued Liabilities 14,013 11,271
 Current Portion of Capitalized
 Lease Obligations 6,279 6,731
 Deferred Gross Profit 2,603 3,327
 Accrued Restructuring Costs 1,528 --
 TOTAL CURRENT LIABILITIES 41,489 37,221
 Long Term Capital Lease Obligations 4,881 6,841
 Accrued Restructuring Costs 1,161 --
 TOTAL LIABILITIES 47,531 44,062
 STOCKHOLDERS' EQUITY:
 Common Stock 153 147
 Capital in Excess of Par Value 47,957 44,289
 Treasury Stock -- (11,226)
 Retained Earnings 28,595 81,249
 TOTAL STOCKHOLDERS' EQUITY 76,705 114,459
 TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY $124,236 $158,521
 Certain prior year information has been reclassified to conform with current presentation.
 CHIPS AND TECHNOLOGIES INC.
 Consolidated Statements of Operations
 (Unaudited)
 (In thousands except per share amounts)
 Three Months Ended Nine Months Ended
 March 31, March 31,
 1992 1991 1992 1991
 Net Sales $31,292 $55,612 $107,981 $176,163
 Costs of Goods Sold
 and Manufacturing
 Expenses 23,921 37,143 102,225(A) 109,979
 Gross margin 7,371 18,469 5,756 66,184
 Research and Development 11,718 14,155 35,455 38,875
 Marketing and Selling 7,747 9,202 24,753 27,291
 General and Administrative 2,968 3,086 10,698 9,256
 Restructuring Charge -- -- 6,400 --
 Total Operating Expenses 22,433 26,443 77,306 75,422
 Income (Loss) from
 Operations (15,062) (7,974) (71,550) (9,238)
 Other Income, Net 52 591 670 2,046
 Income (Loss) before
 Taxes (15,010) (7,383) (70,880) (7,192)
 Benefit for Income taxes (4,728) (2,607) (22,327) (2,877)
 Net Income (Loss) $(10,282) $(4,776) $(48,553) $(4,315)
 Net Income (Loss)
 Per Share $(0.70) $(0.37) $(3.47) $(0.34)
 Weighted Average Common
 Shares 14,752 13,035 14,011 13,632
 (A) Includes $19.7 million related to additional provisions for excess and slow moving inventory recorded in the quarter ended Dec. 31, 1991.
 -0- 4/21/92
 /CONTACT: Christine B. Hoberg of Chips and Technologies, 408-434-0600/
 (CHPS) CO: Chips and Technologies ST: California IN: CPR SU: ERN


RM -- SJ004 -- 0840 04/21/92 16:06 EDT
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Date:Apr 21, 1992
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