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ZYCAD ANNOUNCES SECOND QUARTER 1993 LOSS

 FREMONT, Calif., Aug. 4 /PRNewswire/ -- Zycad Corp.(R) (NASDAQ: ZCAD) today reported a net loss of $4,841,000, or 31 cents per share, on revenues of $9,474,000 for the quarter ended June 30, 1993. For the comparable three-month period ended June 30, 1992, the company's revenues were $12,590,000, and the net income was $683,000, or 4 cents per share.
 The June 30, 1993 results included restructuring costs of $1,637,000 related to the recent reduction in force, a write-down of previously capitalized software amounting to $1,328,000, and other "one-time" charges of $830,000. The one-time charges include hardware tooling costs related to the planned XP(TM) product performance improvements, ViP(TM) prototype costs, excess inventory charges and marketing program costs. A gain of $1,881,000 from the sale of 50,000 shares of Synopsys Inc. (NASDAQ-NMS: SNPS) common stock is also included in the results.
 For the six-month period ended June 30, 1993, the company reported a net loss of $4,831,000, or 31 cents per share, on revenues of $19,586,000. For the comparable period ended June 30, 1992, the company's revenues were $23,197,000, and the net income was $1,795,000 or 10 cents per share. The 1993 results include the previously described restructuring costs, software development write-down, and other charges, and a gain of $2,783,000 from the sale of 75,000 shares of Synopsys Inc. common stock. The 1992 results include a gain of $633,000 on the disposition of 146,591 shares of Synopsys Inc. common stock.
 "The company clearly has not met its revenue expectations over the last several quarters," stated Phillips W. Smith, president and chief executive officer. "Our revenue shortfall is primarily due to Zycad being in the midst of a product transition cycle, combined with the impact of a longer sales cycle related to general economic conditions. The performance enhancements to the XP product are not due for customer shipment until the fourth quarter and our new VHDL accelerator product, ViP, scheduled for beta release in the fourth quarter, is a year late from its originally targeted production date.
 "Our cost reduction actions in January 1993 were taken to reduce the operating break-even level to $12 million per quarter," continued Smith. "Because revenue attainment in the first half of 1993 did not meet our original plan, a further downsizing, announced last week, was necessary to align the company's operating costs with a $10 million revenue level that has been consistent over the last three quarters."
 Smith added, "Product development transition issues, combined with slower-than-anticipated general economic recovery, contributed to our decision to more conservatively reflect the current value of the company's capitalized software development costs.
 "Notwithstanding these issues," Smith said, "we still remain the leader in providing simulation performance and system level verification solutions to customers requiring high performance simulation. We fully expect to return to profitability as our new product offerings become available."
 The company also announced that it recently sold its final 25,000 shares of Synopsys Inc. common stock and will include a $1.1 million gain related to this transaction in its third quarter results.
 Zycad Corp. is dedicated to providing solutions which help customers solve complex design and system verification problems. These solutions increase engineering productivity, while decreasing product development cycles. Users gain a competitive advantage in terms of product quality and speed-to-market, which can translate to greater profitability. Zycad markets its solutions worldwide through direct and indirect sales channels.
 NOTE: Zycad Corp. is a registered trademark and XP and ViP are trademarks of Zycad Corp.
 ZYCAD CORP.
 Condensed Consolidated Balance Sheets
 (in thousands)
 June 30, 1993 December 31, 1992
 ASSETS (unaudited)
 Current assets:
 Cash and cash equivalents $ 3,479 $ 6,627
 Short-term investments 2,249 422
 Accounts receivable, net 9,685 11,390
 Inventories 475 1,187
 Other current assets 1,065 1,073
 Total current assets 16,953 20,699
 Property and equipment, net 6,983 6,662
 Other assets 2,696 3,552
 Total assets $26,632 $30,913
 LIABILITIES AND STOCKHOLDERS'
 EQUITY
 Current liabilities:
 Current portion of debt
 obligations $ 344 $ 578
 Accounts payable 2,252 2,021
 Accrued expenses 3,865 5,140
 Restructuring expenses 1,637 ---
 Deferred revenues 2,444 2,131
 Total current liabilities 10,542 9,870
 Other long-term liabilities 260 327
 Non-current portion of debt
 obligations 148 309
 Total liabilities 10,950 10,506
 Stockholders' equity:
 Common stock, par value $0.10 1,640 1,627
 Additional paid-in capital 42,612 42,418
 Accumulated deficit (25,643) (20,812)
 Treasury stock
 (778,000 shares) (2,666) (2,666)
 Accumulated translation
 adjustments (261) (160)
 Total stockholders' equity 15,682 20,407
 Total liabilities and
 stockholders' equity $26,632 $30,913
 Condensed Consolidated Statements of Operations
 (in thousands, except for per-share data)
 (unaudited)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1993 1992 1993 1992
 Revenues:
 Product $ 5,262 $ 9,140 $10,496 $16,446
 Service 4,212 3,450 9,090 6,751
 Total revenues 9,474 12,590 19,586 23,197
 Cost of revenues:
 Product 1,505 1,852 2,633 3,246
 Service 3,092 2,064 5,959 3,738
 Total cost of
 revenues 4,597 3,916 8,592 6,984
 Gross Profit 4,877 8,674 10,994 16,213
 Operating expenses:
 Sales and marketing 5,458 5,459 10,225 10,226
 Research and
 development 2,591 2,151 4,347 3,904
 General and
 administrative 681 610 1,222 1,239
 Restructuring 2,965 --- 2,965 ---
 Total operating
 expenses 11,695 8,220 18,759 15,369
 Operating income (6,818) 454 (7,765) 844
 Other income (expense):
 Interest income 32 117 87 296
 Interest expense (25) (36) (52) (125)
 Other 1,970 148 2,899 780
 Other income, net 1,977 229 2,934 951
 Net income $(4,841) $ 683 $(4,831) $ 1,795
 Net income per share $ (0.31) $ 0.04 $ (0.31) $ 0.10
 Average common and
 common equivalent
 shares outstanding 15,605 18,632 15,570 18,552
 -0- 8/4/93
 /CONTACT: Peter J. Cassidy, executive vice president Operations and chief financial officer of Zycad, 510-623-4400/
 (ZCAD SNMS)


CO: Zycad Corp. ST: California IN: CPR SU: ERN

TM-GT -- SJ008 -- 9610 08/04/93 19:27 EDT
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Date:Aug 4, 1993
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