Categories
Business Wire

Xicor Announces Fourth Quarter and Year End 2002 Earnings Results; Company Reports Growth in Mixed-Signal Bookings

Xicor Announces Fourth Quarter and Year End 2002 Earnings Results; Company Reports Growth in Mixed-Signal Bookings

Business Editors

MILPITAS, Calif.–(BUSINESS WIRE)–Jan. 22, 2003

Xicor, Inc., (Nasdaq:XICO), a leading supplier of programmable mixed-signal integrated circuits, today reported results for the fourth quarter and fiscal year ended December 31, 2002. Results for the quarter are consistent with the expectations provided in the mid-quarter update on December 16, 2002.

Revenue for the fourth quarter of fiscal 2002 was $9.3 million, approximately the same as the $9.4 million of product sales in the third quarter of fiscal year 2002. Sales of mixed-signal products were $6.6 million compared to $6.6 million in the third quarter and up over 30% from $5.0 million in the same quarter a year ago. Memory products sales were $2.7 million, with $2.2 million in parallel EEPROM products and $0.5 million in serial EEPROM products.

Revenue for fiscal year 2002 was $38.5 million. Sales of mixed-signal products were $24.1 million, or 63% of the $38.3 million of 2002 product sales, compared to 50% in fiscal year 2001. Memory product sales were $14.2 million, with $9.9 million in parallel EEPROM products and $4.3 million in serial EEPROM products.

OEM bookings for the quarter were greater than billings, resulting in a book-to-bill ratio significantly greater than 1-to-1. OEM customer bookings for mixed-signal products were up 34% compared to the third quarter and parallel memory product bookings were up 91%. Bookings for serial EEPROM products declined approximately 50% as the Company has effectively exited this business. OEM billings represented 58% of sales for the quarter. Sales to Asia and Japan were 40% of total sales for the quarter, Europe was 25% and North America represented 35%.

On a GAAP basis the Company reported a loss of $3.5 million or $0.15 per share for the quarter. The loss included restructuring charges totaling $1.2 million for severance costs associated with the Company’s plans to achieve profitability and facilities charges associated with the relocation of the Company’s corporate headquarters.

According to Xicor president and CEO, Lou DiNardo, “The fourth quarter of our fiscal year has provided many positive signs for Xicor. Revenue was on the high end of our expectations, bookings from OEM customers were robust and we have seen traction in our design win activity for our new products. Our gross margin percentage improved to 48% in the fourth quarter of 2002. Excluding the $629,000 quarterly benefit from the amortization of the deferred gain on the sale of the Company’s wafer fabrication assets, which ended in the third quarter, the third quarter gross margin percentage on product sales was 46%. Our efforts to control spending have provided leverage as our operating expenses, excluding restructuring charges, decreased by over $350,000 compared to the third quarter from $6.2 million to $5.8 million.

“The combination of revenue, change in product mix, gross margin improvement and spending controls allowed us to minimize our loss for the quarter to $0.09 per share, excluding one-time charges and adjustments. As mentioned in our December mid-quarter update, our goal is to achieve positive earnings before interest, taxes, depreciation and amortization (EBITDA) and neutral cash flow from operations at approximately $10 million in quarterly sales while we drive our new product development effort and expand our served addressable market.

“Looking forward, we expect the first quarter of 2003 to be a growth quarter. We see little contribution from serial EEPROM products in the first quarter; and we are focused on our plans to grow our revenue in high performance mixed-signal products and gain market share in parallel EEPROM products. As a result, total sales are expected to grow modestly in the first quarter as we offset the decline in serial EEPROM products with growth in other product areas. Overall, customer activity, price and delivery quotations, as well as expedites to pull in existing orders are up. We expect OEM bookings activity to remain strong throughout the quarter and believe that we are well positioned with OEM customer backlog to achieve our goals in the first quarter.

“We strengthened our sales team and engineering staff during the quarter, introduced many exciting new products that address growth markets and we are focused on the execution necessary to meet the demands of our customers,” concluded Mr. DiNardo.

Conference Call Details

A live webcast of the conference call to discuss the fourth quarter 2002 financial results for Xicor, Inc. will take place on January 22, 2003 at 6:00 p.m. Eastern Time. The webcast will be publicly available at http://www.vcall.com

A replay of the webcast may be accessed via the same address for ninety days from the call’s conclusion.

In addition, a standard telephone instant replay of the conference call is available by dialing (303) 590-3000, followed by the passcode 520772. The telephone instant replay service is available from January 22, 2003 through January 29, 2003.

Xicor Corporate Information

Xicor designs, develops and markets a wide variety of programmable mixed-signal integrated circuits and nonvolatile memory products used in networking, computing, communication and industrial applications. The Company’s products include digitally controlled potentiometers and system management ICs that allow system designers to digitally control analog functions in signal processing, microprocessor monitoring and power management.

Xicor product, corporate and financial information is available on the World Wide Web at http://www.xicor.com

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our goal to achieve positive earnings before interest, taxes, depreciation and amortization (EBITDA) and neutral cash flow from operations at approximately $10 million in quarterly sales while we drive our new product development effort and expand our served addressable market; our expectation for the first quarter of 2003 to be a growth quarter; our expectation that we will see little contribution from serial EEPROM products in the first quarter; our plans to grow our revenue in high performance mixed-signal products and gain market share in parallel EEPROM products; our expectation for total sales to grow modestly in the first quarter as we offset the decline in serial EEPROM products with growth in other product areas; our expectation for OEM bookings activity to remain strong throughout the first quarter of 2003; and our belief that we are well positioned with OEM customer backlog to achieve our goals in the first quarter.

Factors that could cause actual results to differ materially include the following: general economic conditions and conditions specific to the semiconductor industry; fluctuations in customer demand, including loss of key customers, order cancellations or reduced bookings; product mix; competitive factors such as pricing pressures on existing products and the timing and market acceptance of new product introductions (both by Xicor and its competitors); Xicor’s ability to successfully integrate and achieve the desired business objectives associated with the acquisition of Analog Integration Partners; Xicor’s ability to have available an appropriate amount of low cost foundry production capacity in a timely manner; our foundry partners’ timely ability to successfully manufacture products for Xicor using Xicor’s proprietary technology; any disruptions of our foundry relationships; manufacturing efficiencies; the ability to continue effective cost reductions; currency fluctuations; unexpected design and manufacturing difficulties; the timely development and introduction of new products and submicron processes, and the risk factors listed from time to time in Xicor’s SEC reports, including but not limited to the Annual Report on Form 10-K for the year ended December 31, 2001 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002, June 30, 2002 and September 29, 2002 (Management’s Discussion and Analysis of Financial Condition and Results of Operations, Factors Affecting Future Results section). Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Xicor undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

XICOR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended Year Ended

December 31, December 31,

————————————

2002 2001 2002 2001

————————————

Net sales $9,302 $11,752 $38,534 $70,073

Cost of sales 4,857 5,850 19,076 45,100

————————————

Gross profit 4,445 5,902 19,458 24,973

————————————

Operating expenses:

Research and development 3,419 2,768 13,056 13,613

Selling, general and

administrative 2,411 3,282 11,033 18,235

Restructuring and facilities

charge 1,178 – 1,936 3,205

Amortization of purchased

intangible assets 256 – 739 –

In-process research and

development – – 1,800 –

————————————

7,264 6,050 28,564 35,053

————————————

Income (loss) from operations (2,819) (148) (9,106)(10,080)

————————————

Interest expense (808) (403) (3,259) (524)

Interest income 164 236 789 1,237

Other income and (expense), net – – (1,206) –

————————————

(644) (167) (3,676) 713

————————————

Income (loss) before income taxes (3,463) (315) (12,782) (9,367)

Provision for income taxes – (16) – 102

————————————

Net income (loss) $(3,463) $(299) $(12,782)$(9,469)

====================================

Net income (loss) per common share:

Basic $(0.15) $(0.01) $(0.55) $(0.43)

====================================

Diluted $(0.15) $(0.01) $(0.55) $(0.43)

====================================

Shares used in per share

calculations:

Basic 23,685 22,173 23,265 21,803

====================================

Diluted 23,685 22,173 23,265 21,803

====================================

XICOR, INC.

PRO FORMA INFORMATION

(Unaudited)

(In thousands, except per share amounts)

Pro forma operating results do not represent our results of

operations or earnings per share information in accordance with

generally accepted accounting principles (GAAP) in the United States

of America and may be different from pro forma measures used by other

companies. They are presented as an alternative for understanding our

operating results. See “Reconciliation of Pro Forma Net Income to GAAP

Net Income” below for items excluded from pro forma operating results.

Three Months Ended Year Ended

December 31, December 31,

———————————–

2002 2001 2002 2001

———————————–

Net sales $9,302 $11,752 $38,254 $70,073

Cost of sales 4,857 5,850 19,076 36,900

———————————–

Gross profit 4,445 5,902 19,178 33,173

———————————–

Operating expenses:

Research and development 3,419 2,768 13,056 13,613

Selling, general and

administrative 2,411 3,282 11,033 18,235

———————————–

5,830 6,050 24,089 31,848

———————————–

Income (loss) from operations (1,385) (148) (4,911) 1,325

Interest expense (808) (403) (3,259) (524)

Interest income 164 236 789 1,237

———————————–

Income (loss) before income taxes (2,029) (315) (7,381) 2,038

Provision for income taxes – (16) – 102

———————————–

Net income (loss) $(2,029) $(299) $(7,381) $1,936

===================================

Net income (loss) per common share:

Basic $(0.09) $(0.01) $(0.32) $0.09

===================================

Diluted $(0.09) $(0.01) $(0.32) $0.08

===================================

Shares used in per share

calculations:

Basic 23,685 22,173 23,265 21,803

===================================

Diluted 23,685 22,173 23,265 23,971

===================================

RECONCILIATION OF PRO FORMA NET INCOME

TO GAAP NET INCOME

(Unaudited)

Three Months Ended Year Ended

December 31, December 31,

———————————-

2002 2001 2002 2001

———————————-

Pro forma net income (loss) $(2,029) $(299) $(7,381) $1,936

Items excluded from pro forma:

Royalty revenue – – 280 –

Inventory write-down – – – (8,200)

Restructuring and facilities

charge (1,178) – (1,936) (3,205)

Amortization of purchased

intangible assets (256) – (739) –

In-process research and

development – – (1,800) –

Other income and (expense), net – – (1,206) –

———————————-

Net income (loss) $(3,463) $(299) $(12,782)$(9,469)

==================================

XICOR, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

December 31, December 31,

2002 2001

——————

ASSETS

Current assets:

Cash and cash equivalents $32,648 $56,367

Short-term investments 4,648 –

Accounts receivable 4,606 3,501

Inventories 4,939 9,404

Prepaid expenses and other current assets 539 192

——————

Total current assets 47,380 69,464

Long-term investments 1,085 –

Property, plant and equipment,

at cost less accumulated depreciation 3,041 5,223

Goodwill 10,762 –

Purchased intangible assets, net 2,062 –

Other assets 2,766 5,764

——————

Total assets $67,096 $80,451

==================

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable $6,215 $9,646

Accrued expenses 6,136 7,867

Deferred income on shipments to distributors 5,762 10,465

Deferred gain on sale of fab assets – 2,082

Current portion of long-term obligations 432 841

——————

Total current liabilities 18,545 30,901

Convertible subordinated notes 32,506 31,896

Long-term obligations 470 738

——————

Total liabilities 51,521 63,535

——————

Shareholders’ equity:

Preferred stock; 5,000 shares authorized – –

Common stock; 200,000 shares authorized;

23,737 and 22,339 shares outstanding 149,216 137,775

Accumulated deficit (133,641)(120,859)

——————

Total shareholders’ equity 15,575 16,916

——————

Total liabilities and shareholders’ equity $67,096 $80,451

==================

COPYRIGHT 2003 Business Wire

COPYRIGHT 2003 Gale Group