7/25/2002 - SST (Silicon Storage Technology, Inc.) (Nasdaq: SSTI) today announced results for the second quarter ended June 30, 2002. Net revenues for the second quarter were $69.5 million, compared with $74.6 million in the first quarter and with $62.7 million in the second quarter a year ago.
Net loss for the second quarter was $4.2 million, or $0.05 per share, based on approximately 92.4 million shares outstanding. This compares with a net profit of $1.6 million, or $0.02 per share, based on approximately 97.0 million diluted shares outstanding in the first quarter of 2002, and with a net profit of $1.1 million, or $0.01 per share, based on approximately 96.0 million diluted shares outstanding for the second quarter of 2001.
Excluding an increase in reserves for bad debt of approximately $4.1 million, offset by associated taxes of $1.3 million, the net loss for the second quarter would have been $1.5 million, or $0.02 per share.
SST finished the second quarter with $185.4 million in cash, cash equivalents and marketable securities, up by $6.8 million from $178.6 million in the prior quarter. Days sales outstanding were 57 days compared with 66 days in the first quarter and net inventories stood at $94.8 million, up approximately $3.5 million from $91.3 million the previous quarter.
"The substantial drop in the PC related business was disappointing in light of the growing optimism during the first quarter, when the Internet computing business was better than expected," said Bing Yeh, president and CEO. "We believe that the 29 percent sequential unit decline in our PC related shipments was partially due to seasonal softness in the PC market and partially due to the inventory correction caused by our customers overbuying during the first quarter. The good news is that, excluding the Internet computing segment, shipments into the digital consumer, wireless communications and networking applications increased over the prior quarter in both units and dollars.
"We are also very pleased to report continued strength in our licensing revenues in the second quarter, as our newest licensee met another milestone and is continuing to make good progress. Our technology licensing program continues to be successful and we believe that licensing revenues will exceed $25 million in 2002.
"Our design-in activities continue to be strong, particularly in applications such as MP3 players, digital TVs, Bluetooth modules and wireless LAN devices. As we emerge from the current semiconductor down turn, we expect to continue to gain market share in applications in which we still have very low penetration rates, such as DVD players, printers, hard-disk drives, cellular phones, PDAs and set-top boxes.
"As we move into the second half of the year, we continue to invest strategically in research and development, improve our global infrastructure and increase our operational efficiency. Our products are competitively positioned and we expect to see sequential growth in unit shipments. We believe that we are in an excellent position to continue to gain market share in key strategic areas and to take advantage of the growth opportunities that we believe will drive our business expansion over the remainder of the year."
Third Quarter 2002 Outlook
Historically, SST has always had strong sequential unit growth in the third quarter. However, due to the current stock market conditions and its potential impact on consumer confidence, the company expects the third quarter growth this year may be much weaker. Thus, revenues are expected to be flat to an increase of three percent from the second quarter. The tax rate is expected to remain at 32 percent. Earnings per share are expected to be between a loss of $0.02 and break-even.
SST's quarterly conference call will be held today, July 24th at 1:30 p.m. PDT. Those wishing to participate in the conference should dial (800) 450-0786 using the passcode "SST" at approximately 1:20 p.m. PDT. A replay of the call will be available for two weeks by dialing (800) 475-6701 using the access code 644738. A webcast of the conference call will be available on www.sst.com and on www.streetevents.com. Both webcasts will be available until the next earnings conference call.
About SuperFlash Technology
SST's SuperFlash technology is a NOR type, split-gate cell architecture which uses a reliable thick-oxide process with fewer manufacturing steps resulting in a low-cost, nonvolatile memory solution with excellent data retention and higher reliability. The split-gate NOR SuperFlash architecture facilitates a simple and flexible design suitable for high performance, high reliability, small or medium sector size, in- or off-system programming and a variety of densities, all in a single CMOS-compatible technology.
About Silicon Storage Technology, Inc.
Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of nonvolatile memory solutions, based on proprietary, patented SuperFlash technology, for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. SST's product families include high functionality flash memory components, flash mass storage products and 8-bit microcontrollers with on-chip flash memory. SST also offers its SuperFlash technology for embedded applications through its world-class manufacturing partners and technology licensees IBM, Motorola, National Semiconductor, NEC Corporation, Oki Electric Industry Co. Ltd., Samsung Electronics Co. Ltd., SANYO Electric Co., Ltd., Seiko Epson Corp., Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and Winbond Electronics Corp. TSMC offers SuperFlash under its trademark Emb-FLASH. Further information on SST can be found on the company's Web site at http://www.sst.com
Except for the historical information contained herein, this news release contains forward-looking statements regarding flash memory market conditions, the company's future financial performance, the performance of new products and the company's ability to bring new products to market that involve risks and uncertainties. These risks may include timely development, acceptance and pricing of new products, the terms and conditions associated with licensees' royalty payments, the impact of competitive products and pricing, and general economic conditions as they affect the company's customers, as well as other risks detailed from time to time in the company's SEC reports, including the reports on Form 10-K for the year ended December 31, 2001 and on Form 10-Q for the quarter ended March 31, 2002.
For more information about SST and the company's comprehensive list of product offerings, please call 1-888/SST-CHIP. Information can also be requested via email to email@example.com or through SST's Web site at http://www.sst.com. SST is located at 1171 Sonora Court, Sunnyvale, Calif.; telephone: 408/735-9110; fax: 408/735-9036.
The SST logo and SuperFlash are registered trademarks of Silicon Storage Technology, Inc. ComboMemory and SoftPartition are trademarks of Silicon Storage Technology, Inc. Emb-FLASH is a trademark of TSMC. All other trademarks or registered trademarks are the property of their respective holders.
For More Information Contact:
Stapleton Communications Inc.
Jeffrey L. Garon
Vice President & Chief Financial Officer
Silicon Storage Technology, Inc.
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