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| Zilog® Announces Third Quarter Fiscal 2009 Financial Results | << Back View All |
SAN JOSE, Calif., Feb 09, 2009 /PRNewswire-FirstCall via COMTEX/ -- Zilog(R), Inc. (Nasdaq: ZILG), a leading supplier of embedded system-on-chip (SoC) solutions for consumer and industrial applications, and an industry leader in remote control and universal IR database solutions, today reported results for its 2009 fiscal year third quarter ended December 27, 2008.
Sales for the three month and nine month periods ended December 27, 2008 were $13.0 million and $50.2 million, respectively, as compared to $17.0 million and $50.5 million for the comparable periods a year ago. Sales for the quarter declined on a sequential basis by 32 percent. New product sales declined in the quarter reflecting weaker end customer demand although on a year to date basis, new product sales increased 12 percent as compared to the comparable period a year ago. The Company implemented further cost reduction actions and as a result, expects to reduce its total spending in the March 2009 fiscal quarter by 20 to 25 percent from fiscal Q2 levels. The GAAP net loss for the three month period ended December 27, 2008 was $5.7 million or 33 cents per share as compared to $2.4 million or 14 cents per share for the same period a year ago. The GAAP net loss for the nine month period ended December 27, 2008 was $9.0 million or 53 cents per share versus $7.3 million or 44 cents per share for the comparable nine month period a year ago. The net loss for the three and nine month periods ended December 27, 2008 also reflects special charges of $1.7 million and $2.8 million, respectively. Special charges include the severance and other related costs associated with its worldwide reduction in force, expenses of production test outsource activities that are now substantially complete and the ongoing costs associated with its strategic alternatives review. "The rapid contraction in the global economy and the clouded outlook for demand has caused us to take significant cost reduction actions that included a 35 percent reduction in our worldwide headcount and a 10 percent salary reduction for all of our North America employees along with executive staff," said Darin Billerbeck, Zilog's president and chief executive officer. "We are encouraged by our new products year to date sales growth and market opportunities, as well as our streamlined manufacturing model. As we continue to review our strategic alternatives, we remain laser-focused on delivering our new products and technologies. We believe that our innovative products, coupled with our lean company structure, will position us extremely well for growth when economic conditions improve. Although the market is still difficult to call, we believe sales for the March 2009 quarter will decline between 5 and 15 percent from the December 2008 quarter levels." On a non-GAAP basis, adjusted EBITDA, as defined below, was negative $2.3 million and negative $1.4 million for the three and nine months ended December 27, 2008, respectively, as compared to negative $0.3 million and negative $1.5 million for the comparable periods a year ago. The results for the period reflected the benefit of lower overall spending which was offset by $0.4 million in inventory charges. Additionally, the results included unfavorable variances arising from significantly lower volumes that negatively impacted gross margin and resulted in a lower gross margin percent of sales. Cash and long term investments net of debt continue to be in a solid position and were $14.2 million at December 27, 2008, which was in the range of our expectations. The Company continues to experience redemption by issuers of its Auction Rate Preferred Stock (ARPS) investments. These investments continue to be classified as long term on the consolidated balance sheet. NON-GAAP FINANCIAL INFORMATION (Unaudited) The Company may make reference to certain Non-GAAP financial measures. Management believes that these Non-GAAP measures are useful measures of operating performance and liquidity because they may exclude the impact of certain items, such as amortization of intangible assets, stock-based compensation, depreciation, non-operating interest, income taxes and special charges. However, these Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net income (loss) and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP. Non-GAAP Net Loss (Unaudited) Non-GAAP net loss excludes special charges and non-cash charges relating to the amortization of intangible assets and stock-based compensation. We believe that Non-GAAP net loss is a useful measure as it excludes certain special charge items as well as certain non-cash charges, which facilitates a comparison of the Company's operating performance. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, the net loss measured in accordance with GAAP. Non-GAAP EBITDA (Unaudited) Management believes that Non-GAAP EBITDA ("EBITDA"), that is Earnings or loss Before Interest, Taxes, Depreciation and Amortization, is a useful measure of financial performance. We believe that the disclosure of EBITDA helps investors more meaningfully evaluate our liquidity position by the elimination of non-cash related items such as depreciation and amortization. We believe that our investor base regularly uses EBITDA as a measure of the liquidity of our business. Our management uses EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. Non-GAAP Adjusted EBITDA (Unaudited) EBITDA reflects our Earnings or loss Before Interest, Taxes, Depreciation and Amortization. Additionally, management uses separate "Adjusted EBITDA" calculations for purposes of determining certain employees' incentive compensation and, subject to meeting specified Adjusted EBITDA amounts, for accelerating the vesting of EBITDA-linked stock options. Adjusted EBITDA, as we define it, excludes interest, income taxes, effects of changes in accounting principles and non-cash charges such as depreciation, amortization, in-process research and development, and stock-based compensation expense. It also excludes cash and non-cash charges associated with reorganization items and special charges and credits, which represent operational restructuring charges, including asset write-offs, employee termination costs, relocation costs and lease termination costs. Adjusted EBITDA also excludes changes in operating assets and liabilities, which are included in net cash provided by (used in) operating activities. Our management uses Adjusted EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. This Non-GAAP Adjusted EBITDA measure allows management to monitor cash generated from the operations of the business. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net loss and net cash provided or used in operating activities prepared in accordance with GAAP. About Zilog, Inc. Founded in 1974, Zilog is a global supplier of 8, 16 and 32-bit microcontroller and microprocessor "system-on-a-chip" (SoC) solutions that allow design engineers the freedom and creativity required for continued innovation in embedded design. The company won international acclaim for designing one of the first architectures in the microprocessors and microcontrollers industry. Today, Zilog designs, develops and markets a broad portfolio of devices for embedded control and communication applications used in consumer electronics, home appliances, security systems, point of sales terminals, personal computer peripherals, as well as industrial and automotive applications. Zilog is headquartered in San Jose, California, with sales offices in Asia, Europe and North America. For more information about Zilog and its products, visit the Company's website at: http://www.zilog.com. EZ80ACCLAIM!, CRIMZON, Zatara, Zilog, Z8, Z80, eZ80, Z8 ENCORE!, Encore!XP and Zneo are registered trademarks of Zilog, Inc. in the United States and in other countries. Other product and or service names mentioned herein may be trademarks of the companies with which they are associated. Cautionary Statements This release contains forward-looking statements (including those related to our expectations for our March 31, 2009 quarter and the impact of the global financial crisis and recessionary concerns) relating to expectations, plans or prospects for Zilog, Inc. that are based upon the current expectations and beliefs of Zilog's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For example, delay in customer ramps of our 32-bit products or weakness in our 8-bit classic products could negatively impact our March 2009 quarter. The current financial market volatility and the impact of the recession on our customers make it especially difficult to predict our results for the March 2009 quarter. Our expense and inventory management programs may not be sufficient to manage our cash flows. Additionally, our ability to attract and retain technical employees may be negatively impacted by uncertainties relating to potential future changes in the ownership and control of the Company. Design wins are defined as the projected one-year net sales for a customer's new product design for which the Company has received at least a $1,000 purchase order for its devices. Design win estimates are determined based on projections from customers and may or may not be realized. Whether or not Zilog achieves anticipated revenue from design wins can be dependant on the timeliness of customers to ramp and whether or not the project in question is as commercially successful as the customers anticipated. Notwithstanding changes that may occur with respect to customer matters relating to the forward-looking statements, Zilog does not expect to, and disclaims any obligation to update such statements until release of its next quarterly earnings announcement or in any other manner. Zilog, however, reserves the right to update such statement, or any portion thereof, at any time for any reason. The financial information presented herein is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Form 10-Q for the period ended December 27, 2008. For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2008, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov or from the Company's website at http://www.zilog.com. SOURCE Zilog, Inc. | |
