EX-99.1 2 v111643_ex99-1.htm

FOR IMMEDIATE RELEASE

ISSI ANNOUNCES SECOND FISCAL QUARTER 2008 RESULTS

San Jose, Calif.—April 24, 2008--Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported its financial results for the second fiscal quarter ended March 31, 2008.

Revenue in the second fiscal quarter ended March 31, 2008 was $58.0 million, down 8.4% from the $63.3 million reported in the December 2007 quarter, and down 3.3% from the $60.0 million reported in the March 2007 quarter. Net income for the March 2008 quarter was $2.0 million, or $0.07 per diluted share. Net income includes a $0.8 million charge for stock-based compensation expense and a $0.6 million credit for the reversal of previously accrued liabilities for which we are no longer obligated. These results compare with net income for the March 2007 fiscal quarter of $7.1 million, or $0.19 per diluted share, which included a $0.9 million charge for stock-based compensation expense, $1.8 million for legal and accounting fees associated with our stock option investigation, and an $8.5 million gain on sale of assets.

Operating income for the second fiscal quarter ended March 31, 2008 was $0.9 million which included the $0.8 million stock-based compensation expense, and the $0.6 million credit for the reversal of previously accrued liabilities which improved gross margins by 1%. This compares to an operating loss of ($2.4) million for the same quarter in 2007 which included a $0.9 million stock-based compensation expense and a $1.8 million expense for legal and accounting fees associated with our stock option investigation. Gross margins for the second fiscal 2008 quarter were 22.9% compared to 19.0% for the same quarter in fiscal 2007.

The Company’s cash, cash equivalents and short-term investments totaled $41.2 million at March 31, 2008, a decrease of $102.1 million from December 31, 2007. This decrease was primarily due to the completion of our $70 million Tender Offer and stock repurchase, reclassification of $19.1 million in Auction Rate Securities to long-term investment due to failed auctions, and a decrease in our accounts payable. The Company’s inventory at March 31, 2008 totaled $46.8 million, an increase of $8.6 million from December 31, 2007.

“In the March quarter, we missed our revenue goal as the pricing environment for commodity DRAM continued to weaken, and we reduced our commodity revenue,” said Scott Howarth, ISSI’s President and CEO. “Strength in our SRAM business and improved product mix in our target markets allowed us to expand our margins, and announce positive operating earnings as well as net income that exceeded our guidance for the quarter. This is our seventh consecutive quarter of profitability and third consecutive quarter of operating income which demonstrates the success of our strategy,” added Mr. Howarth.
 
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ISSI Release
April 24, 2008
Page 2

Conference Call
 
A conference call will be held today at 1:30 p.m. Pacific time to discuss this release. To access ISSI's conference call via telephone, dial 719-325-4840 by 1:20 p.m. Pacific time. The call will be webcast from ISSI's website at www.issi.com.
 
About the Company

ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications and (iv) automotive electronics. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets EEPROM, SmartCards and is developing selected non-memory products focused on its key markets. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at www.issi.com.

Forward Looking Statements
 
This news release contains forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning demonstrating the success of our strategy are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include supply and demand conditions in the market place, unexpected reductions in average selling prices for our products, our ability to sell our products for key applications and the pricing and gross margins achieved on such sales, our ability to control or reduce operating expenses, changes in manufacturing yields, order cancellations, order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers, or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the period ending September 2007 and our Quarterly Report on Form 10-Q for the period ended December 31, 2007. In addition, the financial information in this press release is unaudited and subject to any adjustments that may be made in connection with the quarterly review. The Company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.
 
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CONTACT: 
Scott Howarth
President & CEO, Acting CFO
Investor Relations
(408) 969-6600  
ir@issi.com
 
 
 
 

Integrated Silicon Solution, Inc.
 
Condensed Consolidated Statements of Operations
  
(Unaudited)
  
(In thousands, except per share data)
  
                   
   
Three Months Ended
  
Six Months Ended
  
   
March 31,
  
March 31,
  
   
2008
  
2007
  
2008
  
2007
  
                   
                   
Net sales
  
$
58,046
  
$
59,995
  
$
121,394
  
$
122,139
  
Cost of sales
    
44,750
   
48,601
   
94,897
   
98,200
 
Gross profit
    
13,296
   
11,394
   
26,497
   
23,939
 
                           
Operating expenses:
                          
Research and development
    
4,935
   
5,140
   
9,709
   
10,502
 
Selling, general and administrative
    
7,463
   
8,675
   
15,125
   
17,768
 
Total operating expenses
    
12,398
   
13,815
   
24,834
   
28,270
 
                           
Operating income (loss)
    
898
   
(2,421
)
  
1,663
   
(4,331
)
Interest and other income (expense), net
    
1,105
   
1,000
   
3,179
   
2,552
 
Gain on sale of investments
    
-
   
8,549
   
189
   
9,147
 
Income before income taxes, minority
                          
interest and equity in net loss of
                         
affiliated companies
    
2,003
   
7,128
   
5,031
   
7,368
 
Provision for income taxes
    
40
   
3
   
100
   
13
 
                           
Income before minority interest and equity
                          
in net loss of affiliated companies
    
1,963
   
7,125
   
4,931
   
7,355
 
                           
Minority interest in net (income) loss of
                         
consolidated subsidiary
    
20
   
(64
)
  
19
   
(72
)
                           
Equity in net loss of affiliated companies
    
-
   
-
   
-
   
(92
)
                           
Net income
  
$
1,983
  
$
7,061
  
$
4,950
  
$
7,191
  
                           
Basic net income per share
  
$
0.07
  
$
0.19
  
$
0.15
  
$
0.19
  
Shares used in basic per share calculation
    
28,160
   
37,612
   
32,374
    
37,612
  
                           
Diluted net income per share
  
$
0.07
  
$
0.19
  
$
0.15
  
$
0.19
  
Shares used in diluted per share calculation
    
28,436
   
38,006
   
32,668
    
37,998
  
 
 
 
 
 

Integrated Silicon Solution, Inc.
  
Condensed Consolidated Balance Sheets
  
(In thousands)
  
            
   
 March 31,
  
September 30,
  
   
 2008
  
2007
  
   
 (unaudited)
  
(1)
  
ASSETS
  
Current assets:
           
  Cash and cash equivalents
  
$
37,025
  
$
53,722
  
  Short-term investments
    
4,212
   
80,093
 
  Accounts receivable, net
    
39,206
   
37,030
 
  Inventories
    
46,756
   
32,056
 
  Other current assets
    
4,262
   
6,134
 
               
Total current assets
    
131,461
   
209,035
 
Property, equipment and leasehold improvements, net
    
24,591
   
23,284
 
Long-term investments
    
19,090
   
-
 
Goodwill
    
25,338
   
25,338
 
Purchased intangible assets, net
    
2,628
   
3,538
 
Other assets
    
1,589
   
1,520
 
Total assets
  
$
204,697
  
$
262,715
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
              
  Short-term debt and notes
  
$
-
  
$
614
  
  Accounts payable
    
41,874
   
36,509
 
  Accrued compensation and benefits
    
3,029
   
3,588
 
  Accrued expenses
    
6,965
   
6,734
 
               
Total current liabilities 
    
51,868
   
47,445
 
               
Other long-term liabilities
    
851
   
793
 
               
Total liabilities
    
52,719
   
48,238
 
               
Commitments and contingencies
              
               
Minority interest
    
707
   
726
 
               
Stockholders' equity:
              
  Common stock
    
3
   
4
 
  Additional paid-in capital
    
308,346
   
376,998
 
  Accumulated deficit
    
(157,718
)
  
(162,668
)
  Accumulated comprehensive income (loss)
    
640
   
(583
)
               
Total stockholders' equity
    
151,271
   
213,751
 
Total liabilities and stockholders' equity
  
$
204,697
  
$
262,715
  
 
(1) Derived from audited financial statements.