EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

    Silicon Storage Technology, Inc.                        

 

News Release

For More Information Contact:

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

SST Reports Third Quarter 2008 Financial Results

SUNNYVALE, Calif., Oct 29, 2008—SST (Silicon Storage Technology, Inc.) (NASDAQ: SSTI), a leader in flash memory technology, today announced results for the third quarter ended Sept. 30, 2008.

Net revenues for the third quarter were $92.4 million compared with $83.7 million in the second quarter of 2008 and with $107.5 million in the third quarter of 2007. Product revenues for the third quarter of 2008 were $79.8 million, compared with $71.1 million in the second quarter of 2008 and with $97.8 million in the third quarter of 2007. Revenues from technology licensing for the third quarter were $12.6 million, comparable to the second quarter of 2008. Technology licensing revenues in the third quarter of 2007 were $9.7 million.

Net income from operations for the third quarter was $4.1 million compared with a net loss from operations of $5.9 million in the second quarter of 2008 and with net income from operations of $2.4 million in the third quarter of 2007.

Net income for the third quarter of 2008 was $4.9 million, or $0.05 per share, based on approximately 99.7 million diluted shares. By comparison, the company recorded a net loss of $9.6 million, or a loss of $0.09 per share in the second quarter of 2008, based on approximately 101.8 million diluted shares. For the third quarter of 2007, SST reported a net loss of $16.6 million, or a loss of $0.16 per share on approximately 104.2 million diluted shares.

SST finished the third quarter of 2008 with $132.8 million in cash, cash equivalents, short-term investments, and long-term marketable securities, down approximately $16.1 million from $148.9 million

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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at June 30, 2008. During the third quarter, the company made common stock repurchases totaling 2.7 million shares at an aggregate cost of approximately $8.6 million.

Management Qualitative Comments

“Our third quarter revenues were at the high end of our guidance range and our net income was substantially better than our plan due to several favorable, non-recurring adjustments and reduced operating expenses,” said Bing Yeh, president and CEO. “However, since September we have seen a significant drop in our new bookings and are acutely aware of a rapidly weakening global economy. Therefore, we are reacting accordingly to reduce our operating expenses with the goal of returning our company to profitability for the benefit of our shareholders, customers and employees. We believe that the depth and breadth of our core business, the investments we have made in new products and technologies, and our strong balance sheet will allow us to weather this economic downturn and will drive growth in revenues and profits for our company in the subsequent recovery.”

Fourth Quarter 2008 Outlook

SST expects its fourth quarter revenues to be between $63 million and $69 million. Gross margin is expected to be between 31 and 34 percent, subject to the risk of changing market conditions. Total operating expenses are expected to be between $28 million and $29 million. Net loss per share is expected to be between $0.07 and $0.12.

Conference Call Dial-in Information

SST will hold a conference call to discuss its financial results today at 1:30 p.m. PDT. Those wishing to participate in the conference call should dial (800) 288-8975, international participants please dial (651) 224-7497, using the password “SST” at approximately 1:20 p.m. PDT. A replay of the call will be available for one week by dialing (800) 475-6701, international participants dial (320) 365-3844, using the access code 963617. A webcast replay of the conference call will be available until the company’s next conference call on the company’s Web site at http://www.sst.com/events.

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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About Silicon Storage Technology, Inc.

Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of memory and non-memory products for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. Leveraging its proprietary, patented SuperFlash technology, SST is a leading provider of nonvolatile memory solutions with product families that include various densities of high functionality flash memory components and flash mass storage products. The company also offers its SuperFlash technology for embedded applications through its broad network of world-class manufacturing partners and technology licensees, including TSMC, which offers it under its trademark Emb-FLASH. SST’s non-memory products include NAND controller-based products, smart card ICs and modules, flash microcontrollers and radio frequency ICs and modules. Further information on SST can be found on the company’s Web site at http://www.sst.com.

Forward-Looking Statements

Except for the historical information contained herein, this news release contains forward-looking statements regarding memory and non-memory market conditions, SST’s future financial performance, the launch, design cycle and performance of new products, SST’s licensing business, SST’s ability to diversify its business, the transition of SST’s products to smaller geometrics, and SST’s ability to bring new products to market, all of which involve risks and uncertainties. These risks may include timely development, acceptance and pricing of new products, the terms, conditions and revenue recognition issues associated with licensees’ royalty payments, the impact of competitive products and pricing, and general economic conditions as they affect SST’s customers, as well as other risks detailed from time to time in the company’s periodic reports, including the Annual Report on Form 10-K for the year ended December 31, 2007 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2008. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, SST disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

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 literature@sst.com or through SST’s Web site at http://www.sst.com. SST’s head office is located at 1171 Sonora Court, Sunnyvale, Calif.; telephone: 408/735-9110; fax: 408/735-9036.

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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The SST logo and SuperFlash are registered trademarks of Silicon Storage Technology, Inc. All other trademarks or registered trademarks are the property of their respective holders.

###

— FINANCIAL TABLES TO FOLLOW —

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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Silicon Storage Technology, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

 

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2007     2008     2007     2008  

Net revenues:

         

Product revenues

    $ 97,794     $ 79,801     $ 276,282     $ 220,572  

Technology licensing

      9,709       12,597       28,088       36,611  
                                

Total net revenues

      107,503       92,398       304,370       257,183  

Cost of revenues

      73,609       61,421       218,362       176,548  
                                

Gross profit

      33,894       30,977       86,008       80,635  
                                

Operating expenses:

         

Research and development

      14,685       14,260       42,012       45,095  

Sales and marketing

      7,397       6,713       21,701       21,114  

General and administrative

      7,103       5,931       21,448       20,835  

Other non-recurring charges

      2,319       —         6,324       —    
                                

Total operating expenses

      31,504       26,904       91,485       87,044  
                                

Income (loss) from operations

      2,390       4,073       (5,477 )     (6,409 )

Impairment of equity investments

      (19,400 )     —         (19,400 )     (234 )

Other income, net

      3,499       2,313       7,144       4,397  
                                

Income (loss) before provision for (benefit from) income taxes and pro rata share of loss from equity investments

      (13,511 )     6,386       (17,733 )     (2,246 )

Provision for (benefit from) income taxes

      1,233       (438 )     2,397       (5,098 )
                                

Income (loss) before pro rata share of loss from equity investments

      (14,744 )     6,824       (20,130 )     2,852  

Pro rata share of loss from equity investments

      1,861       1,903       5,308       6,040  
                                

Net income (loss)

    $ (16,605 )   $ 4,921     $ (25,438 )   $ (3,188 )
                                

Net income (loss) per share—basic

    $ (0.16 )   $ 0.05     $ (0.24 )   $ (0.03 )
                                

Shares used in per share calculation—basic

      104,198       99,186       104,113       101,527  
                                

Net income (loss) per share—diluted

    $ (0.16 )   $ 0.05     $ (0.24 )   $ (0.03 )
                                

Shares used in per share calculation—diluted

      104,198       99,676       104,113       101,527  
                                

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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Silicon Storage Technology, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

 

 

     December 31,
2007		     September 30,
2008		  
ASSETS     

Current assets:

     

Cash and cash equivalents

    $ 118,157     $ 63,631  

Short-term investments

      44,067       47,435  

Trade accounts receivable, net

      56,313       47,843  

Inventories

      50,178       65,298  

Other current assets

      6,055       6,235  
                

Total current assets

      274,770       230,442  

Property and equipment, net

      18,247       19,803  

Long-term marketable equity securities

      36,160       23,544  

Long-term marketable securities

      —         21,749  

Goodwill and intangible assets, net

      18,612       16,585  

Other assets

      55,676       51,273  
                

Total assets

    $ 403,465     $ 363,396  
                
LIABILITIES     

Current liabilities:

     

Trade accounts payable

    $ 42,067     $ 40,433  

Accrued expenses and other liabilities

      28,293       17,729  

Deferred revenue

      3,004       5,211  
                

Total current liabilities

      73,364       63,373  

Other liabilities

      7,548       7,568  
                

Total liabilities

      80,912       70,941  
                
SHAREHOLDERS’ EQUITY     

Common stock

      434,905       420,245  

Accumulated other comprehensive income

      31,239       18,989  

Accumulated deficit

      (143,591 )     (146,779 )
                

Total shareholders’ equity

      322,553       292,455  
                

Total liabilities and shareholders’ equity

    $ 403,465     $ 363,396  
                

 

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SST Reports Third Quarter 2008 Financial Results

Oct. 29, 2008

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Silicon Storage Technology, Inc. and Subsidiaries

Supplemental Data

 

     Percentage of
Gross Product Revenue		    Change in
Revenue		  
     3Q07    2Q08    3Q08    3Q07 to
3Q08		     2Q08 to
3Q08		  

Product Revenue By Ship-To Location

              

North America

    5%    5%    4%    (35% )   (12% )

Total International

    95%    95%    96%    (16% )   15%  

Europe

    7%    7%    7%    (14% )   11%  

Japan

    9%    9%    8%    (26% )   13%  

Korea

    7%    4%    5%    (48% )   25%  

China

    38%    32%    31%    (32% )   10%  

Taiwan

    25%    38%    35%    15%     4%  

Other Far East

    9%    5%    10%    0%     117%  

Product Revenue by Application

              

Digital Consumer

    39%    32%    30%    (38% )   5%  

Internet Computing

    20%    21%    20%    (14% )   7%  

Networking

    10%    12%    10%    (20% )   (7% )

Wireless Communications

    31%    35%    40%    5%     29%  

Total

    100%    100%    100%    (17% )   13%  

Licensing Revenue as a % of Total Revenue

    9%    15%    13%    30%     0%