ISSI Announces First Fiscal Quarter 2015 Results

MILPITAS, Calif., Jan. 27, 2015 — (PRNewswire) — Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported financial results for the first fiscal quarter ended December 31, 2014.

First Fiscal Quarter and Recent Highlights:

  • Reported total revenue of $80.9 million, compared to $84.2 million in the fourth fiscal quarter of 2014 and $79.1 million in the first fiscal quarter of 2014;
  • Automotive revenue was essentially flat sequentially and increased 10.0% from the prior year;
  • Industrial revenue decreased 4.7% sequentially and increased 8.0% from the prior year;
  • Gross margin was 36.0%, compared to 35.3% in the fourth fiscal quarter of 2014 and 32.3% in the first fiscal quarter of 2014;
  • GAAP net income was $0.10 per diluted share and non-GAAP net income was $0.20 per diluted share;
  • Ended the quarter with cash and short-term investments of $132.1 million;
  • Executed an agreement with Spansion to develop and supply HyperRamâ„¢ products based on the HyperBusâ„¢ Interface and licensed Spansion's complete line of Flash solutions;
  • Expanded available products for automotive market with a broad line of automotive grade serial DTR flash solutions; and
  • Announced a quarterly cash dividend of $0.06 per share to be paid on February 20, 2015, to stockholders of record as of February 9, 2015.

"Revenue in the December quarter was down a little more than our original seasonal expectations due to softness in Europe and China, but revenue did grow 2.3% compared to the year ago quarter.  Gross margins increased sequentially by 70 basis points in the December quarter to the highest level since 2010 on continued cost reductions and the stronger U.S. dollar compared to the New Taiwan dollar," said Scott Howarth, ISSI's President and CEO. "We also continued to extend our design win traction across our end markets as customers transition to more advanced products and higher densities, which aligns with our expanded product portfolio.  

"Also, during the December quarter, we continued to make significant progress on our flash and analog initiatives targeting automotive and industrial customers. Most notably, we broadened our collaborative agreements with Spansion, further expanding our available flash solutions. We also announced full production of our automotive grade serial NOR flash products supporting long-term system reliability in harsh operating environments. Additionally, we are actively pursuing increased design activity for our analog products targeting automotive lighting and audio applications, and have identified numerous analog design opportunities with automotive customers in the U.S., Europe and China."

First Fiscal Quarter 2015 Results
Revenue in the first fiscal quarter ended December 31, 2014 was $80.9 million, compared to $84.2 million in the fourth fiscal quarter of 2014 and $79.1 million in the first fiscal quarter of 2014. Revenue in the first fiscal quarter of 2015 included $72.9 million of SRAM and DRAM revenue, $6.3 million of NOR flash revenue, and $1.7 million of analog revenue.

GAAP gross margin in the first fiscal quarter was 36.0%, compared to 35.3% in the September 2014 quarter and 32.3% in the December 2013 quarter.

GAAP net income in the first fiscal quarter of 2015 was $3.2 million, or $0.10 per diluted share, compared to GAAP net income of $2.8 million, or $0.09 per diluted share, in the September 2014 quarter and GAAP net income of $5.4 million, or $0.18 per share, in the December 2013 quarter.

Non-GAAP net income in the December 2014 quarter was $6.3 million, or $0.20 per diluted share, compared to $6.2 million, or $0.19 per diluted share, in the September 2014 quarter and $5.7 million, or $0.19 per diluted share, in the December 2013 quarter.

Non-GAAP results exclude stock based compensation, amortization of intangibles related to acquisitions, legal expenses related to our litigation with GSI Technology, incremental proxy related expenses, gains on the sales of investments, and non-cash tax expense related to the utilization of previously recorded deferred tax assets. A reconciliation of our GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Dividend Payment
The ISSI Board of Directors has approved a dividend of $0.06 per share to be paid on February 20, 2015, to stockholders of record as of February 9, 2015.

March Quarter Outlook
The Company expects total revenue for the March quarter to range between $80.0 and $85.0 million, consisting of SRAM and DRAM revenue of between $72.0 million and $76.0 million, NOR flash revenue of between $6.5 million and $7.0 million, and analog revenue of between $1.5 million and $2.0 million. Gross margin for the March quarter is expected to range between 35.0% and 36.0%. GAAP operating expenses are expected to range between $24.5 million and $25.5 million, excluding any incremental proxy related expenses. GAAP net income is expected to be between $0.09 and $0.13 per diluted share and non-GAAP net income is expected to range between $0.18 and $0.23 per diluted share.

Conference Call Information
A conference call will be held today at 7:00 a.m. Pacific Time to discuss the Company's first fiscal quarter 2015 financial results. To access ISSI's conference call via telephone, dial 888-572-7034 by 6:50 a.m. Pacific Time. The participant passcode is 7037857. The call will also be webcast from ISSI's website at http://www.issi.com.

Non-GAAP Financial Information
In addition to disclosing results determined in accordance with GAAP, ISSI discloses its non-GAAP operating income, provision for income taxes and net income for certain periods that exclude stock based compensation, amortization of intangibles related to acquisitions, legal expenses related to our litigation with GSI Technology, incremental proxy related expenses, gains on sales of investments, and non-cash tax expense related to the utilization of previously recorded deferred tax assets. When presenting non-GAAP results, the Company includes a reconciliation of the non-GAAP results to the results under GAAP. Management believes that including the non-GAAP results assists investors in assessing the Company's operational performance and its performance relative to its competitors. The Company has presented its non-GAAP results as a complement to its results provided in accordance with GAAP, and these results should not be regarded as a substitute for GAAP. Management uses non-GAAP measures to plan and forecast future periods, to establish operational goals, to compare with its business plan and individual operating budgets, to assist the public in measuring the Company's performance, to allocate resources and, relative to the Company's historical financial performance, to enable comparability between periods. Management also considers such non-GAAP results to be an important supplemental measure of its performance. The economic substance behind management's decision to use such non-GAAP measures relates to the non-GAAP measures being a useful measure of the potential future performance of the Company's business. In line with common industry practice and to help enable comparability with other technology companies, the Company's non-GAAP presentation excludes the impact of the items described above. Other companies may calculate non-GAAP results differently than the Company, limiting its usefulness as a comparative measure. In addition, such non-GAAP measures may exclude financial information that some may consider important in evaluating the Company's performance. Management compensates for the foregoing limitations of non-GAAP measures by presenting certain information on both a GAAP and non-GAAP basis and providing reconciliations of the GAAP and non-GAAP measures.

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