SAN JOSE, Calif., Jan. 27 /PRNewswire-FirstCall/ -- Zilog, Inc.
(NASDAQ: ZILG), a trusted supplier of application specific,
embedded control products including energy management solutions for
industrial and consumer markets, today reported financial results
for its three- and nine-month periods ended December 26, 2009. Net
sales from continuing operations for the fiscal 2010 third quarter
were $8.7 million, a sequential increase of 7 percent and a
year-over-year decrease of 4 percent. Licensing royalties were $0.8
million in the third fiscal quarter, compared to $1.0 million in
the previous quarter and $0.6 million in Q3 a year ago. The
sequential increase in sales reflects a continued improvement in
global demand for products following the global economic downturn
that commenced in 2008. The financial results exceeded our previous
guidance in both top and bottom line performance. On February 18,
2009, the Company sold its universal remote control and secured
transaction processor businesses ("sale businesses"). In accordance
with FASB ASC 205, the comparative financial statements for its
previous fiscal periods ended December 27, 2008, have been restated
to reflect the sold businesses as discontinued operations. Further,
on December 4, 2009, the Company signed a definitive merger
agreement ("Merger Agreement") in which Ixys Corporation ("Ixys")
agreed to acquire all of the outstanding shares of the Company for
$3.5858 per share in cash, subject to customary closing conditions.
The Company expects to hold a special meeting of shareholders on
February 17, 2010 to vote on the merger. If the merger is approved
the Company expects to close shortly thereafter. GAAP net income
for the fiscal third quarter ended December 26, 2009 was $0.3
million, or 1 cent per share, compared to GAAP net income of $1.6
million, or 9 cents per share, in the previous fiscal quarter and a
GAAP net loss of $5.7 million, or 33 cents per share, for fiscal Q3
a year ago. Net income for the fiscal 2010 third quarter includes
special charges of $0.6 million, or 3 cents per share, which
included $0.5 million in legal and other costs associated with the
Merger Agreement. The previous quarter's results included $1.55
million in income from discontinued operations. Results for the
third fiscal quarter a year ago included special charges of $1.7
million and net losses from discontinued operations of $0.4
million. Special charges in Q3 fiscal 2009 included costs
associated with reductions in headcount as a result of declining
sales driven by the downturn in the global economy. On a
year-to-date basis for the nine months ended December 26, 2009,
sales were $24.0 million and GAAP net income was $2.2 million, or
13 cents per share, compared to sales of $29.1 million and a GAAP
net loss of $9.0 million, or 53 cents per share for the nine months
ended December 27, 2008. The financial results reflect an $11.2
million favorable improvement in net income for the fiscal 2010
nine-month period as compared to the comparable period in 2009.
This improvement reflects a $5.1 million reduction in sales offset
by improved product gross margins from 40 percent to 45 percent, a
$10.5 million or 49 percent reduction in operating expenses, a $2.6
million reduction in special charges and amortization of intangible
assets and the benefit of $1.0 million in patent sales.
Additionally, fiscal 2010 year to date net income as compared to
fiscal 2009 was negatively impacted by a $3.1 million reduction in
net income from discontinued operations offset by a $1.6 million
discontinued operations gain on sale reflecting the receipt of 50
percent of an escrow receivable related to the sale businesses.
Fiscal 2009 results for the nine months ended December 27, 2008
included special charges of $2.8 million reflecting severance and
other related costs associated with the global economic downturn
resulting in a significant worldwide reduction in force.
Additionally, special charges included costs associated with the
production test outsource activities as well as expenses associated
with the strategic alternatives review. The Company reported cash,
cash equivalents and long-term investments of $37.4 million at
December 26, 2009, compared to $36.4 million and $33.3 million at
September 26, 2009 and March 31, 2009, respectively. Net cash
provided by continuing operating activities was $3.2 million for
the year to date nine months of fiscal 2010, as compared to net
cash used in continuing operating activities of $6.9 million for
the comparative nine month period a year ago. On a non-GAAP basis,
adjusted EBITDA from continuing operations, as defined below, was
positive $1.4 million for the fiscal 2010 third quarter, as
compared to positive $0.7 million in the prior fiscal quarter and
negative $2.6 million in the third fiscal quarter a year ago. On a
year to date basis, adjusted EBITDA from continuing operations was
positive $2.8 million for the nine months ended December 26, 2009
as compared to negative $6.4 million for the comparative nine
months a year ago. The outlook for this quarter reflects the
traditional seasonal slowdown in demand with an expected sequential
reduction in sales. As was the case in Q3, the Company expects
distribution end-demand to be the key to determining final sales
levels for Q4 and for fiscal 2010 as a whole. The Company expects
net sales for its fiscal 2010 fourth quarter ending March 31, 2010,
to be lower by 3 percent to 5 percent, as compared to the third
fiscal quarter ended December 26, 2009. Additionally in the fourth
quarter, the Company expects $1.55 million in cash receipts from
its remaining 50 percent of an escrow amount associated with the
sale of its discontinued business in February 2009. 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. Three Months Ended Dec. Sep. Jun. 26, 26, 27, 2009 2009 2009
---- ---- ---- (in thousands) Reconciliation of Non-GAAP Net Income
(Loss) to GAAP Net Income (Loss)
------------------------------------- Non-GAAP net income (loss)
from continuing operations $1,035 $332 $394 Non-GAAP adjustments on
continuing operations: Special charges and credits 578 77 135
Amortization of intangible assets - - - Non-cash stock-based
compensation COS 35 19 19 Non-cash stock-based compensation R&D
43 20 24 Non-cash stock-based compensation SG&A 171 166 183 ---
--- --- Total non-GAAP adjustments, continuing operations 827 282
361 --- --- --- GAAP net income (loss) from continuing operations
$208 $50 $33 ==== === === Three Months Ended Mar. Dec. 31, 27, 2009
2009 ---- ---- Reconciliation of Non-GAAP Net Income (Loss) to GAAP
Net Income (Loss) -----------------------------------------------
Non-GAAP net income (loss) from continuing operations ($1,776)
($2,871) Non-GAAP adjustments on continuing operations: Special
charges and credits 3,478 1,696 Amortization of intangible assets
174 209 Non-cash stock-based compensation COS 21 44 Non-cash
stock-based compensation R&D (24) 126 Non-cash stock-based
compensation SG&A 201 297 --- --- Total non-GAAP adjustments,
continuing operations 3,850 2,372 ----- ----- GAAP net income
(loss) from continuing operations ($5,626) ($5,243) ======= =======
Non-GAAP Net Income (Loss) from continuing operations (Unaudited)
Non-GAAP net income (loss) from continuing operations (Non-GAAP net
income (loss)) excludes special charges and non-cash charges
relating to the amortization of intangible assets and stock-based
compensation. Following the sale of the universal remote control
and secured transaction processor businesses in February 2009,
Non-GAAP net income (loss) was restated to exclude amounts related
to the Company's discontinued operations. We believe that Non-GAAP
net income (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. Three Months Ended ------------------
Reconciliation of Net Income (Loss) and Dec. Sep. Jun. Mar. Dec.
Cash Flows 26, 26, 27, 31, 27, --------------------- From Operating
Activities to EBITDA 2009 2009 2009 2009 2008 ---------------------
---- ---- ---- ---- ---- (in thousands) Reconciliation of net
income (loss) to EBITDA: Net income (loss) from continuing
operations $208 $50 $33 ($5,626) ($5,243) Depreciation and
amortization 328 338 318 452 466 Interest income (5) (6) (3) (4)
(24) Provision (benefit) for income taxes 36 22 40 (2) 67 --- ---
--- --- --- EBITDA from continuing operations $567 $404 $388
($5,180) ($4,734) ==== ==== ==== ======= ======= Reconciliation of
EBITDA to net cash provided by (used in) conitnuing operating
activities: EBITDA $567 $404 $388 ($5,180) ($4,734) Provision
(benefit) for income taxes (36) (22) (40) 2 (67) Interest income 5
6 3 4 24 Non-cash stock- based compensation 249 205 226 198 467
Loss on disposition of operating assets - - - 986 11 Changes in
other operating assets and liabilities 176 (393) 1,457 (4,119)
(571) --- ---- ----- ------ ---- Net cash provided by (used in)
continuing operating activities $961 $200 $2,034 ($8,109) ($4,870)
==== ==== ====== ======= ======= Nine Months Ended
----------------- Reconciliation of Net Income (Loss) and Cash
Flows Dec. 26, Dec. 27, ---------------------------------------
From Operating Activities to EBITDA 2009 2008
----------------------------------- ---- ---- Reconciliation of net
income (loss) to EBITDA: Net income (loss) from continuing
operations $292 ($12,424) Depreciation and amortization 984 1,380
Interest income (14) (143) Provision (benefit) for income taxes 98
183 --- --- EBITDA from continuing operations $1,360 ($11,004)
====== ======== Reconciliation of EBITDA to net cash provided by
(used in) conitnuing operating activities: EBITDA $1,360 ($11,004)
Provision (benefit) for income taxes (98) (183) Interest income 14
143 Non-cash stock-based compensation 680 1,126 Loss on disposition
of operating assets - 46 Changes in other operating assets and
liabilities 1,239 2,976 ----- ----- Net cash provided by (used in)
continuing operating activities $3,195 ($6,896) ====== =======
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. Following the sale of the universal remote control and
secured transaction processor businesses in February 2009, EBITDA
was restated to exclude amounts related to the Company's
discontinued operations. 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 investors regularly use
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. Three Months Ended
------------------ Reconciliation of Net Income (Loss) and Cash
Dec. Sep. Jun. Mar. Dec. Flows 26, 26, 27, 31, 27, ----------------
From Operating Activities to Adjusted EBITDA 2009 2009 2009 2009
2008 ---------------- ---- ---- ---- ---- ---- (in thousands)
Reconciliation of net income (loss) to Adjusted EBITDA: Net income
(loss) from continuing operations $208 $50 $33 ($5,626) ($5,243)
Depreciation and amortization including intangibles 328 338 318 626
675 Interest income (5) (6) (3) (4) (24) Provision (benefit) for
income taxes 36 22 40 (2) 67 Special charges and credits 578 77 135
3,478 1,696 Non-cash stock- based compensation 249 205 226 198 467
--- --- --- --- --- Adjusted EBITDA, continuing operations $1,394
$686 $749 ($1,330) ($2,362) ====== ==== ==== ======= =======
Reconciliation of Adjusted EBITDA to net cash provided by (used in)
continuing operating activities: Adjusted EBITDA, continuing
operations $1,394 $686 $749 ($1,330) ($2,362) Special charges and
credits (578) (77) (135) (3,478) (1,696) Provision (benefit) for
income taxes (36) (22) (40) 2 (67) Interest income 5 6 3 4 24 Loss
on disposition of operating assets - - - 986 11 Changes in other
operating assets and liabilities 176 (393) 1,457 (4,293) (780) ---
---- ----- ------ ---- Net cash provided by (used in) continuing
operating activities $961 $200 $2,034 ($8,109) ($4,870) ==== ====
====== ======= ======= Nine Months Ended -----------------
Reconciliation of Net Income (Loss) and Cash Flows Dec. 26, Dec.
27, --------------------------------------- From Operating
Activities to Adjusted EBITDA 2009 2008
------------------------------------- ---- ---- Reconciliation of
net income (loss) to Adjusted EBITDA: Net income (loss) from
continuing operations $292 ($12,424) Depreciation and amortization
including intangibles 984 2,007 Interest income (14) (143)
Provision (benefit) for income taxes 98 183 Special charges and
credits 790 2,840 Non-cash stock-based compensation 680 1,126 ---
----- Adjusted EBITDA, continuing operations $2,830 ($6,411) ======
======= Reconciliation of Adjusted EBITDA to net cash provided by
(used in) continuing operating activities: Adjusted EBITDA,
continuing operations $2,830 ($6,411) Special charges and credits
(790) (2,840) Provision (benefit) for income taxes (98) (183)
Interest income 14 143 Loss on disposition of operating assets - 46
Changes in other operating assets and liabilities 1,239 2,349 -----
----- Net cash provided by (used in) continuing operating
activities $3,195 ($6,896) ====== ======= 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. 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, lease termination costs, costs associated with selling our
discontinued operations and costs associated with our merger with
Ixys. Adjusted EBITDA also excludes changes in operating assets and
liabilities, which are included in net cash provided by (used in)
operating activities. Following the sale of the universal remote
control and secured transaction processor businesses in February
2009, Adjusted EBITDA was restated to exclude amounts related to
the Company's discontinued operations. 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. Earnings conference call The Company will be
conducting a conference call with analysts and investors today,
January, 27, 2010 at 2:00 p.m. PST (5:00 p.m. EST) to review the
details of its financial results. Analysts and investors may access
the call by dialing (866) 203-2528 within the United States or
(617) 213-8847 from outside the United States, using participant
pass code 31603197. The webcast will be distributed in a
listen-only mode through Zilog's website at http://www.zilog.com/.
Additionally, institutional investors can access the call via
StreetEvents at http://www.streetevents.com/. Following the
completion of the earnings call, an audio MP3 replay will be
available from the Company's investor relations website at
http://www.zilog.com/. A telephone replay of the conference call
will also be available for one week after the conference call at
(888) 286-8010 (U.S.) and (617) 801-6888 (international) and can be
accessed using pass code 30666050. About Zilog, Inc. Zilog is a
trusted supplier of application specific, embedded system-on-chip
(SoC) solutions for the industrial and consumer markets. From its
roots as an award-winning architect in the microprocessor and
microcontroller industry, Zilog has evolved its expertise beyond
core silicon to include SoCs, single board computers, application
specific software stacks and development tools that allow embedded
designers quick time to market in areas such as energy management,
monitoring and metering and motion detection. For more information,
visit http://www.zilog.com/. EZ80ACCLAIM!, 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 2010 quarter, the timing
and outcome of our shareholder vote, the timing of the merger if
approved, the expected receipt of the remaining escrow receivable
and our position as the global economy recovers) 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, weakness in our 8-bit
classic or embedded flash products could negatively impact our
March 2010 fiscal quarter. Changes in requirements for supporting
the Transition Services Agreement with Maxim Integrated Products,
Inc., which was as a result of selling the universal remote control
and secured transaction processor businesses and is currently
scheduled to terminate on February 18, 2010, could impact our cash
projections. Any major claims against the escrow fund resulting in
the delay or reduction of the amount to be received could
negatively impact our cash flow expectations. We are being sued in
Delaware and California for certain claims relating to our proposed
merger with Ixys. These claims are disclosed in our proxy statement
filed with U.S. Securities and Exchange Commission ("SEC") on
January 15, 2010. Further legal actions may be made by these
parties or other parties that could impact the timing of our
shareholder vote and the closing of the proposed merger.
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 which
may make it difficult to execute on our long-term strategy.
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
periods ended December 26, 2009. For a detailed discussion of these
and other cautionary statements, please refer to the risk factors
discussed in filings with the SEC, including but not limited to,
the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2009, 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/ and can be
found under the investor section. Contact: Daniel Francisco
Francisco Group Zilog Communications (916) 812-8814 Source: Zilog,
Inc. http://www.zilog.com/ Zilog, Inc. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) Dec. 26, March 31, 2009
2009 ---- ---- ASSETS Current assets: Cash and cash equivalents
$36,980 $32,230 Accounts receivable, net 3,156 1,698 Receivables
under transition services agreement 255 1,696 Escrow receivable
related to sold business 1,550 3,100 Inventories 3,285 4,022
Deferred tax asset 10 10 Prepaid expenses and other current assets
1,110 1,199 Current assets associated with discontinued operations
- 960 --- --- Total current assets 46,346 44,915 Long term
investments 375 1,100 Property, plant and equipment, net 1,856
2,347 Goodwill 1,861 2,211 Other assets 1,320 1,079 ----- -----
Total assets $51,758 $51,652 ======= ======= LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Short term debt $- $346
Accounts payable 2,532 1,939 Payables under transition services
agreement 1,516 275 Income taxes payable 174 195 Accrued
compensation and employee benefits 1,455 1,349 Other accrued
liabilities 3,888 3,828 Deferred income including remaining escrow
6,048 8,024 Current liabilities associated with discontinued
business - 1,256 --- ----- Total current liabilities 15,613 17,212
Deferred tax liability 10 10 Other non-current liabilities 1,536
2,804 ----- ----- Total liabilities 17,159 20,026 ------ ------
Stockholders' equity: Common stock 186 186 Additional paid-in
capital 128,131 127,436 Treasury stock (7,563) (7,563) Other
comprehensive income 209 173 Accumulated deficit (86,364) (88,606)
------- ------- Total stockholders' equity 34,599 31,626 ------
------ Total liabilities and stockholders' equity $51,758 $51,652
======= ======= Zilog, Inc. UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands except per share data and
percentages) Three Months Ended ------------------ Dec. 26, Dec.
27, 2009 2008 ---- ---- Net sales from continuing operations $8,670
$9,035 Cost of sales 4,359 6,091 ----- ----- Gross margin 4,311
2,944 ----- ----- Gross margin % 49.7% 32.6% ---- ---- Operating
expenses: Research and development 1,252 1,657 Selling, general and
administrative 2,345 4,696 Special charges 578 1,696 Amortization
of intangible assets - 209 --- --- Total operating expenses 4,175
8,258 ----- ----- Operating income (loss) from continuing
operations 136 (5,314) --- ------ Interest and other income :
Interest income 5 24 Other income, net 103 114 --- --- Income
(loss) from continuing operations before provision for income taxes
244 (5,176) Provision for income taxes 36 67 --- --- Net income
(loss) from continuing operations 208 (5,243) Net income (loss)
from discontinued operations 30 (425) Gain from sale of
discontinued operations, net of tax 17 - --- --- Net income (loss)
$255 ($5,668) ==== ======= Basic and diluted net income (loss) from
continuing operations per share $0.01 ($0.31) Basic and diluted net
income (loss) from discontinued operations per share - (0.02) Basic
and diluted net income from gain on sale of discontinued operations
net of tax per share - - --- --- Basic and diluted net income
(loss) per share $0.01 ($0.33) ===== ====== Weighted-average shares
used in computing basic net income (loss) per share 17,308 17,071
====== ====== Weighted-average shares used in computing diluted net
income (loss) per share 17,318 17,071 ====== ====== Nine Months
Ended ----------------- Dec. 26, Dec. 27, 2009 2008 ---- ---- Net
sales from continuing operations $23,975 $29,113 Cost of sales
13,264 17,436 ------ ------ Gross margin 10,711 11,677 ------
------ Gross margin % 44.7% 40.1% ---- ---- Operating expenses:
Research and development 3,462 5,147 Selling, general and
administrative 7,196 15,911 Special charges 790 2,840 Amortization
of intangible assets - 627 --- --- Total operating expenses 11,448
24,525 ------ ------ Operating income (loss) from continuing
operations (737) (12,848) ---- ------- Interest and other income :
Interest income 14 143 Other income, net 1,113 464 ----- --- Income
(loss) from continuing operations before provision for income taxes
390 (12,241) Provision for income taxes 98 183 --- --- Net income
(loss) from continuing operations 292 (12,424) Net income (loss)
from discontinued operations 386 3,459 Gain from sale of
discontinued operations, net of tax 1,564 - ----- --- Net income
(loss) $2,242 ($8,965) ====== ======= Basic and diluted net income
(loss) from continuing operations per share $0.02 ($0.73) Basic and
diluted net income (loss) from discontinued operations per share
0.02 0.20 Basic and diluted net income from gain on sale of
discontinued operations net of tax per share 0.09 - ---- --- Basic
and diluted net income (loss) per share $0.13 ($0.53) ===== ======
Weighted-average shares used in computing basic net income (loss)
per share 17,278 16,982 ====== ====== Weighted-average shares used
in computing diluted net income (loss) per share 17,279 16,982
====== ====== Zilog, Inc. UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended
----------------- Dec. 26, Dec. 27, 2009 2008 ---- ---- CASH FLOWS
FROM OPERATING ACTIVITIES: Net income (loss) from continuing
operations $292 ($12,424) Adjustments to reconcile net income
(loss) to net cash provided by (used in ) continuing operating
activities: Depreciation and amortization 984 1,380 Disposition of
operating assets - 46 Non-cash stock-based compensation 680 1,126
Amortization of fresh-start intangible assets - 627 Goodwill 350 -
Changes in operating assets and liabilities: Accounts receivable,
net (1,458) (620) Receivable under transition services agreement
1,441 - Escrow receivable 1,550 - Inventories 737 2,400 Prepaid
expenses and other current and non-current assets (116) (163)
Accounts payable 593 167 Payable under transition services
agreement 1,241 - Accrued compensation and employee benefits 106
(328) Deferred income from disti and escrow (1,976) (494) Accrued
and other current and non- current liabilities (1,229) 1,387 ------
----- Net cash provided by (used in) continuing operating
activities 3,195 (6,896) ----- ------ Net cash provided by
discontinued operating activities 90 3,642 --- ----- CASH FLOWS
FROM INVESTING ACTIVITIES: Redemption of long term investments 725
625 Capital expenditures (494) (519) ---- ---- Net cash provided by
investing activities 231 106 --- --- Net cash provided by sale of
discontinued operations 1,564 - ----- --- CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from short term debt - 660 Payments on short
term debt (346) (692) Proceeds from issuance of common stock under
employee stock purchase and stock option plans 16 112 --- --- Net
cash provided by (used in) financing activities (330) 80 ---- ---
Net cash provided by discontinued financing activities - 3 --- ---
Increase in cash and cash equivalents 4,750 (3,065) Cash and cash
equivalents at beginning of period 32,230 16,625 ------ ------ Cash
and cash equivalents at end of period $36,980 $13,560 =======
======= Zilog, Inc. SELECTED UNAUDITED TRENDED FINANCIAL
INFORMATION (Amounts in thousands except percentages, selected key
metrics and per share amounts) Three Months Ended
------------------ Dec. 26, Sep. 26, Jun. 27, 2009 2009 2009 ----
---- ---- Sales & Expenses Information:
----------------------------- Net sales from continuing operations
$8,670 $8,070 $7,235 Cost of sales 4,359 4,386 4,520 ----- -----
----- Gross margin 4,311 3,684 2,715 ----- ----- ----- Gross margin
% 49.7% 45.7% 37.5% ---- ---- ---- Operating expenses: Research and
development 1,252 1,179 1,031 Selling, general and administrative
2,345 2,370 2,481 Special charges and credits 578 77 135
Amortization of intangible assets - - - --- --- --- Total operating
expenses 4,175 3,626 3,647 ----- ----- ----- Operating income
(loss) from continuing operations 136 58 (932) Interest income 5 6
3 Other income (expense) 103 8 1,002 --- --- ----- Income (loss)
from continuing operations before provision for income taxes 244 72
73 Provision (benefit) for income taxes 36 22 40 --- --- --- Net
income (loss) from continuing operations 208 50 33 --- --- --- Net
income (loss) from discontinued operations 30 36 320 Gain from sale
of discontinued operations, net of tax 17 1,547 - --- ----- --- Net
income (loss) $255 $1,633 $353 ==== ====== ==== Basic and diluted
net income (loss) from continuing operations per share $0.01 - -
Basic and diluted net income (loss) from discontinued operations
per share - - 0.02 Basic and diluted net income from gain on sale
of discontinued operations per share - 0.09 - --- ---- --- Basic
and diluted net income (loss) per share $0.01 $0.09 $0.02 =====
===== ===== Weighted average basic shares 17,308 17,291 17,230
Weighted average diluted shares 17,318 17,297 17,230 Net Sales
Information: ---------------------- Net Sales - by channel Direct
$1,913 $2,310 $1,685 Distribution 6,757 5,760 5,550 ----- -----
----- Total net sales $8,670 $8,070 $7,235 ====== ====== ====== Net
Sales - by region America's $3,593 $3,466 $2,853 Asia (including
Japan) 3,626 3,326 3,336 Europe 1,451 1,278 1,046 ----- ----- -----
Total net sales $8,670 $8,070 $7,235 ====== ====== ====== Selected
Key Metrics (as defined in our Form 10-Q and 10-K)
--------------------------------------- Days sales outstanding 33
38 27 Net sales to inventory ratio (annualized) 10.6 8.6 8.7
Current ratio 3.0 2.8 2.6 Distributor weeks of inventory 13 12 12
Other Selected Financial Metrics --------------------------------
Depreciation and amortization $328 $338 $318 Stock based
compensation $249 $205 $226 Capital expenditures $33 $141 $320 Cash
and cash equivalents $36,980 $35,998 $33,826 Long term investments
$375 $375 $900 Cash and long term investments $37,355 $36,373
$34,726 Short term debt - - - Cash and long term investments, net
of debt $37,355 $36,373 $34,726 EBITDA, adjusted $1,394 $686 $749
Three Months Ended ------------------ Mar. 31, Dec. 27, 2009 2008
---- ---- Sales & Expenses Information:
----------------------------- Net sales from continuing operations
$7,044 $9,035 Cost of sales 4,379 6,091 ----- ----- Gross margin
2,665 2,944 ----- ----- Gross margin % 37.8% 32.6% ---- ----
Operating expenses: Research and development 1,118 1,657 Selling,
general and administrative 3,442 4,696 Special charges and credits
3,478 1,696 Amortization of intangible assets 174 209 --- --- Total
operating expenses 8,212 8,258 ----- ----- Operating income (loss)
from continuing operations (5,547) (5,314) Interest income 4 24
Other income (expense) (85) 114 --- --- Income (loss) from
continuing operations before provision for income taxes (5,628)
(5,176) Provision (benefit) for income taxes (2) 67 --- --- Net
income (loss) from continuing operations (5,626) (5,243) ------
------ Net income (loss) from discontinued operations (3,831) (425)
Gain from sale of discontinued operations, net of tax 21,606 -
------ --- Net income (loss) $12,149 ($5,668) ======= ======= Basic
and diluted net income (loss) from continuing operations per share
($0.33) ($0.31) Basic and diluted net income (loss) from
discontinued operations per share (0.22) (0.02) Basic and diluted
net income from gain on sale of discontinued operations per share
1.26 - ---- --- Basic and diluted net income (loss) per share $0.71
($0.33) ===== ====== Weighted average basic shares 17,171 17,071
Weighted average diluted shares 17,171 17,071 Net Sales
Information: ---------------------- Net Sales - by channel Direct
$1,849 $1,625 Distribution 5,195 7,410 ----- ----- Total net sales
$7,044 $9,035 ====== ====== Net Sales - by region America's $2,975
$3,569 Asia (including Japan) 2,571 4,046 Europe 1,498 1,420 -----
----- Total net sales $7,044 $9,035 ====== ====== Selected Key
Metrics (as defined in our Form 10-Q and 10-K)
-------------------------------------------- Days sales outstanding
22 28 Net sales to inventory ratio (annualized) 7.0 8.0 Current
ratio 2.6 1.5 Distributor weeks of inventory 18 13 Other Selected
Financial Metrics -------------------------------- Depreciation and
amortization $452 $466 Stock based compensation $198 $467 Capital
expenditures $107 $82 Cash and cash equivalents $32,230 $13,560
Long term investments $1,100 $1,300 Cash and long term investments
$33,330 $14,860 Short term debt $346 $693 Cash and long term
investments, net of debt $32,984 $14,168 EBITDA, adjusted ($1,304)
($2,362) Nine Months Ended ----------------- Dec. 26, Dec. 27, 2009
2008 ---- ---- Sales & Expenses Information:
----------------------------- Net sales from continuing operations
$23,975 $29,113 Cost of sales 13,264 17,436 ------ ------ Gross
margin 10,711 11,677 ------ ------ Gross margin % 44.7% 40.1% ----
---- Operating expenses: Research and development 3,462 5,147
Selling, general and administrative 7,196 15,911 Special charges
and credits 790 2,840 Amortization of intangible assets - 627 ---
--- Total operating expenses 11,448 24,525 ------ ------ Operating
income (loss) from continuing operations (737) (12,848) Interest
income 14 143 Other income (expense) 1,113 464 ----- --- Income
(loss) from continuing operations before provision for income taxes
390 (12,241) Provision (benefit) for income taxes 98 183 --- ---
Net income (loss) from continuing operations 292 (12,424) ---
------- Net income (loss) from discontinued operations 386 3,459
Gain from sale of discontinued operations, net of tax 1,564 - -----
--- Net income (loss) $2,242 ($8,965) ====== ======= Basic and
diluted net income (loss) from continuing operations per share
$0.02 ($0.73) Basic and diluted net income (loss) from discontinued
operations per share 0.02 0.20 Basic and diluted net income from
gain on sale of discontinued operations per share 0.09 - ---- ---
Basic and diluted net income (loss) per share $0.13 ($0.53) =====
====== Weighted average basic shares 17,278 16,982 Weighted average
diluted shares 17,279 16,982 Net Sales Information:
---------------------- Net Sales - by channel Direct $5,908 $5,658
Distribution 18,067 23,455 ------ ------ Total net sales $23,975
$29,113 ======= ======= Net Sales - by region America's $9,912
$11,312 Asia (including Japan) 10,288 12,530 Europe 3,775 5,271
----- ----- Total net sales $23,975 $29,113 ======= =======
Selected Key Metrics (as defined in our Form 10-Q and 10-K)
-------------------------------------------- Days sales outstanding
33 28 Net sales to inventory ratio (annualized) 10.6 8.0 Current
ratio 3.0 1.5 Distributor weeks of inventory 13 13 Other Selected
Financial Metrics -------------------------------- Depreciation and
amortization $984 $1,380 Stock based compensation $680 $1,126
Capital expenditures $494 $519 Cash and cash equivalents $36,980
$13,560 Long term investments $375 $1,300 Cash and long term
investments $37,355 $14,860 Short term debt - $693 Cash and long
term investments, net of debt $37,355 $14,168 EBITDA, adjusted
$2,830 ($6,411) DATASOURCE: Zilog, Inc. CONTACT: Daniel Francisco
of Francisco Group, +1-916-812-8814, for Zilog Communications Web
Site: http://www.zilog.com/
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