Catalyst Semiconductor Reports 3rd Quarter FY 2008 Financial Results

Business Wire,  Feb 28, 2008  

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Third quarter and YTD FY 2008 highlights included:

* Third quarter net revenues of $17.8 million, down 14% sequentially and up 9% over the year ago quarter.

* YTD net revenues, up $10.5 million, or 22% year-over-year.

* YTD Analog/Mixed Signal revenues, up $4.7 million, or 116% year- over-year.

* Third quarter total gross margin of 38.5 %, up from 37.3% in Q2.

* Third quarter GAAP net income of $0.4 million - $0.02 EPS.

* Third quarter non-GAAP net income of $1.1 million - $0.06 EPS.

SANTA CLARA, Calif. -- Catalyst Semiconductor, Inc. (NASDAQ:CATS), a developer and marketer of programmable and analog/mixed signal products used in telecommunications, networking systems, computers, automotive, industrial and consumer markets, today reported financial results for its third quarter of fiscal year 2008, which ended January 27, 2008.

Net revenues for the third quarter ended January 27, 2008 were $17.8 million, down 14% from net revenues of $20.7 million for the preceding quarter ended October 28, 2007, and up 9% from net revenues of $16.4 million for the third quarter ended January 28, 2007. Catalyst previously announced on February 5, 2008 that it expected net revenues and net income for the third quarter ended January 27, 2008 to be between $17.4 to $17.6 million and $0.1 million and $0.3 million, respectively.

Net revenues from analog/mixed signal products were $2.2 million, or 13% of net revenues in the third quarter ended January 27, 2008, down 40% from $3.8 million, or 18% of net revenues for the quarter ended October 28, 2007, and up 72% from $1.3 million, or 8% of net revenues for the third quarter ended January 28, 2007.

Net income for the third quarter ended January 27, 2008, was $0.4 million, or $0.02 per diluted share, compared with net income of $1.0 million, or $0.06 per diluted share for the preceding quarter ended October 28, 2007, and net income of $0.1 million, or $0.01 per diluted share in the third quarter ended January 28, 2007. Net income for the third quarter ended January 27, 2008 includes the impact of $634,000 of expenses incurred for professional services associated with strategic transaction activities that were under discussion during the quarter. In January 2008, the board of directors terminated these discussions due to changes in market conditions.

On a non-GAAP basis, net income for the third quarter was $1.1 million, or $0.06 per diluted share, compared with non-GAAP net income of $1.3 million, or $0.07 per diluted share, for the preceding quarter ended October 28, 2007, and $0.6 million, or $0.03 per diluted share, in the third quarter ended January 28, 2007. Non-GAAP net income reflects adjustments for non-cash stock compensation expenses and professional fees incurred in association with strategic transaction activities, which are more fully detailed in the reconciliation between net income on a GAAP basis and net income on a non-GAAP basis provided in the statements that accompany this press release.

The gross margin percentage for the third quarter ended January 27, 2008 was 38.5%, compared with 37.3% in the preceding quarter ended October 28, 2007 and 35.6% in the third quarter ended January 28, 2007. The gross margin percentage improvement over the previous quarter was attributable to greater manufacturing efficiencies in our back-end manufacturing operations.

Operating activities during the third quarter generated a positive cash flow of $1.6 million and $7.5 million year-to-date with cash and short term investments increasing by $1.0 million to $36.5 million at the end of the third quarter ended January 27, 2008.

In February 2008, Catalyst announced that its board of directors approved increasing the number of authorized shares under the stock repurchase program to four million shares. Prior to the increase, Catalyst had approximately 763,000 shares remaining under the current stock repurchase program.

Management Comments & Outlook

"Total revenues for the third quarter were lower than our results for the first and second quarters due in large part to seasonality in our business. However, we are pleased that year-to-date revenues through the fiscal third quarter are up 22% over the same period last year with our analog/mixed signal net revenues up by 116% year-over-year," said Gelu Voicu, Catalyst's President and Chief Executive Officer. "While we saw a slow start in our fiscal fourth quarter, due to the Chinese New Year holiday at the beginning of February, we are encouraged to see that our bookings and shipments after four weeks are at a similar level to what we attained at this point during the third quarter."

Other highlights of the quarter included:

* Catalyst introduced four new products: one bus product for I/O expansion and three LED drivers. The LED drivers exemplify Catalyst's strategy to be a "one-stop" vendor for a broad range of LED drivers which address all the major segments of the lucrative LED market - from cell phone backlighting to mid-size portable panels, to large-panel video and LED signage.