California Micro Devices Reports Fiscal 2000 First Quarter Operating Results - Company Financial Information

Edge: Work-Group Computing Report, August 2, 1999

California Micro Devices Corporation (Nasdaq NMS: CAMD) has reported a net loss of $945,000, or $0.09 per share, on revenues of $8.5 million, for the quarter ended June 30, 1999, the first quarter of its fiscal year 2000. This compares with a net loss of $846,000, or $0.08 per share, on revenues of $8.2 million, for the fiscal quarter ended June 30, 1998. The year-earlier loss included a $575,000 one-time gain from an insurance settlement. For the quarter ending June 30, 1999, average shares outstanding were 10,117,000, compared to 9,983,000 shares for the prior year's quarter.

According to Jeffrey Kalb, California Micro Devices' president and chief executive officer, "The June quarter is normally a difficult one for us, so we were pleased that we were able to maintain revenue essentially flat quarter to quarter. Although at first glance the net loss is $100,000 greater than the year-ago quarter, that quarter included a one-time insurance settlement of $575,000, which reduced administrative expenses. So, ongoing operations actually improved by $475,000 on about $300,000 in increased revenue. Revenues increased 3% from the year earlier quarter, as a result of unit shipment increases of 21%, offset by lower average selling prices due to an increase in the mix of higher volume standard products. Gross margins on product sales improved to 27% compared to 20% a year ago. R&D investment was up slightly and selling and marketing was up over $200,000.

"But the real news we have for this quarter is orders. Our bookings were the best we've achieved in three years, resulting in a book-to-bill ratio of 1.13 to one and a backlog starting this quarter that is almost 45% higher than last quarter's. Three years ago the semiconductor and passives industries in which we participate went into a prolonged slump. In recent months, both of those industries have strengthened and our new products are also beginning to take root. Those are both encouraging signs."

Kalb also noted that while, product dollar sales were essentially flat compared to the quarter ended March 31, 1999, factory shipments were down slightly, offset by an increase in distributor revenue. According to Kalb, "The sequential decrease in factory shipments lowered gross margins somewhat, but with the stronger backlog coming into the September quarter, margins should get back on their upward track."

Research and development costs were $959,000 in the June 30, 1999 quarter compared to $902,000 in the quarter ended June 30, 1998. This increase was primarily due to material costs associated with the large number of new products in development. Selling, marketing and administrative costs were $2,117,000 for the quarter ended June 30, 1999, compared to $1,480,000 in the year earlier quarter, net of a $575,000 insurance settlement as noted earlier in this release. The remaining increase reflects higher investment in sales and marketing.

In closing, Kalb noted, "With the book-to-bill ratio for the June quarter the best it's been in over a year, and with our total orders the best we've had in three years, we are looking at an improved picture for the September quarter. While the summer is traditionally a slow quarter for the industry, our stronger backlog positions California Micro Devices for improved financial performance for this quarter."

Headquartered in Milpitas, Calif., California Micro Devices (CMD) designs, manufactures and markets integrated thin film, silicon-based termination and filtering components and active electronic circuitry. Built in ISO 9000-registered quality system environments, CMD's products target the requirements of computer, networking and communication-based system manufacturers for smaller, high-density devices that operate at high frequencies with superior performance and functionality.

For further information on the Company, please visit California Micro Devices's web site at http://www.camd.com or call Interactive Shareholder Information Services on 888/209-7223.

                 CALIFORNIA MICRO DEVICES CORPORATION
                       Statements of Operations
            (Amounts in thousands, except per share data)
                             (Unaudited)

                                           Three Months Ended
                                                June 30,
                                            1999        1998

Net product sales                         $  8,517    $  8,231

Cost and expenses:
  Cost of sales                              6,209       6,550
  Research and development                     959         902
  Selling, marketing and administrative      2,117       1,480
                                          ------*   --------
    Total costs and expenses                 9,285       8,932
                                          ------*   --------
Operating (loss)                              (768)       (701)
Other expense, net                             177         145
                                          ------*   --------
(Loss) before income taxes                    (945)       (846)
Income taxes                                           --
                                          ------*   --------
 Net (loss)                               $   (945)   $   (846)
                                          ========    ========
Basic and diluted net (loss) per
  share                                   $  (0.09)   $  (0.08)
                                          ========    ========
Weighted average common shares
  and share equivalents outstanding         10,117       9,983
                                          ========    ========


                 CALIFORNIA MICRO DEVICES CORPORATION
                            Balance Sheets
                        (Amounts in thousands)

                                           June 30,   March 31,
                                             1999       1999
 ASSETS:                                  (Unaudited)

Current assets:
  Cash and short-term securities            $ 3,735   $ 4,933
  Accounts receivable, less allowance for
    doubtful accounts of $207 and $224        4,707     4,471
  Inventories                                 8,668     8,438
  Other assets                                  779       592
                                            -----*  -------
    Total current assets                     17,889    18,434

Property, plant & equipment, net             10,882    11,540
Restricted cash(a)                            3,122     2,900
Other long term assets                          791       770
                                            -----*  -------
    Total assets                            $32,684   $33,644
                                            =======   =======

LIABILITIES & SHAREHOLDERS' EQUITY:
 Current liabilities:
  Accounts payable                        $  3,078  $  3,239
  Accrued salaries and benefits              1,045       998
  Other accrued liabilities                    706       554
  Deferred margin on shipments
   to distributors                             516       576
  Current maturities of long-term
   debt and capital lease obligations          709       685
                                          ------* --------
    Total current liabilities                6,054     6,052

Long-term debt, less current maturities      7,443     7,503
Other long-term liabilities                    838       919
                                          ------* --------
    Total liabilities                       14,335    14,474

Shareholders' equity:
  Common stock - no par value;
   authorized 25,000,000; issued and
   outstanding 10,152,692 shares            53,398    53,328

  Accumulated deficit                      (35,049)  (34,158)
                                          ------* --------
    Total shareholders' equity              18,349    19,170
                                          ------* --------
  Total liabilities and
   shareholders' equity                   $ 32,684  $ 33,644
                                          ========  ========

(a) Includes $2 million in restricted cash which serves as the
 Company's guarantee for the CVR value included in the settlement
 of shareholder class actions.