Financial: Vitesse Reports Record Revenue and Profit - Vitesse Semiconductor - Company Financial Information

Edge: Work-Group Computing Report, July 19, 1999

Vitesse Semiconductor Corp. (NASDAQ:VTSS) Monday reported record revenues and net income for the third quarter of fiscal 1999, ended June 30, 1999.

Revenues in the third quarter of fiscal 1999 were $73 million, an increase of 58 percent over the $46.1 million in the third quarter of fiscal 1998, and an increase of 9 percent over the $66.9 million in the second quarter of fiscal 1999.

Net income for the third quarter of fiscal 1999 was $19.4 million, or $0.24 per share (taxed at 33 percent), compared with net income of $13.9 million, or $0.18 per share (taxed at 20 percent), in the third quarter of fiscal 1998, and net income of $17.6 million, or $0.22 per share (taxed at 33 percent), in the second quarter of fiscal 1999.

For the nine-month period ended June 30, 1999, revenues were $200.1 million, a 65 percent increase over the $121 million recorded in the nine-month period ended June 30, 1998. Net income for the nine- month period ended June 30, 1999, was $52.5 million, or $0.64 per share (taxed at 33 percent), compared with $36.4 million, or $0.46 per share (taxed at 20 percent), for the nine-month period ended June 30, 1998.

Vitesse President and Chief Executive Officer Lou Tomasetta said: "I am pleased to report another successful quarter in which we set records for revenues, operating profit and net income. We saw continued strength in our focus areas, particularly in the Fibre Channel market. Our manufacturing groups continued to ramp up production volumes in order to meet our growing demand."

Vitesse Semiconductor is a world leader in the design, development, manufacturing and marketing of high-bandwidth communications and Automatic

Test Equipment (ATE) integrated circuits (ICs).

The company's products address the needs of telecommunications, data communications and ATE equipment manufacturers who demand a combination of high speed, high complexity and low power dissipation.

Vitesse, with headquarters in Camarillo, manufactures volume ICs at its two fabrication facilities in Camarillo and Colorado Springs, Colo. Company/product information can be found on the Web at www.vitesse.com.

                   VITESSE SEMICONDUCTOR CORP.
                        FINANCIAL SUMMARY
                     Statement of Operations
              (in thousands except per share data)
                          (unaudited)

                                          Three months ended
                                    June 30,   June 30,   March 31,
                                      1999       1998       1999

Revenues                            $ 73,044   $ 46,108   $ 66,863
Costs and expenses:
   Cost of revenues                   26,736     18,168     24,907
   Engineering & development          11,743      7,375     10,669
   Selling, general & administrative   8,347      5,635      7,688
Income from operations                26,218     14,930   23,889
Other income                           2,743      2,467      2,735
Income before income taxes            28,961     17,397     26,334
Income taxes                           9,557      3,470    8,689
Net income                            19,404     13,927     17,645
Weighted average shares               82,399     79,348     81,902
Net income per share                $   0.24   $   0.18   $   0.22

                                     Nine months ended
                                    June 30,   June 30,
                                      1999       1998

Revenues                            $200,086   $121,021
Costs and expenses:
   Cost of revenues                   74,604     48,374
   Engineering & development          31,977     19,392
   Selling, general & administrative  23,054     14,746
Income from operations                70,451     38,509
Other income                           7,887      6,931
Income before income taxes            78,338     45,440
Income taxes                          25,851      9,078
Net income                            52,487     36,362
Weighted average shares               81,588     78,703
Net income per share                $   0.64   $   0.46


                  Selected Balance Sheet Items
                          (unaudited)

                                June 30,     March 31,    Sept. 30,
                                  1999         1999         1998

Cash and investments            $198,990   $185,439     $162,294
Accounts receivable             $ 64,992     $ 48,124     $ 39,749
Inventories                     $ 22,715     $ 20,493     $ 16,795
Total current assets            $320,434     $286,275     $243,032
Total assets                    $477,550   $439,603     $368,411
Total current liabilities       $ 27,090   $ 26,444     $ 27,723
Total long-term liabilities     $  2,725     $  2,725     $    ---
Total shareholders' equity      $447,735     $410,434     $340,688

NOTE: All references to the number of common shares, weighted average number of common shares and per share data for all periods presented have been adjusted to reflect a 2-for-1 stock split of the common stock that was effected on May 26, 1998.