Silicon Valley Research Reports Fiscal 1999 Results - 4th qtr 1999 and fiscal year 1999 - Company Financial Information

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

Silicon Valley Research, Inc. (OTC BB:SVRI) reported Thursday that for the fourth fiscal quarter ended March 31, 1999, its revenues were $724,000 compared to $369,000 for the third quarter and $506,000 for the quarter ended March 31, 1998.

The Company reported a net loss for the current quarter of $(393,000) compared to a net loss of $(1,033,000) for the third quarter and a net loss of $(4,345,000) for the fourth quarter of the prior year. Net loss per share for this quarter was $(0.01) compared to a net loss per share of $(0.04) for the third quarter and a net loss per share of $(0.21) for the quarter ended March 31, 1998.

Revenues for the fiscal year ended March 31, 1999 were $2,046,000 compared to $2,755,000 for the previous fiscal year. The net loss for the current year was $(4,241,000) compared to a net loss of $(12,038,000) for the previous year. Net loss per share for the current year was $(0.16) compared to a net loss per share of $(0.69) for the year ended March 31, 1998. Results for the year ended March 31, 1999, but not for the prior year, include the operating activity of Quality I.C. Corporation, which was acquired by Silicon Valley Research, Inc. on March 31, 1998.

In June 1999, David Arscott and David Knight were both elected to the Company's Board of Directors. Arscott is General Partner and Co-Founder of Compass Technology Partners, which invests in public and private technology companies. Arscott is also a director and past Chairman of Lam Research Corporation, a public semiconductor capital equipment company, and a director of Cyberstate University. David Knight is the Founder and CEO of The Shearwater Group, Inc., a worldwide EDA software distribution and support company providing software tools and turnkey hardware/software solutions for Integrated Circuit ("IC") design. Knight has over thirty years experience in the IC design and manufacturing industry. "We're excited to have both Mr. Arscott and Mr. Knight on our Board," stated James Benouis, the Company's President and CEO. "We will continue to rely on their knowledge, guidance and support as we plot our path to profitability."

"SVR's attracting such high caliber Board members is recognition of the progress we have made in the past year," continued Benouis. "We are an entirely new company with new people and new products that fill a growing void in the marketplace. The response we received to our new DCP (Design Cockpit Platform) product at the Design Automation Conference ("DAC") in June was outstanding. Coming out of DAC, we are convinced more than ever that there is a growing need for a non-proprietary framework, such as DCP, as well as a complete, affordable yet powerful APR solution under $75,000. We are excited about the quarters ahead."

Founded in 1979, Silicon Valley Research, Inc. develops, markets and supports innovative IC physical design software for floorplanning, placement, routing, custom layout and parasitic extraction of deep submicron Integrated Circuits (ICs). SVR also provides design consulting services and support to its customers. The advanced technology in SVR's production-proven tools results in dense, high-yielding, high performance chips. Headquartered in San Jose, SVR has sales offices and distributors in the United States and Asia. Information on potential factors which may affect the Company's financial results are included in the Company's Quarterly Reports on Form 10-Q and the Company's Annual Report on Form 10-K. FMI: http://www.svri.com.

            SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                 (In thousands, except per share data)

                      Consolidated Balance Sheets

Assets                             March 31, 1998    March 31, 1999

Current Assets:
 Cash and cash equivalents          $    1,926          $      247
 Accounts receivable, net                  484                 444
 Prepaid expenses and
  other current assets                     257                 109
                                      ---------           ---------
                                         2,667                 800
Fixed assets, net                          667                 290
Other assets, net                        1,931                 969
                                      ---------           ---------
                                    $    5,265          $    2,059

Liabilities and Shareholders' Equity
Current Liabilities:
 Short-term borrowings              $      285          $      225
 Current portion of long-term debt         263                 137
 Notes payable                             200                50
 Accounts payable                          352                 450
 Accrued expenses                          968                 478
 Deferred revenue                          539                 235
                                       --------            --------
                                         2,607               1,575
                                       --------            --------
Long-term debt                              77                 --
Deferred tax liability                      17                  24

Shareholders' Equity:
 Common Stock, no par value             41,834              43,930
 Accumulated deficit                   (39,346)            (43,587)
 Cumulative translation adjustment          76                 117
                                        -------            --------
                                         2,564                 460
                                        -------            --------
                                    $    5,265          $    2,059


             Consolidated Statements of Operations

                           Three Months Ended       Year  Ended
                               March  31,             March 31,
                             1998      1999        1998      1999
Revenue:
 License fees and other    $   93   $   237      $   953   $   645
 Maintenance and services     413       487        1,802     1,401
 Total revenue                506       724        2,755     2,046

Cost of revenue:
 License fees and other       420      80      2,205       339
 Maintenance and services     161       234          573       776
 Total cost of revenue        581       314        2,778     1,115
Gross margin                  (75)      410        (23)      931

Operating expenses:
 Engineering, research and
  development                 857       399        3,568     2,275
 Selling and marketing        676       289        3,677     1,974
 General and administrative   230     108        1,063       909
 Impairment loss on
  prepaid royalty              --        --        1,217        --
 Acquired in-process research
  and development           2,480      --        2,480      --
     Total operating
  expenses                  4,243       796       12,005     5,158

Operating loss             (4,318)     (386)     (12,028)  (4,227)
Total other income
 (expense), net               (27)       (7)         (10)     (14)
Loss before provision for
 income taxes              (4,345)     (393)     (12,038)  (4,241)
Provision for income taxes     --        --           --        --
Net loss                $  (4,345)  $  (393)   $ (12,038) $(4,241)

Net loss per share
 (basic and diluted)    $   (0.21)  $ (0.01)   $   (0.69) $ (0.16)

Weighted-average common
 shares and equivalents
 (basic and diluted)       20,642    26,212       17,549    25,748