Revenue and EPS Exceed High End of Revised Guidance
"As the result of stronger than expected demand at the end of the quarter for our products for personal computers and mobile handsets, revenue in fiscal Q1 exceeded the high end of our revised guidance," said Robert V. Dickinson, president and CEO. "We are also pleased that we were solidly profitable on a non-GAAP basis, including the Arques Technology product line, and had positive cash flow from operations in the quarter." He noted that bookings for the quarter were weak as expected, while the number of design wins reached 401, the second highest number ever achieved, surpassed only by the prior quarter's record level.
Dickinson reported that mobile handset product revenue increased 3% year on year with 22% year-on-year sales growth to top five OEMs largely offset by substantial year-on-year declines in sales to second tier and Chinese OEMs reflecting their collective loss of market share over the past year as well as competition from low end ceramic filters. He also noted that personal computer and digital consumer electronics product revenue increased by 28% year-on-year with low capacitance ESD revenue growing by 73% year-on-year.
The company's outlook for the September quarter is for revenue between $16.0 and $17.5 million compared to $18.5 million in the same quarter a year ago. On a GAAP basis, a net loss per share of between $0.01 and $0.03 is expected compared to a profit of $0.09 per share a year ago. On a non-GAAP basis, excluding acquisition costs and employee stock-based compensation expenses, and using a cash basis tax rate, diluted EPS is expected to be between $0.02 and $0.04. The company also indicated that it expects positive cash flow from operations in the quarter.
Conference Call and Webcast Today
California Micro Devices will hold a conference call today at 2:00 p.m. Pacific Time to discuss its June quarter results. Within the USA, interested parties can access the conference call by dialing 800-257-1836. International parties may gain access by dialing 303-205-0066. No password is necessary.
A replay of the conference call will be available on the company's web site at www.cmd.com (Investor Relations link) beginning at approximately 4:00 p.m. Pacific Time today and continuing about a year.
About California Micro Devices Corporation
California Micro Devices Corporation is a leading supplier of application specific analog semiconductor products for the mobile handset, personal computer and digital consumer electronics markets. Key products include Application Specific Integrated Passive(TM) (ASIP(TM)) devices and selected high value analog and mixed signal ICs. Detailed corporate and product information may be accessed at www.cmd.com.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the company's earnings release contains non-GAAP financial measures that exclude the effects of employee share-based compensation and the requirements of SFAS No. 123R, "Share-based Payment" ("123R"). The non-GAAP financial measures used by management and disclosed by the company exclude the income statement effects of all forms of employee share-based compensation and the effects of 123R upon the number of diluted shares used in calculating non-GAAP earnings per share. The non-GAAP financial measures also exclude Arques Technology acquisition related costs, including amortization of acquisition-related intangibles and one-time charges for acquired in-process research and development, and in the future will exclude any acquisition-related contingent payments. One of the two non-GAAP financial measures excludes the Arques Technology product line, including revenue and cost of sales from the product line and allocations for research and development and selling, general & administrative expenses relating to the product line. In addition, these non-GAAP measures utilize a tax rate that is based upon the income taxes we expect to actually pay relating to this quarter's activities and results. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding these non-GAAP financial measures, see the Form 8-K dated July 27, 2006 that the company has filed with the Securities and Exchange Commission.
All statements contained in this press release that are not historical facts are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They are not guarantees of future performance or events. Rather, they are based on current expectations, estimates, beliefs, assumptions, and goals and objectives and are subject to uncertainties that are difficult to predict. As a result, our actual results may differ materially from the statements made. Often such statements can be identified by their use of words such as will, intends, expects, plans, believes, anticipates, and estimates. Forward looking statements in this press release include our outlook for revenue, earnings per share (both GAAP and non-GAAP), and cash flow during the second quarter of fiscal 2007. These forward-looking statements are based upon our assumptions about and assessment of the future, which may or may not prove true, and involve a number of risks and uncertainties including whether our customers experience the demand we anticipate for their products based in part upon their input and our order backlog, whether the designed performance of our devices satisfies our customers' requirements so that they continue to design our devices into their products, whether our devices perform to their design specification, whether competitors introduce devices at lower prices than our devices causing price erosion, whether we encounter any difficulty in obtaining the requisite supply of quality product from our contract manufacturers, contract assemblers and test houses without interruption or unanticipated price increases, and whether we incur unexpected operating expenses as well as the risk factors detailed in the company's Form 8K, 10K, and 10Q filings with the Securities and Exchange Commission. Due to these and other risks, the company's future actual results could differ materially from those discussed above. These forward-looking statements speak only as to the date of this release, and, except as required by law, we undertake no
obligation to publicly release updates or revisions to these statements whether as a result of new information, future events, or otherwise.
NOTE: The CMD(TM) logo, ASIP(TM), Application Specific Integrated Passive(TM), PicoGuard(TM), MediaGuard(TM), PhotonIC(TM) and FlexBoost(TM) are trademarks of California Micro Devices. All other trademarks are property of their respective owners.
California Micro Devices Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(Unaudited)
June 30, March 31,
2006 2006
ASSETS
Current assets:
Cash and cash equivalents $8,733 $9,788
Short-term investments 37,214 39,958
Accounts receivable, net 8,917 10,667
Inventories 5,509 5,508
Deferred tax assets 2,719 2,711
Prepaid expenses and other current assets 807 1,078
Total current assets 63,899 69,710
Property, plant and equipment, net 4,201 3,961
Goodwill and purchased intangible assets, net 5,871 --
Other long-term assets 83 61
TOTAL ASSETS $74,054 $73,732
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,841 $5,901
Accrued liabilities 3,927 3,185
Deferred margin on shipments to distributors 2,837 2,684
Current maturities of long-term debt and
capital lease obligations 82 82
Total current liabilities 12,687 11,852
Other long-term liabilities 148 8
Total liabilities 12,835 11,860
Commitments and contingencies
Shareholders' equity:
Common stock - no par value; 50,000,000 shares
authorized; shares issued and outstanding:
22,991,231 and 22,855,223 as of June 30, 2006
and March 31, 2006, respectively 112,088 110,673
Accumulated other comprehensive gain (loss) 2 (5)
Accumulated deficit (50,871) (48,796)
Total shareholders' equity 61,219 61,872
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $74,054 $73,732
California Micro Devices Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
(On a GAAP basis)
Three Months Ended June 30,
2006 2005
Net sales $16,072 $14,687
Cost and expenses:
Cost of sales 9,989 9,620
Research and development 2,055 1,434
Selling, general and administrative 4,194 3,342
In-process research and development 2,210 --
Amortization of purchased intangible assets 34 --
Restructuring expense -- 57
Total costs and expenses 18,482 14,453
Operating income (loss) (2,410) 234
Other income, net 539 248
Income (loss) before income taxes (1,871) 482
Income taxes 204 14
Net income (loss) $(2,075) $468
Net income (loss) per share-basic $(0.09) $0.02
Weighted average common shares outstanding
- basic 22,899 21,645
Net income (loss) per share-diluted $(0.09) $0.02
Weighted average common shares and share
equivalents outstanding-diluted 22,899 22,020
Reconciliation of net income (loss) to
non-GAAP net income:
Net income (loss) $(2,075) $468
Reconciling items:
Non GAAP loss from Arques Technology product
line before taxes 515 --
Amortization of purchased intangible assets 34 --
In-process research and development 2,210 --
Stock-based compensation expense under SFAS
123(R), net of tax 844 --
Difference between effective tax rate and cash
basis tax rate 154 --
Non-GAAP net income $1,682 $468
Add back: Non GAAP loss from Arques
Technology product line after taxes (517) --
Non-GAAP net income including
Arques Technology product line $1,165 $468
Non-GAAP:
Net income per share - basic $0.07 $0.02
Net income per share - diluted $0.07 $0.02
Non-GAAP including Arques Technology
product line:
Net income per share - basic $0.05 $0.02
Net income per share - diluted $0.05 $0.02
Shares used in calculation of non-GAAP:
Weighted average common shares
outstanding - basic 22,899 21,645
Weighted average common shares and share
equivalents outstanding - diluted 23,083 22,020
California Micro Devices Corporation
CONDENSED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
(On a non-GAAP basis)
Three Months Ended June 30,
2006 2005
Net sales $16,029 $14,687
Cost and expenses:
Cost of sales 9,760 9,620
Research and development 1,729 1,434
Selling, general and administrative 3,317 3,342
Restructuring -- 57
Total costs and expenses 14,806 14,453
Operating income 1,223 234
Other income, net 509 248
Income before income taxes 1,732 482
Income taxes 50 14
Net income $1,682 $468
Net income per share-basic $0.07 $0.02
Weighted average common shares
outstanding - basic 22,899 21,645
Net income per share - diluted $0.07 $0.02
Weighted average common shares and share
equivalents outstanding - diluted 23,083 22,020
See accompanying reconciliation of GAAP measures to non-GAAP measures.
California Micro Devices Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
(On a non-GAAP basis and including Arques Technology product line
results)
Three Months Ended June 30,
2006 2005
Net sales $16,072 $14,687
Cost and expenses:
Cost of sales 9,859 9,620
Research and development 1,867 1,434
Selling, general and administrative 3,668 3,342
Restructuring -- 57
Total costs and expenses 15,394 14,453
Operating income 678 234
Other income, net 539 248
Income before income taxes 1,217 482
Income taxes 52 14
Net income $1,165 $468
Net income per share - basic $0.05 $0.02
Weighted average common shares outstanding
- basic 22,899 21,645
Net income per share - diluted $0.05 $0.02
Weighted average common shares and share
equivalents outstanding - diluted 23,083 22,020
See accompanying reconciliation of GAAP measures to non-GAAP measures.
California Micro Devices Corporation
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
Three Months Ended June 30,
Net income (loss) per share: 2006 2005
Basic:
GAAP net income (loss) per share $(0.09) $0.02
Reconciling items:
Arques Technology product line 0.02 --
Amortization of purchased intangible assets 0.00 --
In-process research and development 0.10 --
Stock-based compensation expense under SFAS
123(R), net of tax 0.03 --
Difference between effective tax rate and cash
basis tax rate 0.01 --
Non-GAAP net income per share $0.07 $0.02
Add back: Arques Technology product line (0.02) --
Non-GAAP net income per share including
Arques Technology product line $0.05 $0.02
Diluted:
GAAP net income (loss) per share $(0.09) $0.02
Reconciling items:
Arques Technology product line 0.02 --
Amortization of purchased intangible assets 0.00 --
In-process research and development 0.10 --
Stock-based compensation expense under SFAS
123(R), net of tax 0.03 --
Difference between effective tax rate and cash
basis tax rate 0.01 --
Non-GAAP net income per share $0.07 $0.02
Add back: Arques Technology product line (0.02) --
Non-GAAP net income per share including
Arques Technology product line $0.05 $0.02
Web site: http://www.calmicro.com/