ZLOG 
By On
Net sales for the fiscal fourth quarter were
GAAP net income for the fourth quarter ended
"The collapse of global demand in fiscal 2009 was arguably unprecedented and created economic challenges for all. Even in this uninviting environment, we made progress in our ongoing strategic review process with the successful completion of the sale of our universal remote control and secured transaction businesses. This has in essence been a milestone year for us as we completed the right-sizing of the company, improved our financial strength and continued to expand our product portfolio," said
For the fiscal year ended
The company expects net sales for its 2010 fiscal first quarter ending
NON-GAAP FINANCIAL INFORMATION (Unaudited)
The Company may make reference to certain Non-GAAP financial measures. Management believes that these Non-GAAP measures are useful measures of operating performance and liquidity because they may exclude the impact of certain items, such as amortization of intangible assets, stock-based compensation, depreciation, non-operating interest, income taxes and special charges. However, these Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net income (loss) and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP.
Three Months Ended
Mar. 31, Dec. 27, Sep. 27, Jun. 28, Mar. 31,
2009 2008 2008 2008 2008
(in thousands)
Reconciliation of Non-GAAP Net
Loss to GAAP Net Loss
Non-GAAP net loss from
continuing operations ($1,767) ($2,888) ($2,545) ($2,382) ($3,001)
Non-GAAP adjustments:
Special charges and credits 3,479 1,696 554 590 511
Amortization of intangible
assets 174 209 209 209 209
Non-cash stock-based
compensation COS 21 44 30 42 35
Non-cash stock-based
compensation R&D (24) 126 47 72 36
Non-cash stock-based
compensation SG&A 201 297 211 257 (205)
Total non-GAAP adjustments 3,851 2,372 1,051 1,170 586
GAAP Net loss from continuing
operations (5,618) (5,260) (3,596) (3,552) (3,587)
Non-GAAP Net Loss (Unaudited)
Non-GAAP net loss excludes special charges and non-cash charges relating to the amortization of intangible assets and stock-based compensation. We believe that Non-GAAP net loss is a useful measure as it excludes certain special charge items as well as certain non-cash charges, which facilitates a comparison of the Company's operating performance. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, the net loss measured in accordance with GAAP.
Three Months Ended
Mar. 31, Dec. 27, Sep. 27, Jun. 28, Mar. 31,
2009 2008 2008 2008 2008
(in thousands)
Reconciliation of Net Loss
and Cash Flows From Operating
Activities to EBITDA
Reconciliation of net loss
to EBITDA:
Net loss from continuing
operations ($5,618) ($5,260) ($3,596) ($3,552) ($3,587)
Depreciation and
amortization 626 675 687 645 723
Interest income (4) (24) (49) (70) (155)
Provision for income taxes (2) 67 62 54 78
EBITDA from continuing
operations ($4,998) ($4,542) ($2,896) ($2,923) ($2,941)
Reconciliation of EBITDA to
net cash provided by (used in)
operating activities:
EBITDA ($4,998) ($4,542) ($2,896) ($2,923) ($2,941)
Provision for income
taxes 2 (67) (62) (54) (78)
Interest income (4) (24) (49) (70) (155)
Non-cash stock-based
compensation 198 467 288 371 (134)
Loss on disposition of
operating assets 985 11 - 34 78
Changes in other operating
assets and liabilities (4,295) (716) (706) 4,056 (384)
Net cash provided by (used in)
continuing operating
activities ($8,112) ($4,871) ($3,425) $1,414 ($3,614)
Non-GAAP EBITDA (Unaudited)
Management believes that Non-GAAP EBITDA ("EBITDA"), that is Earnings or loss Before Interest, Taxes, Depreciation and Amortization, is a useful measure of financial performance. We believe that the disclosure of EBITDA helps investors more meaningfully evaluate our liquidity position by the elimination of non-cash related items such as depreciation and amortization. We believe that our investor base regularly uses EBITDA as a measure of the liquidity of our business. Our management uses EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital.
Three Months Ended
Mar. 31, Dec. 27, Sep. 27, Jun. 28, Mar. 31,
2009 2008 2008 2008 2008
(in thousands)
Reconciliation of Net Loss
and Cash Flows From Operating
Activities to Adjusted EBITDA
Reconciliation of net loss to
Adjusted EBITDA:
Net loss from continued
operations ($5,618) ($5,260) ($3,596) ($3,552) ($3,587)
Depreciation and
amortization 626 675 687 645 723
Interest income (4) (24) (49) (70) (155)
Provision for income taxes (2) 67 62 54 78
Special charges and
credits 3,479 1,696 554 590 511
Non-cash stock-based
compensation 198 467 288 371 (134)
Adjusted EBITDA ($1,321) ($2,379) ($2,054) ($1,962) ($2,564)
Reconciliation of Adjusted
EBITDA to net cash provided
by (used in) operating
activities:
Adjusted EBITDA ($1,321) ($2,379) ($2,054) ($1,962) ($2,564)
Special charges and
credits (3,479) (1,696) (554) (590) (511)
Provision for income
taxes 2 (67) (62) (54) (78)
Interest income (4) (24) (49) (70) (155)
Loss on disposition of
operating assets 985 11 - 34 78
Changes in other operating
assets and liabilities (4,295) (716) (706) 4,056 (384)
Net cash provided by (used
in) operating activities ($8,112) ($4,871) ($3,425) $1,414 ($3,614)
Non-GAAP Adjusted EBITDA (Unaudited)
EBITDA reflects our Earnings or loss Before Interest, Taxes, Depreciation and Amortization. Additionally, management uses separate "Adjusted EBITDA" calculations for purposes of determining certain employees' incentive compensation and, subject to meeting specified Adjusted EBITDA amounts, for accelerating the vesting of EBITDA-linked stock options. Adjusted EBITDA, as we define it, excludes interest, income taxes, effects of changes in accounting principles and non-cash charges such as depreciation, amortization, in-process research and development, and stock-based compensation expense. It also excludes cash and non-cash charges associated with reorganization items and special charges and credits, which represent operational restructuring charges, including asset write-offs, employee termination costs, relocation costs and lease termination costs. Adjusted EBITDA also excludes changes in operating assets and liabilities, which are included in net cash provided by (used in) operating activities. Our management uses Adjusted EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. This Non-GAAP Adjusted EBITDA measure allows management to monitor cash generated from the operations of the business. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net loss and net cash provided or used in operating activities prepared in accordance with GAAP.
About Zilog, Inc.
Zilog is a trusted supplier of application specific, embedded system-on-chip (SoC) solutions for the industrial and consumer markets. From its roots as an award-winning architect in the microprocessor and microcontroller industry, Zilog has evolved its expertise beyond core silicon to include SoCs, single board computers, application specific software stacks and development tools that allow embedded designers quick time to market in areas such as energy management, monitoring and metering and motion detection. For more information, visit http://www.zilog.com/. EZ80ACCLAIM!, Zilog, Z8, Z80, eZ80, Z8 ENCORE!, Encore!XP and Zneo are registered trademarks of Zilog, Inc. in
Other product and or service names mentioned herein may be trademarks of the companies with which they are associated.
Cautionary Statements
This release contains forward-looking statements (including those related to its expectations for the
Notwithstanding changes that may occur with respect to customer matters relating to the forward-looking statements, the company does not expect to, and disclaims any obligation to update such statements until release of its next quarterly earnings announcement or in any other manner. The company, however, reserves the right to update such statement, or any portion thereof, at any time for any reason.
The financial information presented herein is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Form 10-K for the fiscal year ended
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended
Contact:
Daniel Francisco
Francisco Group
Zilog Communications
(916) 812-8814
Source: Zilog, Inc. www.Zilog.com
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data and percentages)
Three Months Ended Twelve Months Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2009 2008 2009 2008
Net sales $ 7,044 $ 10,138 $ 36,157 $ 44,644
Cost of sales 4,379 5,884 21,815 25,035
Gross margin 2,665 4,254 14,342 19,609
Gross margin % 38% 42% 40% 44%
Operating expenses:
Research and development 1,117 2,307 6,265 8,296
Selling, general and
administrative 3,442 4,760 19,353 19,269
Special charges and credits 3,479 511 6,318 1,974
Amortization of intangible assets 174 209 801 961
Total operating expenses 8,212 7,787 32,737 30,500
Operating loss (5,547) (3,533) (18,395) (10,891)
Other income:
Other income (expense) (77) (131) 403 (350)
Interest income 4 155 148 819
Loss before provision for
income taxes (5,620) (3,509) (17,844) (10,422)
Provision for income taxes (2) 78 181 863
Net loss from continuing
operations $ (5,618) $ (3,587) $(18,025) $(11,285)
Net income (loss) from
discontinued operations (3,826) 1,645 (384.0) 1,994
Gain on sale of discontinued
operations, net of tax 21,606 - 21,606 -
Net income (loss) $ 12,162 $ (1,942) $ 3,197 $ (9,291)
Basic and diluted net loss
per share $ 0.71 $ (0.11) $ 0.19 $ (0.55)
Weighted-average shares used in
computing basic and diluted
net loss per share 17,171 16,923 17,111 16,893
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, March 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 32,230 $ 16,625
Accounts receivable, net 1,698 2,203
Inventories 4,022 6,908
Deferred tax asset 10 263
Prepaid expenses and other current assets 5,995 1,266
Current assets associated with
discontinued operations 960 6,533
Total current assets 44,915 33,798
Long term investments 1,100 1,925
Property, plant and equipment, net 2,347 4,594
Goodwill 2,211 2,211
Intangible assets, net - 2,528
Other assets 1,079 581
Non current assets associated with
discontinued operations - 2,203
Total assets $ 51,652 $ 47,840
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term debt $ 346 $ 720
Accounts payable 4,368 5,508
Income taxes payable 195 513
Accrued compensation and employee
benefits 1,349 2,312
Other accrued liabilities 2,550 2,086
Deferred income 8,024 5,571
Current liabilities associated with
discontinued operations 1,256 2,733
Total current liabilities 18,088 19,443
Deferred tax liability 10 263
Other non-current tax liabilities 1,928 1,255
Total liabilities 20,026 20,961
Stockholders' equity:
Common stock 186 185
Additional paid-in capital 127,436 125,838
Treasury stock (7,563) (7,456)
Other comprehensive income 173 102
Accumulated deficit (88,606) (91,790)
Total stockholders' equity 31,626 26,879
Total liabilities and stockholders'
equity $ 51,652 $ 47,840
Zilog, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
Mar. 31, Mar. 31,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (18,025) $ (11,285)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,832 2,115
Disposition of operating assets 1,032 318
Non-cash stock-based compensation 1,324 713
Amortization of fresh-start intangible assets 801 961
Impairment of intangible assets 1,727 -
Changes in operating assets and liabilities:
Accounts receivable, net 505 1,293
Inventories 759 901
Prepaid expenses and other current
and non-current assets (5,160) 1,925
Accounts payable (1,140) 157
Accrued compensation and employee benefits (963) (418)
Deferred income 2,453 (1,392)
Accrued and other current and non-current
liabilities (138) (808)
Net cash provided by (used in) operating activities (14,993) (5,520)
Net cash provided by discontinued operating
activities 6,066 3,901
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of assets held for sale - MOD II
property - 3,237
Proceeds from sale of discontinued businesses,
net of transaction costs 24,695 -
Redemption of long term investments 825 -
Investment in long term securities - (1,925)
Capital expenditures (626) (1,299)
Net cash provided by (used in) investing activities 24,894 13
Net cash used in discontinued investing activities - (2,076)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short term debt 660 720
Payments on short term debt (1,034) -
Repurchase of restricted shares (54) (282)
Proceeds from issuance of common stock under
employee stock purchase and stock option
plans 116 470
Net cash provided by (used in) financing activities (312) 908
Net cash provided by (used in) discontinued
financing activities (50) 9
Increase (decrease) in cash and cash equivalents 15,605 (2,765)
Cash and cash equivalents at beginning of period 16,625 19,390
Cash and cash equivalents at end of period 32,230 16,625
Zilog, Inc.
SELECTED UNAUDITED TRENDED FINANCIAL INFORMATION
(Amounts in thousands except percentages, selected
key metrics and per share amounts)
Three Months Ended
Mar. 31, Dec. 27, Sep. 27, Jun. 28, Mar. 31,
2009 2008 2008 2008 2008
Sales & Expenses Information:
Net sales $7,044 $9,035 $10,474 $9,604 $10,138
Cost of sales 4,379 6,091 6,086 5,259 5,884
Gross margin 2,665 2,944 4,388 4,345 4,254
Gross margin % 38% 33% 42% 45% 47%
Operating expenses:
Research and development 1,117 1,657 1,757 1,733 2,307
Selling, general and
administrative 3,442 4,696 5,723 5,492 4,760
Special charges and credits 3,479 1,696 554 590 511
Amortization of intangible
assets 174 209 209 209 209
Total operating expenses 8,212 8,258 8,243 8,024 7,787
Operating loss (5,547) (5,314) (3,855) (3,679) (3,533)
Interest income 4 24 49 70 155
Other income (expense) (77) 97 272 111 (131)
Loss before provision for
income taxes (5,620) (5,193) (3,534) (3,498) (3,509)
Provision for income taxes (2) 67 62 54 78
Net loss from continuing
operations (5,618) (5,260) (3,596) (3,552) (3,587)
Net profit (loss) from
discontinued operatons (3,826) (408) 2,039 1,811 1,645
Gain (loss) from sale of
discontinued oprations,
net of tax 21,606 - - - -
Net profit (loss) $12,162 ($5,668) ($1,557) ($1,741) ($1,942)
Weighted average basic and
diluted shares 17,171 17,071 16,949 16,948 16,923
Basic and diluted net loss
per share $0.71 ($0.33) ($0.09) ($0.10) ($0.11)
Net Sales Information:
Net Sales - by channel
Direct $1,536 $1,625 $2,404 $1,629 $2,056
Distribution 5,508 7,410 8,070 7,975 8,082
Total net sales $7,044 $9,035 $10,474 $9,604 $10,138
Net Sales - by region
America's $2,975 $3,569 $3,783 $3,961 $4,194
Asia (including Japan) 2,571 4,046 4,899 3,563 4,071
Europe 1,498 1,420 1,792 2,080 1,873
Total net sales $7,044 $9,035 $10,474 $9,604 $10,138
Selected Key Metrics (as defined in our Form 10-Q and 10-K)
Days sales outstanding 35 39 34 37 37
Net sales to inventory ratio
(annualized) 7.0 8.0 7.5 5.9 5.9
Current ratio 2.5 1.5 1.6 1.5 1.7
Other Selected Financial Metrics
Depreciation and amortization
(excluding intangibles) $452 $466 $478 $436 $514
Amortization of fresh-start
intangibles $174 $209 $209 $209 $209
Stock based compensation $198 $467 $288 $371 ($134)
Capital expenditures $107 $82 $78 $359 $403
Cash and cash equivalents $32,230 $13,560 $16,899 $17,829 $16,625
Long term investments $1,100 $1,300 $1,450 $1,500 $1,925
Cash and long term
investments $33,330 $14,860 $18,349 $19,329 $18,550
Short term debt $346 $693 $1,039 $1,385 $720
Cash and long term
investments, net of debt $32,984 $14,168 $17,310 $17,944 $17,830
SOURCE Zilog, Inc.
