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Financial Releases
Simtek Reports 66% Product Revenue Growth and $0.02 per Share Ex-Item Profit for First Quarter 2007
- Product Revenue Increases 66% Year-Over-Year
- Ex-Item Profit of $321 Thousand Versus Ex-Item Loss of $20 Thousand in Q106
- Ex-Item EPS $0.02 Per Share Versus Ex-Item Loss Per Share of ($0.00) in Q106
- Revenue Guidance set at $8.2 - $8.5 million for Q207
- Revenue Guidance set to be more than $40 million for 2007
COLORADO SPRINGS, Colo., April 26 /PRNewswire-FirstCall/ -- Simtek Corporation (Nasdaq: SMTK - News), the inventor, pioneer, and world's premier supplier of nonvolatile static random access memory (nvSRAM) integrated circuits, today announced its financial results for the first quarter ended March 31, 2007.
First Quarter Highlights
- Product revenue of $7.9 million, a 66% increase over Q106
- Gross product margin increased to 43.6% from 26.8% a year ago
- Ex-item profit of $321 thousand compared to ex-item loss of
$20 thousand in Q106
- Second quarter revenue guidance of $8.2 - $8.5 million up sequentially
4% to 8% and up 28% to 33% compared to last year's second quarter
- Revenue guidance for the year set to exceed $40 million resulting in
growth of more than 40% vs. 2006
- More than 30 new design wins in the first quarter, many from new
customers
- Company approved for NASDAQ listing
Financial Results
Total revenue for the first quarter of 2007 was $7.9 million, consisting entirely of product revenue, representing a 66% increase over product revenue of $4.7 million in Q106. Revenue was reduced due to inventory returned by a distributor terminated by the Company in the quarter. The Company reported ex-item net income for the first quarter of $321 thousand, or $0.02 per share, compared to an ex-item net loss of $20 thousand, or ($0.00) per share in Q106. The 2006 net loss includes the benefit of the $1.0 million of royalty revenue received from Cypress Semiconductor. There was no such revenue in the 2007 period. Ex-item income excludes the effects of stock options, amortization of acquisition related costs, contractual milestone payments to Cypress Semiconductor to be paid from the restricted cash account, and costs associated with the new strategic business opportunity. On a GAAP basis, the Company reported a net loss for the 2007 period of $490 thousand or ($.03) per share compared to a loss of $901 thousand or ($0.06) per share for the comparable 2006 period.
All per share amounts reflect the effect of the 1 for 10 reverse stock split that was completed on October 5, 2006.
Simtek delivered strong revenue growth in the first quarter compared to a year ago. Simtek, like many of its peers, experienced normal seasonality and a slow down in orders from customers in the RAID-storage market in Q42006 and Q12007 resulting in a dip in sequential revenue.
"Simtek has diversified its customer and industry base to help insulate the Company from the volatility in the storage industry. During the quarter, we continued to add new design wins in non-storage market segments and also added a new distributor in Japan with strong relationships with non-storage electronic component designers. As a result of this strategy we were still able to deliver strong revenue growth in the first quarter," stated Harold Blomquist, Simtek President and CEO. "We believe this diversification, as well as improving ordering patterns from our storage customers, will allow us to deliver strong revenue growth year-over-year. We anticipate sequential growth in the second quarter and the remainder of the year as we see the industry gradually rebounding. We are revising our guidance for the year to take the industry wide slowdown into account."
"Also during the quarter, we completed the design and verification process for our first fully integrated version of our 4-megabit nvSRAM. We've handed the design off to Cypress for initial silicon manufacturing. We are working closely with a select group of beta customers and are seeing high levels of interest in this new and exciting product. We anticipate having production ready devices by the end of the year," concluded Mr. Blomquist.
Outlook for 2007
For 2007, Simtek is revising its product revenue guidance to be in excess of $40 million, an increase of more than 40% year over year, and anticipates that Q207 product revenue will be in the range of $8.2 to $8.5 million, showing both sequential growth of 4% to 8% as well as growth between 28% and 33% compared to the second quarter of 2006. The Company does not expect any royalty revenue in 2007. Gross margins are projected to increase to approximately 50% by the end of 2007. Ex-item profit for 2007 is expected to be in the range of $0.23-$0.29 per share.
Ex-Item Earnings
Simtek reports net income or loss in accordance with GAAP and additionally uses ex-item financial measures which are adjusted from the most directly comparable GAAP financial measures to exclude charges related to non-cash, unusual or non-recurring expenses the Company may incur from time to time, in order to provide additional comparative information between periods. Management believes that these ex-item measures are important to investor understanding of the Company's disclosures regarding past, current and future operating results. Following is reconciliation* of the Ex-item financial measures to the most comparable GAAP financial measures:
Unaudited
(Amounts in thousands, except per share amounts)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
Net Loss, as reported $(490) $(901)
Adjusted-GAAP items:
Expense Related to New Strategic Business 86 --
Contractual Milestone Payments to be Paid
from Restricted Cash -- 314
Amortization of Non-compete Agreement 446 448
Costs associated with employee stock options 279 119
Ex-item Net Income (Loss) $321 $(20)
Per Share Data:
Net Loss, as reported $(0.03) $(0.06)
Adjusted-GAAP items:
Expense Related to New Strategic Business $-- $--
Contractual Milestone Payments to be Paid from
Restricted Cash $-- $0.02
Amortization of Non-compete Agreement $0.03 $0.03
Costs associated with employee stock options $0.02 $0.01
Ex-item Net Income (Loss) Per Share $0.02 $(0.00)
* pursuant to the requirements of Regulation G.
Conference Call
Simtek management will host a conference call at 5:00 p.m. ET (2:00 p.m. PT) today to discuss these results. The call can be accessed by dialing 866-250-3615 and giving the company name, "Simtek." Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. A replay of the conference call will be available two hours after the call for the following five business days by dialing 800-405-2236 and entering the following pass code: 11088197#. Also, the conference call together with supplemental financial information will be available over the Internet at http://www.simtek.com in the Investor Info area of the site or by going to http://www.mkr-group.com.
About Simtek Corporation
Simtek Corporation designs and markets high-speed nonvolatile semiconductor memory products, for use in a variety of systems including RAID servers, storage arrays, GPS navigational systems, industrial controllers, robotics, copiers, avionics, metering, consumer, UPS, and networking and broadcast equipment. Information on Simtek products can be obtained from its web site: www.simtek.com; email: information@simtek.com. The company is headquartered in Colorado Springs, Colorado.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements predicting Simtek's future growth. These forward-looking statements are inherently difficult to predict and involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, guidance and projections of future performance including predictions of future revenue, profitability, and expectations of the business environment in which Simtek operates. For a detailed discussion of these and other risk factors, please refer to Simtek's filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K and subsequent Form 10-Q and Form 8-K filings.
SIMTEK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value and share amounts)
ASSETS
March 31, December 31,
2007 2006
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents $2,876 $4,522
Restricted investments 1,775 1,775
Accounts receivable - trade, net 4,979 5,537
Inventory, net 8,121 6,596
Prepaid expenses and other current assets 442 312
Total current assets 18,193 18,742
EQUIPMENT AND FURNITURE, net 1,394 1,239
DEFERRED FINANCING COSTS AND DEBT ISSUANCE COSTS 41 54
Goodwill 992 992
NON-COMPETITION AGREEMENT 6,680 7,126
OTHER ASSETS 114 89
TOTAL ASSETS $27,414 $28,242
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $3,949 $3,771
Accrued expenses 934 939
Accrued vacation payable 263 229
Accrued wages 45 814
Line of credit 371 681
Debentures, current 480 480
Total current liabilities 6,042 6,914
DEBENTURES, NET OF CURRENT 2,220 2,220
Total liabilities 8,262 9,134
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $0.0001 par value; 200,000
shares authorized, none issued -- --
Common stock, $.0001 par value; 30,000,000
shares authorized, 16,227,929 and 16,226,929
shares issued and outstanding at March 31, 2007
and 16,146,679 and 16,145,679 shares issued
outstanding at December 31, 2006 2 2
Additional paid-in capital 67,678 67,173
Treasury stock, at cost; 1,000 shares (1) (1)
Accumulated deficit (48,689) (48,198)
Accumulated other comprehensive income:
Cumulative translation adjustment 162 132
Total shareholders' equity 19,152 19,108
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $27,414 $28,242
SIMTEK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except share and per share amounts)
For the three months
ended March 31,
2007 2006
Revenue
Product sales, net $7,867 $4,743
Royalty revenue -- 1,035
Total Revenue 7,867 5,778
Cost of sales 4,435 3,470
GROSS PROFIT 3,432 2,308
OPERATING EXPENSES:
Research and development costs 1,613 1,545
Sales and marketing 1,152 944
General and administrative 1,109 699
Total operating expenses 3,874 3,188
LOSS FROM OPERATIONS (442) (880)
OTHER INCOME (EXPENSE):
Interest income 49 40
Interest expense (98) (60)
Exchange rate variance 12 --
Other expense -- (1)
Total other expense (37) (21)
LOSS BEFORE PROVISION FOR INCOME TAXES (479) (901)
Provision for income taxes (11) --
NET LOSS $(490) $(901)
NET LOSS PER COMMON SHARE:
Basic and diluted $(.03) $(.06)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 16,211,671 14,692,083
For further information, please contact:
Simtek Corp.
Brian Alleman, CFO
investorrelations@simtek.com
MKR Group, Inc.
Marie Dagresto or Todd Kehrli
323-468-2300
smtk@mkr-group.com