SSTI SoundThinking Inc

SUNNYVALE, Calif., Dec. 17 /PRNewswire-FirstCall/ -- SST (Silicon Storage Technology, Inc.) (NASDAQ:SSTI), a leader in flash memory technology, today announced that, as a result of weakening demand caused by the rapid slowdown in the global economy over the past several weeks, the company now expects revenue for the fourth quarter of 2008, based on information currently available, to be in the range of $56 to $58 million, versus previous estimates of between $63 to $68 million. SST also announced that it is implementing a global reorganization to reflect changes in anticipated levels of business. This action is being taken to further reduce costs of operations, to streamline the organization going forward, and to improve focus on expediting selective new products to the marketplace. SST will reduce its headcount by approximately 120, or 17 percent of its global workforce and expects most of the reduction to be completed by year-end. SST expects to incur a restructuring charge of approximately $2.8 million, nearly all of which is related to estimated severance costs associated with the workforce reduction. The workforce reduction and other restructuring actions are expected to reduce payroll-related expenses by approximately $13 million in 2009. The GAAP net loss for the fourth quarter is now expected to be in the range of $0.13 to $0.11 per diluted share with a Non-GAAP net loss, excluding the restructuring charges discussed above, in the range of $0.10 and $0.09 per diluted share. The company had previously estimated a GAAP net loss in the range of $0.12 and $0.07 per diluted share. A reconciliation of GAAP and non-GAAP estimates is presented below. Additional charges related to inventory reserves, impairment of goodwill or other assets could adversely affect the company's estimates. "The recent rapid deterioration in worldwide macroeconomic conditions has resulted in a significant decline in consumer spending, which continues to have a strong impact on sales across all of our product categories," said Bing Yeh, president and CEO. "Considering the uncertainty over how prolonged this downturn will be, we are taking decisive and necessary actions to control our costs and to reduce our workforce in order to align our organization to the realities of the current demand environment. This action is taking place in all locations worldwide, across all product lines and in all functional areas of our company. This reduction in workforce will not change in any way our continuous focus on supporting the current and future requirements of our customer base and investing appropriately in our technology roadmap in order to enhance our competitive position. We believe that we can achieve these goals even more effectively by streamlining our organization and strategically reallocating our resources, while improving our profitability at the same time. Over the past 19 years, we have established ourselves as an industry leader with superior SuperFlash technology, deep customer relationships and a talented team of employees dedicated to a common goal of excellence. In recent years, we have also successfully launched strategic initiatives and began to ramp up our new products in RF power amplifier and NANDrive solid-state storage devices. Our fabless business model, in conjunction with our technology leadership, has been resilient during past business cycle downturns. We are confident in our ability to weather this downturn and look forward to emerging even stronger from this challenging environment." About Silicon Storage Technology, Inc. Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of memory and non-memory products for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. Leveraging its proprietary, patented SuperFlash technology, SST is a leading provider of nonvolatile memory solutions with product families that include various densities of high functionality flash memory components and flash mass storage products. The company also offers its SuperFlash technology for embedded applications through its broad network of world-class manufacturing partners and technology licensees, including TSMC, which offers it under its trademark Emb-FLASH. SST's non-memory products include NAND controller-based products, smart card ICs and modules, flash microcontrollers and radio frequency ICs and modules. Further information on SST can be found on the company's Web site at http://www.sst.com/. Non-GAAP Financial Measures SST continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, SST uses non-GAAP financial information to evaluate its ongoing operations and for internal planning purposes. SST's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. SST presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate SST's operating results in a manner that focuses on what SST believes to be its ongoing business operations. SST's management believes it is useful for itself and investors to review, as applicable, both GAAP net loss figures that include restructuring charges, and the non-GAAP measures that exclude such restructuring charges in order to assess the performance of SST's business and for planning and forecasting in subsequent periods. Whenever SST uses such a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure. Forward-Looking Statements Except for the historical information contained herein, this news release contains forward-looking statements regarding the timing and execution of the workforce reduction, number of positions impacted worldwide, expected charges related to the workforce reduction, impact of the workforce reduction and other restructuring actions on SST's future financial results, memory and non-memory market conditions, SST's future financial performance, the launch, design cycle and performance of new products, and SST's ability to bring new products to market, all of which involve risks and uncertainties. These risks may include our ability to execute the workforce reduction and other restructuring actions, negative consequences from our workforce reduction and other restructuring actions such as disruptions to our business, our ability to control costs and realize savings from the workforce reduction, the impact of future inventory reserve charges, impairments of goodwill and other assets, the timely development, acceptance and pricing of new products, the terms, the impact of competitive products and pricing, and general economic conditions as they affect SST's customers, as well as other risks detailed from time to time in the company's periodic reports, including the Annual Report on Form 10-K for the year ended December 31, 2007 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, SST disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. For more information about SST and the company's comprehensive list of product offerings, please call 1-888/SST-CHIP. Information can also be requested via email to or through SST's Web site at http://www.sst.com/. SST's head office is located at 1171 Sonora Court, Sunnyvale, Calif.; telephone: 408/735-9110; fax: 408/735-9036. The SST logo and SuperFlash are registered trademarks, and NANDrive is a trademark of Silicon Storage Technology, Inc. All other trademarks or registered trademarks are the property of their respective holders. For More Information Contact: Leslie Green Green Communications Consulting, LLC (650) 312-9060 SILICON STORAGE TECHNOLOGY, INC. NON-GAAP RECONCILIATION OF ESTIMATED NET LOSS PER SHARE (unaudited) Three Months Ended December 31, 2008 High Low ----- ----- Estimated GAAP net loss per share $0.13 $0.11 ----- ----- Non-GAAP adjustments to net loss per share Restructuring charges (a) 0.03 0.03 ----- ----- Estimated Non-GAAP net loss (b) $0.10 $0.09 ===== ===== (a) Restructuring charges paid or accrued in the three months ended December 31, 2008 (b) Amounts may not add due to rounding DATASOURCE: Silicon Storage Technology, Inc. CONTACT: CONTACT: Leslie Green of Green Communications Consulting, LLC, +1-650-312-9060, for Silicon Storage Technology, Inc. Web Site: http://www.sst.com/

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