SSTI SoundThinking Inc

SUNNYVALE, Calif., April 28 /PRNewswire-FirstCall/ -- SST (Silicon Storage Technology, Inc.) (NASDAQ:SSTI), a leader in flash memory technology, today announced results for the first quarter, ended March 31, 2009. Net revenues for the first quarter were $50.1 million compared with $58.4 million in the fourth quarter of 2008 and with $81.1 million in the first quarter of 2008. Product revenues for the first quarter of 2009 were $38.8 million, compared with $46.3 million in the fourth quarter of 2008 and with $69.7 million in the first quarter of 2008. Revenues from technology licensing for the first quarter were $11.3 million, compared with $12.1 million in the fourth quarter of 2008 and with $11.4 million in the first quarter of 2008. Loss from operations for the first quarter was $6.3 million compared with a loss from operations of $10.8 million in the fourth quarter of 2008 and with a loss from operations of $4.6 million in the first quarter of 2008. Net loss for the first quarter of 2009 was $9.2 million, or $0.10 per share, based on approximately 95.7 million diluted shares. By comparison, in the fourth quarter of 2008, the company recorded a net loss of $36.6 million, or $0.38 per share, based on approximately 95.5 million diluted shares. Included in the fourth quarter 2008 net loss were restructuring charges of $2.5 million, an impairment charge related to the company's investment in Grace Semiconductor Manufacturing Corporation of $11.6 million and an impairment charge related to the company's investment in ACET of $9.7 million. For the first quarter of 2008, SST reported net income of $1.5 million, or $0.01 per share based on approximately 104.0 million diluted shares. SST finished the first quarter of 2009 with $125.7 million in cash, cash equivalents, short-term investments, and long-term marketable debt securities, down approximately $6.0 million from $131.7 million at December 31, 2008. Management Qualitative Comments "We are encouraged by the better than expected first quarter revenues given the current challenging economic environment," said Bing Yeh, president and CEO. "As we progressed through each month during the first quarter, we received more short-term purchase orders in memory products than we had initially projected. We had good results in our non-memory products, as well. However, ASP pressures, particularly in commodity memory, continue to impact gross margin performance and are likely to persist for several quarters. This pressure is the result of both weak end-market demand and manufacturing over-capacity in our industry. Therefore, our focus continues to be on executing our strategy of diversification and advancement of our technology roadmap, while reducing our inventory and streamlining our expenditures. In fact, as a result of our restructuring, our operating expenses decreased substantially in the first quarter. We are actively working towards the goal of returning the company to profitability and are managing our assets conservatively through this period." Second Quarter 2009 Outlook SST expects its second quarter revenues to be between $50 million and $56 million. Gross margin is expected to be between 25 and 28 percent, subject to the risk of changing market conditions. Total operating expenses are expected to be between $22 million and $24 million. Net loss per share is expected to be between $0.12 and $0.08. Conference Call Dial-in Information SST will hold a conference call to discuss its financial results today at 1:30 p.m. PT. Those wishing to participate in the conference call should dial (800) 230-1092, international participants please dial (612) 288-0340, using the password "SST" at approximately 1:20 p.m. PT. A replay of the call will be available for one week by dialing (800) 475-6701, international participants dial (320) 365-3844, using the access code 996784. A webcast replay of the conference call will be available until the company's next conference call on the company's Web site at http://www.sst.com/events. 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/. Forward-Looking Statements Except for the historical information contained herein, this news release contains forward-looking statements regarding memory and non-memory market conditions, SST's future financial performance, including the ability to control expenses, the launch, design cycle and performance of new products, SST's licensing business, SST's ability to diversify its business, the transition of SST's products to smaller geometrics, and SST's ability to bring new products to market, all of which involve risks and uncertainties. These risks may include timely development, acceptance and pricing of new products, the terms, conditions and revenue recognition issues associated with licensees' royalty payments, 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, 2008 and other reports filed from time to time with the Securities and Exchange Commission. 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 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 -- FINANCIAL TABLES TO FOLLOW -- Silicon Storage Technology, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (unaudited) (in thousands, except per share data) Three Months Ended March 31, ---------------- 2008 2009 ---- ---- Net revenues: Product revenues $69,698 $38,787 Technology licensing 11,387 11,342 ------ ------ Total net revenues 81,085 50,129 Cost of revenues 55,376 34,535 ------ ------ Gross profit 25,709 15,594 ------ ------ Operating expenses: Research and development 15,612 11,414 Sales and marketing 7,483 4,960 General and administrative 7,183 5,160 Other - 329 - --- Total operating expenses 30,278 21,863 ------ ------ Loss from operations (4,569) (6,269) Other income, net 874 497 --- --- Loss before provision for (benefit from) income taxes and pro rata share of loss from equity investments (3,695) (5,772) Provision for (benefit from) income taxes (7,050) 2,874 ------ ----- Income (loss) before pro rata share of loss from equity investments 3,355 (8,646) Pro rata share of loss from equity investments 1,896 595 ----- --- Net income (loss) $1,459 $(9,241) ====== ======= Net income (loss) per share - basic $0.01 $(0.10) ===== ====== Shares used in per share calculation - basic 103,602 95,706 ======= ====== Net income (loss) per share - diluted $0.01 $(0.10) ===== ====== Shares used in per share calculation - diluted 104,014 95,706 ======= ====== Silicon Storage Technology, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands) December 31, March 31, 2008 2009 ---- ---- ASSETS Current assets: Cash and cash equivalents $50,880 $34,361 Short-term investments 48,997 55,438 Trade accounts receivable, net 20,117 26,371 Inventories 54,159 42,400 Other current assets 4,153 4,487 ----- ----- Total current assets 178,306 163,057 Property and equipment, net 18,913 17,014 Long-term marketable equity investments 18,196 21,608 Long-term marketable debt securities 31,848 35,876 Goodwill and intangible assets, net 14,794 13,934 Other assets 26,426 26,184 ------ ------ Total assets $288,483 $277,673 ======== ======== LIABILITIES Current liabilities: Trade accounts payable $19,146 $16,499 Accrued expenses and other liabilities 14,200 10,254 Deferred revenue 3,841 2,998 ----- ----- Total current liabilities 37,187 29,751 Other liabilities 8,082 9,608 ----- ----- Total liabilities 45,269 39,359 ------ ------ SHAREHOLDERS' EQUITY Common stock 412,312 413,583 Accumulated other comprehensive income 14,308 17,378 Accumulated deficit (183,406) (192,647) -------- -------- Total shareholders' equity 243,214 238,314 ------- ------- Total liabilities and shareholders' equity $288,483 $277,673 ======== ======== Silicon Storage Technology, Inc. and Subsidiaries Supplemental Data Percentage of Gross Product Change in Revenue Revenue ------------- ------- 1Q08 to 4Q08 to 1Q08 4Q08 1Q09 1Q09 1Q09 ---- ---- ---- ---- ---- Product Revenue By Ship-To Location North America 8% 8% 6% (61%) (41%) Total International 92% 92% 94% (44%) (16%) Europe 8% 7% 7% (51%) (14%) Japan 8% 13% 7% (51%) (53%) Korea 8% 8% 3% (78%) (70%) China and Taiwan 58% 54% 68% (37%) 3% Other Far East 10% 10% 9% (52%) (24%) Product Revenue by Application Digital Consumer 27% 26% 29% (47%) (12%) Internet Computing 23% 24% 22% (46%) (21%) Networking 12% 11% 17% (18%) 26% Wireless Communications 38% 39% 32% (58%) (36%) Total 100% 100% 100% (46%) (18%) Licensing Revenue as a % of Total Revenue 14% 21% 23% (1%) (6%) DATASOURCE: Silicon Storage Technology, Inc. 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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