ISSI Announces Fourth Quarter And Fiscal 2014 Results

MILPITAS, Calif., Oct. 29, 2014 — (PRNewswire) —  Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported financial results for the fourth quarter and fiscal year ended September 30, 2014.

Fourth Fiscal Quarter and Recent Highlights:

  • Reported total revenue of $84.2 million, compared to $84.8 million in the third fiscal quarter of 2014 and $78.4 million in the fourth fiscal quarter of 2013;
  • Automotive revenue increased 8.7% sequentially;
  • Gross margin was 35.3%, compared to 34.5% in the third fiscal quarter of 2014 and 33.1% in the fourth fiscal quarter of 2013;
  • GAAP net income was $0.09 per diluted share and non-GAAP net income was $0.18 per diluted share – both GAAP and non-GAAP EPS include a $0.03 per share tax rate charge;
  • Generated $11.4 million in cash flow from operations and ended the quarter with cash and short-term investments of $140.0 million; and
  • Executed an agreement with Spansion Inc. to develop and supply HyperRamâ„¢ products.

Fiscal Year 2014 Highlights:

  • Revenue grew to $329.0 million, an increase of 7.0% compared to fiscal 2013;
  • Automotive revenue increased 10.8% and IMM revenue increased 33.5% over the prior year;
  • GAAP net income was $23.3 million, or $0.74 per diluted share, and non-GAAP net income was $26.4 million, or $0.83 per diluted share;
  • Announced the industry's first 115C DRAM for automotive applications, an 8Gb DDR3/DDR3L solution for communications customers and an expanded high performance Serial NOR Flash product line;
  • Realized aggregate gains of $9.2 million on sales of a portion of the Company's shares of Nanya Technology Corporation; and
  • Announced a quarterly cash dividend program, with a dividend of $0.06 per share paid on August 15, 2014 and a dividend of $0.06 per share to be paid on November 21, 2014, to stockholders of record as of November 10, 2014.

"During the fourth quarter, revenue continued to grow in our automotive and IMM end markets, which represented approximately 70% of our revenue, while our communications and consumer markets declined due to greater than anticipated weakness in Asia combined with wafer shortages from one of our flash foundries," said Scott Howarth, ISSI's President and CEO. "Over the past year, IMM revenue grew 34% as key global customers transitioned volume to ISSI in recognition of our increasing role as a strategic long-term supplier.  We also continued to grow revenue in the automotive market as we expanded our automotive product offerings with high density DDR2 and DDR3, plus flash and analog solutions.

"Looking ahead to fiscal 2015, we believe we are well positioned for growth across our markets. Our expanded specialty memory portfolio has been a key contributor to increases in market share and customer penetration, particularly with automotive and industrial accounts. Although it is too early to predict a rebound in the communications market, we continue to see strong design activity that should prove beneficial to ISSI when the market returns to growth. We remain focused on continued growth, improved profitability and strong cash generation to support our dividend program and create increasing value for our stockholders."

Fourth Fiscal Quarter 2014 Results
Revenue in the fourth fiscal quarter ended September 30, 2014 was $84.2 million, compared to $84.8 million in the third quarter of 2014 and $78.4 million in the fourth fiscal quarter of 2013. Revenue in the fourth fiscal quarter of 2014 consisted of $76.2 million of SRAM and DRAM revenue, $5.9 million of NOR flash revenue, and $2.1 million of analog revenue. SRAM and DRAM revenue increased 9.0% over the September 2013 quarter.

GAAP gross margin in the fourth fiscal quarter was 35.3%, compared to 34.5% in the June 2014 quarter and 33.1% in the September 2013 quarter.

GAAP net income in the fourth fiscal quarter of 2014 was $2.8 million, or $0.09 per diluted share, compared to GAAP net income of $6.2 million, or $0.19 per diluted share, in the June 2014 quarter and GAAP net income of $4.7 million, or $0.15 per share, in the September 2013 quarter.

Non-GAAP net income in the September 2014 quarter was $5.8 million, or $0.18 per diluted share, compared to $7.9 million, or $0.25 per diluted share, in the June 2014 quarter and $6.1 million, or $0.20 per diluted share, in the September 2013 quarter.

Our GAAP and non-GAAP net income per share in the September 2014 quarter were each reduced by $0.03 per share due to adjustments to the income tax rate as a result of a greater than expected portion of profit in higher tax jurisdictions.

Non-GAAP results exclude stock based compensation, amortization of intangibles related to acquisitions, gains on the sales of investments, and non-cash tax expense related to the utilization of previously recorded deferred tax assets. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Fiscal 2014 Results:
Revenue for the fiscal year ended September 30, 2014 was $329.0 million, an increase of 7.0% from $307.6 million in fiscal 2013. DRAM and SRAM revenue in fiscal 2014 was $294.2 million, an increase of 9.2% from fiscal 2013. GAAP gross margin in fiscal 2014 was 34.1%, compared to 33.0% in fiscal 2013.

GAAP net income in fiscal 2014 was $23.3 million, or $0.74 per share, compared to GAAP net income in fiscal 2013 of $17.5 million, or $0.59 per diluted share. Non-GAAP net income in fiscal 2014 was $26.4 million, or $0.83 per diluted share, compared to $24.2 million, or $0.81 per diluted share, in fiscal 2013.

Cash, cash equivalents and short-term investments totaled $140.0 million at September 30, 2014, compared with $141.6 million at September 30, 2013. 

Dividend Payment
The ISSI Board of Directors has approved a dividend of $0.06 per share to be paid on November 21, 2014, to stockholders of record as of November 10, 2014 .

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