ISSI Announces Fourth Quarter And Fiscal 2013 Results

            ISSI Announces Fourth Quarter And Fiscal 2013 Results

PR Newswire

MILPITAS, Calif., Oct. 29, 2013

MILPITAS, Calif., Oct. 29, 2013 /PRNewswire/ --Integrated Silicon Solution,
Inc. (Nasdaq: ISSI) today reported financial results for the fourth quarter
and fiscal year ended September 30, 2013.

Fourth Fiscal Quarter and Recent Highlights:

  oReported total revenue of $78.4 million, compared to $77.8 million in the
    third fiscal quarter of 2013 and $72.5 million in the fourth fiscal
    quarter of 2012;
  oAutomotive revenue increased 9.3% sequentially;
  oGAAP net income was $0.15 per diluted share and non-GAAP net income was
    $0.20 per diluted share;
  oGenerated $11.6 million in cash flow from operations and cash and
    short-term investments grew to $141.6 million; and
  oAnnounced higher density Flash product line covering SPI and Parallel
    flash targeted at automotive, industrial, consumer, computing, and
    communication markets.

Fiscal Year 2013 Highlights:

  oFiscal 2013 revenue grew to $307.6 million, an increase of 15.6% compared
    to fiscal 2012;
  oAutomotive revenue increased 28.2% compared to fiscal 2012;
  oGAAP net income was $17.5 million, or $0.59 per diluted share, and
    non-GAAP net income was $24.2 million, or $0.81 per diluted share;
  oRealized aggregate gains of $12.0 million on sales of a portion of the
    Company's shares of Nanya Technology Corporation ("Nanya"); and
  oGenerated $33.5 million in cash flow from operations during the fiscal
    year.

"Fiscal 2013 reflected a strong year of growth for ISSI, driven primarily by
our automotive business, which represented almost half of our total revenue,"
said Scott Howarth, ISSI's President and CEO. "Our automotive success reflects
both increased market share and significant growth in electronic content per
vehicle. ISSI's design win momentum in applications such as infotainment,
satellite radio, Bluetooth, safety camera systems, displays and telematics
have been the key to our success in this market. We believe we are also well
positioned with more advanced DDR3 products to support even higher performance
solutions in vehicles in the coming years.

"For the year, our consumer end market revenue increased due to the addition
of flash products, and industrial, medical and military ("IMM") revenue
increased slightly in spite of continued weakness in Europe. We significantly
expanded our product portfolio, design activity and customer base in IMM in
fiscal 2013 and believe we are well positioned for future volume increases.
Communications sales declined year-over-year as a result of the weak macro
environment and continued delays in infrastructure investments by carriers.
However, we significantly increased our addressable market with new QUAD SRAM
and RLDRAM^® solutions, which we expect to be key contributors to our
anticipated growth in fiscal 2014. Also notable during the year, we won a
competitive design bid for next generation memory with Cisco Systems, Inc.
significantly expanding our relationship with this important customer, and
expect this design to begin ramping in 2015. As evidenced by our results this
year, our focus on expanding our product portfolio, broadening customer
relationships and being recognized as a key strategic supplier of specialty
memory solutions continued to serve us well."

Fourth Fiscal Quarter 2013 Results
Revenue in the fourth fiscal quarter ended September 30, 2013 was $78.4
million, compared to $77.8 million in the third quarter of 2013 and an
increase of 8.1% from the $72.5 million in the fourth fiscal quarter of 2012.
Revenue in the fourth fiscal quarter of 2013 consisted of $69.9 million of
SRAM and DRAM revenue, $6.4 million of NOR flash revenue, and $2.1 million of
analog revenue. SRAM and DRAM revenue increased 3.6% from the June 2013
quarter and 1.2% from the September 2012 quarter.

GAAP gross margin in the fourth fiscal quarter was 33.1%, compared to 33.5% in
the June 2013 quarter, and 25.3% in the September 2012 quarter. Non-GAAP gross
margin was 33.3%, compared to 33.7% in the June 2013 quarter.

During the fourth fiscal quarter, the Company continued to sell a portion of
the Nanya shares it purchased in September 2012, realizing a gain of $2.9
million. The remaining tradable Nanya shares are classified as short-term
investments since the Company intends to sell such shares within one year.

GAAP income tax expense in the fourth fiscal quarter was $2.7 million,
compared to $5.2 million in the June 2013 quarter and $1.1 million in the
September 2012 quarter.

GAAP net income in the fourth fiscal quarter of 2013 was $4.7 million, or
$0.15 per diluted share, compared to GAAP net income of $7.1 million, or $0.24
per diluted share, in the June 2013 quarter and GAAP net loss of $13.2
million, or $0.48 per share, in the September 2012 quarter.

Non-GAAP net income in the September 2013 quarter was $6.1 million, or $0.20
per diluted share, compared to $6.7 million, or $0.23 per diluted share, in
the June 2013 quarter and $6.9 million, or $0.24 per diluted share, in the
September 2012 quarter.

Our non-GAAP results exclude stock based compensation, amortization of
intangibles related to acquisitions, other acquisition related charges, asset
impairment charges, gains on the sales of investments, impairment of
investment, and non-cash tax expense. A reconciliation of GAAP results to
non-GAAP results is provided in the financial statement tables following the
text of this press release.

Fiscal 2013 Results:
Revenue for the fiscal year ended September 30, 2013 was $307.6 million, an
increase of 15.6% from revenue of $266.0 million in fiscal 2012. DRAM and SRAM
revenue in fiscal 2013 was $269.3 million, an increase of 5.3% from fiscal
2012. GAAP gross margin in fiscal 2013 was 33.0%, compared with 31.2% in
fiscal 2012.

GAAP net income in fiscal 2013 was $17.5 million, or $0.59 per share, compared
to a GAAP net loss in fiscal 2012 of $2.7 million, or $0.10 per diluted share.
Non-GAAP net income in fiscal 2013 was $24.2 million, or $0.81 per diluted
share. This compares to non-GAAP net income of $25.8 million, or $0.89 per
diluted share, in fiscal 2012.

Cash, cash equivalents and short-term investments totaled $141.6 million at
September 30, 2013, compared with $82.0 million at September 30, 2012.

December Quarter Outlook
The Company expects total revenue for the September quarter to range between
$76.0 and $82.0 million, consisting of SRAM and DRAM revenue of between $68.0
million and $72.5 million, NOR flash revenue of between $6.0 million and $7.0
million, and analog revenue of between $2.0 million and $2.5 million. Gross
margin for the December quarter is expected to range between 33% and 34%.
Operating expenses are expected to range between $21.5 million and $22.5
million. The Company expects to realize additional gains on the Nanya shares
in the December quarter. However, it is difficult to predict the total gains
for the quarter and, as such, these gains have been excluded from the GAAP and
Non-GAAP net income guidance. GAAP net income is expected to be between $0.10
and $0.14 per diluted share and non-GAAP net income, which excludes non-cash
tax expense related to the utilization of deferred tax assets, stock-based
compensation, amortization of intangibles related to acquisitions, and gains
on the sales of Nanya shares, is expected to range between $0.17 and $0.21 per
diluted share.

Conference Call Information
A conference call will be held today at 7:00 a.m. Pacific Time to discuss the
Company's fourth quarter and fiscal 2013 financial results. To access ISSI's
conference call via telephone, dial 800-723-6575 by 6:50 a.m. Pacific Time.
The participant passcode is 7888277. The call will also be webcast from ISSI's
website at http://www.issi.com.

Non-GAAP Financial Information
In addition to disclosing results determined in accordance with GAAP, ISSI
discloses its non-GAAP gross margin, operating income, provision for income
taxes and net income for certain periods that exclude stock based
compensation, the amortization of intangibles related to acquisitions, other
acquisition related charges, asset impairment charges, gains on the sales of
investments, impairment of investment, and non-cash tax expense. When
presenting non-GAAP results, the Company includes a reconciliation of the
non-GAAP results to the results under GAAP. Management believes that including
the non-GAAP results assists investors in assessing the Company's operational
performance and its performance relative to its competitors. The Company has
presented these non-GAAP results as a complement to its results provided in
accordance with GAAP, and these results should not be regarded as a substitute
for GAAP. Management uses non-GAAP measures to plan and forecast future
periods, to establish operational goals, to compare with its business plan and
individual operating budgets, to assist the public in measuring the Company's
performance, to allocate resources and, relative to the Company's historical
financial performance, to enable comparability between periods. Management
also considers such non-GAAP results to be an important supplemental measure
of its performance. The economic substance behind management's decision to use
such non-GAAP measures relates to the non-GAAP measures being a useful measure
of the potential future performance of the Company's business. In line with
common industry practice and to help enable comparability with other
technology companies, the Company's non-GAAP presentation excludes the impact
of the items described above. Other companies may calculate non-GAAP results
differently than the Company, limiting its usefulness as a comparative
measure. In addition, such non-GAAP measures may exclude financial information
that some may consider important in evaluating the Company's performance.
Management compensates for the foregoing limitations of non-GAAP measures by
presenting certain information on both a GAAP and non-GAAP basis and providing
reconciliations of the GAAP and non-GAAP measures.

About the Company
ISSI is a fabless semiconductor company that designs and markets high
performance integrated circuits for the following key markets: (i) automotive,
(ii) communications, (iii) industrial, medical, and military, and (iv) digital
consumer. The Company's primary products are high speed and low power SRAM and
low and medium density DRAM. The Company also designs and markets NOR flash
products and high performance analog and mixed signal integrated circuits.
ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan,
Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web
site at http://www.issi.com/.

Forward Looking Statements
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements concerning
ISSI's design win momentum, being well positioned with more advanced DDR3
products to support even higher performance solutions in vehicles in the
coming years, continued weakness in Europe, being well positioned for further
volume increases, significantly increased addressable market with new QUAD
SRAM and RLDRAM^® solutions, which we expect to be key contributors to our
anticipated growth in fiscal 2014, significantly expanding our relationship
with Cisco Systems and expecting this design to begin ramping in 2015, our
focus continuing to serve us well, intending to sell more Nanya shares within
one year and our outlook for the December 2013 quarter with respect to
revenue, SRAM and DRAM revenue, NOR flash revenue, analog revenue, gross
margin, operating expenses, expecting additional gains on sales of Nanya
shares, and GAAP and Non-GAAP net income per share are forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from those anticipated. Such risks and
uncertainties include supply and demand conditions in the market place,
unexpected reductions in average selling prices for our products, our ability
to sell our products for key applications and the pricing and gross margins
achieved on such sales, the success of our customers' products that use our
devices, ability to control or reduce operating expenses, our ability to
obtain a sufficient supply of wafers, wafer pricing, our ability to maintain
sufficient inventory of products to satisfy customer orders, our ability to
realize the expected benefits of our acquisitions including maintaining
relationships with key customers, vendors and employees, changes in
manufacturing yields, order cancellations, order rescheduling, product
warranty claims, competition, the level and value of inventory held by OEM
customers or other risks listed from time to time in the Company's filings
with the Securities and Exchange Commission, including the Company's Form 10-K
for the year ended September 30, 2012 and the Company's Form 10-Q for the
quarter ended June 30, 2013. In addition, the financial information in this
press release is unaudited and subject to any adjustments that may be made in
connection with the year-end audit. The Company assumes no obligation to
update or revise the forward-looking statements in this release because of new
information, future events, or otherwise.



                     Integrated Silicon Solution, Inc.
                     Condensed Consolidated Statements of Income
                     (Unaudited)
                     (In thousands, except per share data)
                     Three Months Ended                   Fiscal Year Ended
                     September    June 30,   September    September  September
                     30,                     30,          30,        30,
                     2013         2013       2012         2013       2012
Net sales            $        $ 77,788   $        $       $   
                     78,392                 72,500      307,570   265,950
Cost of sales        52,458       51,741     54,172       206,109    182,966
Gross profit         25,934       26,047     18,328       101,461    82,984
Operating expenses:
 Research and       9,925        10,583     10,062       40,839     30,918
development
 Selling, general   11,316       10,829     13,867       43,964     42,174
and administrative
 Impairment of      -            -          4,261        -          4,261
goodwill
 Total operating  21,241       21,412     28,190       84,803     77,353
expenses
Operating income     4,693        4,635      (9,862)      16,658     5,631
(loss)
Interest and other
income (expense),    (183)        546        (2,148)      1,146      (1,724)
net
Gain on sale of      2,878        7,280      -            12,217     -
investments
Income (loss) before 7,388        12,461     (12,010)     30,021     3,907
income taxes
Provision for income 2,658        5,215      1,108        12,277     6,512
taxes
Consolidated net     4,730        7,246      (13,118)     17,744     (2,605)
income (loss)
Net income
attributable to
 noncontrolling  (32)         (182)      (128)        (196)      (113)
interests
Net income (loss)    $       $  7,064  $         $      $    
attributable to ISSI 4,698                  (13,246)    17,548    (2,718)
Basic net income     $       $        $       $      $    
(loss) per share      0.16      0.25       (0.48)        0.62   (0.10)
Shares used in basic
per share            28,928       28,293     27,475       28,223     27,120
calculation
Diluted net income   $       $        $       $      $    
(loss) per share      0.15      0.24       (0.48)        0.59   (0.10)
Shares used in
diluted per share    30,372       29,755     27,475       29,694     27,120
calculation
Reconciliation of GAAP to Non-GAAP
Financial Measures
                     Three Months Ended                   Fiscal Year Ended
                     (In thousands, except per share data)
                     September    June 30,   September    September  September
                     30,                     30,          30,        30,
                     2013         2013       2012         2013       2012
Gross Margin:
 GAAP gross       $        $ 26,047   $        $       $    
profit               25,934                 18,328      101,461   82,984
Adjustments:
 Chingis
intangible asset     170          159        -            631        -
amortization
 Chingis
acquisition related  -            -          -            492        -
inventory write up
 Si En intangible -            -          5,402        -          5,402
asset impairment
 Total         170          159        5,402        1,123      5,402
adjustments
 Non-GAAP gross   26,104       26,206     23,730       102,584    88,386
profit
 Non-GAAP gross   33.3%        33.7%      32.7%        33.4%      33.2%
margin
Operating income
(loss):
 GAAP operating   $       $  4,635  $        $      $    
income (loss)        4,693                  (9,862)     16,658     5,631
Adjustments:
 Chingis
intangible asset     347          336        -            1,352      -
amortization
 Chingis
acquisition expenses -            -          1,284        -          1,284
and charges
 Chingis
acquisition related  -            -          -            492        -
inventory write up
 Si En intangible
asset amortization   -            -          291          -          1,553
and charge
 Si En intangible -            -          14,330       -          14,330
asset impairment
 Stock-based      1,568        1,464      1,301        5,941      5,031
compensation expense
 Total         1,915        1,800      17,206       7,785      22,198
adjustments
 Non-GAAP         $       $  6,435  $       $      $    
operating income     6,608                  7,344       24,443    27,829
Provision for income
taxes:
 On a GAAP basis  $       $  5,215  $       $      $    
                     2,658                  1,108       12,277     6,512
Adjustments:
 Non-cash tax     1,335        2,295      588          6,691      3,953
expense
 Tax impact of
gains on sale of     1,052        2,839      -            4,357      -
investments
 Total         2,387        5,134      588          11,048     3,953
adjustments
 Non-GAAP         $       $       $       $      $    
provision for income   271      81          520       1,229    2,559
taxes
Net income (loss)
attributable to
ISSI:
 On a GAAP basis  $       $  7,064  $         $      $    
                     4,698                  (13,246)    17,548    (2,718)
Adjustments:
 Chingis
intangible asset     347          336        -            1,352      -
amortization
 Chingis
acquisition expenses -            -          1,284        -          1,284
and charges
 Chingis
acquisition related  -            -          -            492        -
inventory write up
 Si En intangible
asset amortization   -            -          291          -          1,553
and charge
 Si En intangible -            -          14,330       -          14,330
asset impairment
 Stock-based      1,568        1,464      1,301        5,941      5,031
compensation expense
 Gain on sales of (2,878)      (7,280)    -            (12,217)   -
investment
 Impairment of    -            -          2,327        -          2,327
investment
 Non-cash tax     1,335        2,295      601          6,691      3,966
expense
 Tax impact of
gains on sale of     1,052        2,839      -            4,357      -
investments
 Total         1,424        (346)      20,134       6,616      28,491
adjustments
 Non-GAAP net     $       $  6,718  $       $      $    
income               6,122                  6,888       24,164    25,773
Shares used in
Non-GAAP net income
per share:
 Basic            28,928       28,293     27,475       28,223     27,120
 Diluted          30,372       29,755     29,160       29,694     28,901
Non-GAAP net income
per share:
 Basic            $       $        $       $      $    
                      0.21      0.24        0.25        0.86    0.95
 Diluted          $       $        $       $      $    
                      0.20      0.23        0.24        0.81    0.89



Integrated Silicon Solution, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
                                              September 30,    September 30,
                                              2013             2012
                                              (unaudited)      (1)
ASSETS
Current assets:
 Cash and cash equivalents                   $   119,997   $    75,497
 Short-term investments                      21,558           6,541
 Accounts receivable, net                    46,088           47,710
 Inventories                                 68,469           66,964
 Other current assets                        16,928           21,204
Total current assets                          273,040          217,916
Property, equipment and leasehold             46,504           29,286
improvements, net
Purchased intangible assets, net              6,626            8,226
Goodwill                                      9,178            9,178
Other assets                                  26,521           52,465
Total assets                                  $   361,869   $   317,071
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                            $    50,229  $    44,705
 Accrued compensation and benefits           8,072            9,420
 Accrued expenses                            7,357            11,133
 Current portion of long-term debt           195              -
Total current liabilities                    65,853           65,258
Long-term debt                                4,534            -
Other long-term liabilities                   8,712            5,478
Total liabilities                             79,099           70,736
Commitments and contingencies
Stockholders' equity:
 Common stock                                3                3
 Additional paid-in capital                  343,947          330,473
 Accumulated deficit                         (72,498)         (90,046)
 Accumulated comprehensive income            9,121            2,399
Total ISSI stockholders' equity               280,573          242,829
 Noncontrolling interest                     2,197            3,506
Total stockholders' equity                    282,770          246,335
Total liabilities and stockholders' equity    $   361,869   $   317,071
(1) Derived from audited financial statements.

SOURCE Integrated Silicon Solution, Inc.

Website: http://www.issi.com
Contact: John M. Cobb, Chief Financial Officer, Investor Relations, (408)
969-6600, ir@issi.com; or Leanne K. Sievers, Shelton Group, (949) 224-3874,
lsievers@sheltongroup.com