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ISSI Announces First Fiscal Quarter 2014 Results

               ISSI Announces First Fiscal Quarter 2014 Results

PR Newswire

MILPITAS, Calif., Jan. 29, 2014

MILPITAS, Calif., Jan. 29, 2014 /PRNewswire/ --Integrated Silicon Solution,
Inc. (Nasdaq: ISSI) today reported financial results for the first fiscal
quarter ended December 31, 2013.

First Fiscal Quarter Highlights:

  oReported record revenue of $79.1 million, compared to $78.4 million in the
    fourth fiscal quarter of 2013 and $76.4 million in the first fiscal
    quarter of 2013;
  oDRAM revenue increased 4.2% and SRAM revenue increased 8.6% over the prior
    year periods;
  oIndustrial, medical, and military (IMM) revenue increased 38.8%
    year-over-year;
  oAutomotive revenue grew 9.0% year-over-year;
  oGAAP net income was $0.18 per diluted share and non-GAAP net income was
    $0.18 per diluted share;
  oRealized $3.1 million in gains on sales of a portion of the Company's
    shares of Nanya Technology Corporation ("Nanya");
  oEnded the quarter with cash and short-term investments of $136.8 million;
    and
  oAchieved multiple design wins for DDR2, DDR3, SDR and mobile DRAM in
    automotive and industrial applications as well as QUAD and RLDRAM3® design
    wins with communications customers. 

"First quarter 2014 set a quarterly revenue record, driven by strong growth in
IMM and consistent performance in our automotive business," said Scott
Howarth, ISSI's President and CEO. "Our IMM growth was fueled by continued
strong orders across our expanded customer base, which is increasingly relying
on ISSI for both new and legacy products. While automotive revenue was flat
sequentially, we continued to expand our pipeline of design wins as we
capitalize on the growing semiconductor content in cars, including multiple
wins for our new higher density DDR2 and DDR3 products. We anticipate
increasing shipment volumes in the coming quarters, driving further growth in
our new products."

First Fiscal Quarter 2014 Results
Revenue in the first fiscal quarter ended December 31, 2013 was $79.1 million,
compared to $78.4 million in the fiscal fourth quarter of 2013 and $76.4
million in the first fiscal quarter of 2013. Revenue in the first fiscal
quarter of 2014 consisted of $69.3 million of SRAM and DRAM revenue, $7.9
million of NOR flash revenue, and $1.9 million of analog revenue. SRAM and
DRAM revenue increased 5.5% from the December 2012 quarter.

Gross margin in the first fiscal quarter was 32.3%, compared to 33.1% in the
September 2013 quarter, and 32.1% in the December 2012 quarter.

During the December 2013 quarter, the Company continued to sell a portion of
the Nanya shares it purchased in September 2012, realizing a gain of $3.1
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 first fiscal quarter was $1.6 million, compared
to $2.7 million in the September 2013 quarter and $1.2 million in the December
2012 quarter.

GAAP net income in the first fiscal quarter of 2014 was $5.4 million, or $0.18
per diluted share, compared to GAAP net income of $4.7 million, or $0.15 per
diluted share, in the September 2013 quarter and GAAP net income of $2.5
million, or $0.09 per diluted share, in the December 2012 quarter.

First quarter non-GAAP net income was $5.4 million, or $0.18 per diluted
share, compared to $6.1 million, or $0.20 per diluted share, in the September
2013 quarter and $5.3 million, or $0.18 per diluted share, in the December
2012 quarter.

Non-GAAP results exclude stock based compensation, amortization of intangibles
related to acquisitions, gains on the sales of investments, 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.

March Quarter Outlook
The Company expects total revenue for the March quarter to range between $77.0
and $82.0 million, consisting of SRAM and DRAM revenue of between $67.5
million and $71.0 million, NOR flash revenue between $7.5 million and $8.5
million, and analog revenue of between $2.0 million and $2.5 million. Gross
margin for the March quarter is expected to range between 32.5 percent and
33.5 percent. 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 March 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 stock based compensation, amortization of intangibles related to
acquisitions, gains on the sales of Nanya shares and non-cash tax expense
related to the utilization of deferred tax assets, is expected to range
between $0.18 and $0.22 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 first fiscal quarter financial results. To access ISSI's conference
call via telephone, dial 877-638-9067 by 6:50 a.m. Pacific Time. The
participant passcode is 9991991. 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 operating income, provision for income taxes and net
income for certain periods that exclude stock based compensation, the
amortization of intangibles related to acquisitions, gains on sales of
investments, 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 its
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
expanded customer base, which is increasingly relying on ISSI for both new and
legacy products, expanding our pipeline of design wins as we capitalize on the
growing semiconductor content in cars, increasing shipment volumes in the
coming quarters, driving further growth in our new products, intending to sell
more Nanya shares within one year and our outlook for the March 2014 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
(especially in the automotive market), unexpected reductions in average
selling prices for our products, our ability to sell our products in our key
markets (including automotive and IMM) and the pricing and gross margins
achieved on such sales, our 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, 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          Three Months Ended
                                December 31,                September 30,
                                2013          2012             2013
Net sales                       $  79,123   $  76,399      $  78,392
Cost of sales                   53,594        51,908           52,458
Gross profit                    25,529        24,491           25,934
Operating expenses:
 Research and development      10,558        10,023           9,925
 Selling, general and          11,434        11,089           11,316
administrative
 Total operating expenses    21,992        21,112           21,241
Operating income                3,537         3,379            4,693
Interest and other income       431           268              (183)
(expense), net
Gain on sale of investments     3,121         -                2,878
Income before income taxes      7,089         3,647            7,388
Provision for income taxes      1,643         1,159            2,658
Consolidated net income         5,446         2,488            4,730
 Net (income) loss
attributable to
 noncontrolling             (11)          11               (32)
interests
Net income attributable to      $   5,435  $   2,499     $   4,698
ISSI
Basic net income per share      $    0.19  $    0.09     $    0.16
Shares used in basic per        29,318        27,696           28,928
share calculation
Diluted net income per share    $    0.18  $    0.09     $    0.15
Shares used in diluted per      30,717        29,106           30,372
share calculation
Reconciliation of GAAP to Non-GAAP Financial Measures
Operating income:
 GAAP operating income       $   3,537  $   3,379     $   4,693
Adjustments:
 Chingis acquisition related -             492              -
inventory write up
 Chingis intangible asset    347           339              347
amortization
 Stock-based compensation    1,491         1,440            1,568
expense
 Total adjustments        1,838         2,271            1,915
 Non-GAAP operating          $   5,375  $   5,650     $   6,608
income
Provision for income taxes:
 On a GAAP basis             $   1,643  $   1,159     $   2,658
Adjustments:
 Non-cash tax expense        203           490              1,335
 Tax impact of gains on sale 1,092         -                1,052
of investments
 Total adjustments        1,295         490              2,387
 Non-GAAP provision for      $    348  $    669     $    271
income taxes
Net income attributable to
ISSI:
 On a GAAP basis             $   5,435  $   2,499     $   4,698
Adjustments:
 Chingis acquisition related -             492              -
inventory write up
 Chingis intangible asset    347           339              347
amortization
 Stock-based compensation    1,491         1,440            1,568
expense
 Gain on sales of            (3,121)       -                (2,878)
investment
 Non-cash tax expense        203           490              1,335
 Tax impact of gains on sale 1,092         -                1,052
of investments
 Total adjustments        12            2,761            1,424
 Non-GAAP net income         $   5,447  $   5,260     $   6,122
Non-GAAP net income per share:
 Basic                       $    0.19  $    0.19     $    0.21
 Diluted                     $    0.18  $    0.18     $    0.20

Integrated Silicon Solution, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
                                             December 31,  September30,
                                             2013          2013
                                             (unaudited)   (1)
ASSETS
Current assets:
 Cash and cash equivalents                  $ 123,399    $ 119,997
 Short-term investments                     13,366        21,558
 Accounts receivable, net                   47,487        46,088
 Inventories                                76,287        68,469
 Other current assets                       18,390        16,928
Total current assets                         278,929       273,040
Property and equipment, net                  50,977        46,504
Purchased intangible assets, net             6,217         6,626
Goodwill                                     9,178         9,178
Other assets                                 25,991        26,521
Total assets                                 $ 371,292    $ 361,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                           $  54,832   $  50,229
 Accrued compensation and benefits          8,284         8,072
 Accrued expenses                           8,265         7,357
 Current portion of long-term debt          195           195
Total current liabilities                   71,576        65,853
Long-term debt                               4,485         4,534
Other long-term liabilities                  6,859         8,712
Total liabilities                            82,920        79,099
Commitments and contingencies
Stockholders' equity:
 Common stock                               3             3
 Additional paid-in capital                 348,132       343,947
 Accumulated deficit                        (67,063)      (72,498)
 Accumulated other comprehensive income     5,266         9,121
Total ISSI stockholders' equity              286,338       280,573
 Noncontrolling interest                    2,034         2,197
Total stockholders' equity                   288,372       282,770
Total liabilities and stockholders' equity   $ 371,292    $ 361,869
(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, Shelton Group, Leanne Sievers, EVP, P: 949-224-3874, E:
lsievers@sheltongroup.com, Matt Kreps, Managing Director, P: 972-239-5119 ext.
125, E: mkreps@sheltongroup.com