Home > Press > SST Announces Completion of Its Stock Option Review and Filing of Its 2006 Annual Report With the SEC
Abstract:
SST (Silicon Storage Technology, Inc.) , a leader in flash memory technology, today reported its 2006 financial results and filed its 2006 Annual Report on Form 10-K, containing restated financial statements reflecting accounting adjustments as a result of the Company's recently completed voluntary independent review of its historical stock option practices. In its 2006 Form 10-K SST restated its prior financial results to record an additional $38.8 million of non-cash stock-based compensation expense, associated tax charges of $4.3 million and a related income tax benefit of $1.0 million relating to stock option grants made from 1997 through 2005. The Company also recorded previously immaterial audit differences of $370,000 for all years through 2005.
SST Announces Completion of Its Stock Option Review and Filing of Its 2006 Annual Report With the SEC
SUNNYVALE, CA | Posted on January 16th, 2008 Fiscal 2006 Results
As previously reported, for 2006, net revenues were $452.5 million, a 5.0 percent increase from net revenues of $430.9 million for 2005. Net revenues for 2006 were comprised of product revenues of $415.4 million and licensing revenues of $37.1 million.
Gross margin for 2006 was 26.3 percent compared with 18.2 percent in 2005 (as restated). Operating expenses for 2006 were $102.7 million compared with $102.6 million in 2005 (as restated).
Net loss for 2006 was $20.8 million, or $0.20 per share, based on 103.4 million diluted shares outstanding. This compares with a net loss of $26.6 million (as restated), or $0.26 per share (as restated), based on 101.4 million diluted shares outstanding for 2005. These results include the Company's pro rata share of the losses incurred by investee companies which the company accounts for under the equity method.
Included in the 2006 net loss are: an $8.0 million of non-cash stock-based compensation expense, an impairment charge related to the Company's investment in Grace Semiconductor Manufacturing Corporation of $40.6 million, a $3.5 million write off of the Company's investment in Nanotech, Inc. and a $12.2 million gain on the sale of common stock of PTI. Included in the 2005 net loss are $0.6 million of non-cash stock-based compensation expense and $0.6 million in impairment charges.
Listing Status with NASDAQ Global Market
The Company plans to file its Quarterly Reports on Form 10-Q for the first three quarters of 2007 as soon as reasonably possible and thereby bring itself current with its SEC reporting obligations and address listing deficiencies with the NASDAQ Global Market. The Company expects to shortly submit a plan to the NASDAQ Listing Qualifications Panel addressing its remaining listing deficiencies, including deficiencies related to its inability to hold an annual shareholders meeting in 2007.
Fourth Quarter and Fiscal 2007 Earnings Conference Call Dial-in Information
SST will hold a conference call to discuss these filings and its financial results for the fourth quarter and fiscal year 2007 on Feb. 6 at 1:30 p.m. PT. Those wishing to participate in the conference should dial (866) 861-5389, international participants please dial (612) 288-0329, 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 907638. A webcast replay of the conference call will be available for one year on the company's web site at http://www.sst.com/events .
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About SST (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, flash microcontroller 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 the timing of the filing of the Company's remaining delinquent periodic reports and listing of its common stock on the NASDAQ Global Market. Important factors that could cause actual results to differ materially include the time needed by management and the Company's independent registered public accounting firm to complete their review and other procedures relating to the remaining delinquent periodic reports and actions that may be taken by the NASDAQ Listing Qualifications Panel with respect to the listing of the Company's common stock on the NASDAQ Global Market. This news release also contains forward-looking statements regarding memory and non-memory market conditions, SST's future financial performance, 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' periodic reports, including the Annual Report on Form 10-K for the year ended December 31, 2006.
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 literature@sst.com 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. MelodyWing and NANDrive are trademarks of Silicon Storage Technology, Inc. All other trademarks or registered trademarks are the property of their respective holders.
-- FINANCIAL TABLES TO FOLLOW --
Year ended December 31,
------------ -------------
2005 2006
------------ -------------
as adjusted
and restated
Net revenues:
Product revenues $394,096 $415,441
Technology licensing 36,803 37,068
------------ -------------
Total net revenues 430,899 452,509
Cost of revenues 352,417 333,643
------------ -------------
Gross profit 78,482 118,866
------------ -------------
Operating expenses:
Research and development 48,746 52,969
Sales and marketing 28,544 28,464
General and administrative 22,380 21,312
Other non-recurring charges 2,945 -
------------ -------------
Total operating expenses 102,615 102,745
------------ -------------
Income (loss) from operations (24,133) 16,121
Interest income 1,092 3,355
Dividend income 1,645 1,581
Other income (expense), net (467) 821
Interest expense (241) (345)
Gain on sale of equity investments - 12,206
Impairment of equity investments (605) (44,123)
------------ -------------
Income (loss) before provision for
(benefit from)income taxes, pro rata share
of loss from equity investments and
minority interest (22,709) (10,384)
Provision for (benefit from) income
taxes 2,449 7,194
Minority interest (77) -
------------ -------------
Income (loss) before pro rata share of loss
from equity investments (25,081) (17,578)
Pro rata share of loss from equity
investments (1,543) (3,199)
------------ -------------
Net income (loss) $(26,624) $(20,777)
------------ -------------
------------ -------------
Net income (loss) per share - basic $(0.26) $(0.20)
------------ -------------
------------ -------------
Shares used in per share calculation 101,369 103,355
------------ -------------
------------ -------------
Net income (loss) per share - diluted $(0.26) $(0.20)
------------ -------------
------------ -------------
Shares used in per share calculation 101,369 103,355
------------ -------------
------------ -------------
December 31, December 31,
2005 2006
------------ -------------
as adjusted
and restated
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $78,390 $139,808
Trade accounts receivable, net 77,236 64,943
Inventories 108,718 73,883
Other current assets 13,109 9,074
------------ -------------
Total current assets 277,453 287,708
Equipment, furniture and fixtures,
net 19,415 19,513
Long-term marketable securities 39,057 45,554
Other assets 112,650 83,990
Goodwill 29,637 29,213
------------ -------------
Total assets $478,212 $465,978
------------ -------------
------------ -------------
LIABILITIES
Current liabilities:
Notes payable, current portion $39 $-
Trade accounts payable 70,527 67,658
Accrued expenses and other
liabilities 24,581 27,185
Deferred revenue 4,493 3,390
------------ -------------
Total current liabilities 99,640 98,233
Other liabilities 2,627 2,030
------------ -------------
Total liabilities 102,267 100,263
------------ -------------
SHAREHOLDERS' EQUITY
Common stock 361,586 364,330
Additional paid-in capital 53,789 61,533
Unearned stock-based compensation (558) -
Accumulated other comprehensive
income 31,780 31,281
Retained earnings/(Accumulated
deficit) (70,652) (91,429)
------------ -------------
Total shareholders' equity 375,945 365,715
------------ -------------
Total liabilities and
shareholders' equity $478,212 $465,978
------------ -------------
------------ -------------
Percentage of Change in
Gross Product Revenue Revenue
--------------------- -------------
4Q05 to 3Q06 to
4Q05 3Q06 4Q06 4Q06 4Q06
--------------------- -------------
Product Revenue By Ship-To Location
North America 3% 4% 4% 1% 4%
Total International 97% 96% 96% (11%) 1%
Europe 7% 9% 7% (5%) (14%)
Japan 6% 10% 9% 43% (9%)
Korea 6% 7% 6% (14%) (7%)
China 57% 39% 42% (34%) 7%
Taiwan 13% 22% 24% 58% 9%
Other Far East 8% 9% 8% (10%) (15%)
Product Revenue By Application
Digital Consumer 47% 41% 41% (25%) (2%)
Internet Computing 29% 26% 25% (26%) (9%)
Networking 5% 8% 6% 9% (13%)
Wireless Communications 19% 25% 28% 32% 14%
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Contacts:
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060
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