- Fourth Quarter Net Sales of $18.9 Million, Down 10% from the Third
Quarter and Up 9% From Year-Ago Period
- Fiscal 2006 Net Sales of $78.8 Million, Up 8% From Fiscal 2005
MILPITAS, Calif., Feb. 21 /PRNewswire-FirstCall/ -- Sipex (OTC:
SIPX.PK) today reported fiscal fourth quarter and fiscal year operating
results. Net Sales for the fourth quarter of 2006 were $18.9 million, down
10% from the third quarter net sales of $21.0 million and up 9% from net
sales of $17.2 million recorded in the year-ago period. Net Sales for the
fiscal year of 2006 were $78.8 million, up 8% from the year-ago period.
Fourth quarter 2006 GAAP net loss was $14.3 million, or $0.40 per share,
compared with GAAP net loss of $6.3 million, or $0.18 per share, in the
previous quarter and GAAP net loss of $11.7 million, or $0.33 per share, in
the year-ago period. Fiscal 2006 GAAP net loss was $41.2 million, or $1.16
per share, compared with GAAP net loss of $38.1 million, or $1.07 per
share, in the year-ago period. The fourth quarter and fiscal year 2006 GAAP
net loss included stock-based compensation of $1.2 million and $3.8
million, or $0.03 and $0.11 per share, respectively.
Fourth quarter 2006 non-GAAP net loss was $11.7 million, or $0.33 per
share, compared to $5.3 million, or $0.15 per share, in the previous
quarter and compared to $5.2 million, or $0.15 per share in the fourth
quarter of 2005. Fiscal 2006 non-GAAP net loss was $29.0 million, or $0.81
per share, an increase from $21.8 million, or $0.61 per share for fiscal
year 2005. Non- GAAP results exclude the impact of stock-based
compensation, restructuring and impairment charges, and additional
depreciation expense. A reconciliation of the adjustments made to GAAP net
loss to compute non-GAAP net loss is contained in the financial tables of
this press release.
"The fourth quarter was a very difficult quarter for us as we
experienced much of the same slowness as many of our analog competitors.
Despite this, we did achieve slight growth in our power products. Revenue
improvement in our power family was driven out of our new proprietary DC to
DC converters and LED Management ICs," stated Ralph Schmitt, CEO of Sipex.
"The fourth quarter 2006 financial results were negatively affected by
the restructuring charges," explained Ray Wallin, CFO of Sipex. "We
recorded approximately $1.0 million of personnel severance costs and
approximately $0.5 million of fab shut-down and other costs. In addition,
in response to the slow down in the analog market, we recorded
approximately $4.8 million of inventory related charges, of which
approximately $1.3 million related to our optical product family. While
there is on-going work to dispose of the optical product family, we
anticipate these efforts should be resolved prior to the end of the first
quarter of 2007. We believe all these actions were important steps toward
making the final transition to the fabless model. These structural and
personnel changes have been taken in order to drive the Company towards
profitability. We also continue along the path toward re- listing on the
NASDAQ Global Market."
"Our overall progress continues, the fourth quarter was a record
quarter for introduction of new products with 16 going into production,"
added Mr. Schmitt. "This is an indication that our new product engine is
executing better. These introductions included two new product groups in
the interface product family as well as additions to our PowerBlox(TM) and
LED power product portfolio. All 20 power products currently in development
are proprietary. This will institute a major change in the makeup of our
product portfolio. In the fourth quarter, we also announced our Digital
Power technology, which will be the next stepping stone for the Company by
adding higher ASP system based solutions."
"On the operational front we qualified three additional process
technologies at Silan, our strategic foundry partner in China, completing
our BiPolar and BiCMOS process transfers," noted Mr. Schmitt. "Our CMOS
processes are now running in high volume at Episil Technologies in Taiwan.
We have now secured supply for all our products in an outsourced model. In
the fourth quarter, we had to adjust our manufacturing levels as unit
shipments dropped from 65 million units in the third quarter to 56 million.
This decline was primarily driven by commodity power and interface
products."
"While the fourth quarter was difficult due to market conditions, we
just completed our first turnaround year after a tumultuous 2005," stated
Mr. Schmitt. "We gained back customers which was evident by our yearly
revenue growth, moved to a new manufacturing model and resized our
business. Our team is in place and 2007 is the year all the pieces come
together in order to drive significant shareholder value."
Conference Call -- Today, Sipex will host a conference call at 4:30
p.m. Eastern time (1:30 p.m. Pacific time). Chief Executive Officer, Ralph
Schmitt and Chief Financial Officer, Ray Wallin will present an overview of
the financial results for the fourth quarter and fiscal year 2006 and
answer any questions.
The call is available, live, to any interested party by dialing (800)
230-1951. For international callers, please dial (612) 332-0637. Interested
callers should dial in at least five minutes before the scheduled start
time and ask to be connected to the Sipex Investor Call. A replay of the
investor call will be available approximately 24 hours after the event at
http://www.sipex.com/investors.
About Sipex Corporation
Sipex Corporation is an analog semiconductor company that addresses
standard linear and application specific standard products (ASSP) for
customer systems that are primarily targeted at the consumer, networking
and industrial markets. Our products are categorized into three synergistic
areas of power management, interface and optical storage. Sipex is a global
company with operations in Asia, Europe and North America. It is the
mission of the Company to create innovative analog products that enable
customers to produce differentiated products.
For further information, contact Ray Wallin at: Sipex Corporation, 233
South Hillview Drive, Milpitas, California 95035, (408) 934-7500; or visit
our website at http://www.sipex.com.
Safe Harbor Statement
This press release contains forward-looking statements concerning
Sipex's future events and results of operations including, but not limited
to statements about completing efforts to dispose of the Company's optical
product family, driving the Company toward profitability and re-listing on
the NASDAQ Global Market and changes in the Company's product portfolio.
Statements regarding the Company's beliefs, plans, expectations or
intentions regarding the future are forward-looking statements, within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All such
forward looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are predictions and involve risks and
uncertainties, such that actual results may differ significantly. These
risks include, but are not limited to, the risk that Sipex may be unable to
execute operational improvements, that Sipex may be unable to grow revenues
in future quarters, that Sipex may be unable to dispose of the optical
product family in the first quarter of 2007, that Sipex may not return to
profitability or successfully re-list on the NASDAQ Global Market and that
general market conditions in the semiconductor industry may decline. The
Company disclaims any intention or obligation to publicly update or revise
any forward-looking statements, whether as a result of events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. For further discussion of these risks and
uncertainties, we refer you to the documents the Company files with the SEC
from time to time, including the Company's Annual Report on Form 10-K for
the year ended December 31, 2005 and Quarterly Reports on Form 10-Q for the
quarter ended April 1, 2006, July 1, 2006 and September 30, 2006. All
forward-looking statements are made as of today, and the Company disclaims
any duty to update such statements.
Non-GAAP Reporting -- The Company's management uses non-GAAP measures
to evaluate the performance of our business and to estimate future
performance. Since management finds this measure to be useful, we believe
that our investors benefit from seeing our results "through the eyes" of
management in addition to seeing our GAAP results. For comparison purposes,
the Company makes reference to certain gross margin, operating margin, net
loss and net loss per share. These non-GAAP results were reached by
excluding stock-based compensation expense, restructuring and impairment
charges, and additional depreciation expense. We reference those results to
allow a better comparison of results in the current period to those in
prior periods and to provide meaningful insight to the Company's on-going
operating performance. We have reconciled such non-GAAP results to the most
directly comparable GAAP financial measures.
Our reference to these non-GAAP results should be considered in
addition to results that are prepared under current accounting standards
but should not be considered a substitute for results that are presented as
consistent with GAAP. It should also be noted that our non-GAAP information
may be different from the non-GAAP information provided by other companies.
Clyde Ray Wallin, Chief Financial Officer
Phone: 408-934-7500
Fax: 408-935-7678
Email: rwallin@sipex.com
SIPEX CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
December 30, December 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $13,041 $1,969
Restricted cash 350 500
Short-term investment securities 2,388 -
Accounts receivable, net 6,222 3,735
Accounts receivable, related party,
net 949 3,011
Inventories 15,586 13,400
Prepaid expenses and other current
assets 1,641 1,300
Total current assets 40,177 23,915
Property, plant and equipment, net 19,113 25,803
Restricted cash - noncurrent 57 500
Other assets 202 224
Total assets $59,549 $50,442
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Short-term borrowing $- $3,000
Current portion of lease financing
obligation 191 -
Current portion of bank borrowing 667 -
Accounts payable 10,331 7,394
Accrued expenses 7,185 7,282
Accrued restructuring costs 1,728 1,407
Deferred income, related party 5,543 5,707
Deferred income, other 2,555 2,510
Total current liabilities 28,200 27,300
Long-term accrued restructuring costs 139 584
Long-term portion of bank borrowing 1,333 -
Long-term lease financing obligation 12,152 -
Convertible senior notes 25,826 -
Other long-term liabilities 24 37
Total liabilities 67,674 27,921
Stockholders' equity: (deficit)
Common stock 368 355
Additional paid-in capital 234,601 224,026
Accumulated deficit (243,075) (201,841)
Accumulated other comprehensive loss (19) (19)
Total stockholders' equity
(deficit) (8,125) 22,521
Total liabilities and stockholders'
equity (deficit) $59,549 $50,442
SIPEX CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Years Ended
December September December December December
30, 2006 30, 2006 31, 2005 30, 2006 31, 2005
Net sales $11,629 $12,243 $9,215 $44,733 $40,847
Net sales, related party 7,230 8,781 8,027 34,017 31,827
Total net sales 18,859 21,024 17,242 78,750 72,674
Cost of sales 11,898 9,246 9,346 41,103 35,103
Cost of sales, related
party 7,477 5,582 7,395 28,296 23,822
Total cost of sales 19,375 14,828 16,741 69,399 58,925
Gross profit (loss) (516) 6,196 501 9,351 13,749
Operating expenses:
Research and development 4,030 3,923 5,105 17,332 17,248
Marketing and selling 4,276 3,827 3,046 15,524 10,642
General and
administrative 2,734 3,988 4,063 13,486 14,420
Restructuring and other 1,501 77 132 1,863 577
Impairment of fixed
assets 12 - - 12 9,377
Total operating
expenses 12,553 11,815 12,346 48,217 52,264
Loss from operations (13,069) (5,619) (11,845) (38,866) (38,515)
Other income (expense):
Interest income 176 275 26 721 208
Interest expense (1,383) (898) (13) (3,046) (35)
Other income, net - (19) 296 82 427
Total other income
(expense), net (1,207) (642) 309 (2,243) 600
Loss before income
tax expense (14,276) (6,261) (11,536) (41,109) (37,915)
Income tax expense 2 38 157 125 192
Net loss $(14,278) $(6,299) $(11,693) $(41,234) $(38,107)
Net loss per common share $(0.40) $(0.18) $(0.33) $(1.16) $(1.07)
- basic and diluted
Weighted average common
share outstanding
- basic and diluted 35,808 35,551 35,550 35,615 35,544
SIPEX CORPORATION
Reconciliation of GAAP Gross Profit (Loss) to Non-GAAP Gross Profit (Loss)
(In thousands)
(Unaudited)
Three Months For the Years
Ended Ended
Dec. Sept. Dec. Dec. Dec.
30, 30, 31, 30, 31,
2006 2006 2005 2006 2005
GAAP - gross profit (loss) $(516) $6,196 $501 $9,351 $13,749
Increased depreciation due to
shorter economic
life of Hillview facility
included in:
Total cost of sales - - 4,288 4,519 4,288
Stock based compensation
included in:
Total cost of sales 140 135 - 343 -
Non-GAAP - gross profit (loss) $(376) $6,331 $4,789 $14,213 $18,037
GAAP gross profit (loss) as a
percent of net sales -3% 29% 3% 12% 19%
Non-GAAP gross profit (loss) as a
percent of net sales -2% 30% 28% 18% 25%
SIPEX CORPORATION
Reconciliation of GAAP Loss from Operations to Non-GAAP Loss from
Operations
(In thousands)
(Unaudited)
Three Months Ended For the Years Ended
December September December December December
30, 30, 31, 30, 31,
2006 2006 2005 2006 2005
GAAP - loss from
operations $(13,069) $(5,619) $(11,845) $(38,866) $(38,515)
Increased depreciation
due to shorter
economic
life of Hillview
facility included in:
Total cost of sales - - 4,288 4,519 4,288
Research and
development - - 1,060 1,118 1,060
Marketing and
selling - - 305 322 305
General and
administrative - - 707 744 707
Stock based
compensation included
in:
Total cost of sales 140 135 - 343 -
Research and
development 309 261 - 1,219 -
Marketing and
selling 162 229 - 816 -
General and
administrative 420 258 - 1,265 -
Restructuring and
other 1,501 77 132 1,863 577
Impairment of fixed
assets 12 - - 12 9,377
Non-GAAP - loss from
operations $(10,525) $(4,659) $(5,353) $(26,645) $(22,201)
SIPEX CORPORATION
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
(In thousands)
(Unaudited)
Three Months Ended For the Years Ended
December September December December December
30, 30, 31, 30, 31,
2006 2006 2005 2006 2005
GAAP - Net loss $(14,278) $(6,299) $(11,693) $(41,234) $(38,107)
Increased depreciation
due to shorter
economic life of
Hillview facility
included in:
Total cost of sales - - 4,288 4,519 4,288
Research and
development - - 1,060 1,118 1,060
Marketing and
selling - - 305 322 305
General and
administrative - - 707 744 707
Stock based
compensation included
in:
Total cost of sales 140 135 - 343 -
Research and
development 309 261 - 1,219 -
Marketing and
selling 162 229 - 816 -
General and
administrative 420 258 - 1,265 -
Restructuring and
other 1,501 77 132 1,863 577
Impairment of fixed
assets 12 - - 12 9,377
Non-GAAP - Net loss $(11,734) $(5,339) $(5,201) $(29,013) $(21,793)
SIPEX CORPORATION
Reconciliation of GAAP Net Loss Per Share to Non-GAAP Net Loss Per Share
(In thousands)
(Unaudited)
Three Months For the Years
Ended Ended
Dec. Sept. Dec. Dec. Dec.
30, 30, 31, 30, 31,
2006 2006 2005 2006 2005
GAAP - Net loss per share $(0.40) $(0.18) $(0.33) $(1.16) $(1.07)
Increased depreciation due to
shorter economic life of
Hillview facility included in:
Total cost of sales - - 0.12 0.13 0.12
Research and development - - 0.03 0.03 0.03
Marketing and selling - - 0.01 0.01 0.01
General and administrative - - 0.02 0.02 0.02
Stock based compensation
included in:
Total cost of sales 0.00 0.00 - 0.01 -
Research and development 0.01 0.01 - 0.03 -
Marketing and selling 0.00 0.01 - 0.02 -
General and administrative 0.01 0.01 - 0.04 -
Restructuring and other 0.04 0.00 0.00 0.05 0.02
Impairment of fixed assets 0.00 - - 0.00 0.26
Non-GAAP - Net loss per share (1) $(0.33) $(0.15) $(0.15) $(0.81) $(0.61)
Weighted average common shares
outstanding
- basic and diluted 35,808 35,551 35,550 35,615 35,544
(1) Amounts may not aggregate to the total due to rounding
SOURCE Sipex Corporation
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Related links:
http://www.sipex.com/
http://www.prnewswire.com/comp/111683.html/
CONTACT:
Clyde Ray Wallin, Chief Financial Officer of
Sipex, +1-408-934-7500, or fax, +1-408-935-7678, or
rwallin@sipex.com
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