Announces It Is Now Current With Its SEC Filing Requirements
-- Second Quarter Revenues of $21.0 Million, Up 18% Sequentially and Up 15%
From Year-Ago Period -- Second Quarter GAAP Net Loss Per Share of $0.19,
Improved From $0.39 in the First Quarter and $0.46 in Year-Ago Period --
Milpitas, California Wafer Fab Shut-down to Occur at the end of the Third
Quarter
MILPITAS, Calif., Sept. 21 /PRNewswire-FirstCall/ -- Sipex (OTC:
SIPX.PK) has today filed its Form 10-Q Quarterly Reports with the
Securities and Exchange Commission for the first and second quarters of
2006. Together with these reports, along with its Form 10-K/A and Form 10-K
for 2005, its Form 10-K for 2004 and its Forms 10-Q for 2005, the Company
is now current with its periodic SEC reporting requirements.
Revenues for the second quarter of 2006 were $21.0 million, an increase
of 18% from first quarter revenues of $17.9 million and an increase of 15%
from revenues of $18.3 million recorded in the year-ago period. Second
quarter 2006 GAAP net loss was $6.9 million, or $0.19 per share, compared
with GAAP net loss of $13.8 million, or $0.39 per share, in the previous
quarter and GAAP net loss of $16.2 million, or $0.46 per share, in the
year-ago period. Included in the first and second quarter 2006 GAAP net
loss is stock-based compensation of $0.9 million and $0.8 million, or $0.03
and $0.02 per share, respectively. The first quarter 2006 GAAP net loss
includes $6.7 million of depreciation based upon our decision to reduce the
remaining estimated depreciation life for our headquarters facility. The
second quarter 2005 GAAP net loss includes a $9.4 million impairment charge
based on changes in the planned use for our wafer fabrication long-lived
assets.
Second quarter 2006 non-GAAP net loss was $6.1 million, or $0.17 per
share, an increase from $5.9 million, or $0.16 per share in the previous
quarter and a decrease from $6.8 million, or $0.19 per share in the second
quarter of 2005. Non-GAAP results exclude the impact of stock-based
compensation, restructuring and impairment charges. 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.
"This now brings our financials up to date," explained Ray Wallin, CFO
of Sipex. "These results incorporate a number of restructuring activities
such as the sale of our building as well as completion of our convertible
debenture financing. We expect to file our third quarter 2006 results
on-time. We expect third quarter 2006 results to include restructuring
charges for our fab closure."
"One of our primary goals for 2006 was to re-establish revenue growth.
In 2005, we lost business due to our internal investigation and financial
situation," stated Ralph Schmitt, CEO of Sipex. "We have now shown two
successive quarters of revenue growth and have solidified our position at
many key accounts."
"As part of our 2006 annual operating plan, we invested in sales and
marketing resources to better penetrate the large analog market. Top analog
marketing and applications talent, along with sales people with critical
customer relationships have been added to our team. Our strategy is to grow
the company to be a broad-based analog supplier. We have released more than
130 new products in the first two quarters of this year. Our new team
members have also been able to start the transition of our
new-product-pipeline to more customer-based application specific standard
product ("ASSP") development. These types of devices will start delivering
revenue to the company in the second half of 2007."
"Over the past few quarters we have reduced our channel inventories and
we are now fully transitioned to a sell-through revenue recognition model.
We have also reduced our distribution partners in Asia to optimize
performance in that market. We anticipate that our transition to a fabless
model will greatly improve our operating model. This transition is now
partially complete as we started to build some of our products out of our
partners' wafer fabs in the second quarter of 2006. We expect our Milpitas,
California wafer fab to be substantially closed at the end of the 3rd
quarter of 2006. However, the majority of our products sold in the third
and fourth quarters will be supplied out of inventory built from our
Milpitas fab."
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 first and second quarters of 2006 and answer
questions on the recently filed financial results for 2003, 2004, and 2005.
The call is available, live, to any interested party by dialing
888-428-4472. For international callers, please dial 651-291-0618.
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. The 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. 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 due to unforeseen issues in the preparation of our
quarterly report for the third quarter we may be unable to file this report
in a timely manner, the ability of management to overcome the challenges
facing Sipex, Sipex's ability to successfully manage the transition to a
fabless semiconductor company and to general market conditions in the
semiconductor industry. 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 and July 1, 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.
SIPEX CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
July 1, Dec. 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $22,766 $1,969
Restricted cash 715 500
Short-term investment securities 3,944 --
Accounts receivable, net 6,653 3,735
Accounts receivable, related party, net 2,821 3,011
Inventories 13,414 13,400
Prepaid expenses and other current assets 2,564 1,300
Total current assets 52,877 23,915
Property, plant and equipment, net 20,303 25,803
Restricted cash - noncurrent 388 500
Other assets 193 224
Total assets $73,761 $50,442
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowing $-- $3,000
Current portion of lease financing obligation 164 --
Accounts payable 12,485 7,394
Accrued expenses 5,467 7,282
Accrued restructuring costs 1,775 1,407
Deferred income, related party 6,280 5,707
Deferred income, other 2,505 2,510
Total current liabilities 28,676 27,300
Long-term accrued restructuring costs 325 584
Long-term lease financing obligation 12,253 --
Convertible senior notes 25,447 --
Other long-term liabilities 64 37
Total liabilities 66,765 27,921
Stockholders' equity:
Common stock 355 355
Additional paid-in capital 229,158 224,026
Accumulated deficit (222,498) (201,841)
Accumulated other comprehensive loss (19) (19)
Total stockholders' equity 6,996 22,521
Total liabilities and stockholders' equity $73,761 $50,442
SIPEX CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
For the Three For the Six
Months Ended Months Ended
July 1, April 1, Dec. 31, July 2, July 1, July 2,
2006 2006 2005 2005 2006 2005
Net sales $11,558 $9,303 $9,215 $10,567 $20,861 $22,374
Net sales,
related party 9,455 8,551 8,027 7,765 18,006 15,685
Total net sales 21,013 17,854 17,242 18,332 38,867 38,059
Cost of sales 9,781 10,178 9,346 8,966 19,959 18,312
Cost of sales,
related party 7,366 7,871 7,395 6,121 15,237 11,125
Total cost
of sales 17,147 18,049 16,741 15,087 35,196 29,437
Gross profit
(loss) 3,866 (195) 501 3,245 3,671 8,622
Operating expenses:
Research and
development 3,883 5,496 5,105 4,267 9,379 8,119
Marketing and
selling 3,765 3,656 3,046 2,720 7,421 5,297
General and
administrative 2,743 4,021 4,063 3,138 6,764 7,224
Restructuring (22) 307 132 47 285 59
Impairment of
fixed assets -- -- -- 9,377 -- 9,377
Total operating
expenses 10,369 13,480 12,346 19,549 23,849 30,076
Loss from
operations (6,503) (13,675) (11,845) (16,304) (20,178) (21,454)
Other income
(expense):
Interest income 221 49 26 61 270 146
Interest expense (582) (183) (13) (5) (765) (17)
Other income, net 59 42 296 47 101 94
Total other income
(expense), net (302) (92) 309 103 (394) 223
Loss before income
tax expense (6,805) (13,767) (11,536) (16,201) (20,572) (21,231)
Income tax expense 53 32 157 10 85 22
Net loss $(6,858) $(13,799)$(11,693) $(16,211) $(20,657)$(21,253)
Net loss per
common share
-basic and
diluted $(0.19) $(0.39) $(0.33) $(0.46) $(0.58) $(0.60)
Weighted average
common share
outstanding
-basic and
diluted 35,550 35,550 35,550 35,550 35,550 35,538
SIPEX CORPORATION
Reconciliation of GAAP Gross Profit (Loss) to Non-GAAP Gross Profit
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 1, April 1, Dec. 31, July 2, July 1, July 2,
2006 2006 2005 2005 2006 2005
GAAP - gross
profit (loss) $3,866 $(195) $501 $3,245 $3,671 $8,622
Increased depreciation
due to shorter
economic life
of Hillview
facility included
in cost of sales -- 4,519 4,286 -- 4,519 --
Stock based
compensation
included in
cost of sales (59) 127 -- -- 68 --
Non-GAAP -
gross profit $3,807 $4,451 $4,787 $3,245 $8,258 $8,622
GAAP gross profit
(loss) as a percent
of net sales 18% (1%) 3% 18% 9% 23%
Non-GAAP gross
profit as a percent
of net sales 18% 25% 28% 18% 21% 23%
SIPEX CORPORATION
Reconciliation of GAAP Loss from Operations to Non-GAAP Loss from Operations
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 1, April 1, Dec. 31, July 2, July 1, July 2,
2006 2006 2005 2005 2006 2005
GAAP - loss from
operations $(6,503) $(13,675) $(11,845) $(16,304) $(20,178)$(21,454)
Increased depreciation
due to shorter
economic life
of Hillview facility
included in
cost of sales -- 4,519 4,286 -- 4,519 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in research
and development -- 1,118 1,061 -- 1,118 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in marketing
and selling -- 322 304 -- 322 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in general
and administrative -- 744 707 -- 744 --
Stock based
compensation
included in
cost of sales (59) 127 -- -- 68 --
Stock based
compensation
included in research
and development 311 338 -- -- 649 --
Stock based
compensation
included in
marketing
and selling 235 190 -- -- 425 --
Stock based
compensation
included in general
and administrative 309 278 -- -- 587 --
Restructuring (22) 307 132 47 285 59
Impairment of
fixed assets -- -- -- 9,377 -- 9,377
Non-GAAP - loss
from operations $(5,729) $(5,732) $(5,355) $(6,880) $(11,461)$(12,018)
SIPEX CORPORATION
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 1, April 1, Dec. 31, July 2, July 1, July 2,
2006 2006 2005 2005 2006 2005
GAAP - net loss $(6,858) $(13,799)$(11,693)$(16,211) $(20,657) $(21,253)
Increased depreciation
due to shorter
economic life
of Hillview facility
included in
cost of sales -- 4,519 4,286 -- 4,519 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in research
and development -- 1,118 1,061 -- 1,118 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in marketing
and selling -- 322 304 -- 322 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in general
and administrative -- 744 707 -- 744 --
Stock based
compensation
included in
cost of sales (59) 127 -- -- 68 --
Stock based
compensation
included in research
and development 311 338 -- -- 649 --
Stock based
compensation
included in
marketing
and selling 235 190 -- -- 425 --
Stock based
compensation
included in general
and administrative 309 278 -- -- 587 --
Restructuring (22) 307 132 47 285 59
Impairment of
fixed assets -- -- -- 9,377 -- 9,377
Non-GAAP -
net loss $(6,084) $(5,856) $(5,203) $(6,787) $(11,940) $(11,817)
SIPEX CORPORATION
Reconciliation of GAAP Net Loss Per Share to Non-GAAP Net Loss Per Share
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
July 1, April 1, Dec. 31, July 2, July 1, July 2,
2006 2006 2005 2005 2006 2005
GAAP - net loss
per share $(0.19) $(0.39) $(0.33) $(0.46) $(0.58) $(0.60)
Increased depreciation
due to shorter
economic life
of Hillview facility
included in
cost of sales -- 0.13 0.12 -- 0.13 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in research
and development -- 0.03 0.03 -- 0.03 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in marketing
and selling -- 0.01 0.01 -- 0.01 --
Increased depreciation
due to shorter
economic life
of Hillview facility
included in general
and administrative -- 0.02 0.02 -- 0.02 --
Stock based
compensation
included in
cost of sales -- -- -- -- -- --
Stock based
compensation
included in research
and development 0.01 0.01 -- -- 0.02 --
Stock based
compensation
included in
marketing
and selling 0.01 0.01 -- -- 0.01 --
Stock based
compensation
included in general
and administrative 0.01 0.01 -- -- 0.02 --
Restructuring -- 0.01 -- -- 0.01 --
Impairment of
fixed assets -- -- -- 0.26 -- 0.26
Non-GAAP - net loss
per share (1) $(0.17) $(0.16) $(0.15) $(0.19) $(0.34) $(0.33)
Weighted average
common shares
outstanding -
basic and
diluted 35,550 35,550 35,550 35,550 35,550 35,538
(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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