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» Integrated Silicon Solution CEO Discusses F1Q2011 Results - Earnings Call Transcript
We refer you to the documents ISSI files from time-to-time with the SEC, specifically our most recent Form 10-K filed in December 2011.These documents contain and identify important factors that could cause our actual future results to differ materially from those contained in our financial guidance, projections, comments or other forward-looking statements.Scott Howarth Thank you, John. Results for this quarter reflects two major themes with our memory business doing very well and performing as expected while our smaller analog business dropped significantly caused by the weak Chinese feature phone market. For our memory business, our first quarter results reflect solid performance even during a period of weaker demand in a couple of our end-markets. We achieved record sales especially DRAM, primarily due to increased demand from our automotive and industrial medical and military customers while we continue to achieve strong demand in design win traction. These DRAM results reflect the diversity of our business across four large and differentiated end-markets and the continued success of our focus on high-quality specialty memory products. Our new product execution is on track as we continue to introduce new products and we are also seeing increased opportunities to gain market share as some of the largest competitors reach end of life on certain DRAM and SRAM products. In the communications market we experienced a higher level of weakness as our customers demand for base stations and networking equipments flows impacting our SRAM business. In regards to our analog products, revenue in December quarter declined significantly due to decreased sales of feature phones in the Chinese market. As a transition in demand from feature phones to smart phones accelerates in China, this trend will adversely impact our analog business in the short term. We are working to broaden our analog market opportunity inside and outside the China and in new product areas that we will expand our addressable market. Now let me discuss our results for the December quarter in more detail. Revenue was $66.2 million, which was within our guidance range. Our GAAP net income was $3.8 million or $0.13 per share.
Our non-GAAP net income was $6.3 million or $0.22 per share. Our non-GAAP results exclude stock compensation, the amortization of Si En intangibles and the non-cash tax expense from utilizing net deferred tax assets.We also achieved $7.6 million in cash flow from operations. Combined SRAM and DRAM revenue in the December quarter decreased 3.4% sequentially to $63.8 million which was at the mid-point of our guidance range and represented an increase of 6% over the prior year quarter. DRAM revenue grew 1% sequentially as we benefited from strength in the automotive market coupled with greater product diversity, long life cycle design wins and solid supply relationships with our customers. As I mentioned previously, SRAM revenue decreased due to weakness in the communications market and was down 12% sequentially and our analog revenue in the December quarter was 55% or $2.9 million lower than the September quarter. We also continued to – because we execute our strategy to gain share in our key markets, automotive revenue grew 24% from the September quarter and 44% from the year ago quarter. We also achieved strong growth, in the industry, industrial, medical, and military markets with 5% sequential growth and 60% revenue growth over the prior year quarter. Overall, our communications market revenue decreased 24% sequentially and 28% on a year-over-year basis due to overall end-market weakness. We believe there are large and growing opportunities for ISSI in these markets where customers value our high-quality products, strong engineering capability and long life cycle support. Now I will briefly review our key markets and products including DRAM, SRAM and analog. During December quarter, especially DRAM represented 67% of our total revenue and increased 1% on a sequential basis, while commodity DRAM represented less than 1% of our total revenue, giving ISSI almost no exposure to this volatile memory market. Read the rest of this transcript for free on seekingalpha.com