- GAAP Net Income - $598 thousand for Q4 2006 COLORADO SPRINGS,
Colo., Feb. 22 /PRNewswire-FirstCall/ -- Simtek Corporation
(NASDAQ:SMTK), the inventor, pioneer, and world's premier supplier
of nonvolatile static random access memory (nvSRAM) integrated
circuits, today announced its financial results for the fourth
quarter and year ended December 31, 2006. Key Highlights - Product
revenue of $9.1 million for Q4 2006, a 227% increase over Q4 2005 -
Product revenue of $28.6 million for the full year 2006, a 175%
increase over 2005 - Total revenue of $30.6 million for 2006, a
195% increase over 2005 - Booking of new orders in 2006 were a
record $35.2 million, with a book-to-bill ratio of 1.23 - Gross
product margin increased to 45% for Q4 2006 from 25% a year ago and
40% in Q3 2006 - Net income of $598 thousand, or $0.04 per share
for Q4 2006 versus a loss from continuing operations of $1.8
million or $(0.25) per share for Q4 2005. First time in 23 quarters
the Company has reported positive net income. - Ex-item profit for
the year of $319 thousand compared to a $7.5 million loss from
continuing operations in 2005 - Over 100 new design wins - Company
applied for NASDAQ listing (subsequently approved in 2007) - Hired
Ron Sartore as Executive Vice President to spearhead new product
development Financial Results Total revenue for the fourth quarter
of 2006 was $9.7 million, consisting of $9.1 million of product
revenue and $552 thousand of royalty revenue. Product revenue
represents a 227% increase over $2.8 million in Q4 2005. The
Company reported net income for Q4 2006 of $598 thousand, or $0.04
per share, compared to a net loss from continuing operations of
$1.8 million, or ($0.25) per share for Q4 2005. Excluding the
effects of stock options and amortization of acquisition related
costs, the Company generated ex-item (non- GAAP) net profit of $1.2
million, or $0.07 per share, for Q4 2006. There were no such
charges in the 2005 period. Total revenue for 2006 was a record
$30.6 million, consisting of $28.6 million of product revenue and
$2.0 million of royalty revenue. Product revenue represents a 175%
increase over $10.4 million, and inclusive of royalty revenue,
total revenue represents a 195% increase over $10.4 million
reported in 2005. The Company reported a GAAP net loss for the year
ended December 31, 2006 of $2.0 million, or a ($0.13) per share,
compared to a net loss from continuing operations of $7.5 million,
or ($1.09) per share in 2005. Ex-item net profit was $319 thousand
or $0.02 per share for 2006. All per share amounts reflect the
effect of the 1 for 10 reverse stock split that was completed on
October 5, 2006. "Team Simtek did a phenomenal job in creating and
supporting growth and operational improvements during 2006," stated
Harold Blomquist, Simtek President and CEO. "We are proud of the
significant strides we have made as a company, and look forward to
continuing to progress and grow in 2007. Looking ahead we
anticipate continued strong top-line growth in 2007, as well as
continued improvement in gross margins and positive net income for
2007 as a whole. We look forward to delivering on these goals in
the upcoming quarters." Outlook for 2007 For 2007, Simtek expects
product revenue growth in the range of 60% to 75% year over year,
and anticipates that Q1 2007 as compared to Q1 2006 will be in this
range. The Company does not expect any royalty revenue in 2007.
Gross margins are projected to increase to approximately 50% by the
end of 2007. Investment in engineering and product development is
expected to increase nearly 100% from 2006 levels. Ex-item profit
for 2007 is expected to be in the range of $0.18-$0.21 per share.
"Simtek has under-invested in engineering, research and development
for several years and in 2006 began a somewhat more aggressive
investment plan to fuel a stronger platform of intellectual
property and products. In 2007 we plan to increase investment in
baseline product development by as much as $3 million over 2006
focusing on the launch of the 4 megabit family of products. We also
anticipate investing in engineering R&D to go beyond baseline
products. To that end we are tremendously excited to have set up a
business development and design center in San Diego, California
under the leadership of Ron Sartore. We anticipate investing up to
an additional $3 million in products and technologies that we
believe can place the company on track to serve far larger markets
than ever before," concluded Blomquist. Conference Call Simtek
management will host a conference call at 5:00 p.m. EST (2:00 p.m.
PST) today to discuss these results. The call can be accessed by
dialing 800-257-3401 and giving the company name, "Simtek."
Participants are asked to call the assigned number approximately 10
minutes before the conference call begins. A replay of the
conference call will be available two hours after the call for the
following five business days by dialing 800-405-2236 and entering
the following pass code: 11084026#. Also, the conference call
together with supplemental financial information will be available
over the Internet at http://www.simtek.com/ in the Investor Info
area of the site or by going to http://www.mkr-group.com/. About
Simtek Corporation Simtek Corporation designs and markets
high-speed, re-programmable, nonvolatile semiconductor memory
products, for use in a variety of systems including RAID servers,
industrial automation, GPS navigational systems, robotics, medical
instrumentation, and networking and telecommunications equipment.
Information on Simtek products can be obtained from its web site:
http://www.simtek.com/; email: . The Company is headquartered in
Colorado Springs, Colorado. Forward-Looking Statements This press
release contains 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, including
statements predicting Simtek's future growth. These forward-looking
statements are inherently difficult to predict and involve risks
and uncertainties that could cause actual results to differ
materially, including, but not limited to, projections of future
performance including predictions of future profitability and
expectations of the business environment in which Simtek operates.
For a detailed discussion of these and other risk factors, please
refer to Simtek's filings with the Securities and Exchange
Commission (SEC), including its Annual Report on Form 10-K and
subsequent Form 10-Q and Form 8-K filings. Ex-item Information
Simtek reports net income or loss in accordance with GAAP and
additionally uses ex-item (non-GAAP) financial measures which are
adjusted from the most directly comparable GAAP financial measures
to exclude charges related to new, non-operating, unusual or
non-recurring expenses the Company may incur from time to time, in
order to provide additional comparative information between
periods. Management believes that these ex-item measures are
important to investor understanding of the Company's disclosures
regarding past, current and future operating results. Following is
reconciliation* of the Ex-item (non-GAAP) financial measures to the
most comparable GAAP financial measures: Unaudited (Amounts in
thousands, except per share amounts) Three Months Ended Year Ended
December 31, December 31, 2006 2006 Income (Loss) from Continuing
Operations as reported $598 $(2,007) Adjusted-GAAP items:
Amortization of Non-compete Agreement 445 1,784 Costs associated
with employee stock options 125 542 Ex-item Income from Continuing
Operations $1,168 $319 Per Share Data: Income (Loss) from
Continuing Operations as reported $0.04 $(0.13) Amortization of
Non-compete Agreement $0.02 $0.12 Costs associated with employee
stock options $0.01 $0.03 Ex-item Income Per Share from Continuing
Operations $0.07 $0.02 * Pursuant to the requirements of Regulation
G. Simtek reports net income or loss in accordance with GAAP and
additionally uses ex-item (non-GAAP) financial measures which are
adjusted from the most directly comparable GAAP financial measures
to exclude charges related to non- operating, unusual or
non-recurring expenses the Company may incur from time to time, in
order to provide additional comparative information between
periods. Management believes that these ex-item measures are
important to investor understanding of the Company's disclosures
regarding past, current and future operating results. As of
December 31, 2006 there were 16,145,679 shares outstanding. SIMTEK
CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Amounts in thousands, except par value and share amounts) ASSETS
December 31, December 31, CURRENT ASSETS: 2006 2005 Cash and cash
equivalents $4,522 $1,766 Restricted investments 1,775 2,281
Accounts receivable - trade, net 5,537 1,456 Inventory, net 6,596
2,068 Prepaid expenses and other current assets 312 99 Deposits --
600 Total current assets 18,742 8,270 EQUIPMENT AND FURNITURE, net
1,239 571 DEFERRED FINANCING COSTS 54 111 GOODWILL 992 876
NON-COMPETITION AGREEMENT 7,126 8,910 OTHER ASSETS 89 20 TOTAL
ASSETS $28,242 $18,758 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $3,771 $2,822 Accrued expenses 939
1,419 Accrued vacation payable 229 145 Accrued wages 814 40
Obligation under capital leases -- 13 Line of credit 681 --
Debentures, current 480 240 Total current liabilities 6,914 4,679
DEBENTURES, NET OF CURRENT 2,220 2,760 Total liabilities 9,134
7,439 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred
stock, $1.00 par value; 200,000 shares authorized, none issued --
-- Common stock, $.0001 par value; 30,000,000 shares authorized,
16,146,679 and 16,145,679 shares issued and outstanding at December
31, 2006 and 14,692,082 and 14,691,082 shares issued and
outstanding at December 31, 2005 2 2 Additional paid-in capital
67,173 57,509 Treasury stock, at cost; 1,000 shares (1) (1)
Accumulated deficit (48,198) (46,191) Accumulated other
comprehensive income: Cumulative translation adjustment 132 --
Total shareholders' equity 19,108 11,319 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $28,242 $18,758 SIMTEK CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in
thousands, except share and per share amounts) Three Months Ended
Year Ended December 31, December 31, 2006 2005 2006 2005 REVENUE:
Product sales, net $9,124 $2,794 $28,560 $10,385 Royalty revenue
552 -- 2,070 -- Total revenue 9,676 2,794 30,630 10,385 Cost of
sales 5,008 2,101 18,024 7,591 GROSS MARGIN 4,668 693 12,606 2,794
OPERATING EXPENSES: Research and development costs 1,277 1,672
5,855 6,369 Sales and marketing 1,446 329 4,679 1,493 General and
administrative 1,266 516 3,861 2,275 Total operating expenses 3,989
2,517 14,395 10,137 INCOME (LOSS) FROM CONTINUING OPERATIONS 679
(1,824) (1,789) (7,343) OTHER INCOME (EXPENSE): Interest income 50
36 162 92 Interest expense (123) (61) (370) (238) Exchange rate
variance 1 -- (3) -- Other expense 24 -- 26 (1) Total other income
(expense) (48) (25) (185) (147) INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE PROVISION FOR INCOME TAXES 631 (1,849) (1,974)
(7,490) Provision for income taxes (33) -- (33) -- INCOME (LOSS)
FROM CONTINUING OPERATIONS 598 (1,849) (2,007) (7,490) INCOME
(LOSS) FROM DISCONTINUED OPERATIONS (including gain on disposal of
$1,689) -- (2) -- 1,704 NET INCOME (LOSS) $598 $(1,851) $(2,007)
$(5,786) NET INCOME (LOSS) PER COMMON SHARE: Basic and diluted
Income (loss) from continuing operations $.04 $(.25) $(0.13)
$(1.09) Income from discontinued operations .00 .00 .00 .25 Total
$.04 $(.25) $(.13) $(.84) WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: Basic and diluted 16,123,904 7,301,065 15,125,847
6,861,309 DATASOURCE: Simtek Corporation CONTACT: IR, Todd Kehrli
or Marie Dagresto of MKR Group, Inc., +1-323-468-2300, , for Simtek
Corporation; or Brian Alleman, CFO of Simtek, Web site:
http://www.mkr-group.com/ Web site: http://www.simtek.com/
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