California Micro Devices Reports December Quarter Financial Results

MILPITAS, Calif., Jan. 22 /PRNewswire-FirstCall/ -- California Micro
Devices (Nasdaq: CAMD) today announced its financial results for the third
quarter of fiscal 2008, which ended December 31, 2007. Meeting revised
guidance, revenue was $15.0 million compared to $17.7 million a year ago.
Exceeding revised guidance, diluted EPS on a GAAP basis was $0.01 compared to
$0.03 a year ago. Also exceeding revised guidance, EPS on a non-GAAP basis,
excluding Arques Technology acquisition costs and employee stock-based
compensation expenses, and using a cash basis tax rate, was $0.04 compared to
$0.06 a year ago.
"Q3 revenue was below the midpoint of our revised guidance due to lower
than expected demand for our handset protection devices while revenue from the
personal computer and digital consumer markets exceeded guidance and was the
highest it has been in the last several years," said Robert V. Dickinson,
president and CEO. "Although our revenue was modestly affected by the late
October power failure at one of our foundry partners, we expect to recover
most of the shortfall in Q4." He noted that bookings were down sequentially,
consistent with lower revenue and seasonal patterns, while design wins
rebounded driven by record design wins for low capacitance ESD devices as well
as an increase in design wins at top 5 mobile handset manufacturers.
"I'm also very pleased to report that we are now shipping to four of the
world's top 5 mobile handset manufacturers, marking an important milestone for
our company," added Dickinson.
Providing guidance for the March quarter, Dickinson expects revenue to be
between $13.5 and $15.0 million and diluted EPS on a GAAP basis to be a loss
between ($0.03) and ($0.01). On a non-GAAP basis, excluding Arques Technology
acquisition costs and employee stock-based compensation expenses, and using a
cash basis tax rate, he anticipates diluted EPS to be between breakeven and a
profit of $0.02.
Conference Call and Webcast Today
California Micro Devices will hold a conference call today at 2:00 p.m.
Pacific Time to discuss its December quarter results. Within the USA,
interested parties can access the conference call by dialing 800-218-0713.
International parties may gain access by dialing 303-262-2141. No password is
necessary. A replay of the conference call will be available on the company's
web site at http://www.cmd.com (Investor Relations Link) beginning at
approximately 4:00 p.m. Pacific Time on January 22, 2008 and continuing for
one year.
About California Micro Devices Corporation
California Micro Devices Corporation is a leading supplier of application
specific analog and mixed signal semiconductor products for the mobile
handset, digital consumer electronics and personal computer markets. Key
products include protection devices for mobile handsets, digital consumer
electronics products such as digital TVs, and personal computers as well as
analog and mixed signal ICs for mobile handset displays. Detailed corporate
and product information may be accessed at http://www.cmd.com.
All statements contained in this press release that are not historical
facts are forward-looking statements which are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
They are not guarantees of future performance or events. Rather, they are
based on current expectations, estimates, beliefs, assumptions, and goals and
objectives and are subject to uncertainties that are difficult to predict. As
a result, our actual results may differ materially from the statements made.
Often such statements can be identified by their use of words such as will,
intends, expects, plans, believes, anticipates, and estimates. Forward-looking
statements made in this release include our expected revenues and GAAP and
non-GAAP diluted earnings per share for the fiscal 2008 fourth quarter. These
forward-looking statements are based upon our assumptions about and assessment
of the future, which may or may not prove true, and involve a number of risks
and uncertainties including, but not limited to whether our customers
experience the demand we anticipate for their products based in part upon
their input and our order backlog; whether the designed performance of our
devices satisfies our customers' requirements so that they continue to design
our devices into their products; whether our devices perform to their design
specification; whether we incur unexpected operating expenses; there not being
any unanticipated price reductions for our devices whether due to competitor
inroads or otherwise; and there being no interruption in the supply of quality
product from our contract manufacturers, contract assemblers and test houses
as well as the risk factors detailed in the company's Form 8K, 10K, and 10Q
filings with the Securities and Exchange Commission. Due to these and other
risks, the company's future actual results could differ materially from those
discussed above. These forward-looking statements speak only as to the date of
this release, and, except as required by law, we undertake no obligation to
publicly release updates or revisions to these statements whether as a result
of new information, future events, or otherwise.
In addition to disclosing financial results calculated in accordance with
U.S. generally accepted accounting principles (GAAP), the company's earnings
release contains non-GAAP financial measures which, among other items, exclude
the effects of employee share-based compensation and the requirements of SFAS
No. 123R, "Share-based Payment" ("123R"). The non-GAAP financial measures used
by management and disclosed by the company exclude the income statement
effects of all forms of employee share-based compensation and the effects of
123R upon the number of diluted shares used in calculating non-GAAP earnings
per share. The non-GAAP financial measures also exclude Arques Technology
acquisition related costs, including amortization of acquisition-related
intangibles and, during the first quarter of fiscal 2007, one-time charges for
acquired in-process research and development. In addition, these non-GAAP
measures utilize a tax rate that is based upon the income taxes the company
expects to actually pay relating to this quarter's activities and results. The
non-GAAP financial measures disclosed by the company should not be considered
a substitute for, or superior to, financial measures calculated in accordance
with GAAP and reconciliations to those financial statements should be
carefully evaluated. The non-GAAP financial measures used by the company may
be calculated differently from, and therefore may not be comparable to,
similarly titled measures used by other companies. Set forth below are
reconciliations of the non-GAAP financial measures to the most directly
comparable GAAP financial measures. For additional information concerning the
non-GAAP financial measures, please see the Form 8-K dated January 22, 2008
which the company filed with the Securities and Exchange Commission on
January 22, 2008.

California Micro Devices Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(Unaudited)

December 31, March 31,
2007 2007
ASSETS
Current assets:
Cash and cash equivalents $3,506 $1,908
Short-term investments 47,730 47,116
Accounts receivable, net 5,895 7,514
Inventories 6,976 5,172
Deferred tax assets 2,269 2,201
Prepaid expenses and other current assets 1,316 882
Total current assets 67,692 64,793
Property, plant and equipment, net 5,691 4,840
Goodwill 5,258 5,258
Intangible assets, net 308 432
Other long-term assets 83 560
TOTAL ASSETS $79,032 $75,883

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,664 $4,654
Accrued liabilities 2,092 3,269
Deferred margin on shipments to distributors 2,116 1,479
Current maturities of capital lease
obligations 132 132
Total current liabilities 11,004 9,534
Other long-term liabilities 163 303
Total liabilities 11,167 9,837
Shareholders' equity:
Common stock and additional paid-in capital -
$0.001 par value; 50,000,000 shares
authorized; shares issued and outstanding:
23,293,024 and 23,151,103 as of December 31,
2007 and March 31, 2007, respectively 117,159 114,923
Accumulated other comprehensive income 1 -
Accumulated deficit (49,295) (48,877)
Total shareholders' equity 67,865 66,046
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $79,032 $75,883

California Micro Devices Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
(On a GAAP basis)

Three Months Ended Nine Months Ended
December 31, December 31,
2007 2006 2007 2006

Net sales $14,955 $17,736 $44,201 $52,541
Cost of sales 10,105 11,393 29,995 32,610
Gross Margin 4,850 6,343 14,206 19,931
Operating expenses:
Research and development 1,670 1,903 5,080 6,129
Selling, general and administrative 3,533 4,349 11,170 12,610
In-process research and development - - - 2,210
Amortization of intangible assets 41 41 124 117
Total operating expenses 5,244 6,293 16,374 21,066
Operating income (loss) (394) 50 (2,168) (1,135)
Other income, net 628 646 1,911 1,802
Income (loss) before income taxes 234 696 (257) 667
Income taxes 4 23 12 692
Net income (loss) $230 $673 $(269) $(25)

Net income (loss) per share-basic $0.01 $0.03 $(0.01) $(0.00)
Weighted average common shares
outstanding-basic 23,252 23,063 23,212 22,989

Net income (loss) per share-diluted $0.01 $0.03 $(0.01) $(0.00)
Weighted average common shares and
share equivalents
outstanding-diluted 23,283 23,136 23,212 22,989

Reconciliation of net income (loss)
to non-GAAP net income:
Net income (loss) $230 $673 $(269) $(25)
Reconciling items:
In-process research and development - - - 2,210
Amortization of intangible assets 41 41 124 117
Stock-based compensation expense
under SFAS 123(R), net of tax 586 770 1,746 2,346
Difference between effective tax
rate and cash basis tax rate (21) (22) (36) 532
Non-GAAP net income $836 $1,462 $1,565 $5,180

Non-GAAP:
Net income per share-basic $0.04 $0.06 $0.07 $0.23
Net income per share-diluted $0.04 $0.06 $0.07 $0.22

Shares used in calculation of
non-GAAP:
Weighted average common shares
outstanding-basic 23,252 23,063 23,212 22,989
Weighted average common shares
and share equivalents
outstanding-diluted 23,414 23,217 23,355 23,150

California Micro Devices Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
(On a non-GAAP basis)

Three Months Ended Nine Months Ended
December 31, December 31,
2007 2006 2007 2006

Net sales $14,955 $17,736 $44,201 $52,541
Cost of sales 10,021 11,280 29,733 32,263
Gross Margin 4,934 6,456 14,468 20,278
Operating expenses:
Research and development 1,525 1,730 4,638 5,608
Selling, general and
administrative 3,175 3,865 10,128 11,132
Total costs and expenses 4,700 5,595 14,766 16,740
Operating income (loss) 234 861 (298) 3,538
Other income, net 628 646 1,911 1,802
Income before income taxes 862 1,507 1,613 5,340
Income taxes 26 45 48 160
Net income $836 $1,462 $1,565 $5,180

Net income per share-basic $0.04 $0.06 $0.07 $0.23
Weighted average common shares
outstanding-basic 23,252 23,063 23,212 22,989

Net income per share-diluted $0.04 $0.06 $0.07 $0.22
Weighted average common
shares and share equivalents
outstanding-diluted 23,414 23,217 23,355 23,150

See accompanying reconciliation of GAAP measures to non-GAAP measures.

California Micro Devices Corporation
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)

Three Months Ended Nine Months Ended
December 31, December 31,
Net income (loss) per share: 2007 2006 2007 2006

Basic:
GAAP net income (loss) per share $0.01 $0.03 $(0.01) $(0.00)
Reconciling items:
In-process research and development - - - 0.10
Amortization of intangible assets - - 0.01 0.01
Stock-based compensation expense
under SFAS 123(R), net of tax 0.03 0.03 0.07 0.10
Difference between effective tax
rate and cash basis tax rate - - - 0.02
Non-GAAP net income per share $0.04 $0.06 $0.07 $0.23

Diluted:
GAAP net income (loss) per share $0.01 $0.03 $(0.01) $(0.00)
Reconciling items:
In-process research and development - - - 0.09
Amortization of intangible assets - - 0.01 0.01
Stock-based compensation expense
under SFAS 123(R), net of tax 0.03 0.03 0.07 0.10
Difference between effective tax
rate and cash basis tax rate - - - 0.02
Non-GAAP net income per share $0.04 $0.06 $0.07 $0.22

SOURCE California Micro Devices Corporation

Kevin Berry, Chief Financial Officer of California Micro Devices Corporation,
+1-408-934-3144, kevinb@cmd.com