News

Catalyst Semiconductor Reports 2nd Quarter Financial Results

December 04, 2006 by Jeff Shepard

Catalyst Semiconductor, Inc. reported financial results for its second quarter ended October 31, 2006. For the second quarter ended October 31, 2006, Catalyst had net income of $176,000, or $0.01 per diluted share, on net revenues of $16.3 million. This compares with net income of $927,000, or $0.05 per diluted share, on net revenues of $16.9 million in the second quarter ended October 31, 2005. For the first quarter ended July 31, 2006, Catalyst reported a net loss of ($259,000), or ($0.02) per share, on net revenues of $15.2 million.

Net revenues from analog/mixed signal products were $1.3 million, or 7.9% of net revenues, in the second quarter ended October 31, 2006, compared to $1.2 million, or 7.3% of net revenues, in the second quarter ended October 31, 2005 and $1.4 million, or 9.4% of net revenues, in the first quarter ended July 31, 2006. Gross margin for the second quarter ended October 31, 2006 was 35.5%, compared with 38.0% for the second quarter ended October 31, 2005 and 32.2% for the first quarter ended July 31, 2006. The gross margin increase from the previous quarter is primarily attributable to sales of lower cost inventory and increased manufacturing efficiency due to the higher product volume shipped.

Research & Development expense was $1.9 million for the second quarter ended October 31, 2006, compared to $2.0 million and $1.9 million for the quarters ended October 31, 2005 and July 31, 2006, respectively. Research & Development expenses included stock option related compensation expense of $176,000 and $183,000 for the second and first quarters of 2007, respectively.

Sales, General and Administrative expense was $3.8 million for the second quarter ended October 31, 2006, compared to $3.4 million and $3.9 million for the quarters ended October 31, 2005 and July 31, 2006, respectively. The increase from the year ago quarter is principally attributable to compensation expense of $339,000 associated with stock option grants to sales, marketing and administrative personnel while the first quarter included compensation expense for options of $413,000.

Total stock option related compensation expense was $528,000 for the second quarter ended October 31, 2006 as compared to $608,000 in the first quarter ended July 31, 2006. The reduction is primarily due to the $107,000 expense recorded in the first quarter for the annual grant of stock options to the board of directors. This is a new cost in the company's statement of operations in fiscal 2007, which is a result of the adoption of FAS123R effective at the beginning of this fiscal year.

"We are encouraged to see that our product margins increased over the previous quarter, particularly in the memory product lines. We believe this is attributable to our ongoing transition to .35 micron products and other cost cutting measures that we hope to see have a further positive effect on our margins in the future," said Gelu Voicu, President and CEO. "Another sign of progress is that during the quarter, Catalyst introduced its first series of proprietary analog products, the Quad Mode™ LED drivers. This innovative product series brings a new level of efficiency to battery operated displays while saving manufacturing costs over competitive designs."