Zilog Announces Second Quarter Fiscal 2010 Financial Results

• Press Release
• Source: Zilog, Inc.
• On 4:00 pm EDT, Wednesday October 28, 2009

SAN JOSE, Calif., Oct. 28 /PRNewswire-FirstCall/ -- Zilog, Inc. (Nasdaq: ZILG - News), a trusted supplier of application specific, embedded system-on-chip (SoC) solutions for industrial and consumer markets, today reported financial results for its three- and six-month periods ended September 26, 2009.

Net sales from continuing operations for the fiscal 2010 second quarter ended September 26, 2009 were $8.1 million, a sequential increase of 12 percent and a year-over-year decrease of 23 percent. The sequential increase exceeded the previously announced guidance range. The increase over the first fiscal quarter sales levels reflected growth in all regions as well as a rise in ongoing licensing royalties. Sales included licensing royalties of $1.0 million in the second fiscal quarter, compared to $0.7 million in the previous quarter and $0.6 million in the second fiscal quarter a year ago. The year-over-year decline in sales reflects the worldwide fall in demand for end products as a result of the global economic downturn. On February 18, 2009, the Company sold its universal remote control and secured transaction processor businesses. In accordance with FASB ASC 205.2 (FAS 144), the comparative financial statements for the Company's previous fiscal periods ended September 27, 2008, have been restated to reflect the sold businesses as discontinued operations.

GAAP net income for the fiscal second quarter ended September 26, 2009, was $1.6 million, or 9 cents per share, compared to GAAP net income of $0.4 million, or 2 cents per share, in the previous fiscal quarter and a GAAP net loss of $1.6 million, or 9 cents per share, for the fiscal second quarter a year ago. Net income for the fiscal 2010 second quarter includes a gain from discontinued operations reflecting a receipt of $1.55 million, or 50 percent of an escrow balance that was outstanding from the sale of the businesses in February 2009. The remainder of the escrow balance is expected to be received in February 2010. The previous fiscal quarter's results included $1.0 million in other income for the sale of certain patents and intellectual property rights. Additionally, the results for the second fiscal quarter a year ago included net income from discontinued operations of $2.1 million.

"In the second quarter of fiscal 2010, we continued the improved performance we achieved in the opening quarter of this fiscal year, as once again we recorded profitability, sequential sales growth, increased cash and a positive book-to-bill ratio. Our second fiscal quarter results exceeded our guidance, reflecting higher margins, lower spending and increased revenues--including a sizeable increase in licensing revenue," said Darin G. Billerbeck, Zilog's president and chief executive officer. "As a result, the second quarter was our third consecutive fiscal quarter of GAAP net income. Even excluding the discontinued operations gain, we were non-GAAP profitable in the second fiscal quarter. These results, combined with our substantial progress in development of our new energy management solutions, gives us growing confidence as the global economy begins to recover."

On a year-to-date basis for the six months ended September 26, 2009, sales were $15.3 million and GAAP net income was $2.0 million, or 12 cents per share, compared to sales of $20.1 million and a GAAP net loss of $3.3 million, or 19 cents per share, for the six months ended September 27, 2008. Net income for the fiscal 2010 first half includes net gains of $1.0 million for the sale of patents and intellectual property rights as well as a gain of $1.5 million for discontinued operations offset by special charges of $0.2 million. Additionally, excluding special charges and amortization of intangible assets, operating expenses for continuing operations for the fiscal first half of fiscal 2010 were $7.1 million, a 52 percent reduction from spending levels in the first half of fiscal 2009. Additionally, fiscal 2009 first half results included special charges of $1.1 million related to activities associated with consolidation and outsourcing of certain of the company's activities.

The Company reported cash, cash equivalents and long-term investments of $36.4 million at September 26, 2009, compared to $34.7 million and $33.3 million at June 27, 2009 and March 31, 2009, respectively. Net cash provided by continuing operating activities was $0.2 million for the fiscal 2010 second quarter, as compared to net cash used in continuing operating activities of $3.4 million for the second quarter in the prior fiscal year and net cash provided by continuing operating activities of $2.0 million in the previous fiscal quarter. On a non-GAAP basis, adjusted EBITDA from continuing operations, as defined below, was positive $0.7 million for the fiscal 2010 second quarter, as compared to negative $2.3 million in the second fiscal quarter a year ago and positive $0.7 million in the prior fiscal quarter.

"Our second quarter results reflected the benefits of our business rationalization, including a continued reduction in our overall spending. Our current cost structure scales to support revenue growth with minimal incremental spending. With the stabilization in our business model and the strength of our balance sheet, we are well positioned to take advantage of improvements in the global economy," said Perry J. Grace, Zilog's executive vice president and chief financial officer. "In the short term, we remain cautiously optimistic. December is historically a seasonally slower quarter, although beginning quarter backlog levels for the third quarter fiscal 2010 are higher than they were at the same time last quarter. We are not expecting the third quarter fiscal 2010 licensing royalties to be as high as they were last quarter, and distribution end-demand will be key to determining the final revenue levels for the third quarter," Grace concluded.

The Company expects net sales for its fiscal 2010 third quarter ending December 27, 2009, to be lower by 3 percent to 5 percent, as compared to the second fiscal quarter ended September 26, 2009. At December 27, 2009 the Company anticipates to end with cash, cash equivalents and long-term investment levels consistent with those at September 26, 2009.

NON-GAAP FINANCIAL INFORMATION (Unaudited)

The Company may make reference to certain Non-GAAP financial measures. Management believes that these Non-GAAP measures are useful measures of operating performance and liquidity because they may exclude the impact of certain items, such as amortization of intangible assets, stock-based compensation, depreciation, non-operating interest, income taxes and special charges. However, these Non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net income (loss) and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP.

                                                Three Months Ended
                                  Sep. 26, Jun. 27, Mar. 31, Dec. 27, Sep. 27,
                                    2009     2009     2009     2008     2008
                                                 (in thousands)
    Reconciliation of Non-GAAP
     Net Income (Loss) to GAAP
     Net Income (Loss)
    Non-GAAP net income (loss)
     from continuing operations     $333     $394  ($1,776) ($2,871) ($2,563)
    Non-GAAP adjustments on
     continuing operations:
        Special charges and
         credits                      77      135    3,478    1,696      554
        Amortization of
         intangible assets             -        -      174      209      209
        Non-cash stock-based
         compensation COS             19       19       21       44       30
        Non-cash stock-based
         compensation R&D             20       24      (24)     126       47
        Non-cash stock-based
         compensation SG&A           167      183      201      297      211
      Total non-GAAP adjustments,
       continuing operations         283      361    3,850    2,372    1,051
    GAAP net income (loss) from
     continuing operations           $50      $33  ($5,626) ($5,243) ($3,614)

Non-GAAP Net Income (Loss) from continuing operations (Unaudited)

Non-GAAP net income (loss) from continuing operations (Non-GAAP net income (loss)) excludes special charges and non-cash charges relating to the amortization of intangible assets and stock-based compensation. Following the sale of the two businesses in February, 2009, Non-GAAP net income (loss) was restated to exclude amounts related to the Company's discontinued operations. We believe that Non-GAAP net income (loss) is a useful measure as it excludes certain special charge items as well as certain non-cash charges, which facilitates a comparison of the Company's operating performance. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, the net loss measured in accordance with GAAP.

                                               Three Months Ended
                                  Sep. 26, Jun. 27, Mar. 31, Dec. 27, Sep. 27,
                                    2009     2009     2009     2008     2008
                                                 (in thousands)
    Reconciliation of Net Income
     (Loss) and Cash Flows From
     Operating Activities to EBITDA
      Reconciliation of net income
       (loss) to EBITDA:
        Net income (loss) from
         continuing operations       $50      $33  ($5,626) ($5,243) ($3,614)
        Depreciation and
         amortization                338      318      452      466      478
        Interest income               (6)      (3)      (4)     (24)     (49)
        Provision (benefit) for
         income taxes                 22       40       (2)      67       62
    EBITDA from continuing
     operations                     $404     $388  ($5,180) ($4,734) ($3,123)

    Reconciliation of EBITDA to
     net cash provided by (used
     in) continuing operating
     activities:
      EBITDA                        $404     $388  ($5,180) ($4,734) ($3,123)
      Provision (benefit) for
       income taxes                  (22)     (40)       2      (67)     (62)
      Interest Income                  6        3        4       24       49
      Non-cash stock-based
       compensation                  206      226      198      467      288
      Loss on disposition of
       operating assets                -        -      986       11        -
      Changes in other operating
       assets and liabilities       (394)   1,457   (4,119)    (571)    (577)
    Net cash provided by (used
     in) continuing operating
     activities                     $200   $2,034  ($8,109) ($4,870) ($3,425)

Non-GAAP EBITDA (Unaudited)

Management believes that Non-GAAP EBITDA ("EBITDA"), that is Earnings or loss Before Interest, Taxes, Depreciation and Amortization, is a useful measure of financial performance. Following the sale of the two businesses in February, 2009, EBITDA was restated to exclude amounts related to the Company's discontinued operations. We believe that the disclosure of EBITDA helps investors more meaningfully evaluate our liquidity position by the elimination of non-cash related items such as depreciation and amortization. We believe that our investors regularly use EBITDA as a measure of the liquidity of our business. Our management uses EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital.

                                               Three Months Ended
                                  Sep. 26, Jun. 27, Mar. 31, Dec. 27, Sep. 27,
                                    2009     2009     2009     2008     2008
                                                 (in thousands)
    Reconciliation of Net Income
     (Loss) and Cash Flows From
     Operating Activities to
     Adjusted EBITDA

    Reconciliation of net income
     (loss) to Adjusted EBITDA:
        Net income (loss) from
         continuing operations       $50      $33  ($5,626) ($5,243) ($3,614)
        Depreciation and
         amortization                338      318      452      466      478
        Interest income               (6)      (3)      (4)     (24)     (49)
        Provision (benefit) for
         income taxes                 22       40       (2)      67       62
        Special charges and
         credits                      77      135    3,478    1,696      554
        Non-cash stock-based
         compensation                206      226      198      467      288
      Adjusted EBITDA, continuing
       operations                   $687     $749  ($1,504) ($2,571) ($2,281)

    Reconciliation of Adjusted
     EBITDA to net cash provided
     by (used in) continuing
     operating activities:
      Adjusted EBITDA, continuing
       operations                   $687     $749  ($1,504) ($2,571) ($2,281)
      Special charges and credits    (77)    (135)  (3,478)  (1,696)    (554)
      Provision (benefit) for
       income taxes                  (22)     (40)       2      (67)     (62)
      Interest income                  6        3        4       24       49
      Loss on disposition of
        operating assets               -        -      986       11        -
      Changes in other operating
       assets and liabilities       (394)   1,457   (4,119)    (571)    (577)
    Net cash provided by (used in)
     continuing operating
     activities                     $200   $2,034  ($8,109) ($4,870) ($3,425)

Non-GAAP Adjusted EBITDA (Unaudited)

EBITDA reflects our Earnings or loss Before Interest, Taxes, Depreciation and Amortization. Additionally, management uses separate "Adjusted EBITDA" calculations for purposes of determining certain employees' incentive compensation and, subject to meeting specified Adjusted EBITDA amounts. Adjusted EBITDA, as we define it, excludes interest, income taxes, effects of changes in accounting principles and non-cash charges such as depreciation, amortization, in-process research and development, and stock-based compensation expense. It also excludes cash and non-cash charges associated with reorganization items and special charges and credits, which represent operational restructuring charges, including asset write-offs, employee termination costs, relocation costs and lease termination costs. Adjusted EBITDA also excludes changes in operating assets and liabilities, which are included in net cash provided by (used in) operating activities. Following the sale of the two businesses in February, 2009, Adjusted EBITDA was restated to exclude amounts related to the Company's discontinued operations. Our management uses Adjusted EBITDA as a supplement to cash flows from operations as a way to assess the cash generated from our business available for capital expenditures and the servicing of other requirements including working capital. This Non-GAAP Adjusted EBITDA measure allows management to monitor cash generated from the operations of the business. However, this Non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net loss and net cash provided or used in operating activities prepared in accordance with GAAP.

About Zilog, Inc.

Zilog is a trusted supplier of application specific, embedded system-on-chip (SoC) solutions for the industrial and consumer markets. From its roots as an award-winning architect in the microprocessor and microcontroller industry, Zilog has evolved its expertise beyond core silicon to include SoCs, single board computers, application specific software stacks and development tools that allow embedded designers quick time to market in areas such as energy management, monitoring and metering and motion detection. For more information, visit http://www.zilog.com/.

EZ80ACCLAIM!, Zilog, Z8, Z80, eZ80, Z8 ENCORE!, Encore!XP and Zneo are registered trademarks of Zilog, Inc. in the United States and in other countries.

Other product and or service names mentioned herein may be trademarks of the companies with which they are associated.

Cautionary Statements

This release contains forward-looking statements (including those related to our expectations for our December 2009 quarter and our position as the global economy recovers as well as our expectations with respect to the remaining escrow funds) relating to expectations, plans or prospects for Zilog, Inc. that are based upon the current expectations and beliefs of Zilog's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For example, weakness in our 8-bit classic or embedded flash products could negatively impact our December 2009 fiscal quarter. Changes in requirements for supporting the Transition Services Agreement with Maxim Integrated Products, Inc. could impact our cash projections. Additionally, our ability to attract and retain technical employees may be negatively impacted by uncertainties relating to potential future changes in the ownership and control of the Company which may make it difficult to execute on our long-term strategy. Whether we receive the remaining escrow funds in February 2010 depends on whether there are any claims for indemnification made by the buyer of our remote control and point of sale businesses.

Design wins are defined as the projected one-year net sales for a customer's new product design for which the Company has received at least a $1,000 purchase order for its devices. Design win estimates are determined based on projections from customers and may or may not be realized. Whether or not Zilog achieves anticipated revenue from design wins can be dependent on the timeliness of customers to ramp and whether or not the project in question is as commercially successful as the customers anticipated. Notwithstanding changes that may occur with respect to customer matters relating to the forward-looking statements, Zilog does not expect to, and disclaims any obligation to update such statements until release of its next quarterly earnings announcement or in any other manner. Zilog, however, reserves the right to update such statement, or any portion thereof, at any time for any reason.

The financial information presented herein is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Form 10-Q for the period ended September 26, 2009.

For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov or from the Company's website at www.Zilog.com.

    Contact:
    Daniel Francisco
    Francisco Group
    Zilog Communications
    (916) 812-8814

                                     Zilog, Inc.
                  UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (in thousands)

                                                           Sept. 26, March 31,
                                                             2009      2009
    ASSETS
    Current assets:
      Cash and cash equivalents                             $35,998   $32,230
      Accounts receivable, net                                3,446     1,698
      Receivables under transition services agreement           845     1,696
      Escrow receivable related to sold business              1,550     3,100
      Inventories                                             3,747     4,022
      Deferred tax asset                                         10        10
      Prepaid expenses and other current assets                 685     1,199
      Current assets associated with discontinued
       operations                                                 -       960
        Total current assets                                 46,281    44,915

    Long term investments                                       375     1,100
    Property, plant and equipment, net                        2,152     2,347
    Goodwill                                                  2,211     2,211
    Other assets                                              1,173     1,079
    Total assets                                            $52,192   $51,652

          LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Short term debt                                            $-      $346
      Accounts payable                                        2,722     1,939
      Payables under transition services agreement            3,496       275
      Income taxes payable                                      170       195
      Accrued compensation and employee benefits              1,373     1,349
      Other accrued liabilities                               3,478     3,828
      Deferred income including remaining escrow              5,022     8,024
      Current liabilities associated with discontinued
       business                                                   -     1,256
        Total current liabilities                            16,261    17,212

    Deferred tax liability                                       10        10
    Other non-current liabilities                             1,857     2,804
        Total liabilities                                    18,128    20,026

    Stockholders' equity:
      Common stock                                              186       186
      Additional paid-in capital                            127,876   127,436
      Treasury stock                                         (7,563)   (7,563)
      Other comprehensive income                                185       173
      Accumulated deficit                                   (86,620)  (88,606)
        Total stockholders' equity                           34,064    31,626
    Total liabilities and stockholders' equity              $52,192   $51,652



                                      Zilog, Inc.
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands except per share data and percentages)

                                          Three Months Ended  Six Months Ended
                                          Sep. 26, Sep. 27,  Sep. 26, Sep. 27,
                                            2009     2008      2009     2008

    Net sales from continuing operations   $8,070  $10,474  $15,305  $20,078
    Cost of sales                           4,386    6,086    8,906   11,345
    Gross margin                            3,684    4,388    6,399    8,733
    Gross margin %                           45.7%    41.9%    41.8%   43.5%
    Operating expenses:
      Research and development              1,179    1,757    2,210    3,490
      Selling, general and administrative   2,370    5,723    4,851   11,215
      Special charges                          77      554      212    1,144
      Amortization of intangible assets         -      209        -      418
        Total operating expenses            3,626    8,243    7,273   16,267
    Operating income (loss)from
     continuing operations                     58   (3,855)    (874)  (7,534)

    Interest and other income :
      Interest income                           6       49        9      119
      Other income, net                         8      254    1,010      350
    Income (loss) from continuing
     operations before provision
     income taxes                              72   (3,552)     145   (7,065)
    Provision for income taxes                 22       62       62      116
    Net income (loss) from
    Net income (loss) from
     continuing operations                     50   (3,614)      83   (7,181)
    Net income from discontinued operations    36    2,058      356    3,884
    Gain from sale of discontinued
     operations, net of tax                 1,547        -    1,547        -
    Net income (loss)                      $1,633  ($1,556)  $1,986  ($3,297)

    Basic and diluted net income (loss)
     from continuing operations per share       -   ($0.21)       -   ($0.42)
    Basic and diluted net income from
     discontinued operations per share          -    $0.12    $0.02    $0.23
    Basic and diluted net income from gain
     on sale of discontinued operations
     net of tax per share                   $0.09        -    $0.09        -
    Basic and diluted net income (loss)
     per share                              $0.09   ($0.09)   $0.12   ($0.19)

    Weighted-average shares used in
     computing basic net income
     (loss) per share                      17,291   16,949   17,262   16,937
    Weighted-average shares used in
     computing diluted net income
     (loss) per share                      17,297   16,949   17,268   16,937



                                    Zilog, Inc.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (in thousands)

                                         Three Months Ended  Six Months Ended
                                          Sep. 26, Sep. 26,  Sep. 27, Sep. 27,
                                            2009     2008      2009     2008
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss) from continuing
     operations                              $50   ($3,614)     $83  ($7,181)
    Adjustments to reconcile net loss
     to net cash provided by continuing
     operating activities:
      Depreciation and amortization          338       478      656      914
      Disposition of operating assets          -         -        -       35
      Non-cash stock-based compensation      206       288      431      659
      Amortization of fresh-start
       intangible assets                       -       209        -      418
    Changes in operating assets and
     liabilities:
      Accounts receivable, net            (1,243)     (765)  (1,748)    (373)
      Receivable under transition
       services agreement                    639         -      851        -
      Escrow receivable                    1,550         -    1,550        -
      Patent assignment receivable         1,000         -        -        -
      Inventories                           (406)      963      275    1,307
      Prepaid expenses and other
       current and non-current assets        207      (137)     432     (194)
      Accounts payable                        95        24      783    1,712
      Payable under transition
       services agreement                    266         -    3,221        -
      Accrued compensation and
       employee benefits                     (60)      (58)      24      678
      Deferred income from disti
       and escrow                         (1,831)     (486)  (3,002)    (902)
      Accrued and other current
       and non-current liabilities          (611)     (327)  (1,322)     901
        Net cash provided by (used in)
         continuing operating activities     200    (3,425)   2,234   (2,026)
        Net cash provided by
         discontinued operating
         activities                           36     2,842       60    1,870

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Redemption of long term
       investments                           525        50      725      475
      Capital expenditures                  (141)      (78)    (461)    (437)
        Net cash provided by (used in)
         investing activities                384       (28)     264       38
        Net cash provided by sale
          of discontinued operations       1,547         -    1,547        -

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from short term debt            -         -        -      660
      Payments on short term debt              -      (346)    (346)    (346)
      Proceeds from issuance of
       common stock under employee
       stock purchase and stock
       option plans                            5        26        9       76
        Net cash provided by (used in)
         financing activities                  5      (320)    (337)     390
        Net cash provided by
         discontinued financing
         activities                            -         1        -        2

    Increase in cash and cash
     equivalents                           2,172      (930)   3,768      274
    Cash and cash equivalents at
     beginning of period                  33,826    17,829   32,230   16,625
    Cash and cash equivalents at
     end of period                       $35,998   $16,899  $35,998  $16,899



                                       Zilog, Inc.
                      SELECTED UNAUDITED TRENDED FINANCIAL INFORMATION
                (Amounts in thousands except percentages, selected
                           key metrics and per share amounts)

                                               Three Months Ended
                                  Sep. 26, Jun. 27, Mar. 31, Dec. 27, Sep. 27,
                                    2009     2009     2009     2008     2008

    Sales & Expenses Information:
    Net sales from continuing
     operations                    $8,070   $7,235   $7,044   $9,035  $10,474
    Cost of sales                   4,386    4,520    4,379    6,091    6,086
    Gross margin                    3,684    2,715    2,665    2,944    4,388
    Gross margin %                   45.7%    37.5%    37.8%    32.6%    41.9%
    Operating expenses:
      Research and development      1,179    1,031    1,118    1,657    1,757
      Selling, general and
       administrative               2,370    2,481    3,442    4,696    5,723
      Special charges and credits      77      135    3,478    1,696      554
      Amortization of intangible
       assets                           -        -      174      209      209
        Total operating expenses    3,626    3,647    8,212    8,258    8,243

    Operating loss from continuing
     operations                        58     (932)  (5,547)  (5,314)  (3,855)

    Interest income                     6        3        4       24       49
    Other income (expense)              8    1,002      (85)     114      254
    Income (loss) from continuing
     operations before provision
     for income taxes                  72       73   (5,628)  (5,176)  (3,552)
    Provision (benefit) for
     income taxes                      22       40       (2)      67       62
    Net income (loss) from
     continuing operations            $50      $33  ($5,626) ($5,243) ($3,614)
    Net income (loss) from
     discontinued operations           36      320   (3,831)    (425)   2,058
    Gain from sale of
     discontinued operations,
     net of tax                     1,547        -   21,606        -        -
    Net income (loss)              $1,633     $353  $12,149  ($5,668) ($1,556)

    Basic and diluted net income
     (loss) from continuing
     operations per share               -        -   ($0.33)  ($0.31)  ($0.21)
    Basic and diluted net income
     (loss) from discontinued
     operations per share               -    $0.02   ($0.22)  ($0.02)   $0.12
    Basic and diluted net income
     from gain on sale of
     discontinued operations per
     share                          $0.09        -    $1.26        -        -
    Basic and diluted net income
     (loss) per share               $0.09    $0.02    $0.71   ($0.33)  ($0.09)
    Weighted average basic shares  17,291   17,230   17,171   17,071   16,949
    Weighted average diluted
     shares                        17,297   17,230   17,171   17,071   16,949

    Net Sales Information:
    Net Sales - by channel
    Direct                         $2,310   $1,685   $1,849   $1,625   $2,404
    Distribution                    5,760    5,550    5,195    7,410    8,070
        Total net sales            $8,070   $7,235   $7,044   $9,035  $10,474

    Net Sales - by region
    America's                      $3,629   $2,840   $2,975   $3,569   $3,783
    Asia (including Japan)          3,471    3,349    2,571    4,046    4,899
    Europe                            970    1,046    1,498    1,420    1,792
        Total net sales            $8,070   $7,235   $7,044   $9,035  $10,474

    Selected Key Metrics (as
     defined in our Form 10-Q
     and 10-K)
    Days sales outstanding             38       27       22       28       22
    Net sales to inventory ratio
      (annualized)                    8.6      8.7      7.0      8.0      7.5
    Current ratio                     2.8      2.6      2.6      1.5      1.6
    Distributor weeks of inventory     12       12       18       13       12

    Other Selected Financial
     Metrics
    Depreciation and amortization    $338     $318     $452     $466     $478
    Stock based compensation         $205     $226     $198     $467     $288
    Capital expenditures             $141     $320     $107      $82      $78
    Cash and cash equivalents     $35,998  $33,826  $32,230  $13,560  $16,899
    Long term investments            $375     $900   $1,100   $1,300   $1,450
    Cash and long term
     investments                  $36,373  $34,726  $33,330  $14,860  $18,349
    Short term debt                     -        -     $346     $693   $1,039
    Cash and long term
     investments, net of debt     $36,373  $34,726  $32,984  $14,168  $17,310
    EBITDA, adjusted                 $687     $749  ($1,504) ($2,571) ($2,281)

Buzz up!