Home > News > Exar Reports First Quarter Fiscal 1999 Operating Results

FREMONT, California, July 21, 1998 - Exar Corporation (Nasdaq: EXAR) today reported operating results for first quarter fiscal 1999. Revenue for the first quarter was $21.8 million compared to first quarter fiscal 1998 revenue of $24.4 million. Net income for the first quarter was $2.4 million or $0.24 per share compared to $1.5 million or $0.16 per share for the first fiscal quarter of 1998.

First quarter revenue decreased 13.3% from $25.1 million in the preceding quarter. Net income in the first quarter decreased 4.0% from pro forma net income (before unusual charges) in the fourth quarter of $2.5 million. Gross margin in the first quarter increased to 53.8% from 51.4% in the preceding quarter, and 46.9% in the first quarter of fiscal 1998.

"Revenue was softer than anticipated in the first quarter, particularly in Japan, however, we showed a strong improvement in EPS (50%) year-on-year," said Donald L. Ciffone, president and chief executive officer, Exar Corporation. "Despite lower revenue, we were able to continue improvement in margins due to a richer than expected product mix and improved operating efficiencies. We also experienced significant sequential design win growth over the prior quarter in our focus markets."

During the quarter, the Communications division introduced new data communications products: the XR16C2850, the industry's first dual UART targeted at networking and telecommunications equipment applications, and a new multi-product family of dual-channel UARTS for a wide range of data communications applications. The division secured design wins with two key European suppliers for E1 products, and overall design win activity in the communications segment remained strong.

The Video & Imaging division introduced new low power converter products in the quarter including a new family of 3V digital-to-analog converters for a wide range of digital calibration devices, and analog-to-digital converters for scanning and imaging applications. The division secured scanner design wins for Exar's new family of imaging subsystems introduced to the market in April, including a win with one of the leading Taiwanese scanner manufacturers.

During the quarter, Exar also announced a new distribution agreement with Pioneer-Standard Electronics, Inc., the third largest distributor in North America, to distribute Exar products in the United States, Mexico and Canada. Pioneer extends Exar's reach in focus markets, particularly communications, with a strong technical support capability.

Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties, including industry and market conditions impacting price, availability of raw materials and inventory, manufacturing costs and yields, transition issues related to transfer of the Company's test operations, competitive factors and the Company's successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended March 31, 1998.

Exar Corporation designs, develops and markets innovative, system-oriented analog and mixed-signal integrated circuits for video & imaging, communications and silicon sensing markets. The Company, based in Fremont, CA, had fiscal 1998 revenues of $102.0 million and employs about 365 people worldwide.

EXAR CORPORATION AND SUBSIDIARIES

EXAR CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)(Unaudited)

	Three Months Ended
	June 30,
	1998	1997
NET SALES	$21,764	$24,398
COSTS AND EXPENSES:
Cost of sales	10,066	12,946
Research and development	3,412	3,774
Selling, general and administrative	5,422	5,538
Goodwill amortization	185	292
	19,085	22,550
INCOME FROM OPERATIONS	2,679	1,848
OTHER INCOME, NET	1,091	611
INCOME BEFORE INCOME TAXES	3,770	2,459
INCOME TAXES	1,404	976
NET INCOME	$ 2,366	$ 1,483
Basic net income per share	$ .25	$ .16
Diluted net income per share	$ .24	$ .16
Shares used in computation of basic
net income per share	9,539	9,199
Shares used in computation of diluted
net income per share	9,970	9,458

 EXAR CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	June 30,	March 31,
	1998	1998
	(Unaudited)
ASSETS
Current assets:
Cash and short-term investments	$ 77,177	$ 79,307
Accounts receivable, net	15,864	16,764
Inventories	6,971	6,781
Other current assets	6,751	6,738
Total Current Assets	106,763	109,590
Property and equipment, net	27,367	26,746
Other assets	7,139	7,333
	$ 141,269	$ 143,669
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities	$ 13,351	$ 19,195
Non-current liabilities	712	745
Stockholders’ equity	127,206	123,729
	$ 141,269	$ 143,669
Linda Prosser, VP, Marketing Communications