UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: January 30, 1998
QUALITY SEMICONDUCTOR, INC.
(Exact name of registrant as specified in its charter)
California 2-23128 77-0199189
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
851 Martin Avenue
Santa Clara, CA 95050
(Address of principal executive offices) (including Zip code)
(408) 450-8000
(Registrant's telephone number, including area code)
Exhibit Index on page 3
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 Quality Semiconductor, Inc. Press Release dated
January 21, 1998
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QUALITY SEMICONDUCTOR, INC.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit No. Exhibit
99.1 Quality Semiconductor, Inc. Press Release dated
January 21, 1998
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For more information contact:
Rick Bottomley
Acting Chief Financial Officer
Quality Semiconductor, Inc.
(408) 450-8000
Morgen-Walke Associates, Inc.
Doug Sherk, Carolyn Bass, Jim Byers
(415) 296-7383
Josh Passman, Vince Daniels
(212) 850-5600
FOR IMMEDIATE RELEASE
QUALITY SEMICONDUCTOR REPORTS FISCAL 1998 FIRST QUARTER RESULTS
SANTA CLARA, CA -- (January 21, 1998) -- Quality Semiconductor, Inc.
(Nasdaq:QUAL) today reported for the first quarter ended December 31, 1997. The
reported results are in line with the Company's first quarter outlook
announcement on December 8, 1997. Revenue for the first quarter was $18,534.00
versus $12,345,000 for the first quarter a year ago, and $20,502,000 for the
prior quarter. Net loss for the first quarter was $989,000, or a $0.13 loss per
share, compared to net income of $131,000, or $0.02 per share in the same
quarter a year ago, and a net loss of $1,180,000, or a $0.16 loss per share for
the prior quarter. The earnings shortfall was due primarily to pricing pressures
in its networking product line and the revenue shortfall was due primarily to
softness in demand of its logic products. Average weighted common shares
outstanding for the first quarter ended December 31, 1997 were 7,373,000 versus
6,185,000 for the first quarter of the previous year.
Paul Gupta, President and CEO stated "although we are disappointed with
our performance in the first fiscal quarter, we are encouraged by the continued
acceptance of the Company's networking products in which we shipped over 900,000
units in the first quarter of fiscal 1998. In addition, we are also encouraged
with the results of our cost reduction efforts achieved in the latter half of
the first quarter. Our fab in Sydney, Australia received ISO 9001 certification,
and is now qualified at 0.5 micron production, which we anticipate will enhance
our cost reduction programs while providing a low cost alternative source of
supply for wafers for our networking products.
Except for historical information contained herein, the matters
discussed in this press release are forward-looking statements that are subject
to certain risks and uncertainties that could cause the actual results to differ
materially from those projected, including, among others, litigation, the impact
of competitive products and pricing, general economic conditions and conditions
specific to the semiconductor industry, fluctuations in customer demand, the
timing and market acceptance of new product introductions, the timely
development and qualification of new products and other risk factors listed in
the Company's SEC reports including the Company's periodic reports filed
pursuant to the Security Exchange Act of 1934 and the Registration Statement on
form S-1 filed by the Company in connection with its initial public offering.
Quality Semiconductor assumes no obligation to update the information included
in this press release.
Quality Semiconductor, Inc. designs, develops and markets
high-performance logic and networking semiconductor products. The Company
targets systems manufacturers principally in the networking, personal computer
and workstation markets. The Company's logic products include the 3.3-volt and
5-volt QSFCT families of high-speed, low-noise interface logic devices, the
QuickSwitch family of high-speed, low-resistance bus switches, a family of
low-skew clock management products, a family of analog switch devices, and new
JTAG products designed to allow board-level testing of complex products. QSI's
networking products include two Fast Ethernet CMOS transceivers that provide
high integration solutions for the adapter, repeater, switch and card bus
markets.
-tables to follow-
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Quality Semiconductor Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
---------------------------------
1997 1996
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Net revenues $ 18,534 $ 12,345
Cost of sales 13,420 7,238
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Gross Margin 5,114 5,107
Operating expenses:
Research and development 2,720 2,110
Sales and marketing 2,392 1,788
General and administrative 1,371 925
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Total operating expenses 6,483 4,823
Operating income (loss) (1,369) 284
Interest, net (153) (83)
------------- -------------
Income (loss) before taxes (1,522) 201
Provision (benefit) for taxes (533) 70
------------- -------------
Net income (loss) $ (989) $ 131
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Net income (loss) per share - Basic $ (0.13) $ 0.02
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Net income (loss) per share - Diluted $ (0.13) $ 0.02
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Weighted shares outstanding - Basic 7,373 5,664
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Weighted shares outstanding - Diluted 7,373 6,185
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Quality Semiconductor Inc.
Consolidated Balance Sheets
(unaudited, in thousands)
Dec 31 Sept. 30,
------------ -------------
1997 1997
------------ -------------
Assets
Current assets:
Cash, cash equivalents, and
short-term investments $ 13,908 $ 13,059
Accounts receivable, net 9,223 8,748
Inventories 13,725 17,689
Other current assets 5,791 5,327
------------ ------------
Total current assets 42,647 44,823
Property and equipment, net 22,382 22,859
Other assets 1,883 2,150
============ =============
Total assets $ 66,912 $ 69,832
============ =============
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable, accrued liabilities,
and deferred income $ 10,571 $ 11,382
Current portion of long-term obligations 6,141 5,666
------------ -------------
Total current liabilities 16,712 17,048
Long-term liabilities 6,054 7,202
Deferred tax liabilities 1,832 1,945
Shareholders equity 42,314 43,637
============ =============
Total liabilities and shareholders equity $ 66,912 $ 69,832
============ =============
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SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUALITY SEMICONDUCTOR, INC.
Date: January 30, 1998 By: /s/ Richard A. Bottomley
-----------------------------------
Richard A. Bottomley
Acting Chief Financial Officer
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