<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 10-Q
__________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter ended March 30, 1996
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____.
Commission File Number: 0-19299
________________________________
INTEGRATED CIRCUIT SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Pennsylvania 23-2000174
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2435 Boulevard of the Generals
Norristown, Pennsylvania 19403
(Address of principal executive offices)
(610) 630-5300
(Registrant's telephone number including area code)
________________________________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [_]
As of May 10, 1996, there were 11,319,248 outstanding shares of the
Registrant's Common Stock, no par value.
===============================================================================
<PAGE>
INTEGRATED CIRCUIT SYSTEMS, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets:
March 30, 1996 and June 30, 1995 3
Consolidated Statements of Operations:
Three and Nine Months Ended March 30, 1996 and March 31, 1995 4
Consolidated Statements of Cash Flows:
Nine Months Ended March 30, 1996 and March 31, 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit 11 15
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands)
<TABLE>
<CAPTION>
March 30, June 30,
1996 1995
---------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $24,466 $ 9,960
Marketable securities - current 4,566 12,525
Accounts receivable, net 14,422 18,825
Inventory, net 18,938 15,504
Deferred income taxes 3,938 3,550
Prepaid income taxes 213 410
Other current assets 3,094 3,073
------- -------
Total current assets 69,637 63,847
------- -------
Property and equipment, net 13,591 13,358
Deposits on purchase contracts and
facility lease 6,065 4,240
Goodwill 1,896 409
Other assets 219 328
------- -------
Total assets $91,408 $82,182
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Note payable to bank $ 4,648 $ -
Current portion of long-term
obligations 157 294
Accounts payable 7,008 5,863
Accrued expenses and other current
liabilities 3,519 5,759
------- -------
Total current liabilities 15,332 11,916
------- -------
Long-term debt, less current portion 1,661 3,480
Deferred income taxes 1,017 997
------- -------
Total liabilities 18,010 16,393
------- -------
Minority interest 4,568 3,305
Shareholders' Equity:
Preferred stock, authorized 5,000
shares, non issued - -
Common stock, no par value,
authorized 50,000 shares;
issued and outstanding 11,317 and
11,110 shares as of March 30, 1996
and June 30, 1995, respectively 31,826 29,449
Retained earnings 37,004 33,035
------- -------
Total shareholders' equity 68,830 62,484
------- -------
Total liabilities and
shareholders' equity $91,408 $82,182
======= =======
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ and shares in thousands, except for per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 30, March 31, March 30, March 31,
1996 1995 1996 1995
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Revenues: $17,349 $27,793 $78,762 $76,225
Cost and expenses:
Cost of sales 13,964 13,428 47,340 35,958
Research and development expense 3,080 2,837 8,994 8,476
Sales and marketing expense 3,164 3,276 9,794 9,880
General and administrative expense 1,891 2,219 5,314 6,170
Non-recurring charges:
Change in business strategies - 3,822 - 3,822
Discontinued product lines - 3,606 - 3,606
Facility closing - - 1,757 -
Write off of in-process research
and development costs - 4,092 1,500 4,092
------- ------- ------- -------
Operating income (loss) (4,750) (5,487) 4,063 4,221
------- ------- ------- -------
Interest and other income (452) (323) (1,120) (924)
Interest expense 123 304 555 701
------- ------- ------- -------
Income (loss) before income taxes
and minority interest (4,421) (5,468) 4,628 4,444
------- ------- ------- -------
Income taxes (1,918) (632) 1,672 3,085
Minority interest (417) 341 (1,012) 341
------- ------- ------- -------
Net income (loss) $(2,086) $(5,177) $ 3,968 $ 1,018
======= ======= ======= =======
Net income (loss) per common share $(0.18) $(0.47) $0.34 $0.09
======= ======= ======= =======
Common and common equivalent shares 11,317 11,055 11,586 10,992
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
March 30, March 31,
1996 1995
-----------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,969 $ 1,018
Adjustments to reconcile net income
to net cash provided by operating
activities:
Non-recurring charge - facility
closing 1,757 -
Depreciation and amortization 2,310 2,503
Write-off of in-process research
and development costs 1,500 4,092
Minority interest in net income (1,012) 519
(Gain) loss on disposition of
assets 32 -
Deferred income taxes (369) (2,742)
Tax benefit of stock option
exercises 427 282
Accounts receivable 3,203 2,487
Inventory (3,503) (3,372)
Other assets, net (1,737) (2,116)
Accounts payable, accrued
expenses and other current
liabilities (2,066) 739
Income taxes payable 197 408
------- -------
Net cash provided by operating
activities 4,708 3,818
------- -------
Cash flows from investing activities:
Capital expenditures (2,569) (2,354)
Sales, maturities (purchase) of
marketable securities 7,846 2,384
Net assets acquired (334) (1,766)
------- -------
Net cash provided by (used
in) investing activities 4,943 (1,736)
------- -------
Cash flows from financing activities:
Net borrowing under line of credit
agreement 2,964 1,146
Repayments of long-term debt (153) (287)
Exercise of stock options 2,043 749
------- -------
Net cash provided by (used in)
financing activities 4,854 1,608
------- -------
Net increase in cash and cash
equivalents 14,505 3,690
Cash and cash equivalents:
Beginning of period 9,960 887
------- -------
End of period $24,465 $ 4,577
======= =======
Supplemental disclosures of cash flow
information:
Cash payments during the period for:
Interest $ 334 $ 256
======= =======
Income taxes $ 1,387 $ 6,100
======= =======
Supplemental disclosures of non-cash
investing activities:
Issuance of Turtle Beach common
stock - acquisition of
Value Media $ 2,673 $ -
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) INTERIM ACCOUNTING POLICY
The accompanying consolidated financial statements have not been audited. In
the opinion of the Company's management, the accompanying consolidated financial
statements reflect all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the Company's financial position at March
30, 1996 and results of operations and cash flows for the interim periods
presented. Certain items have been restated to conform to current period
presentation.
Certain footnote information has been condensed or omitted from these
consolidated financial statements. Therefore, these financial statements should
be read in conjunction with the consolidated financial statements and related
notes included in the Company's Annual Report on Form 10-K for the year ended
June 30, 1995. Results of operations for the three month and nine month periods
ended March 30, 1996 are not necessarily indicative of results to be expected
for the full year.
(2) CONSOLIDATION POLICY
The accompanying consolidated financial statements include the accounts of the
Company and all of its subsidiaries (wholly and majority-owned), after
elimination of all significant intercompany accounts and transactions.
(3) SUBSIDIARY'S ACQUISITION AND CONSOLIDATION
In January 1996, Turtle Beach Systems, Inc. ("Turtle Beach"), a majority owned
subsidiary of the Company issued 500,000 shares of its common stock, valued at
$2.67 per share, to the Company as consideration of the cancellation by the
Company of indebtedness in the principal amount of $1,325,000 owing to the
Company by Turtle Beach. In February 1996, the Company purchased from Value
Media, Inc., a minority stockholder in Turtle Beach, 183,700 shares of common
stock of Turtle Beach for a cash payment of $490,479. At March 30, 1996, the
Company owned 80.8% of the common stock of Turtle Beach.
(4) INVENTORY
Inventory is valued at the lower of cost or market using the first-in, first-out
(FIFO) method. The components of inventories are as follows (in thousands):
<TABLE>
<CAPTION>
March 30, June 30,
1996 1995
---------- --------
<S> <C> <C>
Work-in-process $ 7,511 $ 9,407
Finished parts 11,427 6,097
------- -------
Total inventory $18,938 $15,504
======= =======
</TABLE>
6
<PAGE>
(5) NET INCOME PER COMMON SHARE
Primary earnings per common share is computed using the weighted average number
of common and common equivalent shares outstanding during the period. Common
equivalent shares consist of stock options to purchase common stock (using the
treasury stock method based on average price over the period). Fully diluted
earnings per share is based on the weighted average number of shares and
equivalent shares outstanding (using the treasury stock method based on ending
price, if higher), unless anti-dilutive.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table sets forth, for the periods indicated, certain cost,
expense and income items as a percentage of total revenues. The table and the
subsequent discussion should be read in conjunction with the financial
statements and the notes thereto:
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 30, March 31, March 30, March 31,
1996 1995 1996 1995
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Revenue 100.0% 100.0% 100.0% 100.0%
Cost and expenses:
Cost of sales 80.5 48.3 60.2 47.2
Research and development expense 17.8 10.2 11.4 11.1
Sales and marketing expense 18.2 11.8 12.4 13.0
General and administrative expense 10.9 8.0 6.7 8.1
Change in business strategies - 13.7 - 5.0
Discontinued product line - 13.0 - 4.7
Facility closing - - 2.2 -
Write-off of in-process research and
development costs - 14.7 1.9 5.4
----- ----- ----- -----
Operating income (loss) (27.4) (19.7) 5.2 5.5
Interest and other (income) (2.6) (1.1) (1.4) (1.2)
Interest expense 0.7 1.1 0.7 0.9
----- ----- ----- -----
Income (loss) before income taxes
and minority interest (25.5) (19.7) 5.9 5.8
Income tax expense (11.1) (2.3) 2.1 4.0
Minority interest (2.4) 1.2 (1.3) 0.5
----- ----- ----- -----
Net income (loss) (12.0%) (18.6%) 5.0% 1.3%
===== ===== ===== =====
</TABLE>
Third Quarter 1996 as compared to Third Quarter 1995
Consolidated revenue decreased by 37.6% or $10.4 million for the third quarter
ended March 30, 1996 as compared to the prior year quarter. The decrease in
revenue was primarily attributable to a general softness in the PC component
business and continued impact of declining orders in the frequency timing
generator (FTG) business and was partially offset by increased revenue
contribution from Turtle Beach.
The Company's FTG component revenue decreased by 53.8% or $6.8 million for the
third quarter of fiscal 1996 as compared to the prior year quarter. Total FTG
component revenue contributed 33.5% of consolidated revenue for the third
quarter in fiscal 1996 which represented a decline with respect to 45.3% for the
prior year quarter.
Timing and communication component revenue, which includes data communications
and power, decreased by 48.3% or $1.3 million for the third quarter of fiscal
1996, as compared to the prior year quarter. Timing and communications
component revenue comprised 7.8% of consolidated revenue for the third quarter
of fiscal 1996 versus 9.4% for the prior year quarter.
8
<PAGE>
Multimedia revenue which includes revenue from the Company's majority owned
subsidiary ARK Logic, Inc. ("ARK Logic") and other integrated circuit components
for PC graphics, audio and video applications decreased by 48.0% or $2.3 million
in the third quarter of fiscal 1996 as compared to the prior year quarter.
Multimedia revenue comprised 14.3% of consolidated revenue for the third
quarter of fiscal 1996, as compared to 17.2% for the prior year quarter.
Revenue from custom ASIC components decreased by 27.9% or $1.3 million during
the third quarter of fiscal 1996, as compared to the prior year quarter. ASIC
component revenue comprised 20.0% of consolidated revenue for the third quarter
of fiscal 1996 versus 17.3% for the prior year quarter.
Revenues from Turtle Beach increased by 40.6% or $1.2 million during the third
quarter of fiscal 1996, as compared to the prior year quarter. The increased
revenue reflects gain in certain product lines acquired from Value Media, Inc.
in the second quarter of fiscal 1996. Turtle Beach contributed 24.4% of
consolidated revenue in the second quarter of fiscal 1996, as compared to 10.8%
in the prior year quarter.
Foreign revenue (which includes shipments of ICs to offshore subsidiaries of US
multinational companies) was 55.6% of total revenue for the third quarter of
fiscal 1996, which remains largely unchanged from the 56.0% of total revenue in
the prior year quarter.
Cost of sales as a percentage of total revenue was 80.5% for the third quarter
of fiscal 1996, as compared to 48.3% in the prior year quarter. The increase
in the cost of sales percentage was primarily due to an average selling price
(ASP) decline in the FTG and Multimedia product lines and the impact of reduced
revenues on fixed manufacturing overhead.
Research and development expense increased to 17.8% of total revenue for the
third quarter of fiscal 1996 from 10.2% in the prior year quarter. The
increase reflects reduced revenue and increased efforts on new product
development. While sales, general and administrative expenses nominally
decreased as compared to the prior year period, they increased significantly as
a percentage of revenues due to reduced revenues during the quarter.
Net loss for the third quarter fiscal 1996 was $2.1 million or $0.18 per share,
as compared to net loss of $5.2 million (including one-time charge of $8.9
million, tax effected) or $0.47 per share.
Nine Months Ended March 30, 1996 as compared to Nine Months Ended March 31, 1995
Consolidated revenue increased by 3.3% or $2.5 million for the nine months ended
March 30, 1996, as compared to the prior year period. The increase in revenue
was primarily attributable to increases in revenue from Turtle Beach and
multimedia components, partially offset by the decreases in revenue associated
with FTG and ASIC components.
The Company's FTG component revenue decreased 9.3% or $3.4 million for the nine
months of fiscal 1996, as compared to prior year period. Total FTG component
revenue contributed 41.8% of consolidated revenue for the nine months of fiscal
1996, which represented a decline with respect to 47.6% of consolidated revenue
for the prior year period.
Timing and communication component revenue decreased by 8.1% or $500,000 for the
nine months of fiscal 1996, as compared to the prior year period. Timing and
communications component revenue comprised 7.2% of consolidated revenue for the
nine months of fiscal 1996, as compared to 8.1% for the prior year period.
9
<PAGE>
Multimedia component revenue increased by 29.6% or $2.7 million for the nine
months ended March 30, 1996, as compared to the prior year period. The increase
reflects the acquisition of ARK Logic in the third quarter of fiscal 1995.
Multimedia revenue contributed 15.2% to the consolidated revenue during fiscal
1996 as compared to 12.1% in the prior year period.
Revenue from custom ASIC components decreased by 17.9% or $2.8 million during
the nine months of fiscal 1996, as compared to the prior year period. ASIC
component revenue comprised 16.3% of consolidated revenue for the nine months
ended March 30, 1996, versus 20.5% for the prior year period.
Revenues from Turtle Beach increased by 72.8% or $6.5 million during the nine
months of fiscal 1996, as compared to the prior year period. The increase is
primarily due to the acquisition of the upgrade kit product line of Value Media,
Inc. in the second quarter of fiscal 1996. Turtle Beach contributed 19.6% of
consolidated revenue in fiscal 1996, as compared to 11.7% in the prior year
period.
Foreign revenue (which includes shipments of ICs to offshore subsidiaries of US
multinational companies) was 60.5% of total revenue for the nine months ended
March 30, 1966, as compared to 57.2% of total revenue in the prior year period.
Costs of sales as a percentage of total revenue was 60.1% for the nine months of
fiscal 1996, as compared to 47.2% in the prior year period. The increase in the
cost of sales percentage reflects the dilutive impact of revenue gains at Turtle
Beach and Multimedia components, as well as a decline in average sales price for
the FTG and Multimedia product lines.
Research and development expense increased slightly to $9.0 million for the nine
months of fiscal 1996 from $8.5 million in the prior period. The increase is
primarily attributable to increased investment in new products. Sales, general
and administrative expenses, as a percentage of revenues, declined to 19.1% from
21.1% in fiscal 1996, as compared to the prior year period.
Income Taxes
The Company's effective income tax rate was 36.2% for the nine months ended
March 30, 1996, as compared to 69.4% in the prior year period. The non-tax
deductible intangible write-offs related to the acquisition of ARK Logic taken
in the third quarter of 1995 resulted in the unusually high tax rate in the
prior period. Excluding the tax impact of these write-offs, the Company's
effective tax rate would have been 36.9%.
Industry Factors
The Company continues to experience pricing pressures and increased competition
in its more mature, lower performance products. The Company's strategy has been
to develop new products and introduce them ahead of the competition in order to
be selected for design into products of leading OEMs. The Company's newer
components, which include advanced motherboard FTG components, timing and
communication components and PC multimedia audio and graphics components, are
examples of this strategy. There can, however, be no assurance that the Company
will continue to be successful in these efforts or that further competitive
pressures will not have a material impact on revenue growth or profitability.
The Company's backlog as of March 30, 1996 was $24.9 million, as compared to
$28.0 million in the prior year period. The reduction in backlog is
primarily attributable to order slowdown and inventory scheduling adjustments by
customers in the personal computer market. The Company includes in its backlog
customer
10
<PAGE>
released orders which may be canceled generally with 60 days advance notice
without significant penalty to the customers. Accordingly, the Company believes
that its backlog, at any particular time, should not be used as a measure of
future revenues.
The semiconductor and personal computer industry, in which the Company
participates, is generally characterized by rapid technological change, intense
competitive pressure, and, as a result, product price erosion. The Company's
operating results can be impacted significantly by the introduction of new
products, new manufacturing technologies, rapid changes in the demand for
products, decreases in the average selling price over the life of a product and
the Company's dependence on third-party wafer suppliers. The Company's
operating results are subject to quarterly fluctuations as a result of a number
of factors, including competitive pressures on selling prices, availability of
wafer supply, fluctuation in yields, changes in the mix of products sold, the
timing and success of new product introductions and the scheduling of orders by
customers. The Company believes that its future quarterly operating results may
also fluctuate as a result of Company-specific factors, including pricing
pressures on its more mature FTG components as well as the competitive pressure
and lower gross margins for its multimedia products, continuing demand for its
custom ASIC products and acceptance of the Company's newly introduced ICs and
board level and software products, and market acceptance of its customers'
products. Due to the effect of these factors on future operations, past
performance may be a limited indicator in assessing potential future
performance.
Liquidity and Capital Resources
At March 30, 1996, the Company's principal sources of liquidity included cash
and cash equivalents of $24.5 million and $4.6 million of short-term
investments. The investments primarily consist of marketable securities with
various maturities up to one year. During the first nine months of fiscal 1996,
cash flow from operating activities totaled $4.7 million reflecting favorable
operating income and reduced tax payments. During this quarter, the Company
repaid $1.8 million of its mortgage loan to reduce interest expense, and placed
a $2 million deposit with Chartered Semiconductor in accordance with the wafer
purchase agreement.
Expenditures for property and equipment totaled $2.6 million in the first nine
months of fiscal 1996, as compared to $2.4 million in the first nine months of
fiscal 1995. Expenditures in fiscal 1996 were primarily for work stations and
computer-aided design software for use in new product development and for state-
of-the-art test equipment.
The Company believes that existing sources of liquidity and funds expected to be
generated from operations will provide adequate cash to fund the Company's
anticipated working capital needs over the short term. Further expansion of the
Company's business or the completion of any material strategic acquisitions may
require additional funds which, to the extent not provided by internally
generated sources, could require the Company to seek access to debt or equity
markets.
Update on impact of one-time charges taken in FY 1995 and FY 1996
The Company's Form 10-K for the fiscal year ending June 30, 1995 discussed a
one-time charge of $11.5 million taken during the third quarter of fiscal 1995.
The Company believes that the actions associated with this charge will generate
annual savings in excess of $5 million. These savings are expected to be
generated primarily through a reduction of salary and associated overhead and
expenses as a result of approximately 70 fewer employees and consultants at the
Company's various facilities. This reduction affects substantially all employee
groups and will require the payment of approximately $2.1 million in severance
over the twelve month period ending March 31, 1996. The actions contemplated by
this charge have largely been accomplished
11
<PAGE>
and a substantial portion of the expected savings has been realized. The full
impact of such savings will not, however, be realized until fiscal 1997. The
Company does not currently expect these savings will be materially offset by
anticipated increased expenses or reduced revenue associated with the activities
leading to this charge. In addition, as of the date of this filing, the Company
has recovered approximately $250,000 by disposing of certain of the assets which
were written off. Of the total charge, approximately $9 million was related to
non-cash items. The charge is not expected to affect future cash outflows other
than for the severance payments offset by any recovery of assets written-off.
The Company's Form 10-Q for the second quarter of fiscal 1996 ending December
30, 1995, discusses a one-time charge of $2.7 million taken during the second
quarter of fiscal 1996. The subject charge, however, includes severance of $0.3
million to be paid over the remainder of fiscal 1996, relating to the reduction
of approximately 20 employees as a result of the closing of Turtle Beach's York
facility. In addition, the charge includes a reserve for terminating the lease
for the York facility and a write-off of fixed and other assets as a result of
the closure of the York facility. The Company expects to generate annual
savings of approximately $600 thousand, primarily as a result of the reductions
in personnel and associated overhead. The full impact of such savings will not,
however, be realized until first quarter of fiscal year 1997. The Company does
not currently expect these savings to be materially offset by anticipated
increased expenses or reduced revenue associated with the activities leading to
this charge. Of the total charge, approximately $2 million was related to non-
cash items. The charge is not expected to affect future cash outflows other
than for the severance payments offset by any recovery of assets written-off.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
11 Computation of Net Income Per Share for the three and nine
months ended March 30, 1996 and March 31, 1995
(b) Reports on Form 8-K:
None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 13, 1996 INTEGRATED CIRCUIT SYSTEMS, INC.
By: /S/ David W. Sear
--------------------------------------
David W. Sear
President and Chief Executive Officer
Date: May 13, 1996 By: /S/ Hock E. Tan
-------------------------------------
Hock E. Tan
Senior Vice President
(principal financial & accounting
officer)
14
<PAGE>
EXHIBIT II
INTEGRATED CIRCUIT SYSTEMS, INC.
COMPUTATION OF PER SHARE INCOME
($ and shares in thousands, except for per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 30, March 31, March 30, March 31,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Primary
- -------
Net income (loss) $(2,086) $(5,177) $ 3,968 $ 1,018
======= ======= ======= =======
Common and common equivalent shares outstanding:
Weighted average common shares 11,317 11,055 11,261 10,892
outstanding
Assumed exercise of stock options - - 325 100
------- ------- ------- -------
11,317 11,055 11,586 10,992
======= ======= ======= =======
Earnings per common share and common
equivalent shares $(0.18) $(0.47) $ 0.34 $ 0.09
======= ======= ======= =======
Fully Diluted
- -------------
Net income (loss) $(2,086) $(5,177) $ 3,968 $ 1,018
======= ======= ======= =======
Common and common equivalent shares outstanding:
Weighted average common shares 11,317 11,055 11,261 10,892
outstanding
Assumed exercise of stock options - - 334 100
------- ------- ------- -------
11,317 11,055 11,595 10,992
======= ======= ======= =======
Earnings per common share and common
equivalent shares $(0.18) $(0.47) $0.34 $ 0.09
======= ======= ======= =======
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-30-1996
<CASH> 24,466
<SECURITIES> 4,566
<RECEIVABLES> 17,526
<ALLOWANCES> 3,104
<INVENTORY> 18,938
<CURRENT-ASSETS> 69,637
<PP&E> 21,341
<DEPRECIATION> 7,750
<TOTAL-ASSETS> 91,408
<CURRENT-LIABILITIES> 15,332
<BONDS> 1,661
31,826
0
<COMMON> 0
<OTHER-SE> 37,004
<TOTAL-LIABILITY-AND-EQUITY> 91,408
<SALES> 78,762
<TOTAL-REVENUES> 78,762
<CGS> 47,340
<TOTAL-COSTS> 47,340
<OTHER-EXPENSES> 27,359
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 555
<INCOME-PRETAX> 4,628
<INCOME-TAX> 1,672
<INCOME-CONTINUING> 4,628
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,968
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
