ZiLOG Inc. New (ZILG, Financial) filed Quarterly Report for the period ended 2008-12-27.
Zilog Inc designs manufactures and markets semiconductor devices. Headquartered in San Jose California Zilog maintains design centers in San Jose; Ft. Worth Texas; Nampa Idaho; Seattle Wash.; and Bangalore India advanced wafer manufacturing in Nampa and test operations in Manila Philippines. ZiLOG Inc. New has a market cap of $41.73 million; its shares were traded at around $2.3 with and P/S ratio of 0.62.
Interest Income and Expense. Interest income relates to interest earned on our cash and cash equivalents. Cash equivalents are primarily invested in a mixture of treasury backed securities, money market funds and high-grade commercial paper with maturities of 90 days or less. Interest income for the nine months ended December 27, 2008 was $0.1 million as compared to $0.7 million for the nine months ended December 29, 2007. The lower interest income is the result of a lower cash balance as well as the investment in treasury guaranteed short term investments 23 yielding significantly lower interest rates. During 2008, with the anomalies in the financial market and the uncertainty caused by tightening of liquidity requirements, including the failure of the ARPS, we moved a considerable amount of our cash and cash equivalents to government guaranteed securities to ensure availability and security. Other income was $0.5 million income for the nine months ended December 27, 2008 as compared to $0.2 million expense for the nine months ended December 29, 2007. The income in 2008 primarily reflects currency exchange gains on the strengthening US dollar versus the currencies of India and the Philippines. This was the inverse in 2007 which created currency losses.
As of December 27, 2008, we had $0.7 million of bank borrowings outstanding primarily reflecting borrowings under a short term bank arrangement utilized to finance a three-year license agreement for engineering development software. As of December 29, 2007, we had no debt or bank borrowings outstanding. Additionally, in April 2008, we entered into a three-year agreement to license certain technologies to further develop our 32-bit ARM core based technology. The total cost of this agreement was $2.4 million and the unpaid portion of $2.0 million has been included in short and long-term liabilities on our consolidated condensed balance sheet as of December 27, 2008.
Cash Flows From Operating Activities. During the nine months ended December 27, 2008, net cash used by operating activities was $3.3 million compared to $3.7 million net cash used in operating activities during the nine months ended December 29, 2007. This $0.4 million improvement primarily reflects improvement in working capital items through reduction of inventory levels and decrease in accounts receivable, offset by changes in other assets and liabilities including the reduction in non-cash deferred charges that were amortized in fiscal 2008.
Cash Flows From Investing Activities. During the nine months ended December 27, 2008, net cash provided by investing activities was less than $0.1 million, a decrease of $2.1 million from $2.2 million during the nine months ended December 29, 2007. Cash provided by investing activities in the nine months ended December 27, 2008 includes $0.6 million of redemptions of our investment in ARPS classified as long term investments, partially offset by $0.5 million of computer software and hardware related capital expenditures. Cash provided by investing activities in the nine months ended December 29, 2007 included the sale of our MOD II facility for a gross sales price of $3.2 million offset by the purchase of $1.0 million of capital expenditures primarily related to our headquarter facility relocation.
Cash Flows From Financing Activities. During each of the nine month periods ended December 27, 2008 and December 29, 2007, $0.1 million and $0.2 million in net cash were provided by financing activities, respectively. During the nine months ended December 27, 2008, our financing activities included the receipt of cash under our short term financing arrangement of $0.7 million offset by payments of $0.7 million and $0.1 million from proceeds from the issuance of common stock under employee stock purchase and stock option plans. During the nine months ended December 29, 2007, $0.4 million of cash was provided by proceeds from the issuance of common stock under employee stock option and stock purchase plans.
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Zilog Inc designs manufactures and markets semiconductor devices. Headquartered in San Jose California Zilog maintains design centers in San Jose; Ft. Worth Texas; Nampa Idaho; Seattle Wash.; and Bangalore India advanced wafer manufacturing in Nampa and test operations in Manila Philippines. ZiLOG Inc. New has a market cap of $41.73 million; its shares were traded at around $2.3 with and P/S ratio of 0.62.
Highlight of Business Operations:
Special Charges and Credits. Specials charges and credits totaled $2.8 million for the nine months ended December 27, 2008 as compared to $1.5 million for the nine months ended December 29, 2007. The 2008 charges included costs and expenses of $1.2 million associated with our worldwide workforce reduction initiated and implemented in December 2008 and January 2009. Additionally, special charges included costs related to our strategic alternatives review of $0.3 million and $0.9 million of continued costs related to our manufacturing test operations outsource which were substantially complete at December 27, 2008. The 2007 charges included $1.0 million related to the consolidation of worldwide engineering activities and costs related to our test outsource activity. Additionally, 2007 included $0.2 million for the MOD II facility held for sale consisting of associated maintenance and selling costs of that site in Nampa, Idaho. This was offset by a $0.7 million refund received from our Philippines defined benefit plan as the plan was in an overfunded position.Interest Income and Expense. Interest income relates to interest earned on our cash and cash equivalents. Cash equivalents are primarily invested in a mixture of treasury backed securities, money market funds and high-grade commercial paper with maturities of 90 days or less. Interest income for the nine months ended December 27, 2008 was $0.1 million as compared to $0.7 million for the nine months ended December 29, 2007. The lower interest income is the result of a lower cash balance as well as the investment in treasury guaranteed short term investments 23 yielding significantly lower interest rates. During 2008, with the anomalies in the financial market and the uncertainty caused by tightening of liquidity requirements, including the failure of the ARPS, we moved a considerable amount of our cash and cash equivalents to government guaranteed securities to ensure availability and security. Other income was $0.5 million income for the nine months ended December 27, 2008 as compared to $0.2 million expense for the nine months ended December 29, 2007. The income in 2008 primarily reflects currency exchange gains on the strengthening US dollar versus the currencies of India and the Philippines. This was the inverse in 2007 which created currency losses.
As of December 27, 2008, we had $0.7 million of bank borrowings outstanding primarily reflecting borrowings under a short term bank arrangement utilized to finance a three-year license agreement for engineering development software. As of December 29, 2007, we had no debt or bank borrowings outstanding. Additionally, in April 2008, we entered into a three-year agreement to license certain technologies to further develop our 32-bit ARM core based technology. The total cost of this agreement was $2.4 million and the unpaid portion of $2.0 million has been included in short and long-term liabilities on our consolidated condensed balance sheet as of December 27, 2008.
Cash Flows From Operating Activities. During the nine months ended December 27, 2008, net cash used by operating activities was $3.3 million compared to $3.7 million net cash used in operating activities during the nine months ended December 29, 2007. This $0.4 million improvement primarily reflects improvement in working capital items through reduction of inventory levels and decrease in accounts receivable, offset by changes in other assets and liabilities including the reduction in non-cash deferred charges that were amortized in fiscal 2008.
Cash Flows From Investing Activities. During the nine months ended December 27, 2008, net cash provided by investing activities was less than $0.1 million, a decrease of $2.1 million from $2.2 million during the nine months ended December 29, 2007. Cash provided by investing activities in the nine months ended December 27, 2008 includes $0.6 million of redemptions of our investment in ARPS classified as long term investments, partially offset by $0.5 million of computer software and hardware related capital expenditures. Cash provided by investing activities in the nine months ended December 29, 2007 included the sale of our MOD II facility for a gross sales price of $3.2 million offset by the purchase of $1.0 million of capital expenditures primarily related to our headquarter facility relocation.
Cash Flows From Financing Activities. During each of the nine month periods ended December 27, 2008 and December 29, 2007, $0.1 million and $0.2 million in net cash were provided by financing activities, respectively. During the nine months ended December 27, 2008, our financing activities included the receipt of cash under our short term financing arrangement of $0.7 million offset by payments of $0.7 million and $0.1 million from proceeds from the issuance of common stock under employee stock purchase and stock option plans. During the nine months ended December 29, 2007, $0.4 million of cash was provided by proceeds from the issuance of common stock under employee stock option and stock purchase plans.
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