During the second quarter of 1995, Cyrix recognized settlement income of $10 million from Intel Corporation, as that company elected not to further appeal a January 21, 1994 court decision concerning certain of Cyrix's microprocessor products.
Aggressive pricing in the entry-level 486 microprocessor market resulted in the sequential decline in revenue and profit margins. "We expect entry-level 486 processor margins to decrease further in the third quarter, " said Jerry Rogers, Cyrix President and Chief Executive Officer. "Our challenge is to ramp the 5x86 processor as steeply as possible in order to offset declining 486 business."
"We made the right decision when we committed our resources to the new products and to exit the 486 portion of the marketplace," Rogers said. "With the M1 expected to contribute revenue late in the quarter and initial shipments of the 5x86 already in progress, we look forward to a complete transition of our line to these new products."
Cyrix's 5x86 is the first full-featured chip to challenge the Intel Pentium® processor's dominance of fifth-generation, x86 microprocessors.
Cyrix Corporation, founded in 1988, designs, develops and markets high-performance processors for the personal computer industry. Cyrix has demonstrated the ability and commitment to bring innovative and compatible technology to market in an impressive design cycle time. Cyrix is a publicly held company traded on NASDAQ. It is the policy of Cyrix Corporation not to confirm analyst projections regarding future Company earnings.
June 30, December 31,
1995 1994
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Assets
Cash, cash equivalents and investments $ 51,221 $ 59,241
Accounts receivable, net 34,136 41,995
Inventories 15,487 18,477
Deferred taxes and other assets 19,419 12,455
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Total current assets 120,262 132,168
Net property and equipment 92,115 38,047
Prepayments for product purchases,
less current portion 46,667 23,330
Deferred taxes and other assets 2,822 2,589
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Total assets $ 261,866 $ 196,134
=============================
Liabilities and Stockholders' Equity
Current liabilities $ 50,464 $ 52,153
Long-term debt, less current maturities 58,783 18,253
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Total liabilities 109,247 70,406
Stockholders' equity 152,619 125,728
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Total liabilities and stockholders' equity $ 261,866 $ 196,134
=============================
Quarter ended June 30 Six months ended June 30
1995 1994 1995 1994
---------------------- ----------------------
Net sales $ 50,238 $ 58,696 $ 120,382 $ 104,976
Royalty revenue -- -- 15,000 --
---------------------- ----------------------
Net revenues 50,238 58,696 135,382 104,976
Cost of sales 30,913 28,280 70,980 50,222
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Gross margin 19,325 30,416 64,402 54,754
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Marketing, general and administrative 10,165 10,637 20,380 22,513
Research and development 6,864 5,886 14,310 11,209
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Total operating expenses 17,029 16,523 34,690 33,722
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Income from operations 2,296 13,893 29,712 21,032
Income from litigation settlement 10,000 -- 10,000 500
Net interest income (expense) (852) 157 (1,157) 341
---------------------- ----------------------
Income before taxes 11,444 14,050 38,555 21,873
Taxes on income 3,950 4,814 13,576 7,474
---------------------- ----------------------
Net income $ 7,494 $ 9,236 $ 24,979 $ 14,399
====================== ======================
Net income per common and common
equivalent share $0.38 $0.46 $1.26 $0.72
====================== ======================
Weighted average common and common
equivalent shares outstanding 19,841 19,961 19,801 19,900
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