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Wednesday, January 22, 2003
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OAK Technology posts total revenue of $28.4 million for second fiscal quarter
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Oak Technology, Inc. (Nasdaq: OAKT) a leading provider of embedded solutions for the HDTV, digital imaging, and optical storage markets, today announced that for the second quarter of fiscal 2003, ended December 31, 2002, the company reported total net revenues of $28.4 million. This compares with total net revenues of $36.3 million reported in the same quarter a year ago.
The company made significant progress during the quarter in repositioning Oak to focus on the high-growth HDTV market. With completion of the acquisition of TeraLogic, a leading developer of HDTV hardware and software, the company has intensified its focus on the fast-growing digital entertainment market. Oak announced separately today that the company has executed a letter of intent to enter into a joint venture with Winbond of Taiwan, investing certain technology and assets in exchange for a significant minority equity position in Cheertek, a recent spin-off from Winbond, to build a cost-competitive optical storage business. Over the next two quarters, the company plans to transfer its optical storage business to the joint venture and reduce Oak's headcount from approximately 525 to approximately 300 people. As a result, Oak believes this will reduce the run rate of the company's operating expenses by as much as 40%, leaving Oak well positioned to achieve pro forma profitability in the second half of calendar 2003.
The company reported a net loss on a GAAP basis of $22.9 million, or $(0.41) per share, for the second fiscal quarter of 2003. The reported net loss for the second quarter of fiscal 2002 was $6.3 million, or $(0.11) per share. On a pro forma basis, excluding amortization of intangible assets of $2.8 million, acquisition-related expenses of $7.8 million, a restructuring charge of $3.2 million, and a gain on sale of marketable securities of $0.7 million, Oak posted a net loss of $10.0 million, or $(0.18) per share, in the second quarter, compared with a pro forma net loss of $1.2 million, or $(0.02) per share, in the second quarter of the previous fiscal year. Pro forma results for the second quarter of fiscal 2002 exclude a restructuring charge of $2.0 million and amortization of intangible assets of $3.0 million.
In the first half of fiscal 2003, net revenues were $58.6 million, compared with $69.6 million reported in the same period of fiscal 2002. The company reported a net loss of $28.6 million, or $(0.51) per share on a GAAP basis for the first half of fiscal 2003. For the same period of fiscal 2002 the company reported a GAAP net loss of $12.5 million, or $(0.23) per share. On a pro forma basis, excluding amortization of intangible assets of $4.5 million, acquisition related expenses of $7.8 million, a restructuring charge of $3.2 million, and a gain on sale of marketable securities of $0.7 million, the net loss for the first half of fiscal 2003 was $13.9 million, or $(0.25) per share, compared with a pro forma net loss of $4.0 million, or $(0.07) per share for the first half of fiscal 2002, which also excluded restructuring charges and amortization of intangible assets.
"With a new structure for the optical storage business, Oak will be able to compete more effectively in this market with offshore competitors while receiving an ongoing license fee and royalty annuity based on our intellectual property and product design," said Young Sohn, Oak's chairman and chief executive officer. "We believe Oak's intellectual property combined with Cheertek's cost structure will create a powerful competitor in the optical storage market. Our TeraLogic Group is the leader in HDTV today and we continue to exploit this leadership with the emergence of high-definition broadcasting. We are also excited that Oak's OTI-4110 system-on-a chip design was recently named one of EDN's best products of 2002. We are in production with this product, which we believe can drive market penetration in the laser and inkjet MFP/printer market. We believe our strong presence in high-growth markets and significantly reduced cost structure resulting from the strategic moves we are making can deliver pro forma profitability to our shareholders by the end of the calendar year."
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