CAMPBELL, Calif. -- One day after announcing its chief executive officer was stepping down, Zilog Inc. today reported net sales of $56 million for the fourth quarter of 2000, as compared to the $65.4 million in Q4 1999. Annual net sales for 2000 were $239.2 million compared with $245.1 million in 1999.
Zilog reported an operating loss of $18.2 million during the fourth quarter of 2000, compared to $2.3 million of operating income reported during the fourth quarter of 1999.
Gross margin for the fourth quarter of 2000 was 28% of net sales, compared to 40% in the fourth quarter of 1999. The decline in gross margin during the fourth quarter of 2000 reflects significant under-absorption of fixed manufacturing costs in Zilog's wafer fabs. Gross margin was also impacted by approximately $1 million of excess inventory that was scrapped during the fourth quarter of 2000.
Last month, Zilog announced it was cutting 7% of its 1,300 workforce because of weak sales. Zilog also said it was negotiating with AMI Semiconductor Inc of San Diego to acquire one of its wafer fabs in Nampa, Idaho (see Dec. 22 story).
"We swiftly responded to the inventory correction that is occurring in our end markets by markedly reducing wafer starts in the fourth quarter," said Curtis J. Crawford, chairman, president and CEO of Zilog, in a prepared statement. "The impact of reduced production on our gross margin was necessary to keep our inventory levels in line with market conditions."
Earlier this week, Zilog announced that Crawford would step down as CEO as soon as a successor could be found. He will remain chairman (see Jan. 30 story).