Integrated Circuit Systems today reported it increased its profits by cutting costs and migrating to higher margin digital consumer products.
The Valley Forge, Pa.-based supplier of mixed-signal clock chips said its fiscal fourth quarter revenue grew 3% from the third quarter to $55.1 million. Operating income grew 17% to $14.2 million, while diluted earnings per share increased 6% to 17 cents, a penny short of Wall Street analysts' expectations as compiled by First Call.
Gross margin was 60.2% compared to pro forma gross margin of 58.8% in the March quarter, and 60% in the June 2001 quarter.
"ICS' business model of penetrating silicon timing devices into new markets such as storage area networks and memory modules have driven ... growth as the communications and other end markets are struggling to come back to 2000 levels," said Hock Tan, president and chief executive of ICS.
ICS said sales into digital consumer products increased to 18% of June-quarter revenue from 15% a quarter ago, while sales into low-margin PC applications declined from 47% of revenue to 44% of revenue over the same period. Communications represented 29% of revenue and military was 9%.
For the fiscal year, which ended in June, IC reported $182.7 million in revenue, almost flat with fiscal 2001, due to declines in end market demand. Pro forma gross margin for the year was 58.9%, down from 61.8% last year due to produc mix and ICS' acquisition of Micro Networks Corp. in January 2002.
Legal expenses related to concluding patent litigation brought pro forma operating income down 7% from fiscal 2001 to $46.9 million and reduced pro forma earnings per share 24% to 60 cents.