Zilog Inc., Campbell, Calif. today disclosed that it did not make the interest payment of $13.3 million on its senior notes, which was due on September 4.
Accordingly, the company said it has classified its bond indebtedness as a current liability on the September 30, 2001 balance sheet.
Zilog said it is currently in discussions with an informal group of its bondholders to restructure the senior notes.
"Once we successfully address the issue of our senior notes, Zilog will be well positioned to compete during this difficult period and to take full advantage of the eventual economic recovery," Jim Thorburn, acting chief executive, said in a released statement.
Separately, Zilog reported a net loss of $14.7 million for the third quarter of 2001, compared to a net loss of $7.9 million for the same quarter last year, and a net loss of $27.1 million for the second quarter of 2001.
Earnings before interest, taxes, depreciation and amortization (EBITA) for the third quarter was $6.6 million on net sales of $42.7 million, compared to EBITA of $11.6 million on net sales of $66.2 million for the same quarter last year, and negative EBITDA of $1.5 million in the previous quarter on net sales of $44 million.
On an operating basis, the company recorded a loss of $6.8 million for the quarter, which included special charges of $4.5 million comprised of employee termination benefit costs of $2.7 million, wafer fab transfer costs of $0.5 million and professional service fees of $1.3 million relating to its financial restructuring.
That compared to operating losses of $19.7 million in the previous quarter of 2001 and $0.5 million in the third quarter of 2000.
The company ended the third quarter of 2001 with $26.7 million of cash and cash equivalents, as compared to $22.7 million at the end of the previous quarter.
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