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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 22, 2007
Simtek Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 0-19027 84-1057605
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4250 Buckingham Dr. #100, Colorado Springs, CO 80907
(Address of Principal Executive Offices)
(719) 531-9444
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition.
On February 22, 2007, Simtek Corporation (the "Company") issued a press
release titled, "Simtek Reports Positive Net Income for Fourth Quarter and
Ex-Item Profit for Fiscal Year 2006".
Following is a summary of the financial results:
Total revenue for the fourth quarter was $9.7 million and for the full year
was $30.6 million. The quarter and year to date figures include $552 thousand
and $2 million of royalty revenue. Product sales, representing semiconductor
devices shipped to customers, for the fourth quarter of $9.1 million compare to
$2.8 million for the 4th quarter of 2005, an increase of 227%. Unit selling
prices for our highest volume products increased slightly during the 4th quarter
from the 3rd quarter. For the year ended December 31, 2006, product sales were
$28.6 million compared to $10.4 million in the 2005, an increase of 175%. For
2005, the pro-forma combined revenue for Simtek and the former ZMD business was
$18.1 million, so compared to the pro-forma combined numbers, product sales
increased 58% in 2006.
New orders booked in 2006 were $35.2 million, resulting in a book to bill
ratio of 1.23 for the year.
Cost of sales for the 4th quarter was $5 million resulting in a product
gross margin of 45% compared to 40% in the 3rd quarter, 29% in the 2nd quarter
and 27% in the first quarter of 2006. For the year, cost of sales was $18
million and the product gross margin was 37%. Gross margin for 2005 stood at
27%. Margins for the period were helped by price increases on our high volume
256K products; reduced costs on the 1 megabit device; and the benefit of moving
final testing of our highest volume 256K devices to Asia. The cost of the 1
megabit commercial product has been reduced nearly 30% since December 2005. We
expect to see additional margin improvements in 2006 as we continue to transfer
probe and final testing offshore and unit volume of 1 megabit continue to
increase.
Research and development expenses, which are the key to our future growth,
for the 4th quarter were $1.3 million compared to $1.7 million in the 4th
quarter 2005. For the year, research and development expenses were $5.9 million
compared to $6.4 million for 2005. The 2006 amount reflects continued
development of the 4 megabit and 130 nanometer process with Cypress and the
addition of our engineering team in Dresden. The 2005 R&D expenses included
approximately $1.2 million related to final development and fixing of the
quarter micron products.
Selling, General and Administrative expenses were $2.7 million for the 4th
quarter 2006 compared to $800 thousand in the 2005 quarter. For the year,
selling, general and administrative expenses are $8.5 million compared to $3.8
million in 2005. The expenses in the 2006 periods include considerably higher
commissions to the sales team based on nearly triple the revenue. They also
include the amortization of the non-compete agreement with ZMD of $445 thousand
for the quarter and $1.8 million for the year. The expenses in the 2006 periods
also include non-cash expense related to employee stock options of $94,000 and
$382,000 for the quarter and year to date periods. Both the fourth quarter and
full year amounts include approximately $535 thousand for executive incentive
compensation. In addition, we incurred approximately $659,000 and $1.4 million
in the respective 2006 periods for SG&A expenses in the new Simtek GMBH
subsidiary, as we continue to build our European business.
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Net Income from Continuing Operations, on a GAAP basis, was $598 thousand
or $0.04 cents per share for the fourth quarter 2006 compared to a loss of $1.8
million or ($0.25) cents per share last year. On a GAAP basis, the year to date
net loss from continuing operations is $2.0 million or ($0.13) cents per share
compared to $7.5 million or ($1.09) per share in 2005. Excluding the effect of
the amortization of the non-compete agreement with ZMD and the expenses
associated with employee stock options, the ex-item or non-GAAP net income for
the 4th quarter was $1.2 million or $0.07 cents per share and the year to date
ex-item profit was $319 thousand or $0.02 cents per share. The ex-item results
represent an improvement from the losses reported in the 2005 periods of $3.0
million and $7.8 million, respectively.
The full text of the press release is attached as Exhibit 99.1 to this Form
8-K Current Report.
Item 9.01: Financial Statements and Exhibits
(d) Exhibits
Exhibit Number Description
-------------- -----------
99.1 Press Release, dated February 22, 2007, titled "Simtek
Reports Positive Net Income for Fourth Quarter and
Ex-Item Profit for Fiscal Year 2006".
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SIMTEK CORPORATION
By: /s/Brian Alleman
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Brian Alleman, Chief Financial Officer
February 22, 2007
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EXHIBIT INDEX
Exhibit Number Description
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99.1 Press Release, dated February 22, 2007, titled "Simtek
Reports Positive Net Income for Fourth Quarter and Ex-Item
Profit for Fiscal Year 2006".
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