ISSI Announces First Fiscal Quarter 2015 Results

About the Company
ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) automotive, (ii) communications, (iii) industrial, and (iv) digital consumer. The Company's primary products are low, medium and high density DRAM and high speed and low power SRAM. The Company also designs and markets NOR flash products and high performance analog and mixed signal integrated circuits. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at http://www.issi.com/.

Forward Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning our continuing to extend our design win traction across our end markets as customers transition to more advanced products and higher densities, continuing to make significant progress on our flash and analog initiatives targeting automotive and industrial customers, NOR flash products supporting long-term system reliability in harsh operating environments, actively pursuing increased design activity for our analog products and having identified many analog design opportunities with automotive customers, and our outlook for the March 2015 quarter with respect to total revenue, SRAM and DRAM revenue, NOR flash revenue, analog revenue, gross margin, operating expenses and GAAP and Non-GAAP net income per share are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include supply and demand conditions in the market place (especially in the automotive market and the industrial market), unexpected reductions in average selling prices for our products, our ability to sell our products in our key markets (including automotive and industrial) and the pricing and gross margins achieved on such sales, our ability to continue to control or reduce operating expenses (including proxy related expenses), our ability to obtain a sufficient supply of wafers, wafer pricing, our ability to maintain sufficient inventory of products to satisfy customer orders, our ability to realize the expected benefits of our acquisitions including maintaining relationships with key customers, vendors and employees, changes in manufacturing yields, order cancellations, order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers, the outcome of any existing or future litigation involving intellectual property or other matters (including our existing litigation with GSI) or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended September 30, 2014. In addition, the financial information in this press release is unaudited and subject to any adjustments that may be made in connection with the year-end audit. The Company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.



Integrated Silicon Solution, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)

	Three Months Ended		Three Months Ended
	December 31,		September 30,
	2014	2013	2014


Net sales	$ 80,910	$ 79,123	$ 84,152
Cost of sales	51,765	53,594	54,471
Gross profit	29,145	25,529	29,681

Operating expenses:
Research and development	12,248	10,558	12,880
Selling, general and administrative	12,897	11,434	11,450
Total operating expenses	25,145	21,992	24,330

Operating income	4,000	3,537	5,351
Interest and other income (expense), net	162	431	204
Gain on sale of investments	-	3,121	-

Income before income taxes	4,162	7,089	5,555
Provision for income taxes	926	1,643	2,697

Consolidated net income	3,236	5,446	2,858

Net income attributable to
noncontrolling interests	(50)	(11)	(26)

Net income attributable to ISSI	$ 3,186	$ 5,435	$ 2,832

Basic net income per share	$ 0.10	$ 0.19	$ 0.09
Shares used in basic per share calculation	30,990	29,318	30,699

Diluted net income per share	$ 0.10	$ 0.19	$ 0.09
Shares used in diluted per share calculation	32,521	30,717	32,383


Reconciliation of GAAP to Non-GAAP Financial Measures

Operating income:
GAAP operating income	$ 4,000	$ 3,537	$ 5,351
Adjustments:
Litigation & Proxy	981	282	418
Chingis intangible asset amortization	347	347	347
Stock-based compensation expense	1,526	1,491	1,507
Total adjustments	2,854	2,120	2,272
Non-GAAP operating income	$ 6,854	$ 5,657	$ 7,623

Provision for income taxes:
On a GAAP basis	$ 926	$ 1,643	$ 2,697
Adjustments:
Non-cash tax expense	309	186	1,053
Tax impact of gains on sale of investments	-	1,092	-
Total adjustments	309	1,278	1,053
Non-GAAP provision for income taxes	$ 617	$ 365	$ 1,644

Net income attributable to ISSI:
On a GAAP basis	$ 3,186	$ 5,435	$ 2,832
Adjustments:
Litigation & Proxy	981	282	418
Chingis intangible asset amortization	347	347	347
Stock-based compensation expense	1,526	1,491	1,507
Gain on sales of investment	-	(3,121)	-
Non-cash tax expense	309	186	1,053
Tax impact of gains on sale of investments	-	1,092	-
Total adjustments	3,163	277	3,325
Non-GAAP net income	$ 6,349	$ 5,712	$ 6,157

Non-GAAP net income per share:
Basic	$ 0.20	$ 0.19	$ 0.20
Diluted	$ 0.20	$ 0.19	$ 0.19

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