Industry Slump Hurts Silicon Systems’ Quarter

Hard hit by an industrywide slump in the sale of computer and telecommunications products, Silicon Systems Inc., Friday posted a 53% drop in net earnings on a 2% rise in revenues during the second quarter ended March 30.

The Tustin-based integrated circuit maker reported net income of $822,000, compared with $1.7 million a year earlier. Revenues were ahead to $12.6 million, from $12.3 million the prior year.

Net income for the six months fell to $2.4 million, from $2.8 million a year ago. Revenues increased 33% to $29 million, from $21.7 million.

“Our order backlog continued to decline throughout the quarter,” said Carmelo Santoro, president and chief executive officer. Second-quarter backlog stood at $20 million, compared with a backlog of $35.3 million a year ago. Santoro said even though $12-million worth of orders were booked during the quarter, the cancellation of other, older orders resulted in net bookings of only $3.8 million.

“In spite of the extremely negative conditions in the industry, we are continuing with our targeted strategic investments,” said Santoro.

“Our Singapore assembly, test and design facility continues to progress and we expect production (to begin) during the summer months.” He said the company is also committed to establishing a permanent design facility for its telecommunications products in Grass Valley, Calif.