Silicon Systems of Tustin Reports 47% Income Dip for 2nd Quarter

Silicon Systems Inc., a Tustin-based firm that this week agreed to be acquired by TDK Corp., reported that net income for the second quarter ended April 1 declined 47%, to $1.5 million from the $2.8 million in the year-earlier quarter.

Revenue rose 9%, to $30.7 million from $28.1 million.

For the 6 months, net income dropped 30%, to $4 million from $5.2 million for the comparable period a year ago. Revenue totaled $60.8 million, up 13% from the $53.8 million reported for the first half of fiscal 1988.

“Second-quarter bookings were lackluster but showed signs of improvement,” said Carmelo J. Santoro, chairman, president and chief executive of Silicon Systems.

“Excess small-computer-systems inventories, both hardware and software, continue throughout all channels of distribution within the industry,” Santoro said. “However, as those inventories continue to deplete, most forecasters are predicting a resumption of relatively normal business next quarter.”

On Monday, Silicon Systems and TDK announced that they had entered into a definitive merger agreement under which TDK will acquire all outstanding shares of Silicon Systems for about $200 million.

Silicon Systems manufactures integrated circuits for use by data communications, telecommunications, and computer equipment manufacturers.

--VICKY CLEPPER