Date: 27/01/2009

Zoran revenues dropped by 40% to $74.7 million in 4Q 08

Zoran Corporation reported results for its fourth quarter and year ended December 31, 2008. The revenues for the fourth quarter were $74.7 million, around 40% fall while compared to $126.1 million in last quarter and around 42% fall in comparison to $129.4 million revenues of fourth quarter of 2007. The Company reported a fourth quarter GAAP net loss of $20.2 million, or $0.40 per share, which includes $3.1 million for stock-based compensation expense, $109 thousand for amortization of acquired intangible assets and an adjustment of the tax provision to a non-GAAP rate of $6.5 million. This compares with a net loss of $154.2 million, or $3.01 per share, for the previous quarter and net income of $58.7 million, or $1.11 per diluted share, for the fourth quarter last year. As a reminder, the previous quarter’s net loss included non-cash charges of $167.6 million for impairment of intangible assets.

Non-GAAP net loss for the fourth quarter was $10.5 million, or $0.21 per share, which excludes charges related to the amortization of acquisition-related purchased intangible assets, stock-based compensation expenses and the adjustment of the tax provision to a non-GAAP rate. This compares with non-GAAP net income of $13.9 million, or $0.27 per diluted share, for the previous quarter, and $18.1 million, or $0.34 per diluted share, for the same period last year.

For the full year 2008, revenues were $438.5 million, compared to $507.4 million for 2007. GAAP net loss for 2008 was $215.7 million, or $4.20 per diluted share, compared to net income of $66.2 million or $1.29 per diluted share for the full year 2007. Non-GAAP net income for 2008 was $8.4 million, or $0.16 per diluted share. This compares with non-GAAP net income of $70.9 million, or $1.37 per diluted share for 2007.

However there is a growth new too, Dr. Levy Gerzberg, Zoran’s president and chief executive officer said “DTV grew 59 percent on an annual basis and mobile phone processors increased nearly five-fold during the same period. These strong results were not enough to offset the impact of the deteriorating economy on our remaining markets however, and we do not expect any near-term improvements in those markets. Our focus remains on managing our resources and controlling expenses and we are pleased to have generated nearly $26 million in cash from operations during the quarter, enabling us to begin the year with $396 million in cash and short-term investments and long-term investments. We have multiple new product introductions scheduled for 2009 and continue to see solid design win activity for existing product lines, positioning us well for when the economy recovers.”

Highlights:

1. Revenues by product line for the fourth quarter of 2008 were 36 percent Digital Camera, 23 percent DTV, 23 percent Printer Imaging, 10 percent DVD, 7 percent mobile phone processors and 1 percent other
2. Products powered by Zoran gained CES 2009 Innovation recognition, including Aiptek’s Portable Media Player PocketCinema V10, Samsung’s Upconverting DVD Player DVD-H1080, and new digital camera models under major brand names.
3. Flip Mino HD from Pure Digital using Zoran’s COACH digital camera technology was named “Gadget of the Year” by Freep.com and listed under PC World’s Best Products of CES 2009
4. Printing devices using Zoran’s IPS Software Solution won industry awards again in 2008