MLIN Micro Linear

Micro Linear Announces Second Quarter 2005 Financial Results SAN JOSE, Calif., July 28 /PRNewswire-FirstCall/ -- Micro Linear Corporation (NASDAQ:MLIN) announced today its financial results for the second quarter ended June 30, 2005. Net revenue for the second quarter of 2005 was $6.0 million, an increase of 40% from $4.2 million for the first quarter of 2005 and down 8% from $6.5 million in net revenue for the second quarter of 2004. The increase in net revenue from the prior quarter was primarily due to a combination of the seasonality of our wireless business and production shipments of our first transceiver targeted for the Personal Handyphone System (PHS) market, the ML1900. The decrease in net revenue from the year ago comparable period was mainly due to the decrease in demand for our legacy networking products. Gross margin for the second quarter of 2005 was $3.6 million, up 65% from $2.2 million for the first quarter of 2005, and down 5% from $3.8 million in gross margin for the second quarter of 2004. The percentage gross margin rose to 61% for the second quarter of 2005 from 52% for the first quarter of 2005, and from 59% for the second quarter of 2004. The increase in the gross margin percentage from the prior quarter and the year ago period was due primarily to lower manufacturing overhead costs in the second quarter of 2005. The Company reported a net loss for the second quarter of 2005 of $0.9 million, or $0.07 per share, compared to a net loss of $1.5 million, or $0.12 per share, for the first quarter of 2005, and a $0.8 million loss, or $0.07 per share for the second quarter of 2004. Net revenue for the six months ended June 30, 2005 was $10.2 million, compared to $10.3 million for the same period in 2004. Gross margin for the first six months of 2005 totaled $5.8 million, up 5% from $5.6 million for the first six months of 2004. The Company reported a net loss of $2.4 million, or $0.19 per share, for the first six months of 2005, compared to a net loss of $3.5 million, or $0.29 per share, for the first six months of 2004. "We are pleased at the quarter's revenue and margin growth over the first quarter, and the continued improvement in our bottom line," said Tim Richardson, Micro Linear's President and CEO, "our focus continues to be building on this base during the second half of the year as we enter the PHS marketplace," he added. A conference call to provide expanded comments on this earnings release and other operational issues will be held today at 2:00 p.m. PDT. To participate in the conference call, please dial 1-800-500-0311 (North America) or 1-719-457-2698 (International) prior to 2:00 p.m. PDT. A recording of the call will be available after 6:00 p.m. PDT July 28, 2005 through August 11, 2005 via the following numbers: North American access phone number: 1-888-203-1112, passcode 4400352 International access phone number: 1-719-457-0820, passcode 4400352 About Micro Linear Corporation: Micro Linear Corporation is a fabless semiconductor company specializing in wireless integrated circuits. In addition to its PHS products, the Company offers a full line of high data-rate ISM-band transceivers for consumer applications such as cordless phones, wireless speakers and headphones, game controllers, voice headsets and other electronic appliances. Micro Linear offers a uniquely broad line of transceivers that address the most popular unlicensed bands: 900 MHz, 2.4 GHz, and 5.8 GHz. To simplify system design and decrease time to market, Micro Linear also offers starter kits and reference designs. Headquartered in San Jose, California, Micro Linear's products are available through its authorized representatives and distributors worldwide. More information on the company is available online at http://www.microlinear.com/. Micro Linear Safe Harbor Statement: Except for the historical information contained herein, the statements in this press release, including, but not limited to, statements regarding the impact of the Company's ability to build on its PHS base during the second half of 2005 as it enters into the PHS marketplace, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, the risks associated with the cyclical nature of the semiconductor industry; changes in the average selling prices of the Company's products, including the Company's new PHS product family; the level of product orders; the ability of customers to cancel, delay or otherwise change orders without significant penalty; new product announcements or introductions by competitors; the market's acceptance of the Company's products, including the Company's PHS product family; and other factors that may cause the Company's business or operating results to fluctuate in the future. Additional risks are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year-ended January 2, 2005 and the Company's Quarterly Report on Form 10-Q for the quarter-ended April 3, 2005. Statements included in this release are based on information known to the Company as of the date of this release, and the Company assumes no obligation to update information contained in this release. MICRO LINEAR CORPORATION CONSOLIDATED BALANCE SHEETS UNAUDITED (IN THOUSANDS) June 30 DEC 31 2005 2004 ASSETS CURRENT ASSETS CASH AND SHORT-TERM INVESTMENTS $13,745 $15,580 ACCOUNTS RECEIVABLE, NET 3,675 2,878 INVENTORIES 2,519 1,770 OTHER CURRENT ASSETS 298 210 TOTAL CURRENT ASSETS 20,237 20,438 PROPERTY & EQUIPMENT, NET 531 459 OTHER ASSETS 28 28 TOTAL ASSETS $20,796 $20,925 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES ACCOUNTS PAYABLE $2,503 $1,500 ACCRUED LIABILITIES 2,683 2,603 TOTAL CURRENT LIABILITIES 5,186 4,103 STOCKHOLDERS' EQUITY COMMON STOCK 16 15 ADDITIONAL PAID-IN CAPITAL 62,514 61,368 ACCUMULATED OTHER COMPREHENSIVE LOSS (5) (8) ACCUMULATED DEFICIT (26,682) (24,320) TREASURY STOCK (20,233) (20,233) TOTAL STOCKHOLDERS' EQUITY 15,610 16,822 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $20,796 $20,925 MICRO LINEAR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) UNAUDITED THREE MONTHS ENDED SIX MONTHS ENDED June 30, June 30, June 30, June 30, 2005 2004 2005 2004 NET REVENUE $5,964 $6,508 $10,210 $10,348 COST OF GOODS SOLD 2,330 2,683 4,373 4,776 GROSS MARGIN 3,634 3,825 5,837 5,572 OPERATING EXPENSES: RESEARCH AND DEVELOPMENT 2,467 2,612 4,663 5,253 SELLING, GENERAL AND ADMINISTRATIVE 2,112 1,856 3,718 3,702 RESTRUCTURING CHARGES -- 166 -- 166 TOTAL OPERATING EXPENSES 4,579 4,634 8,381 9,121 LOSS FROM OPERATIONS (945) (809) (2,544) (3,549) INTEREST AND OTHER INCOME 103 47 196 109 INTEREST AND OTHER EXPENSE (2) (49) (7) (86) LOSS BEFORE INCOME TAXES (844) (811) (2,355) (3,526) PROVISION FOR INCOME TAXES 6 6 7 10 NET LOSS (850) (817) (2,362) (3,536) NET LOSS PER SHARE: BASIC AND DILUTED NET LOSS PER SHARE: NET LOSS PER SHARE $(0.07) $(0.07) $(0.19) $(0.29) NUMBER OF SHARES USED IN PER SHARE COMPUTATION 12,589 12,377 12,524 12,356 DATASOURCE: Micro Linear Corporation CONTACT: Michael Schradle, Chief Financial Officer of Micro Linear Corporation, +1-408-433-5200 Web site: http://www.microlinear.com/

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