UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K
|
|
|
(Mark One)
|
|
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the fiscal year ended
March 31, 2008
|
or
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period
from to .
|
Commission file
number: 0-22594
Alliance Semiconductor
Corporation
(Exact name of Registrant as
specified in its charter)
|
|
|
Delaware
|
|
77-0057842
|
(State or other jurisdiction
of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
4633 Old
Ironsides Drive
Santa Clara, California 95054
(Address of principal executive
offices including zip code)
Registrants telephone number, including area code is
(408) 855-4900
Securities registered pursuant to Section 12(b) of the
Act:
None
Securities registered pursuant to Section 12(g) of the
Act:
Title of Each Class
Common Stock, par value $0.01
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes
o
No
þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. Yes
o
No
þ
Indicate by check mark whether the registrant: (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past
90 days. Yes
þ
No
o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):
|
|
|
|
|
|
|
Large accelerated
filer
o
|
|
Accelerated
filer
o
|
|
Non-accelerated
filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting
company
þ
|
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes
o
No
þ
The aggregate market value of the common equity held by
non-affiliates of the Registrant was approximately
$21.3 million as of September 28, 2007, based upon the
closing sale price on the last business day of the last
completed second fiscal quarter. Shares of Common Stock held by
each officer and director and by each person who owns 5% or more
of the outstanding Common Stock have been excluded since such
persons may be deemed to be affiliates of Alliance
Semiconductor. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of June 24, 2008, there were 33,047,882 shares of
Registrants Common Stock outstanding.
ALLIANCE
SEMICONDUCTOR CORPORATION
FORM 10-K
For the Period Ended March 31, 2008
TABLE OF
CONTENTS
PART I
Forward-Looking
Statements
This Report contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, including, but not limited to, statements
as to future operating results and plans that involve risks and
uncertainties. We use words such as expects,
anticipates, believes,
estimates, the negative of these terms and similar
expressions to identify forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to differ
materially from any future results, performance or achievements
expressed or implied by those projected in the forward-looking
statements for any reason, including the risks and uncertainties
set forth in Item 1 of Part I hereof (entitled
Business) and in Item 1A of Part I hereof
(entitled Risk Factors) and elsewhere in this
report. References herein to Alliance,
Alliance Semiconductor, the Company,
we, our, us and similar
words or phrases are references to Alliance Semiconductor
Corporation, unless the context otherwise requires.
Overview
During the periods covered in this report, the Company made a
significant transition from being an operating company focused
on the semiconductor industry with synergistic investments in
emerging companies, into a holding company focused on maximizing
return to shareholders. This transformation was largely
completed by fiscal 2008, with the result that our primary
activities now consist of managing our short-term investments.
In fiscal 2006 our Board of Directors entered into a plan for
disposal of our operating business units, which was completed in
the first quarter of fiscal 2007 resulting in proceeds of
$1.8 million in fiscal 2008 and $14.8 million in
fiscal 2007. The Board also entered into a plan for disposal of
the companys investments in Alliance Ventures and Solar
Ventures during the first quarter of fiscal year 2007, which
sales were completed during the last quarter of fiscal 2007 for
aggregate gross proceeds of $2.0 million in fiscal 2008 and
$128.6 million in fiscal 2007.
In fiscal 2007, the Board authorized the distribution of a
significant portion of our cash surplus that was not needed for
expected future operations or known liabilities, including
contingent claims and declared a special cash dividend of $3.75
per share which was paid July 17, 2007 An additional cash
dividend of $0.25 per share was paid April 8, 2008, and the
Board declared a special cash dividend of $0.10 per share which
was paid May 20, 2008 to shareholders of record as of
May 12, 2008. On June 12, 2008 the Board declared a
special cash dividend of $0.25 per share to be paid
July 1, 2008 to shareholders of record as of June 24,
2008.
The Board continues to evaluate various alternatives for the
direction of the Company.
We were incorporated in California on February 4, 1985, and
reincorporated in Delaware on October 26, 1993. We are
headquartered in Santa Clara, California.
Investments
The majority of our assets are held in cash and equivalents and
available-for-sale short-term investments. Cash and equivalents
include money market funds. Short-term investments at
March 31, 2008 included ordinary shares of Tower
Semiconductor, Ltd., an Israeli company traded on both US and
foreign exchanges, and asset-backed securities with primary
holdings consisting of short-term investment grade commercial
paper.
For additional information on these investments, see
Investment Risk under Item 7A of Part II.
Employees
As of March 31, 2008, we had 3 part-time employees in
administration.
2
Web Site
Access to Our Periodic SEC Reports
Our primary Internet address is www.alsc.com. We make our
periodic SEC Reports
(Forms 10-Q
and
10-K),
current reports
(Form 8-K),
proxy statements (Schedule 14A), Section 16 filings by
certain officers, directors and stockholders of Alliance
Semiconductor (Forms 3, 4 and 5), and amendments to those
filings, available free of charge through our Web site on the
same day those filings are made. We may from time to time
provide important disclosures to investors by posting them in
the investor relations section of our Web site, as allowed by
SEC rules.
In addition to the factors discussed elsewhere in this Annual
Report on
Form 10-K,
the following are important factors which could cause actual
results or events to differ materially from those contained in
any forward-looking statements made by or on behalf of the
Company.
We are
subject to certain contingent liabilities that may limit our
available cash resources.
Although we believe that our current cash, cash equivalents and
short-term investments will be sufficient to fund our needs for
at least the current fiscal year, we are subject to contingent
liabilities which may affect our liquidity or limit our
available cash resources.
We have been named as one of many defendants in a class action
suit alleging that we, in concert with the other defendants,
conspired to fix prices for the sale of SRAM products. Although
we have subsequently sold this business and we currently do not
believe these lawsuits will have a material adverse effect on
the company, we may incur significant legal costs and may not be
able to be excused from this proceeding, which could limit our
liquidity. In addition, we cannot provide assurances regarding
the outcome of these lawsuits.
We
hold securities which have experienced significant fluctuations
in value and liquidity.
We have held investments in equity securities which have been
subject to significant fluctuations in value and trading volume
and are traded on US and foreign stock exchanges. At
March 31, 2008 we held Tower Semiconductor ordinary shares,
all of which have been sold at the time of this filing. These
shares have historically experienced fluctuations in market
value, including periods of significant decrease in market
value. For example, during the twelve months ended
March 31, 2008 Tower share prices declined to as low as
$0.74 and rose to as high as $1.94. Our investment in Tower was
subject to inherent risks which could harm Towers business
and financial condition, including those associated with certain
Israeli regulatory requirements, political unrest, and financing
difficulties.
In addition, at March 31, 2008 we held asset-backed
auction-rate securities issued by sub-trusts of two master
trusts, Anchorage Finance Master Trust and Dutch Harbor Finance
Master Trust (the sub-trusts). Auction-rate
securities are intended to behave like short-term instruments
because their interest rates are reset periodically through an
auction process generally scheduled every 28 days.
Investments in these securities can be sold for cash at par
value on the auction date if the auction is successful. Ambac
Assurance has the right to compel the liquidation of the
portfolio of assets held by the sub-trusts and compel the
sub-trusts to purchase Ambac Assurance preferred stock with a
liquidation preference equal to the portfolios liquidated
value. (the Put Right). In August 2007, auctions
began to fail due to insufficient buyers, as the amount of
securities submitted for sale in auctions exceeded the aggregate
amount of the bids. All of our auction-rate securities portfolio
has been subject to failed auctions. To date we have collected
all interest due on our auction-rate securities, and expect to
continue to do so in the future. The investment principal
associated with failed auctions will not be accessible until
successful auctions occur, a buyer is found outside the auction
process, or the issuers establish a different form of financing
to replace these securities. Accordingly, we cannot provide
assurance as to when liquidity in the regularly scheduled
auctions will be restored. Interest payments have been timely
made to date, and the underlying assets are not in default or
otherwise impaired, with the result that the face value of these
investments to date has not declined. See Investment
Risk under Item 7A of Part II. for more
information.
3
Our
financial condition is likely to fluctuate and failure to meet
financial expectations for any period may cause our stock price
to decline.
As discussed in our Annual Report on
Form 10-K
filed March 31, 2007, we have sold each of our operating
business units and have exited the semiconductor business that
had previously characterized our company. Also, we have
completed the sale of our Alliance Venture Investments portfolio
and our interest in Solar Venture Partners. As a result, we
believe that period-to-period comparisons of our results of
operations are not necessarily meaningful, and you should not
rely on these comparisons as indications of future performance.
Other factors that could affect our stock price, in addition to
performance, are
|
|
|
|
|
changes in economic and capital market conditions; and;
|
|
|
|
changes in business regulatory conditions
|
Compliance
with changing regulations of corporate governance and public
disclosure may result in additional expense.
We are committed to maintaining high standards of corporate
governance and public disclosure. As a result, we have invested,
and we intend to continue to invest, resources to comply with
evolving laws, regulations and standards, and this investment
may result in increased general and administrative expense and a
diversion of management time and attention to compliance
activities.
For example, as directed by Section 404 of the
Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring us
as a public company to include a report in our Annual Report on
Form 10-K
that contains an assessment by management of the effectiveness
of our internal controls over financial reporting for fiscal
2008. In addition, our independent registered public accountants
must attest to and report on the effectiveness of our internal
controls over financial reporting, a requirement that we expect
based on currently proposed rules may apply to our Annual Report
on
Form 10-K
for the fiscal year ending March 31, 2010. How companies
implement these requirements, including internal control
revisions, if any, to comply with Section 404s
requirements, and how independent public accountants will apply
these new requirements and test companies internal
controls, are continually evolving. Although we are diligently
and vigorously reviewing our internal controls over financial
reporting to comply with Section 404 requirements, we
cannot be certain as to the outcome of the testing of our
internal controls and any remediation efforts that may be needed.
We may
be unable to attract and retain key personnel who are critical
to the success of our business.
The changes in our business have caused us to reduce our staff
to a level commensurate with our current business activity. If
we were to lose key members of our small staff, we could be
adversely affected. Additionally, limited human resources and
untimely turnovers in staff may result in difficulties in
implementing our policies and procedures including those related
to our internal controls. We are not insured against the loss of
any of our key employees, nor can we assure the successful
recruitment of replacement personnel.
Our executive offices and principal administrative operations
are currently located in a 1,065 square foot leased
facility in Santa Clara, California under a lease which
expires in January 2009. We believe that our facilities are
suitable and adequate for our needs as a company.
|
|
Item 3.
|
Legal
Proceedings
|
SRAM
Class Actions
In October and November 2006, we and other companies in the
semiconductor industry were named as defendants in a number of
purported antitrust class action lawsuits filed in federal
district courts in California and other states, and in Canada.
The Company was served in some but not all of these actions. The
lawsuits purport to state claims on behalf of direct and
indirect purchasers of SRAM products based on an alleged
conspiracy between manufacturers of SRAM devices to fix or
control the price of SRAM during the period January 1, 1998
through December 31, 2005. The Company denies all
allegations of wrongful activity.
4
Based on an agreement to preserve evidence and toll the statute
of limitations until January 10, 2009, the plaintiffs in
the United States litigation voluntarily dismissed Alliance from
the litigation without prejudice. Based on a similar agreement
to toll the statute of limitations until January 10, 2009,
the litigation pending in Ontario and British Columbia, Canada
has been discontinued without prejudice. We anticipate that the
litigation pending in Quebec, Canada will also be discontinued
in accordance with the tolling agreement. At this time we do not
believe these lawsuits will have a material adverse effect on
the company.
|
|
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
Not applicable.
PART II
|
|
Item 5.
|
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
|
Our Common Stock is traded on the over the counter bulletin
board under the symbol ALSC. We completed our initial public
offering on December 1, 1993. The following table sets
forth the high and low sale prices as reported on the NASDAQ
Global Market for the periods prior to September 13, 2006,
and the high and low sale prices as reported on the OTC Bulletin
Board market for the periods indicated subsequent to
September 13, 2006 for our Common Stock.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Fiscal Year 2007
|
|
|
|
|
|
|
|
|
1st Quarter (from April 1, 2006 to June 30, 2006)
|
|
$
|
2.92
|
|
|
$
|
2.60
|
|
2nd Quarter (from July 1, 2006 to September 30, 2006)
|
|
|
3.42
|
|
|
|
2.61
|
|
3rd Quarter (from October 1, 2006 to December 31, 2006)
|
|
|
4.55
|
|
|
|
3.35
|
|
4th Quarter (from January 1, 2007 to March 31,
2007)
|
|
|
4.51
|
|
|
|
4.14
|
|
Fiscal Year 2008
|
|
|
|
|
|
|
|
|
1st Quarter (from April 1, 2007 to June 30, 2007)
|
|
$
|
5.23
|
|
|
$
|
4.42
|
|
2nd Quarter (from July 1, 2007 to September 30, 2007)
|
|
|
5.89
|
|
|
|
2.05
|
|
3rd Quarter (from October 1, 2007 to December 31, 2007)
|
|
|
2.30
|
|
|
|
1.45
|
|
4th Quarter (from January 1, 2008 to March 31,
2008)
|
|
|
1.95
|
|
|
|
0.95
|
|
As of June 5, 2008, there were approximately 84 holders of
record of our Common Stock.
Dividend
Policy
In fiscal 2007, the Board authorized the distribution of a
significant portion of our cash surplus that was not needed for
expected future operations or known liabilities, including
contingent claims and declared a special cash dividend of $3.75
per share which was paid July 17, 2007 An additional cash
dividend of $.0.25 per share was paid April 8, 2008, and
the Board declared a special cash dividend of $0.10 per share
which was paid May 20, 2008 to shareholders of record as of
May 12, 2008. On June 12, 2008 the Board declared a
special cash dividend of $0.25 per share to be paid
July 1, 2008 to shareholder of record as of June 24,
2008. The Board continues to evaluate various alternatives for
returning value to stockholders, but at this time has no other
definitive plans regarding the payment of an additional special
cash dividend to stockholders.
|
|
Item 7.
|
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
|
The following discussion should be read in conjunction with our
Consolidated Financial Statements, and the accompanying notes to
Consolidated Financial Statements included elsewhere in this
report. This discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not
limited to, those described in the section entitled Risk
Factors. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect our present
expectations and analysis and are inherently susceptible to
5
uncertainty and changes in circumstances. We assume no
obligation to update these forward-looking statements to reflect
actual results or changes in factors or assumptions affecting
such forward-looking statements.
Overview
Prior to our fiscal year ended March 31, 2008 (fiscal
2008) we sold substantially all of the assets and
liabilities of our operating business units, effectively exiting
the semiconductor industry, and sold our long-term investment
interests in Alliance Ventures and Solar Venture Partners. The
disposal of our semiconductor operations resulted in a gain of
$6.2 million primarily recognized in our fiscal year ending
March 31, 2007 (fiscal 2007). We recognized a
gain, primarily in fiscal 2007, of approximately
$108.7 million as a result of the sale of Alliance Ventures
and Solar Venture Partners. Subsequent to the closure of the
disposal activities, fiscal 2008 was focused on treasury
management activities.
In fiscal 2008, the Company distributed approximately
$124 million to shareholders via a special, one-time
dividend of $3.75 per share. Subsequent to our year end, we paid
a special cash dividend of $0.25 per share to shareholders on
April 8, 2008, and the Board declared a special cash
dividend of $0.10 per share which was paid May 20, 2008 to
shareholders of record as of May 12, 2008. On June 12,
2008 the Board declared a special cash dividend of $0.25 per
share to be paid July 1, 2008 to shareholders of record as
of June 24, 2008.
As previously reported, Alliance and the Internal Revenue
Service lodged final decision documents with the United States
Tax Court, which were signed and entered by the judge on
February 7, 2008. The documents related to an audit of
fiscal tax years 1999 through 2002. Pursuant to the decision
documents, we received a federal tax refund of approximately
$6.6 million plus interest for the 2001 tax year and no
additional taxes will be owed by us for those periods, but our
net operating loss carry-forwards were reduced to
$138.8 million. During fiscal 2008, in connection with the
resolution of this matter we reversed $32.4 million
previously accrued for taxes and recognized the refund we
received together with the interest thereon.
Our Board continues to evaluate various alternatives for the
direction of the Company going forward.
Results
of Operations
During fiscal 2008, as a result of our significant disposal
activities substantially completed in fiscal 2007, our financial
results were derived from the performance of our remaining
investments, reduced general and administrative activities, and
other non-recurring transactions.
We realized a loss of $1.1 million on sales of common stock
of Tower Semiconductor in fiscal 2008 compared to a gain of
$1.5 million in fiscal 2007. The loss was due to a
substantial reduction in share prices that impacted our sales
during the
4
th
quarter
of fiscal 2008. During fiscal 2008 all contractual sales
restrictions arising from shareholder agreements with other
investors due to our prior affiliation were removed. We have
fully liquidated our remaining position in Tower during fiscal
2009.
Interest and Dividends increased approximately $3.5 million
to $7.5 million in fiscal 2008 due to a $1.3 million
increase in interest on our short term investments and
$1.7 million interest received on tax refunds due to us
together with $0.4 million foreign exchange gains. Future
dividend and interest income will be dependent upon the
Boards decision for the direction of the Company. Any
significant future cash distributions the company may make would
result in reduced interest and dividend income.
Our general and administrative expenses significantly declined
in 2008. During the fiscal year we reduced our total workforce
to 3 consisting of our CEO, CFO and an administrative support
person, each of whom have taken salary reductions. We also
reduced our facilities and corresponding rent payments by
approximately 74%.
We recognized a net gain from discontinued operations of
$3.3 million in 2008 primarily resulting from the sale of
fully amortized patents for $1.25 million and collections
of fully-reserved holdbacks from the prior year sales of our
operating business units. Our 2007 net gain from
discontinued operations of $106.3 million was related to
the sale of Alliance Ventures, Solar Venture Partners, and our
Semiconductor manufacturing units.
6
Our fiscal 2008 benefit from income tax reflected two
significant items: 1) a 2001 and 2002 federal tax refund of
$6.6 million and 2) the reversal of previously accrued
tax liabilities of $32.4 million from 1999 to 2002 in
connection with the resolution of our dispute with the IRS
described above.
Critical
Accounting Policies
We currently dont have any material accounting policies
that are both most important to the portrayal of our financial
condition and results, and that require managements most
difficult, subjective, or complex judgments, often as a result
of the need to make estimates about the effect of matters that
are inherently uncertain. See note 1 to our consolidated
financial statements for a summary of our significant accounting
policies.
Liquidity
and Capital Resources
We ended fiscal 2008 with $72.9 million of cash and cash
equivalents and short-term investments, compared with $188.0
million at the end of fiscal 2007. Working capital, the excess
of current assets over current liabilities, was
$86.9 million at the end of fiscal 2008. down from
$170.6 million at the end of fiscal 2007. The decreases in
cash and cash equivalents, short-term investments and working
capital were due primarily to the liquidation of a substantial
portion of our investment portfolio to fund dividend
distributions to our shareholders during fiscal 2008.
In accordance with our investment policy, we seek to invest with
issuers who have high-quality credit and limit the amount of
investment exposure to any one issuer. The primary objective of
our investment activities is to maximize return while preserving
principal and maintaining a desired level of liquidity to meet
working capital needs. We seek to preserve principal and
minimize exposure to interest-rate fluctuations by limiting
default risk, market risk and reinvestment risk. All investment
securities we own are investment grade. We do not have any
investments in securities that are collateralized by assets that
include mortgages or subprime debt. Our investments in
auction-rate securities are AA-rated as of March 31, 2008,
and collateralized by commercial paper, 80% of which must be
rated
A-1+/Prime-1
or better, and no more than 20% rated
A-1/Prime-1.
Until August 2007, the market for auction-rate securities was
highly liquid. During that month, auctions for the securities we
hold began to fail as the amount of securities submitted for
sale in those auctions exceeded the aggregate amount of the
bids. Ambac Assurance has the right to compel the liquidation of
the portfolio of assets held by the sub-trusts and compel the
sub-trusts to purchase Ambac Assurance preferred stock with a
liquidation preference equal to the portfolios liquidated
value. (the Put Right). All of our auction-rate
securities portfolio at March 31, 2008 has been subject to
failed auctions. For each unsuccessful auction, the interest
rate moves to a maximum rate defined for each security. To date,
we have collected all interest timely on our auction-rate
securities and expect to continue to do so in the future. The
principal associated with failed auctions will not be accessible
until successful auctions occur, a buyer is found outside of the
auction process, or the issuers establish a different form of
financing to replace these securities.
We believe that the credit quality of our auction-rate
securities is high and that we will ultimately recover all
amounts invested in these securities. We do not believe the
current illiquidity of these investments will have a material
impact on our ability to execute our business plans as described
below.
Our net income of $46.2 million for fiscal 2008 was
primarily driven by the non-cash reversal of previously accrued
tax liabilities. In addition, we recognized a $6.6 million
Federal tax refund from the 2001 tax year and received a state
tax refund of $1.6 million, with accrued interest. The
remainder of our fiscal 2008 capital resources were generated
from our short-term investment management off-set by the payment
of the special dividend totaling approximately
$124 million. In fiscal 2007 our significant capital
resources were the result of our disposal of our operating units
and investment portfolios totaling approximately
$160.2 million.
At March 31, 2008 our known future obligations consist of
recurring payroll and other general and administrative expenses
commensurate with our current level of activity. We are
currently receiving interest and dividend payments in excess of
our recurring expenses. Unless we significantly change our
operations, we do not expect our obligations to significantly
increase during fiscal 2009.
7
Plan
of Operations
Our plan of operations is currently focused on the management of
our remaining investments. Our Board of Directors continues to
evaluate various alternatives for the direction of the Company.
Some of the factors affecting our future plans include the
following:
|
|
|
|
|
The ability to utilize our gross deferred tax assets of
approximately $73.1 million.
|
|
|
|
The liquidity of our currently held investments.
|
While our Board is actively evaluating our opportunities for use
of our cash resources, no definitive plans have been made for
the immediate future of the Company.
|
|
Item 7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
INVESTMENT
RISK
At March 31, 2008 we held shares in Tower Semiconductor
which are traded on both the Israeli and NASDAQ stock exchanges.
Our investment in Tower was subject to inherent risks which
could harm the value of this investment, including those
associated with certain Israeli regulatory requirements,
political unrest, financing difficulties and litigation matters.
Towers ordinary shares have historically experienced
periods of significant decrease in market value and fluctuations
in market value.
We have completed the sale of the remaining shares as of the
filing of this report.
INVESTMENTS
IN AUCTION-RATE SECURITIES
At March 31,2008 we held $59.4 million (par value) in
investments in auction-rate securities and concluded no
temporary impairment exists on these securities. Given current
conditions in the auction-rate securities market as described
above in the Liquidity and Capital Resources section included in
Item 7, Managements Discussion and Analysis of
Financial Condition and Results of Operations of this Annual
Report on
Form 1O-K,
we may incur temporary unrealized losses or other-than-temporary
realized losses in the future if market conditions persist and
we are unable to recover the cost of our investments in
auction-rate securities. Ambac Assurance has a put right to
compel conversion of our investment in auction-rate securities
to Ambac preferred stock, but has never indicated publicly that
they have any intention of doing so. A hypothetical
100-basis-point loss from the par value of these investments
would result in a $600,000 impairment.
|
|
Item 8.
|
Financial
Statements and Supplementary Data
|
The index to our Consolidated Financial Statements and Schedule,
and the report of the independent registered public accounting
firm, appear on the pages beginning on
page F-1
of this
Form 10-K.
|
|
Item 9A.
|
Controls
and Procedures
|
Managements
Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as it is
defined in the Securities Exchange Act of 1934. The
Companys internal control over financial reporting is a
process designed under the supervision of the Companys
principal executive officer and principal financial officer, and
effected by the Companys Board of Directors, management,
and other personnel. These internal controls are designed to
provide reasonable assurance that the reported financial
information is presented fairly and in accordance with
accounting principles generally accepted in the United States of
America, that disclosures are adequate, and that the judgments
inherent in the preparation of financial statements are
reasonable. There are inherent limitations in the effectiveness
of any system of internal control, including the possibility of
human error and overriding of controls. Consequently, an
effective internal control system can only provide reasonable,
not absolute, assurance with respect to reporting financial
information. Also, projections of any evaluation of the
effectiveness of the internal control over financial reporting
to future periods are subject to the risk
8
that the controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Our internal control over financial reporting includes policies
and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
Company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally
accepted in the United States of America, and that receipts and
expenditures of the Company are being made only in accordance
with authorizations of management and directors of the Company;
and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or
disposition of the Companys assets that could have a
material effect on the financial statements.
Management conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework
and criteria established in Internal
Control Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that
our internal control over financial reporting was effective as
of March 31, 2008.
This annual report does not include an attestation report of our
independent registered public accounting firm regarding internal
control over financial reporting. Managements report was
not subject to attestation by our independent registered public
accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only
managements report in this annual report.
Evaluation
of Disclosure Controls and Procedures
The Company conducted an evaluation, with the participation of
its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys
disclosure controls and procedures, as defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended, as of
March 31, 2008. Based on this evaluation, our management,
including the Chief Executive Officer and Chief Financial
Officer, concluded that our disclosure controls and procedures
were effective as of March 31, 2008. The Companys
disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported on a timely basis.
Changes
in Internal Control over Financial Reporting
There were no changes in our internal control over financial
reporting that occurred during our most recently completed
fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
|
|
Item 9B.
|
Other
Information
|
None.
PART III
|
|
Item 10.
|
Directors
and Executive Officers of the Registrant
|
Executive
Officers of the Registrant
Information concerning executive officers of Alliance
Semiconductor as of March 31, 2008, is set forth below:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
Melvin L. Keating
|
|
|
61
|
|
|
President and Chief Executive Officer
|
Karl H. Moeller, Jr.
|
|
|
65
|
|
|
Interim Chief Financial Officer
|
Mr. Keating
has served as the Companys
President and Chief Executive Officer since March 2, 2006.
Prior to that, Mr. Keating served as Interim President and
Chief Executive Officer of the Company since December 1,
2005
9
and in addition, as Interim Chief Financial Officer from
December 1, 2005 until January 13, 2006. Prior to
that, Mr. Keating served as a special consultant to the
Company beginning in October 2005, reporting directly to the
Board of Directors. Immediately prior to joining the Company,
Mr. Keating served as Executive Vice President, Chief
Financial Officer and Treasurer of Quovadx, Inc. (NASDAQ: QVDX)
from April 2004 to September 2005. Prior to Quovadx, from 1997
to 2004, Keating served as a strategy consultant to Warburg
Pincus Equity Partners, a private equity and venture capital
firm, where he sourced deals and performed due diligence. From
1995 to 1997, Mr. Keating served as President and CEO of
Sunbelt Management, a $1 billion net worth private company
that owned and managed commercial and retail properties and was
the largest landlord of Target Stores. From 1986 to 1995,
Mr. Keating served as Senior Vice President
Finance and Administration of Olympia &
York Companies (and its successors), a $20 billion private
company that developed NYCs World Financial Center and
Londons Canary Wharf. From 2001 to 2004, Mr. Keating
served on the Board of Price Legacy Corporation, a REIT he
helped create while at Warburg Pincus. In addition he serves on
the Board of Kitty Hawk, Inc. and LCC International, Inc.
Mr. Keating holds two Masters degrees from the University
of Pennsylvania, Wharton School.
Mr. Moeller
has served as the Companys Interim
Chief Financial Officer since January 13, 2006. Prior to
that, Mr. Moeller served as a special consultant to the
Company since December 20, 2005. From July 2004 until
joining the Company, Mr. Moeller served as a senior
financial consultant to several high technology and
biotechnology companies. From September 2002 to July 2003,
Mr. Moeller served as the Chief Financial Officer of
Medconx, Inc., an early stage developer and manufacturer of
components used in disposable medical and surgical devices.
Prior to that, Mr. Moeller served as the Chief Financial
Officer of Olympian, then a privately held fuel distribution
company with annual revenues in excess of $200 million,
from January 2001 through completion of the sale of Olympian in
September 2002. During the period between 1991 and 2003,
Mr. Moeller served as a consultant of David Powell, Inc.,
providing senior financial services to numerous clients,
including the preparation of SEC filings to document the
restructure of Cytotherapeutics, Inc. into StemCells, Inc. and
securing capital for StemCells, Inc. after the restructure.
During this period Mr. Moeller served as Chief Financial
Officer of nCHIP, Inc. from 1993 to 1995, raising additional
financing for the company, and was instrumental in its sale to
Flextronics. Mr. Moeller holds a Bachelors degree in
Finance and Accounting.
Identification
of Directors
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Principal Occupation
|
|
Director Since
|
|
Bryant R. Riley(1)(3)
|
|
|
41
|
|
|
Founder and Chairman of B. Riley & Co, Inc.
|
|
|
2005
|
|
Alan B. Howe(1)(2)
|
|
|
47
|
|
|
Vice President of Strategic Development of Covad Communications
|
|
|
2005
|
|
Bob DAgostino(2)(3)
|
|
|
41
|
|
|
President of Q-mation
|
|
|
2005
|
|
J. Michael Gullard(2)
|
|
|
63
|
|
|
General Partner of Cornerstone Management
|
|
|
2005
|
|
C.N. Reddy
|
|
|
52
|
|
|
Executive Vice President for Investments and Director
|
|
|
1985
|
|
|
|
|
(1)
|
|
Member of the Compensation Committee.
|
|
(2)
|
|
Member of the Audit Committee.
|
|
(3)
|
|
Member of the Nominating and Corporate Governance Committee.
|
Bryant R. Riley
is both founder and Chairman of B.
Riley & Co., Inc. B. Riley & Co. is a
Southern California based brokerage firm providing research and
trading ideas primarily to institutional investors. Founded in
1997, B. Riley & Co. also has offices in
San Francisco and New York. Mr. Riley is also the
founder and Chairman of Riley Investment Management, LLC, an
investment adviser which provides investment management
services. He also serves on the board of directors of Kitty
Hawk, Inc., Aldila, Inc., Celeritek, Inc. and DDi Corporation,
each a Nasdaq listed company. Prior to 1997, Mr. Riley held
a variety of positions in the brokerage industry, primarily as
an Institutional Salesman and Trader. From October 1993-January
1997 he was a co-head of Equity at
Dabney-Resnick,
Inc., a Los Angeles based brokerage firm. From
1991-1993
he
was a co-founder of Huberman-Riley, a Texas based brokerage
firm. Mr. Riley graduated from Lehigh University in 1989
with a B.S. in finance.
10
Alan B. Howe
is currently Vice President of Strategic
Development for Covad Communications, where he has served since
2005. Prior to joining Covad, Mr. Howe was a principal at
Broadband Initiatives, LLC, a boutique consulting and advisory
firm. Mr. Howe was also previously Chief Financial Officer
of Teletrac, Inc. for six years, helping lead Teletrac through a
complex recapitalization and eventually working to facilitate
its sale to Trafficmaster PLC. Mr. Howe joined Teletrac
from Sprint, where he was Director of Corporate Development and
one of the initial team members that helped start Sprint PCS.
Before joining Sprint, he was an Assistant Vice President at
Manufacturers Hanover Trust (now JP Morgan Chase &
Co.) in New York. Prior to his experience at Manufacturers
Hanover Trust, Mr. Howe worked at Draper and Kramer, Inc.,
a large privately held real estate firm based in Chicago.
Mr. Howe serves on the board of directors of Kitty Hawk,
Inc., Dyntek, Inc., Crossroads Systems, Inc. Proxim Wireless,
Inc., and Anacomp, Inc. Mr. Howe holds a B.A. in business
administration from the University of Illinois and an M.B.A.
from the Indiana University Kelley Graduate School of Business.
Bob DAgostino
has served as President of Q-mation
since 1999. Q-mation is a leading supplier of software solutions
targeted at increasing operational efficiencies and asset
performance in large manufacturing companies. Joining Q-mation
in 1990, Mr. DAgostino held various sales, marketing
and operation management positions prior to his appointment as
President in January 1999. Q-mation operates out of offices in
Philadelphia, PA, Boston, MA and Cleveland, OH, focusing
primarily on software for the food, pharmaceutical and consumer
products industries. Mr. DAgostino graduated from
Lehigh University with a B.S. in Chemical Engineering.
J. Michael Gullard
has since 1984 served as a
general partner of Cornerstone Management, a venture capital and
consulting firm that provides strategic focus and direction for
technology companies, primarily in the software and data
communications industries. He also serves on the board of
directors of JDA Software Group, Inc., Proxim Wireless, Inc. and
Planar Systems, Inc., each a Nasdaq listed company, and DynTek,
Inc. Mr. Gullards 33 years in the technology
industry include a number of executive and management posts at
Telecommunications Technology Inc. and the Intel Corporation. He
holds a B.A. and an M.B.A from Stanford University.
C.N. Reddy
is the co-founder of Alliance Semiconductor
and has served as a director of Alliance Semiconductor since the
Companys inception in February 1985. Mr. Reddy served
as the Secretary of Alliance Semiconductor from February 1985 to
October 2000. Beginning in February 1985, Mr. Reddy served
as Vice President of Engineering. In May 1993, he was appointed
Secretary and Chief Operating Officer. In October 2000,
Mr. Reddy resigned his positions as Chief Operating Officer
and Secretary, and was appointed Executive Vice President for
Investments. From 1984 to 1985, he served as Director of Memory
Products of Modular Semiconductor, Inc., and from 1983 to 1984,
Mr. Reddy served as a SRAM product line manager for Cypress
Semiconductor Corporation. From 1980 to 1983, Mr. Reddy
served as a DRAM development manager for Texas Instruments,
Inc., and before that he was a design engineer with National
Semiconductor Corporation for two years. Mr. Reddy holds a
M.S. degree in Electrical Engineering from Utah State
University. Mr. Reddy is a named inventor of over 50
patents related to SRAM and DRAM designs. C.N. Reddy is the
brother of N. Damodar Reddy, the former Chairman of Alliance
Semiconductor. Mr. Reddy serves on the Board of Directors
of many privately held companies, including several companies in
which Alliance Venture Managements investment funds held
equity interests.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our Directors,
our executive officers and persons who own more than 10% of the
Companys Common Stock (collectively, Reporting
Persons) to file initial reports of ownership and changes
in ownership of our Common Stock. Reporting Persons are required
by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based
solely on our review of the copies of such reports received or
written representations from certain Reporting Persons that no
other reports were required, we believe that during fiscal 2008,
all Reporting Persons complied with all applicable filing
requirements except that a late Form 4 was filed by each of
Mr. Howe and Mr. DAgostino.
Code of
Ethics
We have adopted the Code of Ethics that applies to the principal
executive officer, the principal financial officer, principal
accounting officer or controller, or persons performing similar
functions (collectively, the Finance Managers). This
Code of Ethics is included as an exhibit to this
Form 10-K
and can be found under
11
Corporate Governance on the Investor page of our
website www.alsc.com. If any substantive amendments are made to
the Code of Ethics or any waiver is granted, including any
implicit waiver, from a provision of the code to any of the
Finance Managers, we will disclose the nature of such amendment
or waiver on our website at www.alsc.com or in a report on
Form 8-K.
Audit
Committee
The Company has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The members of the
Audit Committee are J. Michael Gullard (Chairman), Alan B. Howe
and Bob DAgostino. The Board has determined that each of
these directors is independent for purposes of the rules of the
NASDAQ Stock Market and the Securities and Exchange Commission
(SEC) as they relate to audit committee members. The
Board has also determined that Mr. Gullard is an
Audit Committee Financial Expert as defined under
the rules of the SEC.
|
|
Item 11.
|
Executive
Compensation
|
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
($)(3)
|
|
($)
|
|
($)
|
|
($)(4)
|
|
($)(5)
|
|
Melvin L. Keating
|
|
|
2008
|
|
|
|
340,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,771
|
|
|
|
352,771
|
|
President and Chief Executive Officer
|
|
|
2007
|
|
|
|
415,000
|
|
|
|
420,000
|
|
|
|
|
|
|
|
337,387
|
|
|
|
|
|
|
|
|
|
|
|
9,316
|
|
|
|
1,181,703
|
|
Karl H. Moeller, Jr.
|
|
|
2008
|
|
|
|
234,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,312
|
|
|
|
250,350
|
|
Interim Chief Financial Officer
|
|
|
2007
|
|
|
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
34,359
|
|
|
|
|
|
|
|
|
|
|
|
12,143
|
|
|
|
286,502
|
|
|
|
|
(1)
|
|
Salary.
The amounts reported in this column
represent base salaries paid to each of the Named Executive
Officers.
|
|
(2)
|
|
Bonus.
The amounts reported in this column for
Fiscal 2007 reflect discretionary cash bonus awards approved by
the Compensation Committee and paid in the fourth quarter of
fiscal 2007.
|
|
(3)
|
|
Option Awards.
No stock options were granted
to any Named Executive Officers in fiscal 2007 or fiscal 2008.
The amounts reported in this column represent the dollar amount
of stock options recognized, or expensed, based on
the vesting of grants made in prior years during fiscal 2007 and
fiscal 2008 for each of the Named Executive Officers as
compensation costs for financial reporting purposes (excluding
forfeiture assumptions) in accordance with
SFAS No. 123R. As of March 31, 2008, none of the
Named Executive Officers held unexercised stock options.
|
|
(4)
|
|
All Other Compensation.
The amounts reported
in this column represent the aggregate dollar amount for each
Named Executive Officer for perquisites and other personal
benefits. Under rules of the SEC, the Company is required to
identify by type all perquisites and other personal benefits for
a Named Executive Officer if the total value for that individual
equals or exceeds $10,000, and to report and quantify each
perquisite or personal benefit that exceeds the greater of
$25,000 or 10% of the total amount for that individual. The
amounts disclosed in this column for Messers. Keating and
Moeller consist of medical and life insurance premiums net of
employee contributions, accidental death and disability
insurance premiums and 401(k) matching payments.
|
|
(5)
|
|
Total Compensation.
The amounts reported in
this column are the sum of the prior columns for each of the
Named Executive Officers.
|
12
Employment
Agreements
Each of Mr. Keating and Mr. Moeller is party to an
employment agreement with the Company. The principal purpose of
the employment agreements is to protect the Company from certain
business risks (e.g. threats from loss of confidentiality or
trade secrets, solicitation of customers and employees) and to
define the Companys right to terminate the employment
relationship. In return, the executive officers are provided
assurances with regard to salary and other compensation and
benefits.
Generally, the employment agreements provide that the executives
shall devote full-time attention, skill and ability to discharge
the duties assigned to them, and to use their best efforts to
promote and protect the interests of Alliance. The Employment
Agreements are terminable by each of the respective parties
thereto at any time, for any reason and with or without cause.
Mr. Keating
Mr. Keating is party to an employment agreement with the
Company, dated December 1, 2005 (the Keating
Agreement), which provides for an annual base salary
(which may be increased by the Board of Directors), and the
initial grant of an option to purchase up to 100,000 shares
of the Companys common stock, subject to full acceleration
in the event of a Change of Control, as defined in the stock
option agreement. The Keating Agreement also provides for
participation in the Companys 401(k) Plan, participation
in the Companys employee life insurance program, vacation
in accordance to the Companys standard paid vacation
policy, and other employee benefit plans maintained by the
Company. In addition, the Keating Agreement provides for
reimbursement of certain out-of-pocket expenses actually
incurred in the course of performing his duties, including
reasonable living expenses in Santa Clara, California, plus
commuting expenses.
Mr. Moeller
Mr. Moeller is party to an employment agreement with the
Company, dated January 13, 2006 (the Moeller
Agreement), which provides for an annual base salary
(which may be increased by the Board of Directors), and the
initial grant of an option to purchase up to 25,000 shares
of the Companys common stock, subject to full acceleration
in the event of a Change of Control, as defined in the stock
option agreement. The Moeller Agreement also provides for
participation in the Companys 401(k) Plan, paid vacation,
health insurance coverage and participation in other employee
benefit plans maintained by the Company.
Dividend
On July 17, 2007, the Company paid a special one-time cash
dividend of $3.75 per share. Messrs. Keating and Moeller,
like all other Company stockholders of record as of July 6,
2007, were recipients of this special cash dividend.
Termination
and Change in Control Provisions
Set forth below are contractual provisions relating to each
Named Executive Officer under various
post-employment
and
change-in-control
scenarios under (i) the terms of an existing employment
agreement with Mr. Keating, and (ii) the terms of an
Option Agreement in place between the Company and
Messrs. Keating and Moeller, respectively.
In addition to the below amounts, in connection with any
termination of employment, each Named Executive Officer would be
entitled to receive the following: (i) all vested amounts
paid by the Company under its 401(k) plan or any similar plans,
(ii) all amounts earned through the date of termination but
not yet paid (bonuses, sick pay and benefits available under
existing benefit plans to the extent applicable, etc.) and
(iii) the value of all vested stock
13
options. We have not included these elements of compensation
below nor have we valued these elements because they are not
triggered by any termination of employment or change
in control.
Employment
Agreement
Mr. Keatings employment agreement provides in part
that if the Company had terminated Mr. Keatings
employment prior to June 1, 2006, the Company would have
had to pay Mr. Keating an amount equal to his base salary
for the period of six months less the period of his employment.
Accelerated
Equity Awards
Messrs. Keating and Moeller are each party to the form of
Option Agreement that contains the change of control provision
described below. Upon a Change of Control (as defined in the
form of Option Agreement), irrespective of whether the option is
assumed, substituted or terminated in connection with the
transaction, the option subject to this agreement becomes fully
vested and exercisable immediately prior to the completion of
such transaction. On January 25, 2007, as previously
disclosed, a Change of Control was triggered upon the completion
of the sale of the limited partnership and general partnership
interests in five wholly owned Alliance Ventures investment
partnerships for $123.6 million. Compensation to executive
officers and directors related to this Change of Control was
reported in the Companys Annual Report on
Form 10-K
for Fiscal 2007. As of March 31, 2008, Messrs. Keating
and Moeller did not hold any unexercised stock options.
Compensation
of Directors
Directors who are also employees of Alliance receive no separate
compensation for serving as directors or as members of Board
committees. For fiscal 2008 directors other than the
Chairman of the Board and the Audit Committee Chairman who are
not employees of Alliance received a $50,000 annual retainer
paid quarterly. The Chairman of the Board received an annual
retainer of $40,000 paid quarterly and the Audit Committee
Chairman received a $55,000 annual retainer paid quarterly. In
March 2008 the Board reduced their compensation effective
April 1, 2008 to $30,000 per year, except for the Chairman
of the Audit Committee, who will receive
$35,000 per year. All directors are reimbursed for
travel-related expenses incurred in connection with their
activities as directors.
Directors are eligible to receive stock option grants under the
2002 Stock Plan. Under the 2002 Stock Plan, the amount of
options, if any, granted to directors and the terms and
provisions of any options granted to directors are at the
discretion of the Compensation Committee. No options were
granted to any non-employee director during fiscal 2008.
On November 1, 2005, each independent member of the Board
received an option to purchase up to 50,000 shares of the
Companys common stock under the Companys 2002 Stock
Option Plan for his services on the Board and its committees.
These options had an exercise price equal to $2.63 per share,
the fair market value of the Companys common stock on the
date of grant as determined based on the closing sales price of
the Companys common stock on the Nasdaq National Market on
November 1, 2005. Each option became fully vested on
January 25, 2007, upon the completion of the sale of the
limited partnership and general partnership interests in five
wholly owned Alliance Ventures investment partnerships, which
constituted a change of control as defined in the Option
Agreement governing these options.
Director
Compensation in Fiscal 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Plan
|
|
|
Deferred
|
|
|
All Other
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
Earnings
|
|
|
($)
|
|
|
$
|
|
|
Bryant R. Riley
|
|
|
40,000
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
40,000
|
|
Alan B. Howe
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
Robert DAgostino
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
J. Michael Gullard
|
|
|
55,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
|
(1)
|
|
As of March 31, 2008, none of the independent directors
held unexercised stock options.
|
14
Dividend
On July 17, 2007, the Company paid a special one-time cash
dividend of $3.75 per share. Each of our directors, like all
other Company stockholders of record as of July 6, 2007,
were recipients of this special cash dividend.
|
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and
Management
|
The following table sets forth information that has been
provided to the Company with respect to beneficial ownership of
shares of the Companys Common Stock as of May 6, 2008
(or such other date as may be indicated in the footnote for the
respective person) for (i) each person or entity who is
known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each executive
officer named in the Summary Compensation Table, (iii) each
of our Directors and (iv) all Directors and current
executive officers of the Company as a group. The information in
this table is based solely on statements in filings with the SEC
or other reliable information. On May 6, 2008, there were
33,047,882 shares of the Companys Common Stock
outstanding.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
of Beneficial
|
|
Percent
|
Name and Address of Beneficial Owner(1)
|
|
Ownership(2)(3)
|
|
of Class
|
|
Bryant R. Riley(4)
|
|
|
5,080,298
|
|
|
|
15.4
|
%
|
11100 Santa Monica Blvd., Suite 800
Los Angeles, CA 90025
|
|
|
|
|
|
|
|
|
Lloyd Miller III(5)
|
|
|
4,046,560
|
|
|
|
12.2
|
%
|
4550 Gordon Drive
Naples, FL 34102
|
|
|
|
|
|
|
|
|
Schneider Capital Management Corporation(6)
|
|
|
3,055,298
|
|
|
|
9.2
|
%
|
460 E. Swedesford Road, Suite 1080
Wayne, PA 19087
|
|
|
|
|
|
|
|
|
David J. Greene & Co. LLC(7)
|
|
|
2,104,343
|
|
|
|
6.4
|
%
|
599 Lexington Avenue
New York, NY 10022
|
|
|
|
|
|
|
|
|
Francis Capital Management, LLC(8)
|
|
|
1,655,200
|
|
|
|
5.0
|
%
|
429 Santa Monica Boulevard, Suite 320
Santa Monica, CA 90401
|
|
|
|
|
|
|
|
|
Harvey Partners, LLC(9)
|
|
|
2,456,000
|
|
|
|
7.4
|
%
|
350 Madison Avenue, 8th Floor
New York, NY 10017
|
|
|
|
|
|
|
|
|
C.N. Reddy(10)
|
|
|
3,904,350
|
|
|
|
11.8
|
%
|
Bob DAgostino
|
|
|
94,450
|
|
|
|
*
|
|
Alan B. Howe
|
|
|
56,700
|
|
|
|
*
|
|
J. Michael Gullard
|
|
|
50,000
|
|
|
|
*
|
|
Melvin L. Keating
|
|
|
200,000
|
|
|
|
*
|
|
Karl H. Moeller, Jr.
|
|
|
|
|
|
|
*
|
|
N. Damodar Reddy(11)
|
|
|
3,806,136
|
|
|
|
11.5
|
%
|
All Directors and current executive officers as a group
(7 persons)(12)
|
|
|
|
|
|
|
28.4
|
%
|
|
|
|
*
|
|
Less than 1%.
|
|
(1)
|
|
Unless otherwise indicated, the address of each of the named
individuals is
c/o Alliance
Semiconductor Corporation, 4633 Old Ironsides Dr.,
Suite 240, Santa Clara, CA 95054.
|
|
(2)
|
|
Unless otherwise noted, the Company believes that all persons or
entities named in the table have sole voting and sole investment
power with respect to all shares of Common Stock shown in the
table to be beneficially owned by them, subject to community
property laws where applicable.
|
|
(3)
|
|
A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days of
May 6, 2008 upon the exercise of options, excluding,
however, options granted pursuant to the Companys
|
15
|
|
|
|
|
1996 Employee Stock Purchase Plan. Each stockholders
percentage ownership is determined by assuming that options that
are held by such person (but not those held by any other person)
and that are exercisable within 60 days of May 6, 2008
have been exercised.
|
|
(4)
|
|
Pursuant to a Schedule 13D/A filed by Bryant R. Riley on
May 6, 2008. Mr. Riley directly or indirectly has sole
voting and dispositive power over securities held by B.
Riley & Co., LLC, B. Riley & Co. Retirement
Trust, Riley Investment Partners Masters Fund, L.P., BR
Investco, LLC and Riley Investment Management LLC. Additionally
Mr. Riley has shared voting and dispositive power over an
aggregate of 2,100,147 shares beneficially owned by Riley
Investment Management LLC and B. Riley & Co., LLC.
Through his relationships with these entities, Mr. Riley
may be deemed to beneficially own a total of
5,080,298 shares of the Companys Common Stock.
|
|
(5)
|
|
The number of shares is as reported on Schedule 13G/A filed
by Lloyd Miller III on February 11, 2008. The
reporting person has sole voting and dispositive power with
respect to 1,673,688 of the reported securities and shared
voting and dispositive power with respect to 2,372,872 of the
reported securities as (i) an investment advisor to the
trustee of certain family trusts, and (ii) the trustee to
certain generation skipping trusts.
|
|
(6)
|
|
The number of shares is as reported on a Schedule 13G/A
filed by Schneider Capital Management Corporation on
February 13, 2008.
|
|
(7)
|
|
The number of shares is as reported on Schedule 13G filed
by David J. Greene & Co. LLC on February 8, 2007.
|
|
(8)
|
|
As the managing member of Francis Capital Management, LLC, John
P. Francis may be deemed to beneficially own the number of
reported shares.
|
|
(9)
|
|
The number of shares is as reported on a Schedule 13 G/A
filed by Harvey Partners, LLC on February 14, 2008. Harvey
Partners, LLC is the investment manager of Harvey SMidCap Fund,
LP, a Delaware limited partnership, and Harvey SMidCap Offshore
Fund, Ltd., a Cayman Islands exempted company, and, as such,
possesses sole power to vote and direct the disposition of all
securities of Alliance held by Harvey SMidCap Fund and Harvey
SMidCap Offshore Fund. Jeffrey C. Moskowitz and James A.
Schwartz, the Managing Members of Harvey Partners, share voting
and investment power with respect to all securities beneficially
owned by Harvey Partners.
|
|
(10)
|
|
Includes 677,500 shares held of record by C.N. Reddy
Investments, Inc., of which C.N. Reddy is the sole stockholder.
|
|
(11)
|
|
The number of shares is as reported on a Form 4 filed on
May 23, 2007.
|
|
(12)
|
|
Includes zero shares subject to options exercisable within
60 days of May 6, 2008.
|
|
|
Item 13.
|
Certain
Relationships and Related Transactions
|
Review,
Approval or Ratification of Transactions with Related
Persons
Our Audit Committee must review and approve in advance any
related party transaction. In approving or rejecting a proposed
related party transaction, our Audit Committee shall consider
the relevant facts and circumstances available and deemed
relevant to the Audit Committee, including, but not limited to
the risks, costs and benefits to us, the terms of the
transaction, the availability of other sources for comparable
services or products, if applicable, and the impact on a
directors independence. Our Audit Committee shall approve
only those related party transactions that, in light of known
circumstances, are in, or are not inconsistent with, our best
interests, as our audit committee determines in the good faith
exercise of its discretion. All of our directors, officers and
employees are required to report to our audit committee any such
related party transaction for approval prior to its completion.
Director
Independence
The Board of Directors has affirmatively determined that the
following four members of the Board of Directors are
independent as that term is defined by the rules of
the NASDAQ Stock Exchange: Bob DAgostino, Alan B. Howe, J.
Michael Gullard and Bryant R. Riley. The Board of Directors has
established three standing committees, an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance
Committee. All the
16
members of each of the aforementioned committees are
independent under applicable rules of the SEC and
the NASDAQ Stock Exchange.
|
|
Item 14.
|
Principal
Accountant Fees and Services
|
On March 24, 2008, the Audit Committee of the
Companys Board of Directors engaged Mark
Bailey & Co. Ltd. (Mark Bailey) as the
Companys independent registered public accounting firm for
the fiscal year ending March 31, 2008. Mark Bailey served
as the Companys registered public accounting firm for the
fiscal year ending March 31, 2007, as well. The fees billed
relating to fiscal years 2008 and 2007 for each of the following
categories of services are set forth below:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(a)
|
|
$
|
91,500
|
|
|
$
|
575,000
|
|
Audit Related Fees(b)
|
|
$
|
|
|
|
$
|
37,500
|
|
Tax Fees(c)
|
|
$
|
11,170
|
|
|
$
|
|
|
All Other Fees
|
|
$
|
|
|
|
$
|
|
|
|
|
|
(a)
|
|
Audit fees represent fees for professional services provided in
connection with the audit of the Companys financial
statements, review of the Companys quarterly financial
statements and audit services provided in connection with other
statutory or regulatory filings, and includes fees for consents.
Audit Fees in 2008 include the audit for fiscal 2008 as well as
quarterly reviews. Audit Fees in 2007 include an additional
maximum of $125,000 which was billed on hours and rate for
actual work performed and $22,000 for prior auditors
consent to the annual filing.
|
|
(b)
|
|
Audit related fees represent fees for accounting consultations
related to potential transactions.
|
|
(c)
|
|
Tax fees principally include fees for tax planning advice. All
such services were pre-approved by the Audit Committee.
|
|
|
|
Our audit committees policy is to pre-approve all audit
and permissible non-audit services provided by the independent
auditors, which they have done. These services may include audit
services, audit-related services, tax services and other
services. Pre-approval is generally provided for up to one year
and any pre-approval is detailed as to the particular service or
category of services and is generally subject to a specific
budget. The independent auditors and management are required to
periodically report to the audit committee regarding the extent
of services provided by the independent auditors in accordance
with this pre-approval, and the fees for the services performed
to date. The audit committee may also pre-approve particular
services on a
case-by-case
basis.
|
PART IV
|
|
Item 15.
|
Exhibits
and Financial Statement Schedules
|
(a)
The following documents are filed as part of this
report:
(1)
Financial Statements.
Please see the
accompanying Index to Consolidated Financial Statements, which
appears on
page F-1
of the report. The Report of Independent Registered Public
Accounting Firm, the Consolidated Financial Statements and the
Notes to Consolidated Financial Statements listed in the Index
to Consolidated Financial Statements, which appear beginning on
page F-2
of this report, are incorporated by reference into Item 8 above.
(2)
Financial Statement
Schedules.
Financial Statement Schedules have
been omitted because the information required to be set forth
therein is either not applicable or is included in the
Consolidated Financial Statements or the notes thereto.
(3)
Exhibits.
See Items 15(b) below.
(b)
Exhibits.
The exhibits listed on the
accompanying Exhibit Index immediately following the
signature page are filed as part of or are incorporated by
reference into this Annual Report on
Form 10-K.
(c)
Financial Statement
Schedules.
Reference is made to
Item 15(a)(2) above.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ALLIANCE SEMICONDUCTOR CORPORATION
|
|
|
|
By:
|
/s/
MELVIN
L. KEATING
|
Melvin L. Keating
President and Chief Executive Officer
(Principal Executive Officer)
June 30, 2008
Karl H. Moeller, Jr.
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
June 30, 2008
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mel Keating and Karl
Moeller, or either of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution
and re-substitution, for him and in his name, place and stead,
in any and all capacities to sign any and all amendments to this
Report on
Form 10-K,
and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitutes or substitute, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report on
Form 10-K
has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ Bryant
Riley
Bryant
Riley
|
|
Chairman of the Board
|
|
June 30, 2008
|
|
|
|
|
|
/s/ J.
Michael Gullard
J.
Michael Gullard
|
|
Director
|
|
June 30, 2008
|
|
|
|
|
|
/s/ Alan
Howe
Alan
Howe
|
|
Director
|
|
June 30, 2008
|
|
|
|
|
|
/s/ Bob
DAgostino
Bob
DAgostino
|
|
Director
|
|
June 30, 2008
|
|
|
|
|
|
/s/ C.
N. Reddy
C.
N. Reddy
|
|
Director
|
|
June 30, 2008
|
18
ALLIANCE
SEMICONDUCTOR CORPORATION
INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
Pages
|
|
|
|
|
F-2
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
F-3
|
|
|
|
|
F-4
|
|
|
|
|
F-5
|
|
|
|
|
F-6
|
|
|
|
|
F-7
|
|
F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Alliance Semiconductor Corporation
We have audited the accompanying consolidated balance sheets of
Alliance Semiconductor Corporation as of March 31, 2008 and
2007, and the related consolidated statements of income,
stockholders equity, and cash flows for the years then
ended. Alliance Semiconductor Corporations management is
responsible for these consolidated financial statements. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Alliance Semiconductor
Corporation as of March 31, 2008 and 2007, and the
consolidated results of its operations and its cash flows for
the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Mark Bailey & Company, Ltd.
Reno, Nevada
June 27. 2008
F-2
ALLIANCE
SEMICONDUCTOR CORPORATION
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands except
|
|
|
|
per share amounts)
|
|
|
ASSETS
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
11,764
|
|
|
$
|
58,236
|
|
Short-term investments
|
|
|
61,167
|
|
|
|
129,774
|
|
Accounts receivable, net
|
|
|
|
|
|
|
3
|
|
Receivable from sale of securities
|
|
|
401
|
|
|
|
1,733
|
|
Federal and State Tax Receivable
|
|
|
8,236
|
|
|
|
|
|
Other current assets
|
|
|
1,895
|
|
|
|
2,455
|
|
Deferred tax assets
|
|
|
3,739
|
|
|
|
12,158
|
|
Assets held for sale
|
|
|
|
|
|
|
5,413
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
87,202
|
|
|
|
209,772
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
10
|
|
Investment in Tower Semiconductor (excluding short-term portion)
|
|
|
|
|
|
|
2,338
|
|
Other assets
|
|
|
68
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
87,270
|
|
|
$
|
212,137
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
17
|
|
|
$
|
351
|
|
Accrued liabilities
|
|
|
134
|
|
|
|
157
|
|
Income tax payable
|
|
|
190
|
|
|
|
34,551
|
|
Liabilities related to assets held for sale
|
|
|
|
|
|
|
4,075
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
341
|
|
|
|
39,134
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
3,739
|
|
|
|
12,158
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
4,080
|
|
|
$
|
51,292
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
Common stock (41,222 shares issued and 33,048 shares
outstanding March 31, 2008, and 40,777 shares issued
and 32,603 shares outstanding March 31, 2007)
|
|
|
412
|
|
|
|
408
|
|
Additional paid-in capital
|
|
|
194,546
|
|
|
|
193,361
|
|
Treasury stock (8,174 shares at cost March 31, 2008
and March 31, 2007)
|
|
|
(68,658
|
)
|
|
|
(68,658
|
)
|
Accumulated earnings/(deficit)
|
|
|
(42,586
|
)
|
|
|
35,110
|
|
Accumulated other comprehensive income/(loss)
|
|
|
(524
|
)
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
83,190
|
|
|
|
160,845
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
87,270
|
|
|
$
|
212,137
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-3
ALLIANCE
SEMICONDUCTOR CORPORATION
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
General and administrative expense
|
|
|
(3,631
|
)
|
|
|
(7,711
|
)
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(3,631
|
)
|
|
|
(7,711
|
)
|
Other Income/(Expense)
|
|
|
|
|
|
|
|
|
Gain/(loss) on sale of marketable securities
|
|
$
|
(1,122
|
)
|
|
$
|
1,515
|
|
Interest and dividends
|
|
|
7,474
|
|
|
|
4,016
|
|
|
|
|
|
|
|
|
|
|
Total other income
|
|
|
6,352
|
|
|
|
5,531
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss) before income tax
|
|
|
2,721
|
|
|
|
(2,180
|
)
|
Benefit/(provision) for income tax
|
|
|
40,182
|
|
|
|
1,255
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss) from continuing operations
|
|
|
42,903
|
|
|
|
(924
|
)
|
Income/(Loss) from discontinued operations, net of tax
|
|
|
3,256
|
|
|
|
106,321
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
46,159
|
|
|
$
|
105,396
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share Basic:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
1.30
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
|
|
$
|
0.10
|
|
|
$
|
3.12
|
|
Net income/(loss)
|
|
$
|
1.40
|
|
|
$
|
3.09
|
|
Net income/(loss) per share Diluted:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
1.30
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
|
|
$
|
0.10
|
|
|
$
|
3.09
|
|
Net income/(loss)
|
|
$
|
1.40
|
|
|
$
|
3.06
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
32,931
|
|
|
|
34,079
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
32,932
|
|
|
|
34,461
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-4
ALLIANCE
SEMICONDUCTOR CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Comprehensive
|
|
|
Retained
|
|
|
Total
|
|
|
|
|
|
|
Common Stock
|
|
|
Paid-In
|
|
|
Treasury
|
|
|
Income
|
|
|
Earnings
|
|
|
Stockholders
|
|
|
|
Shares(1)
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
(Loss)
|
|
|
(Deficit)
|
|
|
Equity
|
|
|
Balance at March 31, 2006
|
|
|
43,755
|
|
|
|
438
|
|
|
|
201,622
|
|
|
|
(68,576
|
)
|
|
|
(1,314
|
)
|
|
|
(70,286
|
)
|
|
|
61,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain/(loss) on investments, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,938
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,396
|
|
|
|
|
|
Tender Offer
|
|
|
(2,978
|
)
|
|
|
(30
|
)
|
|
|
(8,905
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,935
|
)
|
Stock Repurchase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
|
|
|
|
|
|
|
(82
|
)
|
Stock Based Comp
|
|
|
|
|
|
|
|
|
|
|
808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
808
|
|
Stock Option Exercise
|
|
|
0
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
Offering Cost
|
|
|
|
|
|
|
|
|
|
|
(166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(166
|
)
|
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2007
|
|
|
40,777
|
|
|
|
408
|
|
|
|
193,361
|
|
|
|
(68,658
|
)
|
|
|
624
|
|
|
|
35,110
|
|
|
|
160,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain/(loss) on investments, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,148
|
)
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,159
|
|
|
|
|
|
Stock Based Comp
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
Stock Option Exercise
|
|
|
445
|
|
|
|
4
|
|
|
|
1,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,180
|
|
Cash Dividend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(123,855
|
)
|
|
|
(123,855
|
)
|
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2008
|
|
|
41,222
|
|
|
|
412
|
|
|
|
194,546
|
|
|
|
(68,658
|
)
|
|
|
(524
|
)
|
|
|
(42,586
|
)
|
|
|
83,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
ALLIANCE
SEMICONDUCTOR CORPORATION
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
$
|
46,159
|
|
|
$
|
105,396
|
|
Adjustments to reconcile net income/(loss) to net cash used in
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
10
|
|
|
|
141
|
|
Stock based compensation
|
|
|
9
|
|
|
|
808
|
|
Minority interest in subsidiary companies, net of tax
|
|
|
|
|
|
|
295
|
|
Equity in loss of investees
|
|
|
254
|
|
|
|
6,869
|
|
Loss on investments
|
|
|
983
|
|
|
|
(2,932
|
)
|
Gain on sale of business units
|
|
|
(2,076
|
)
|
|
|
(123,325
|
)
|
Gain on disposal of fixed assets
|
|
|
|
|
|
|
351
|
|
Other
|
|
|
(1
|
)
|
|
|
(157
|
)
|
Write-down of marketable securities and venture investments
|
|
|
|
|
|
|
1,852
|
|
Gain on sale of patents
|
|
|
(1,250
|
)
|
|
|
|
|
Provision for income tax
|
|
|
2,532
|
|
|
|
|
|
Deferred income tax
|
|
|
(1,626
|
)
|
|
|
(1,308
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
|
2,495
|
|
Inventory
|
|
|
|
|
|
|
248
|
|
Receivable from sale of securities
|
|
|
1,332
|
|
|
|
249
|
|
Assets held for sale
|
|
|
519
|
|
|
|
270
|
|
Other assets
|
|
|
304
|
|
|
|
(1,852
|
)
|
Federal Tax Receivable
|
|
|
(8,236
|
)
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
385
|
|
Accounts payable
|
|
|
(334
|
)
|
|
|
(2,810
|
)
|
Accrued liabilities and other long-term obligations
|
|
|
(152
|
)
|
|
|
(5,554
|
)
|
Liabilities related to assets held for sale
|
|
|
(1,233
|
)
|
|
|
1,145
|
|
Income tax payable
|
|
|
(34,492
|
)
|
|
|
666
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
2,702
|
|
|
|
(16,782
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Proceeds from sale of business units
|
|
|
1,773
|
|
|
|
18,803
|
|
Proceeds from sale of available-for-sale securities
|
|
|
6,044
|
|
|
|
9,445
|
|
Proceeds from sale of equipment
|
|
|
|
|
|
|
343
|
|
Proceeds from sale/(purchase of) of short-term money market
instruments
|
|
|
62,108
|
|
|
|
(121,534
|
)
|
Purchase of Alliance Ventures and other investments
|
|
|
|
|
|
|
(4,552
|
)
|
Proceeds from sale of Alliance Ventures and other investments
|
|
|
2,327
|
|
|
|
131,976
|
|
Proceeds from sale of patents
|
|
|
1,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
73,502
|
|
|
|
34,481
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Net proceeds from exercise of stock options
|
|
|
1,180
|
|
|
|
2
|
|
Special dividend
|
|
|
(123,856
|
)
|
|
|
|
|
Repurchase of common stock
|
|
|
|
|
|
|
(9,183
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(122,676
|
)
|
|
|
(9,181
|
)
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
(46,472
|
)
|
|
|
8,518
|
|
Cash and cash equivalents at beginning of the period
|
|
|
58,236
|
|
|
|
49,718
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
11,764
|
|
|
$
|
58,236
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid (refunded) for taxes, net
|
|
$
|
945
|
|
|
|
1,466
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-6
ALLIANCE
SEMICONDUCTOR CORPORATION
|
|
Note 1.
|
Alliance
Semiconductor and our Significant Accounting Policies
|
During the reporting periods covered in this report, the Company
made a significant transition from being an operating company
focused on the semiconductor industry with synergistic
investments in emerging companies, into a holding company
focused on maximizing return to shareholders. This
transformation was largely completed by fiscal 2008, with the
result that our primary activities now consist of managing our
short-term investments
In fiscal 2006 our Board of Directors entered into a plan for
disposal of our operating business units, which was completed in
the first quarter of fiscal 2007 resulting in proceeds of
$1.8 million in fiscal 2008 and $14.8 million in
fiscal 2007. The Board also entered into a plan for disposal of
the companys investments in Alliance Ventures and Solar
Ventures during the first quarter of fiscal year 2007, which
sales were completed during the last quarter of fiscal 2007 for
aggregate gross proceeds of $2.0 million in fiscal 2008 and
$128.6 million in fiscal 2007.
In fiscal 2007, the Board authorized the distribution of a
significant portion of our cash surplus that was not needed for
expected future operations or known liabilities, including
contingent claims and declared a special one-time cash dividend
of $3.75 per share, which was paid July 17, 2007. An
additional cash dividend of $.0.25 per share was paid
April 8, 2008, and the Board declared a special cash
dividend of $0.10 per share which was paid May 20, 2008 to
shareholders of record as of May 12, 2008. On June 12,
2008 the Board declared a special cash dividend of $0.25 per
share which will be paid July 1, 2008 to shareholders of
record as of June 24, 2008. (see Note 7
Subsequent Events).
The Board continues to evaluate various alternatives for the
direction of the Company going forward.
|
|
(a)
|
Principles
of Consolidation
|
The consolidated financial statements include the amounts of
Alliance and its wholly-owned subsidiaries.
The consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United
States of America and include the accounts of Alliance
Semiconductor and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and
expense during the period. Estimates and assumptions are
reviewed periodically and the effects of revisions are reflected
in the period that they are determined to be necessary. These
estimates include, the realization of deferred tax assets and
valuations associated with our short term investments, among
others. Actual results could differ from those estimates.
F-7
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Comparative amounts from the year ended March 31, 2007 have
been reclassified to conform to the current year presentation.
For the year ended March 31, 2007 the Company had
significant discontinued operations related to the disposal of
the Semiconductor Manufacturing Operation and Alliance Ventures
and Solar Venture Partners. The following table illustrates the
significant reclassifications, net of tax:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
March 31, 2007:
|
|
|
|
Fiscal
|
|
|
Current
|
|
|
|
2007
|
|
|
Year
|
|
Discontinued Operations:
|
|
Presentation
|
|
|
Presentation
|
|
|
Memory Products:
|
|
|
|
|
|
|
|
|
Loss on operations
|
|
$
|
(921
|
)
|
|
|
|
|
Loss on sale
|
|
|
(1,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Memory
|
|
|
(2,566
|
)
|
|
|
|
|
Non-Memory Products:
|
|
|
|
|
|
|
|
|
Loss on operations
|
|
|
(3,187
|
)
|
|
|
|
|
Gain on sale
|
|
|
10,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Memory
|
|
|
7,589
|
|
|
|
|
|
Venture Investments:
|
|
|
|
|
|
|
|
|
Gain on sale
|
|
|
101,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Discontinued Operations
|
|
$
|
106,321
|
|
|
$
|
106,321
|
|
|
|
(d)
|
Cash
and Cash Equivalents
|
Cash and cash equivalents consist of cash on deposit and highly
liquid money market instruments with banks and financial
institutions. We consider all highly liquid investments with
maturity from the date of purchase of three months or less to be
cash equivalents.
|
|
(e)
|
Short-Term
Investments
|
Short-term investments are accounted for in accordance with
Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity
Securities, (SFAS 115). Management
determines the appropriate categorization of investment
securities at the time of purchase and re-evaluates such
designation as of each balance sheet date. At March 31,
2008 and 2007, equity securities with no restrictions on sale or
that have restrictions that expire within the next year, are
designated as available-for-sale in accordance with
SFAS 115 and reported at fair market value with the related
unrealized gains and losses, net of taxes, included in
stockholders equity. Realized gains and losses and
declines in value of securities judged to be other than
temporary, are included in Other Income/(Expense). The fair
value of the Companys investments is based on quoted
market prices. Realized gains and losses are computed using the
specific identification method.
|
|
(f)
|
Auction
Rate Securities
|
$59.4 million of our Short-term investments on
March 31, 2008 are comprised of asset-backed auction-rate
securities. In accordance with SFAS No. 115,
Accounting for Certain Investments in Debt and Equity
Securities, and based on our ability to market and sell these
instruments, we classify auction-rate securities as
available-for sale and carry them at fair value. Auction-rate
securities are intended to behave like short-term instruments
because their interest rates are reset periodically through an
auction process, typically at intervals of 28 days.
Investments in these securities can be sold for cash at par
value on the auction date if the auction is successful. All of
our auction-rate
F-8
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
securities are AA-rated at March 31, 2008 and
collateralized by high-grade commercial paper. We do not have
any investments in securities that are collateralized by assets
that include mortgages or sub-prime debt. Our intent with these
investments is not to hold these securities to maturity, but to
use the periodic auction feature to provide liquidity as needed.
See Note 2, Short Term Investments, for further information.
In August 2007, auctions began to fail due to insufficient
buyers, as the amount of securities submitted for sale in
auctions exceeded the aggregate amount of the bids.
Substantially all of our auction-rate securities portfolio has
been subject to failed auctions. To date, we have collected all
interest due on our auction-rate securities and expect to
continue to do so in the future. The investment principal
associated with failed auctions will not be accessible until
successful auctions occur, a buyer is found outside of the
auction process, , or the issuers establish a different form of
financing to replace these securities. We understand that
issuers and financial markets are working on alternatives that
may improve liquidity, although it is not yet clear when or if
such efforts will be successful. We intend to hold our
auction-rate securities until we can recover the principal
amount through one of the means described above, and have the
ability to do so based on our other sources of liquidity.
We evaluated our entire auction-rate securities portfolio for
temporary or other-than-temporary impairment at
March 31,2008, based on review of a variety of inputs,
including (i) the commercial paper portfolios held by each
investment, (ii) pricing provided by the firms managing our
investments, and (iii) estimates derived internally
utilizing a discounted cash flow valuation model. As a result of
this review, we determined that the fair value of our
auction-rate securities at March 31, 2008 approximates par
value, and accordingly, we have not recorded any impairment. The
estimated fair values could change significantly based on future
market conditions or the execution by AMBAC Assurance of its
right to compel the liquidation of the portfolio of eligible
assets held by the sub-trusts and compel the sub-trusts to
purchase Ambac Assurance preferred stock with a liquidation
preference equal to the portfolios liquidated value.. We
will continue to assess the fair value of our auction-rate
securities for substantive changes in relevant market
conditions, changes in financial condition or other changes that
may alter our estimates described above. We may be required to
record a temporary unrealized holding loss or an impairment
charge to earnings if we determine that our investment portfolio
has incurred a decline in fair value that is temporary or
other-than-temporary, respectively.
|
|
(g)
|
Property
and Equipment
|
Property and equipment is stated at cost and depreciated on a
straight-line basis over the estimated economic useful lives of
the assets, which range from three to seven years. As of
March 31, 2008 all of our property and equipment was fully
depreciated.
During fiscal 2007 we recognized revenue now reported in
discontinued operations when persuasive evidence of an
arrangement existed, delivery had occurred, the price was fixed
or determinable and collection was reasonably assured.
Collection was not deemed to be reasonably assured if customers
received extended payment terms.
We account for our deferred income taxes in accordance with the
liability method. Under this method, deferred tax assets and
liabilities are determined based on the difference between the
financial statement and income tax bases of the assets and
liabilities using enacted tax rates in effect for the year in
which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce
deferred tax assets to the amounts expected to be realized.
In July 2006, the FASB issued Financial Interpretation
(FIN) No. 48, Accounting for Uncertainty
in Income Taxes, which clarifies the accounting for
uncertainty in income taxes recognized in the financial
statements in accordance with SFAS No. 109,
Accounting for Income Taxes. FIN No. 48
provides that a tax benefit from an
F-9
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
uncertain tax position may be recognized when it is more likely
than not that the position will be sustained upon examination,
including resolutions of any related appeals or litigation
processes, based on the technical merits. Income tax positions
must meet a more-likely-than-not recognition threshold at the
effective date to be recognized upon the adoption of FIN 48
and in subsequent periods. This interpretation also provides
guidance on measurement, derecognition, classification, interest
and penalties, accounting in interim periods, disclosure and
transition. FIN 48 is effective for fiscal years beginning
after December 15, 2006.
The Company adopted the provisions of FASB Interpretation
No. 48,
Accounting for Uncertainty in Income Taxes,
on April 1, 2007. There was no impact to the Company as
a result of the implementation of FIN 48.
|
|
(j)
|
Concentration
of Risks
|
Financial instruments that potentially subject us to
concentrations of risk consist principally of cash and cash
equivalents, and short- and long-term investments.
Cash is deposited with one major bank in the United States while
cash equivalents are deposited in investment accounts and money
market funds. We have not maintained cash in excess of FDIC
insurance limits in our bank accounts, and cash equivalents are
not invested in instruments issued by our major bank.
At March 31, 2008 we held $59.4 million in
asset-backed securities issued by sub-trusts of two master
trusts, Anchorage Finance Master Trust and Dutch Harbor Finance
Master Trust. The rate of interest paid on these securities is
determined at auctions generally scheduled every 28 days.
If the amount of securities submitted for sale exceeds the
amount of purchase orders in a particular auction, the result is
a lack of liquidity and the maximum distribution rate of
interest that can result from that auction. This has been the
case with respect to recent auctions, including the auctions
held during the last eight months of the year ended
March 31, 2008, and we cannot provide assurance as to when
the liquidity in the regularly scheduled auctions will be
restored. (see (f) Auction Rate Securities in this section,
Item 1A. Risk Factors, and Item 7 Managements
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources and Item 7A
Investment Risk (of this report). According to the offering
memorandum for the asset-backed securities, an investment
manager invests the eligible assets held by the sub-trusts in a
diversified portfolio of highly rated commercial paper. We
currently do not believe there is significant default risk
associated with the investment portfolio held by the sub-trusts.
Ambac Assurance, Inc. has the right to compel the liquidation of
the portfolio of eligible assets held by the sub-trusts and
compel the sub-trusts to purchase Ambac Assurance preferred
stock, but has not indicated publicly that they have any
intention of doing so. All interest payments due on the
asset-backed securities have been timely made.
We have held significant investments in Tower. Since Tower is in
the semiconductor business, and is subject to additional risks,
such as fires and other disasters, excess fabrication capacity,
and other risks known to semiconductor manufacturers, there can
be no assurances that our investment in Tower will increase in
value or even maintain its value. Because of the cyclical nature
of the semiconductor industry, it is possible that this
investment will experience a business downturn in the future
which will significantly depress the value of its stock. We have
liquidated our remaining position in Tower as of the filing date
of this report.
|
|
(k)
|
Stock-Based
Compensation
|
At March 31, 2008 and 2007, we have one stock-based
employee compensation plan, which is described more fully in
Note 5. In fiscal 2008 and 2007 we recorded stock
compensation expense in accordance with SFAS 123R
Share Based Payment. Total stock compensation
expense for the fiscal years ended March 31, 2008 and 2007
of $9,000 and $0.7 million, respectively was included in
selling, general and administrative expense and zero and
$73,000, respectively, was included in discontinued operations.
See Note 5 Stock Option Plans for
the assumptions and methodology used to determine the fair value
of stock-based compensation.
F-10
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
(l)
|
Net
Income/(Loss) Per Share
|
Basic earnings per share (EPS) is computed by
dividing net income available to common stockholders by the
weighted average number of common shares outstanding during the
period. Diluted EPS gives effect to all dilutive potential
common shares outstanding during the period including stock
options, using the treasury stock method. At March 31, 2008
and 2007, there were 5,505, and 358,638 options outstanding to
purchase common stock that were excluded from diluted net income
per share computations because their effect would have been
anti-dilutive. The weighted average exercise prices of these
options were $2.49 and $3.46 for fiscal 2008 and 2007,
respectively.
At March 31, the numerators and denominators used in the
Basic and Diluted EPS computations consisted of the following
(in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
Net income/(loss) available to common stockholders
|
|
$
|
46,159
|
|
|
$
|
105,396
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
32,931
|
|
|
|
34,079
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
32,932
|
|
|
|
34,461
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share: Basic
|
|
$
|
1.40
|
|
|
$
|
3.09
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share: Diluted
|
|
$
|
1.40
|
|
|
$
|
3.06
|
|
|
|
|
|
|
|
|
|
|
We recorded comprehensive income of $45.0 million and
$107.3 million in fiscal 2008 and 2007, respectively. The
components of comprehensive income (loss) are shown in the
Consolidated Statements of Stockholders Equity.
|
|
(n)
|
Recently
Issued Accounting Standards
|
Alliances management reviewed recently issued accounting
standards and determined that there were no material standards
applicable to Alliance that had not been previously disclosed in
our filings.
|
|
Note 2.
|
Short
Term Investments
|
Short-Term
Investments
At March 31, short-term investments consisted of the
following available-for-sale securities (in thousands,
except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2008
|
|
|
March 31, 2007
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
Market
|
|
Investment
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Tower Semiconductor Debentures(1)
|
|
|
|
|
|
$
|
38
|
|
|
|
|
|
|
$
|
62
|
|
Tower Semiconductor Ltd. Shares
|
|
|
1,639
|
|
|
|
1,704
|
|
|
|
4,782
|
|
|
|
8,178
|
|
Short-term Marketable securities(2)
|
|
|
|
|
|
|
59,425
|
|
|
|
|
|
|
|
121,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
61,167
|
|
|
|
|
|
|
$
|
129,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Convertible to Tower ordinary shares at $1.10 per share,
36,385 share equivalents at March 31, 2008
|
F-11
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
(2)
|
|
March 31, 2008 amount consists of asset-backed securities
issued by sub-trusts of two master trusts, Anchorage Finance
Master Trust and Dutch Harbor Finance Master Trust
|
Marketable securities held by us have experienced significant
changes in their market value primarily due to the business
climate in the semiconductor and technology sectors and general
market conditions. Management evaluates the marketable
securities for potential other-than-temporary
declines in their value. Such evaluations of our investments
include researching commentary from industry experts, analysts
and other companies.
|
|
Note 3.
|
Comprehensive
Income
|
Accumulated
Other Comprehensive Income
At March 31, 2008 and 2007, accumulated other comprehensive
income consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
Unrealized
|
|
|
|
|
|
Unrealized
|
|
|
|
Gain/(Loss)
|
|
|
Tax Effect
|
|
|
Gain/(Loss)
|
|
|
March 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Tower Semiconductor Ltd. Ordinary Shares
|
|
|
(875
|
)
|
|
|
353
|
|
|
|
(522
|
)
|
Tower Semiconductor Ltd. Debentures
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(878
|
)
|
|
$
|
354
|
|
|
$
|
(524
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
Unrealized
|
|
|
|
|
|
Unrealized
|
|
|
|
Gain/(Loss)
|
|
|
Tax Effect
|
|
|
Gain/(Loss)
|
|
|
March 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Tower Semiconductor Ltd. Ordinary Shares
|
|
|
1,024
|
|
|
|
(413
|
)
|
|
|
611
|
|
Tower Semiconductor Ltd. Debentures
|
|
|
22
|
|
|
|
(9
|
)
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,046
|
|
|
$
|
(422
|
)
|
|
$
|
624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income/(Loss)
At March 31, 2008, comprehensive income/(loss) consisted of
the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
Net income/(loss)
|
|
$
|
46,159
|
|
|
$
|
105,396
|
|
Unrealized gain/(loss) on marketable securities
|
|
|
(1,148
|
)
|
|
|
1,938
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income/(loss)
|
|
$
|
45,011
|
|
|
$
|
107,334
|
|
|
|
|
|
|
|
|
|
|
F-12
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 4.
|
Benefit
for Income Taxes
|
At March 31, the benefit for income taxes consisted of the
following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Current
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
(33,107
|
)
|
|
$
|
|
|
State
|
|
|
(5,792
|
)
|
|
|
|
|
Foreign
|
|
|
(1,283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current
|
|
$
|
(40,182
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
(39,455
|
)
|
|
$
|
(4,543
|
)
|
State
|
|
|
(2,556
|
)
|
|
|
498
|
|
Valuation allowance
|
|
|
42,011
|
|
|
|
2,737
|
|
|
|
|
|
|
|
|
|
|
Total Deferred
|
|
$
|
|
|
|
$
|
(1,308
|
)
|
|
|
|
|
|
|
|
|
|
Total Tax (Benefit)
|
|
$
|
(40,182
|
)
|
|
$
|
(1,308
|
)
|
|
|
|
|
|
|
|
|
|
At March 31, gross deferred tax assets and liabilities
consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Deferred Tax Inventory
|
|
|
|
|
|
|
|
|
NOL
|
|
$
|
63,108
|
|
|
$
|
15,380
|
|
Accrued expenses & reserves
|
|
|
|
|
|
|
160
|
|
Tax Credits
|
|
|
6,286
|
|
|
|
2,306
|
|
Alliance Ventures
|
|
|
|
|
|
|
235
|
|
Tower
|
|
|
3,739
|
|
|
|
12,262
|
|
|
|
|
|
|
|
|
|
|
Gross deferred tax assets
|
|
$
|
73,133
|
|
|
$
|
30,343
|
|
|
|
|
|
|
|
|
|
|
Less: Valuation Allowance
|
|
$
|
(73,133
|
)
|
|
$
|
(30,343
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, benefit for income taxes differs from the
amount obtained by applying the U.S. federal statutory rate
to income before income taxes as follows (in thousands, except
percentage data):
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Tax rate reconciliation
|
|
|
|
|
|
|
|
|
Federal statutory rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Tax at federal statutory rate
|
|
$
|
2,092
|
|
|
$
|
(764
|
)
|
Alternative minimum tax
|
|
|
190
|
|
|
|
|
|
State taxes, net of federal benefit
|
|
|
(2,556
|
)
|
|
|
498
|
|
Audit settlement
|
|
|
(39,088
|
)
|
|
|
|
|
Reclass from discontinued operations
|
|
|
|
|
|
|
(433
|
)
|
Intercompany dividend
|
|
|
1,012
|
|
|
|
|
|
Change in valuation allowance
|
|
|
(162
|
)
|
|
|
2,736
|
|
Other, net
|
|
|
(1,670
|
)
|
|
|
(3,345
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(40,182
|
)
|
|
$
|
(1,308
|
)
|
|
|
|
|
|
|
|
|
|
F-13
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
We had been subject to an audit by the Internal Revenue Service
since December 2005 with respect to fiscal tax years 1999
through 2002. Alliance and the Internal Revenue Service lodged
final decision documents with the United States Tax Court which
were signed and entered by the judge on February 7, 2008,
concluding their dispute in accordance with the terms of the
Stipulation of Settled Issues previously filed with the Court
and described in
Form 8-Ks
filed on July 6, 2007 and January 10, 2008. Pursuant
to the decision documents, Alliance received a tax refund of
approximately $6.6 million plus $1.3 million interest
for the 2001 tax year. As previously announced, as a result of
the settlement no additional taxes will be owed by Alliance for
its taxable years 1999 through 2002, but Alliances net
operating losses were reduced to $138.8 million. During
fiscal 2008 we reversed $32.4 million previously accrued
for taxes and recognized the refund of $6.6 million and
interest we received subsequent to year end in accordance with
the settlement.
As of March 31, 2008, we had a federal net operating loss
carryforward of approximately $138.8 million and cumulative
state net operating loss carryforwards of approximately $86.1.
The federal net operating loss carryforward will expire
beginning in fiscal 2025 and the state net operating loss
carryforwards will begin to expire in fiscal 2012 according to
the rules of each particular state. As of March 31, 2008,
we had federal research and experimentation tax credit
carryforwards of approximately $3.4 million that will begin
to expire in fiscal 2018; federal minimum tax credit
carryfowards of approximately $1.1 million that may be
carried over indefinitely and federal foreign tax credit
carryforwards of approximately $1.0 million that will begin
to expire in fiscal 2011. The research and experimentation tax
credit carryforward attributable to states is approximately
$1.0 million, of which approximately all is attributable to
the State of California and may be carried over indefinitely.
Utilization of net operating losses and tax credit carryforwards
may be subject to limitations due to ownership changes and other
limitations provided by the Internal Revenue Code and similar
state provisions. If such a limitation applies, the net
operating loss and tax credit carryforwards may expire before
full utilization.
|
|
Note 5.
|
Stock
Option Plans
|
|
|
(a)
|
2002
Stock Option Plan
|
At March 31, 2002, 13,000,000 shares of our Common
Stock was reserved under the 1992 Stock Option Plan for
issuance. In April 2002, the 2002 Stock Option Plan (the
Plan) was adopted to replace the expired 1992 Stock
Option Plan. The Board of Directors may terminate the Plan at
any time at its discretion.
Incentive stock options may not be granted at less than
100 percent of the fair value of our common stock at the
date of grant and the option term may not exceed 10 years.
Options granted vest over a period of 5 years. For holders
of more than 10 percent of the total combined voting power
of all classes of our stock, options may not be granted at less
than 110 percent of the current market price of the common
stock at the date of grant and the option term may not exceed
five years.
No grants were made under the 2002 Stock Option Plan in fiscal
2008, and the remaining options outstanding are not material.
F-14
ALLIANCE
SEMICONDUCTOR CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table summarizes grant and stock option activity
under all stock option plans for fiscal years 2008 and 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Weighted Average
|
|
|
|
|
|
|
Number
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Term
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
(In years)
|
|
|
(In thousands)
|
|
|
Outstanding at March 31, 2006
|
|
|
2,455,125
|
|
|
$
|
6.00
|
|
|
|
|
|
|
|
|
|
Grants
|
|
|
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
Exercises
|
|
|
700
|
|
|
$
|
2.67
|
|
|
|
|
|
|
|
|
|
Forfeitures or expirations
|
|
|
1,871,525
|
|
|
$
|
6.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2007
|
|
|
582,900
|
|
|
$
|
4.70
|
|
|
|
5.90
|
|
|
$
|
1,401,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grants
|
|
|
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
Exercises
|
|
|
(444,817
|
)
|
|
$
|
2.63
|
|
|
|
|
|
|
|
|
|
Forfeitures or expirations
|
|
|
(160,820
|
)
|
|
$
|
10.41
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest at March 31, 2008
|
|
|
8,809
|
|
|
$
|
2.02
|
|
|
|
3.53
|
|
|
$
|
|
|
Exercisable and vested at March 31, 2008
|
|
|
5,092
|
|
|
$
|
2.39
|
|
|
|
2.10
|
|
|
$
|
|
|
The aggregate intrinsic value in the table above represents the
total pre-tax intrinsic value (i.e. the difference between our
closing stock price on the last trading day of our the twelve
months ended March 31, 2008 and the exercise price, times
the number of in the money shares) that would have been received
by the option holders had all option holders exercised their
options on March 31, 2008; this amount changes based on the
fair market value of our stock. The total intrinsic value of
options exercised was $827,726 and $50,000 for the twelve months
ended March 31, 2008 and 2007, respectively. Total fair
value of options vested was not material and $851,400 for the
twelve months ended March 31, 2008 and 2007, respectively.
In October and November 2006, we and other companies in the
semiconductor industry were named as defendants in a number of
purported antitrust class action lawsuits filed in federal
district courts in California and other states, and in Canada.
The Company was served in some but not all of these actions. The
lawsuits purport to state claims on behalf of direct and
indirect purchasers of SRAM products based on an alleged
conspiracy between manufacturers of SRAM devices to fix or
control the price of SRAM during the period January 1, 1998
through December 31, 2005. The Company denies all
allegations of wrongful activity.
Based on an agreement to preserve evidence and toll the statute
of limitations until January 10, 2009, the plaintiffs in
the United States litigation voluntarily dismissed Alliance from
the litigation without prejudice. Based on a similar agreement
to toll the statute of limitations until January 10, 2009,
the litigation pending in Ontario and British Columbia, Canada
has been discontinued without prejudice. We anticipate that the
litigation pending in Quebec, Canada will also be discontinued
in accordance with the tolling agreement. At this time we do not
believe these lawsuits will have a material adverse effect on
the company.
|
|
Note 7.
|
Subsequent
Events
|
Subsequent to our year end, we paid a special cash dividend of
$0.25 per share to shareholders on April 8, 2008, and the
Board declared a special cash dividend of $0.10 per share which
was paid May 20, 2008 to shareholders of record as of
May 12, 2008. On June 12, 2008 the Board declared a
special cash dividend of $0.25 per share which will be paid
July 1, 2008 to shareholders of record as of June 24,
2008.
F-15
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Document Description
|
|
|
2
|
.01(A)
|
|
Purchase Agreement dated December 1, 2006 by and between
Alliance Semiconductor Corporation and QTV Capital Limited
|
|
3
|
.01(B)
|
|
Registrants Certificate of Incorporation
|
|
3
|
.02(B)
|
|
Registrants Certificate of Elimination of Series A
Preferred Stock
|
|
3
|
.03(C)
|
|
Registrants Certificate of Amendment of Certificate of
Incorporation
|
|
3
|
.04(B)
|
|
Registrants Bylaws
|
|
4
|
.01(B)
|
|
Specimen of Common Stock Certificate of Registrant
|
|
10
|
.01(D)
|
|
Form of Indemnity Agreement used between the Registrant and
certain of its officers
|
|
10
|
.02(E)
|
|
Registrants 2002 Stock Option Plan
|
|
10
|
.03(F)
|
|
Form of Stock Option Agreement under Registrants 2002
Stock Option Plan
|
|
10
|
.04(G)
|
|
Settlement Agreement by and among Alliance Semiconductor
Corporation and the other signatories listed therein dated as of
October 17, 2005
|
|
10
|
.05(G)
|
|
Form of Amendment to Indemnity Agreement approved by the Board
of Directors on October 17, 2005
|
|
10
|
.06(H)
|
|
Employment Agreement with Melvin L. Keating dated
December 1, 2005
|
|
10
|
.07(H)
|
|
Stock Option Agreement with Melvin L. Keating dated
December 1, 2005
|
|
10
|
.08(I)
|
|
Employment Agreement with Karl H. Moeller, Jr. dated
January 13, 2006
|
|
10
|
.09(I)
|
|
Stock Option Agreement with Karl H. Moeller, Jr. dated
January 13, 2006
|
|
10
|
.10(J)
|
|
Stock Option Agreement with Melvin L. Keating dated
March 28, 2006
|
|
10
|
.11(K)
|
|
Agreement dated June 8, 2006 by and among Alliance
Semiconductor (India) Private Limited, Megasri Constructions
Limited and Vibha Agrotech Limited (each, a company registered
under the Companies Act, 1956 (India))
|
|
10
|
.12(L)
|
|
Settlement Agreement by and among Alliance Semiconductor
Corporation, Prabhakara Balla and Trit Tek Research Ltd. dated
July 7, 2006
|
|
10
|
.13(A)
|
|
Partnership Interests Purchase Agreement dated as of
December 1, 2006 by and among Alliance Semiconductor
Corporation and Alliance Venture Management, LLC.
|
|
10
|
.14(A)
|
|
Mutual Release, dated as of December 1, 2006, by and among
Alliance Semiconductor Corporation, ALSC Venture Management,
LLC, Alliance Ventures I, L.P., Alliance Ventures II, L.P.,
Alliance Ventures III, L.P., Alliance Ventures IV, L.P.,
Alliance Ventures V, L.P. and Alliance Venture Management,
LLC.
|
|
10
|
.15(A)
|
|
Management Agreement dated as of December 1, 2006 by and
among ALSC Venture Management, LLC, Alliance Ventures I,
L.P., Alliance Ventures II, L.P., Alliance Ventures III, L.P.,
Alliance Ventures IV, L.P. and Alliance Ventures V, L.P.
|
|
10
|
.16(A)
|
|
Employment Agreement dated as of December 1, 2006 by and
between ALSC Venture Management and V.R. Ranganath
|
|
14
|
.01(M)
|
|
Code of Ethics
|
|
21
|
.01
|
|
Subsidiaries of Registrant
|
|
23
|
.01
|
|
Consent of Mark Bailey & Company Ltd.
|
|
24
|
.01
|
|
Power of Attorney (see page 29)
|
|
31
|
.01
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 of our Chief Executive Officer
|
|
31
|
.02
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 of our Chief Financial Officer
|
|
32
|
.01
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley
Act of 2002 of our Chief Executive Officer
|
|
32
|
.02
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley
Act of 2002 of our Chief Financial Officer
|
F-16
|
|
|
|
|
Management contract or compensatory plan or arrangement required
to be filed as an Exhibit to this
Form 10-K.
|
|
|
|
(A)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed with the Commission on December 7, 2006.
|
|
(B)
|
|
The document referred to is hereby incorporated by reference
from Registrants Registration Statement on
Form SB-2
(File
No. 33-69956-LA)
declared effective by the Commission on November 30, 1993.
|
|
(C)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed with the Commission on October 23, 1995.
|
|
(D)
|
|
The document referred to is hereby incorporated by reference
from Registrants Annual Report on
Form 10-K
filed with the Commission on June 27, 1997.
|
|
(E)
|
|
The document referred to is hereby incorporated by reference
from Registrants Annual Report on
Form 10-K
filed with the Commission on July 15, 2002.
|
|
(F)
|
|
The document referred to is hereby incorporated by reference
from Registrants Annual Report on
Form 10-K
filed with the Commission on June 23, 2005.
|
|
(G)
|
|
The document referred to is hereby incorporated by reference
from Registrants Quarterly Report on
Form 10-Q
filed on November 23, 2005.
|
|
(H)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed on December 5, 2005.
|
|
(I)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed on January 20, 2006.
|
|
(J)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed with the Commission on April 3, 2006.
|
|
(K)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 8-K
filed with the Commission on June 14, 2006.
|
|
(L)
|
|
The document referred to is hereby incorporated by reference
from Registrants Current Report on
Form 10-Q
filed with the Commission on November 6, 2006.
|
|
|
|
(M)
|
|
The document referred to is hereby incorporated by reference
from Registrants Annual Report on
Form 10-K
filed with the Commission on June 10, 2004.
|
F-17
Alimco Financial (CE) (USOTC:ALMC)
Historical Stock Chart
From Jul 2024 to Aug 2024
Alimco Financial (CE) (USOTC:ALMC)
Historical Stock Chart
From Aug 2023 to Aug 2024