MANHASSET, N.Y. — For a company that unanimously rejected an unsolicited bid by Universal Electronics Inc. only three months ago, nothing is more important for Zilog than putting in place a solid growth plan and executing it well.
Zilog, Inc. (San Jose, Calif.) last week made a long overdue decision to solidify its 32-bit MCU strategy by licensing ARM's Cortex M3 processor.
Although Zilog licensed 32-bit ARM-9 core three years ago, that decision was for Zilog to go after a specific market to secure transactions such as point-of-sale terminals.
Until last week, Zilog had neither made a broader 32-bit MCU strategy decision nor publicly revealed a product roadmap, by placing ARM's Cortex M3 as central to the company's new family of 32-bit-based MCU solutions.
Darin Billerbeck, president & CEO of Zilog, told EE Times that Zilog plans to extend MCU-based products that range "from 20 cents to $20."
The story about the unsolicited offer for Zilog became public in January in a U.S. Securities and Exchange Commission filing by Riley Investment Management LLC, which owns 6.7 percent of Zilog. Riley reported that under the Universal Electronics deal, Universal would get Zilog's remote control business and Riley had agreed to buy the other assets.
In early February, Zilog board members concluded the $4.50-a-share bid by Universal Electronics did not reflect the strategic or potential value of the company. Zilog's CEO noted the company is 12 months into a strategic growth plan and the board concluded it was preferable to proceed with that as a means of maximizing shareholder value.
However, a few months later, Zilog is far from out of the woods.
The company's financial results announced last Thursday revealed that for the fiscal year ended March 31, 2008, Zilog's sales were $67.2 million as compared to $82.0 million a year ago. Zilog blamed its sales decrease on an overall decrease in sales of its mature 8-bit classic products. Zilog shares closed last Friday (May 9) at $4. The company hit a 52-week high of $6.08 last May but ended 2007 down 20 percent. The day before the offer was revealed on Jan. 18, Zilog shares closed at $2.69.
While the company touted new revenue growth stemming from its 32-bit Zatara secured transaction products " using ARM-9 core Zilog licensed three years ago, its contribution remains very small. Zilog said Zatara's sales increased sequentially by more than 80 percent to $1.1 million.
