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TWST: What is ZiLOG?
Mr. Grace: ZiLOG is an 8-bit microcontroller company. It's been in
Silicon Valley for 30 plus years. From a high-tech point of view, it's
actually a very mature company. One of the original founders in the
business of microcontrollers, way back to the early days of Intel, is
Federico Faggin, who is on the Board of Directors today. He was the
Founder of the company and has not been here for the whole 30 years, but
he started it. He went his own way, did his other businesses and came
back about four years ago when we started our major restructuring and
re-focus of the company. The company has a broad portfolio of products,
all primarily focused on the 8-bit microcontroller space. The space is a
very large space. It's about a $4 billion plus market on an annual
basis. About two-thirds of our business is focused on the consumer
market that relates to that, and a big element of our business is our
universal remote control products. Also, we have been investing over the
last few years ' three to four years ' heavily in embedded Flash
technologies to complement the various families of 8-bit microcontroller
products that we do have in the marketplace. It's key for the market
because for the customer base, Flash provides more flexibility and the
ability to reprogram the integrated circuits not only in the factory,
but also in the field. So it's an 'on-the-fly' type of capability that
helps with obsolescence, time to market and so forth. The technology is
good for the customer base. From our point of view, the company has been
around for quite a long time. The current management team is Jim
Thorburn, Norm Sheridan and myself. Norm manages manufacturing and
engineering and right now Jim is overseeing sales and marketing. We came
onto the scene back in 2001 when the management was changed by the then
owner, Texas Pacific Group. Texas Pacific Group took the company from
the public arena to a private company with public debt in 1998, and went
for a few years in that mode. The company had installed a management
team that really was focused on a different technology, 32-bit
processing technologies, focused on communications in the Internet
market and so forth. When that market imploded in the later 1990s, it
created strategic problems for the company. The company had gone through
an era of really struggling to put out new products back in the 1990s,
and also struggled with its focus on its base business, which is the 8-
bit market. Since 2001, we have refocused the company on that. In 2001
and 2002, we did go through a process to convert our debt that the
company had from a bondholders' perspective ' it was about $300 million
in debt. We went through bankruptcy in 2002 and converted the debt to
equity and changed out the shareholder base at that time. In 2004, we
completed a public offering of our stock, raised cash and moved
ourselves back on to the NASDAQ stock market as ZILG.
Tickers included in this excerpt: ZILG
For more information call (212) 952 7433. The
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not make stock recommendations.
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