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SANTA CLARA, Calif.--(BUSINESS WIRE)--May 1, 2006--Alliance Semiconductor
Corporation (Nasdaq:ALSC) ("Alliance") announced that it entered
into a definitive agreement for the sale of its Analog and Mixed Signal
Business Unit to a group of investors led by Shah Capital Partners,
LP for $9,250,000, all cash. This transaction represents the second
agreement to sell an operating Business Unit executed by Alliance during
the past two weeks. The transaction is expected to close before May
31, 2006.
Mel Keating, President and CEO of Alliance, said, "In addition
to the cash being generated by these sales, we will be ending the years
of losses generated by the semiconductor manufacturing operations that
occurred under the prior management. Furthermore, we will be significantly
reducing our overhead run rate. When the new Board was elected in October,
2005, Alliance had a worldwide headcount of 238. Following the completion
of these two transactions, our headcount will be approximately 30. As
a consequence of our reduced headcount, by July 31, 2006, we plan to
relocate our corporate headquarters to smaller, much less expensive
space. This real estate action alone should further reduce expenses
by over $150,000 per month."
Bryant Riley, Chairman of Alliance, said, "This agreement is a
significant step in our plan to return value for Alliance stockholders.
Now that we have taken steps to stop the operating losses, we can focus
on realizing value from the Alliance venture capital investments."
Alliance continues to explore the possible disposition of its remaining
memory chip operations.
Forward-Looking Statements
Except for historical information contained in this release, statements
in this release may constitute forward-looking statements regarding
our assumptions, projections, expectations, targets, intentions or beliefs
about future events. Words or phrases such as "anticipates,"
"believes," "estimates," "expects," "is
expected," "intends," "plans," "predicts,"
"projects," "targets," "will be," "will
continue," "may," "becoming," "receiving"
or similar expressions identify forward-looking statements. Forward-looking
statements involve risks and uncertainties, which could cause actual
results or outcomes to differ materially from those expressed. We caution
that while we make such statements in good faith and we believe such
statements are based on reasonable assumptions, including without limitation,
management's examination of historical operating trends, data contained
in records, and other data available from third parties, we cannot assure
you that our projections will be achieved. In addition to other factors
and matters discussed from time to time in our filings with the U.S.
Securities and Exchange Commission, or the SEC, some important factors
that could cause actual results or outcomes for the Company or our subsidiaries
to differ materially from those discussed in forward-looking statements
include: changes in general economic conditions in the markets in which
we may compete and fluctuations in demand in the semiconductor and communications
industries; the possibility of unsatisfied closing conditions related
to announced transactions; our ability to sustain historical margins;
increased competition; increased costs; increases in our cost of borrowings
or unavailability of debt or equity capital on terms considered reasonable
by management if the need for financing arises; litigation; and adverse
state, federal or foreign legislation or regulation or adverse determinations
by regulators. Any forward-looking statement speaks only as of the date
on which such statement is made, and, except as required by law, we
undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events. New factors emerge
from time to time, and it is not possible for management to predict
all such factors.
CONTACT:
Alliance Semiconductor Corporation
Melvin L. Keating, 408-855-4900
(President and Chief Executive Officer)
SOURCE: Alliance Semiconductor Corporation |
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