Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Scot Ciccarelli - RBC Capital Markets.
Scot Ciccarelli - RBC Capital Markets
Couple of questions here. Can you guys highlight some of the key technologies and customers that you guys will be obtaining with the Zilog deal and what did the deal cost?
Bryan Hackworth
I will tell you the deal cost; the deal cost approximately $9.5 million of cash.
Paul Arling
In terms of the technologies that we will be acquiring, the Zilog has long been a competitor in the infrared database side of the equation and the universal remote control market. They have held a number of customers across the years. They have done a very good particularly in certain regions, Asia in particular. They have an engineering center there where they perform software, firmware and capture services in India and they have done a fantastic job there. They have got relationships with major OEMs, major consumer electronics companies and subscription broadcasters mainly through some of the remote control factories in the industry so we will be taking those over.
Some of these are current customers of ours that will build on the relationship with and others will be new customers but we are very excited about adding their portfolio of technology to our own with this deal.
Scot Ciccarelli - RBC Capital Markets
Would you expect their financial structure to be similar to yours just in terms of when we are trying to figure out impact margins, etc?
Paul Arling
Well, somewhat. We have, again in the first year, the sales agency relationship with Maxim and then the second year, we will take over full sales and distribution rights. So they reported I think sometime last year that this part of their business was doing approximately plus or minus $20 million in sales. During our first year, we will do obviously less than that with the sales agency relationship but longer term; we will become a full sales and distribution agent for the Zilog business.
Scot Ciccarelli - RBC Capital Markets
Okay, that is helpful. And then you guys mentioned some delays in the business category. Just given what is going on in the environment, how comfortable are you that they are indeed delays and not something more ominous?
Bryan Hackworth
I think the biggest reason in fact here, Scot, is that we guidance between $81 million and $85 million and we came just a couple of million short of the low end of our range. We were off quite much more in that that I am slightly concern but at the end of the any quarter, sometimes we get some push outs, sometimes we get pull ins and sometimes they offset. This time we happen to have a little more couple of million dollars to sit through but again if you look at it, it is only a couple of percent off of our range of $81 million to $85 million. So I do not think that is a sign of the future. We are optimistic in the future of the business categories.
- To read the full transcript on Seeking Alpha, click here »
