Silicon Image Reports Third Quarter 2009 Financial ResultsSUNNYVALE, Calif., Oct 22, 2009 (BUSINESS WIRE) --
Silicon Image, Inc. (NASDAQ:SIMG), a leader in semiconductors and
intellectual property for the secure distribution, presentation and
storage of high-definition content, today reported financial results for
its third quarter ended September 30, 2009.
Revenue for the third quarter of 2009 was $37.2 million, compared to
$37.3 million for the second quarter of 2009 and $77.8 million for the
third quarter of 2008.
GAAP net loss for the third quarter of 2009 was $15.5 million, or $0.21
per diluted share, compared to a net loss of $13.3 million, or $0.18 per
diluted share, for the second quarter of 2009 and net income of $6.1
million, or $0.08 per diluted share, for the third quarter of 2008. GAAP
net loss for the third quarter of 2009 includes a one time charge of
approximately $2.0 million for professional fees. GAAP net loss for the
second quarter of 2009 includes pre-tax restructuring expenses of $7.1
million.
Non-GAAP net loss for the third quarter of 2009 was $3.4 million, or
$0.04 per diluted share, compared to a non-GAAP net loss of $4.3
million, or $0.06 per diluted share, for the second quarter of 2009 and
non-GAAP net income of $17.7 million, or $0.23 per diluted share, for
the third quarter of 2008. Non-GAAP net income (loss) for these periods
exclude stock-based compensation expense, amortization of intangible
assets, restructuring charges, and certain professional fees.
A reconciliation of GAAP and non-GAAP items is provided in a table
following the Condensed Consolidated Statements of Operations.
"The company is in the process of implementing a number of important
internal changes that will continue to improve our operating
infrastructure from both execution and cost standpoints," said Hal
Covert, president and chief operating officer of Silicon Image. "These
changes will enhance our ability to take full advantage of the roll-out
of our new products that will be underway as we enter 2010. Our new
products and enhanced operational infrastructure are key factors in the
company's plan to improve revenue generation and achieve profitability
in 2010," concluded Covert.
The following are Silicon Image's financial performance estimates for
the fourth quarter of 2009:
Revenue: $34 million - $37 million
Gross margin: 54% - 55%
GAAP operating expenses: approximately $71 million
Non-GAAP operating expenses: approximately $25 million
Interest income: approximately $0.7 million
Diluted shares outstanding: approximately 75 million
Cash flow neutral
Use of Non-GAAP Financial Information
Silicon Image presents and discusses gross margin, operating expenses,
net income and basic and diluted net income per share in accordance with
Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis
for informational purposes only. Silicon Image believes that non-GAAP
reporting, giving effect to the adjustments shown in the attached
reconciliation, provides meaningful information and therefore uses
non-GAAP reporting to supplement its GAAP reporting and internally in
evaluating operations, managing and monitoring performance, and
determining bonus compensation. Further, Silicon Image uses non-GAAP
information as certain non-cash charges such as amortization of
intangibles, stock based compensation and goodwill impairment do not
reflect the cash operating results of the business. Silicon Image has
chosen to provide this supplemental information to investors, analysts
and other interested parties to enable them to perform additional
analyses of its operating results and to illustrate the results of
operations giving effect to such non-GAAP adjustments. The non-GAAP
financial information presented herein should be considered supplemental
to, and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
Conference Call
The company will host an investor conference call today to discuss its
third quarter 2009 results at 2:00 p.m. Pacific Time and will webcast
the event. To access the conference call, dial 800-533-7619 or
785-830-1923 and enter pass code 8745196. The webcast will be accessible
on Silicon Image's investor relations Web site at http://www.SiliconImage.com.
A replay of the conference call will be available within two hours of
the conclusion of the conference call through October 27, 2009. To
access the replay, please dial 888-203-1112 or 719-457-0820 and enter
pass code 8745196.
About Silicon Image, Inc.
Silicon Image, Inc. is a leading provider of semiconductor and
intellectual property products for the secure distribution, presentation
and storage of high-definition content. With a rich history of
technology innovation that includes creating industry standards such as
DVI and HDMI, the company's solutions facilitate the use of digital
content amongst consumer electronics, personal computer (PC) and storage
devices, with the goal to securely deliver digital content anytime,
anywhere and on any device. Founded in 1995, the company is
headquartered in Sunnyvale, California, with regional engineering and
sales offices in China, Germany, Japan, Korea and Taiwan. For more
information, please visit www.siliconimage.com.
NOTE: Silicon Image and the Silicon Image logo are trademarks,
registered trademarks or service marks of Silicon Image, Inc. in the
United States and/or other countries. HDMI, the HDMI logo, and
High-Definition Multimedia Interface are trademarks or registered
trademarks of HDMI Licensing, LLC in the United States and/or other
countries. All other trademarks and registered trademarks are the
property of their respective owners in the Unites States and/or other
countries.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of federal securities laws and regulations. These
forward-looking statements include, but are not limited to, statements
related to Silicon Image's future operating results, including revenue,
gross margin, operating expenses, interest income and use of cash, and
improvements in the company's operating infrastructure and the impact of
such improvements on the roll-out of the company's new products. These
forward-looking statements involve risks and uncertainties, including
the risks of uncertain economic conditions, competition in our markets,
the company's ability to improve its operating infrastructure and
deliver financial performance in-line with its stated goals and other
risks and uncertainties described from time to time in Silicon Image's
filings with the Securities and Exchange Commission (SEC). These risks
and uncertainties could cause the actual results to differ materially
from those anticipated by these forward-looking statements. In addition,
see the Risk Factors section of the most recent Form 10-K and 10-Q filed
by Silicon Image with the U.S. Securities and Exchange Commission. These
forward-looking statements are made on the date of this press release,
and Silicon Image assumes no obligation to update any such
forward-looking information.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, 2009 June 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
Revenue:
Product $ 30,716 $ 29,436 $ 64,974 $ 94,747 $ 183,997
Licensing 6,440 7,900 12,802 20,257 30,975
Total revenue 37,156 37,336 77,776 115,004 214,972
Cost of revenue and operating expenses:
Cost of product revenue (1) 16,801 17,264 31,518 52,284 87,921
Cost of licensing revenue 156 274 223 626 1,064
Research and development (2) 17,807 17,619 20,714 53,160 64,554
Selling, general and administrative (3) 17,222 12,678 17,468 43,615 54,853
Amortization of intangible assets 1,473 1,473 1,587 4,419 4,761
Restructuring expense 348 7,098 1,876 8,205 1,876
Goodwill impairment - - - 19,210 -
Total cost of revenue and operating expenses 53,807 56,406 73,386 181,519 215,029
Income (loss) from operations (16,651 ) (19,070 ) 4,390 (66,515 ) (57 )
Interest income and other, net 696 598 1,798 2,233 5,094
Income (loss) before provision for income taxes (15,955 ) (18,472 ) 6,188 (64,282 ) 5,037
Income tax expense (benefit) (444 ) (5,143 ) 114 (2,113 ) (13 )
Net income (loss) $ (15,511 ) $ (13,329 ) $ 6,074 $ (62,169 ) $ 5,050
Net income (loss) per share - basic and diluted $(0.21 ) $(0.18 ) $0.08 $(0.83 ) $0.07
Weighted average shares - basic 75,053 74,806 73,861 74,763 76,088
Weighted average shares - diluted 75,053 74,806 75,334 74,763 77,185
______________________
(1) Includes stock-based compensation expense $ 363 $ 244 $ 351 $ 806 $ 1,132
(2) Includes stock-based compensation expense 2,374 1,617 1,753 5,365 5,200
(3) Includes stock-based compensation expense 4,911 2,352 2,004 9,255 8,057
SILICON IMAGE, INC.
GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
RECONCILIATION
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, 2009 June 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
GAAP net income (loss) $ (15,511 ) $ (13,329 ) $ 6,074 $ (62,169 ) $ 5,050
Non-GAAP adjustments:
Stock-based compensation expense (1) 7,648 4,213 4,108 15,426 14,389
Amortization of intangible assets (2) 1,473 1,473 1,587 4,419 4,761
Restructuring expense 348 7,098 1,876 8,205 1,876
Professional fees (4) 2,015 - - 2,015 -
Goodwill impairment (3) - - - 19,210 -
Non-GAAP net income (loss) before tax adjustments (4,027 ) (545 ) 13,645 (12,894 ) 26,076
Income tax effects on above adjustments 674 (3,721 ) 4,037 1,639 -
Non-GAAP net income (loss) $ (3,353 ) $ (4,266 ) $ 17,682 $ (11,255 ) $ 26,076
Non-GAAP net income (loss) per share -- basic $ (0.04 ) $ (0.06 ) $ 0.24 $ (0.15 ) $ 0.34
Non-GAAP net income (loss) per share -- diluted $ (0.04 ) $ (0.06 ) $ 0.23 $ (0.15 ) $ 0.34
Weighted average shares -- basic 75,053 74,806 73,861 74,763 76,088
Weighted average shares -- diluted 75,053 74,806 75,334 74,763 77,185
(1) For the three months and nine months ended September 30, 2009
and 2008, and for the three months ended June 30, 2009, these
adjustments represent the non-cash amortization of stock-based
compensation.
Cost of Revenue $ 363 $ 244 $ 351 $ 806 $ 1,132
Research and Development 2,374 1,617 1,753 5,365 5,200
Selling, General and Administrative 4,911 2,352 2,004 9,255 8,057
Total $ 7,648 $ 4,213 $ 4,108 $ 15,426 $ 14,389
(2) These adjustments represent expenses for the amortization of
intangible assets recorded in connection with our acquisitions.
These on-going expenses pertain to intangible assets that are not
expected to be replaced when fully amortized, as might a depreciable
tangible asset.
(3) This adjustment represents the impairment recorded on goodwill
for the three months ended March 31, 2009.
(4) This adjustment represents the professional fees incurred
during the three months ended September 30, 2009 associated with a
potential strategic acquisition which we evaluated and decided not
to pursue.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Unaudited
September 30, 2009 December 31, 2008
Assets
Current Assets:
Cash and cash equivalents $ 27,883 $ 95,414
Short-term investments 125,335 89,591
Accounts receivable, net 24,454 5,922
Inventories 12,538 12,775
Prepaid expenses and other current assets 17,417 15,275
Deferred income taxes 6,731 6,665
Total current assets 214,358 225,642
Property and equipment, net 15,125 19,394
Intangible assets, net 28,503 32,921
Deferred income taxes, non-current 22,591 28,193
Goodwill - 19,210
Other assets 719 1,181
Total assets $ 281,296 $ 326,541
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 13,570 $ 7,278
Accrued and other liabilities 18,178 23,023
Deferred license revenue 4,299 2,348
Deferred margin on sales to distributors 2,628 6,881
Total current liabilities 38,675 39,530
Other long-term liabilities 9,259 8,064
Total liabilities 47,934 47,594
Stockholders' Equity:
Total stockholders' equity 233,362 278,947
Total liabilities and stockholders' equity $ 281,296 $ 326,541
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(In thousands)
Unaudited
Nine Months Ended
September 30, 2009 September 30, 2008
Cash flows from operating activities:
Net income (loss) $ (62,169 ) $ 5,050
Adjustments to reconcile net income (loss) to cash provided by (used
in) operating activities:
Impairment of goodwill 19,210 -
Stock-based compensation expense 15,426 14,389
Depreciation 6,814 7,894
Deferred income taxes 5,536 (5,306 )
Amortization of intangible assets 4,419 4,761
Amortization of investment premium 2,351 768
Non-cash restructuring expenses 226 459
Loss on disposal and retirement of property and equipment 178 562
Provision for doubtful accounts 42 621
Tax deficiency from employee stock-based compensation plans (1,711 ) (475 )
Gain on derivative transactions (211 ) -
Excess tax benefits from employee stock transactions (32 ) (527 )
Realized gain on sale of short-term investments - (106 )
Changes in assets and liabilities:
Accounts receivable (18,543 ) (2,835 )
Inventories 237 3,695
Prepaid expenses and other current assets (1,437 ) 4,167
Accounts payable 7,403 4,590
Accrued and other current liabilities (3,669 ) (7,090 )
Deferred license revenue 1,951 (815 )
Deferred margin on sales to distributors (4,253 ) (2,551 )
Cash provided by (used in) operating activities (28,232 ) 27,251
Cash flows from investing activities:
Proceeds from sales of short-term investments 110,716 171,231
Purchases of short-term investments (148,592 ) (188,443 )
Purchases of property and equipment (2,855 ) (6,028 )
Proceeds from sale of property and equipment 120 -
Cash used in investing activities (40,611 ) (23,240 )
Cash flows from financing activities:
Proceeds from issuances of common stock, net 2,543 4,748
Excess tax benefits from employee stock transactions 32 527
Payments for vendor financed software and intangibles purchased (1,250 ) (6,153 )
Repurchase of restricted stock units for income tax withholding (280 ) -
Repurchase of common stock - (68,180 )
Cash provided by (used in) financing activities 1,045 (69,058 )
Effect of exchange rate changes on cash and cash equivalents 267 (407 )
Net decrease in cash and cash equivalents (67,531 ) (65,454 )
Cash and cash equivalents -- beginning of period 95,414 137,822
Cash and cash equivalents -- end of period $ 27,883 72,368
Supplemental cash flow information:
Net cash payment (refund) for income taxes $ (4,766 ) $ 1,924
Restricted stock units vested $ 780 $ -
Unrealized net gain (loss) on short-term investments $ 220 $ (399 )
Property and equipment purchased but not paid for $ 167 $ 302
SOURCE: Silicon Image, Inc.
Silicon Image, Inc.
MEDIA CONTACT:
Kasey Holman, 408-616-4192
Media Relations
kasey.holman@siliconimage.com
or
INVESTOR CONTACT:
The Blueshirt Group
Mike Bishop, 415-217-4968
Investor Relations
mike@blueshirtgroup.com
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