Silicon Image Reports Fourth Quarter and Fiscal Year 2009 Financial ResultsSUNNYVALE, Calif., Feb 04, 2010 (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 fourth quarter and fiscal year ended December 31, 2009.
Revenue for the fourth quarter of 2009 was $35.6 million, compared to
$37.2 million for the third quarter of 2009 and $59.4 million for the
fourth quarter of 2008. Revenue for 2009 totaled $150.6 million,
compared with $274.4 million for 2008.
GAAP net loss for the fourth quarter of 2009 was $64.6 million, or $0.85
per diluted share, compared to a net loss of $15.5 million, or $0.21 per
diluted share, for the third quarter of 2009 and net income of $5.0
million, or $0.07 per diluted share, for the fourth quarter of 2008.
GAAP net loss for the fourth quarter of 2009 includes a $28.3 million
intangible asset impairment charge, a $14.7 million restructuring
charge, and a tax provision of $14.6 million. GAAP net loss for 2009 was
$126.8 million, or $1.69 per diluted share, compared to net income of
$10.1 million, or $0.13 per diluted share for 2008. GAAP net loss for
2009 includes a $19.2 million goodwill impairment charge, a $28.3
million intangible asset impairment charge, a tax provision of $12.5
million, and $22.9 million in restructuring charges.
Non-GAAP net loss for the fourth quarter of 2009 was $5.0 million, or
$0.07 per diluted share, compared to a non-GAAP net loss of $3.4
million, or $0.04 per diluted share, for the third quarter of 2009 and
non-GAAP net income of $15.7 million, or $0.21 per diluted share, for
the fourth quarter of 2008. Non-GAAP net loss for 2009 was $16.3
million, or $0.22 per diluted share, compared to net income of $41.7
million, or $0.54 per diluted share, for 2008. Non-GAAP net income
(loss) for these periods exclude stock-based compensation expense,
amortization of intangible assets, impairment of goodwill and intangible
assets, and restructuring charges.
A reconciliation of GAAP and non-GAAP items is provided in a table
following the Condensed Consolidated Statements of Operations.
"With our major restructuring programs complete and a lower breakeven
point we are committed to returning to profitability," said Camillo
Martino, chief executive officer of Silicon Image, Inc. "The company is
poised today to leverage the recently updated HDMI Specification Version
1.4 with first-to-market products ready for volume production, as we
begin to take advantage of a new product introduction cycle and pursue
year on year revenue growth," concluded Martino.
The following are Silicon Image's financial performance estimates for
the first quarter of 2010:
Revenue: $30 million - $32 million
Gross margin: 54% - 55%
GAAP operating expenses: approximately $26 million
Non-GAAP operating expenses: approximately $23 million
Interest income: approximately $0.7 million
Diluted shares outstanding: approximately 75 million
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
fourth quarter and fiscal year 2009 results at 2:00 p.m. Pacific Time
and will webcast the event. To access the conference call, dial
877-856-1964 or 719-325-4810 and enter pass code 4747728. 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 February 9, 2010. To
access the replay, please dial 888-203-1112 or 719-457-0820 and enter
pass code 4747728.
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, 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, new
product introductions, 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 Twelve Months Ended December 31,
December 31, 2009 September 30, 2009 December 31, 2008 2009 2008
Revenue:
Product $ 27,921 $ 30,716 $ 49,204 $ 122,668 $ 233,201
Licensing 7,664 6,440 10,239 27,921 41,214
Total revenue 35,585 37,156 59,443 150,589 274,415
Cost of revenue and operating expenses:
Cost of product revenue (1) 16,290 16,801 24,618 68,574 112,539
Cost of licensing revenue 586 156 123 1,212 1,187
Research and development (2) 15,069 17,807 20,265 68,229 84,819
Selling, general and administrative (3) 11,385 17,222 16,866 55,000 71,719
Restructuring expense (4) 14,702 348 3,982 22,907 5,858
Impairment of intangible assets 28,296 - - 28,296 -
Amortization of intangible assets 59 1,473 1,587 4,478 6,348
Impairment of goodwill - - - 19,210 -
Total cost of revenue and operating expenses 86,387 53,807 67,441 267,906 282,470
Loss from operations (50,802) (16,651) (7,998) (117,317) (8,055)
Interest income and other, net 772 696 1,151 3,005 6,245
Loss before provision for income taxes (50,030) (15,955) (6,847) (114,312) (1,810)
Provision (benefit) for income taxes 14,593 (444) (11,860) 12,480 (11,873)
Net income (loss) $ (64,623) $ (15,511) $ 5,013 $ (126,792) $ 10,063
Net income (loss) per share
Basic and diluted $ (0.85) $ (0.21) $ 0.07 $ (1.69) $ 0.13
Weighted average shares
Basic 75,355 75,053 74,068 74,912 75,570
Diluted 75,355 75,053 74,940 74,912 76,626
_________________
(1) Includes stock compensation expense $ 180 $ 363 $ 313 $ 986 $ 1,445
(2) Includes stock compensation expense 887 2,374 1,934 6,252 7,134
(3) Includes stock compensation expense 1,608 4,911 2,836 10,863 10,893
(4) Includes stock compensation expense - - 14 - 14
SILICON IMAGE, INC.
GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended December 31,
December 31, 2009 September 30, 2009 December 31, 2008 2009 2008
GAAP net income (loss) $ (64,623 ) $ (15,511 ) $ 5,013 $ (126,792 ) $ 10,063
Non-GAAP adjustments:
Stock-based compensation expense (1) 2,675 7,648 5,097 18,101 19,486
Amortization of intangible assets (2) 59 1,473 1,587 4,478 6,348
Restructuring expenses 14,702 348 3,968 22,907 5,844
Impairment of intangible assets (3) 28,296 - - 28,296 -
Impairment of goodwill (4) - - - 19,210 -
Professional fees (5) - 2,015 - 2,015 -
Non-GAAP net income (loss) before tax adjustments (18,891 ) (4,027 ) 15,665 (31,785 ) 41,741
Tax adjustments (6) 13,882 674 - 15,521 -
Non-GAAP net income (loss) $ (5,009 ) $ (3,353 ) $ 15,665 $ (16,264 ) $ 41,741
Non-GAAP net income (loss) per share
Basic $ (0.07 ) $ (0.04 ) $ 0.21 $ (0.22 ) $ 0.55
Diluted $ (0.07 ) $ (0.04 ) $ 0.21 $ (0.22 ) $ 0.54
Weighted average shares
Basic 75,355 75,053 74,068 74,912 75,570
Diluted 75,355 75,053 74,940 74,912 76,626
(1) For the three months ended December 31, 2009, September 30,
2009 and December 31, 2008, and for the twelve months ended
December 31, 2009 and 2008, these adjustments represent the
non-cash amortization of stock-based compensation expense.
Cost of revenue $ 180 $ 363 $ 313 $ 986 $ 1,445
Research and development 887 2,374 1,934 6,252 7,134
Selling general and administrative 1,608 4,911 2,836 10,863 10,893
Restructuring expense - - 14 - 14
Total $ 2,675 $ 7,648 $ 5,097 $ 18,101 $ 19,486
(2) This adjustment represents 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 the
investment in an intellectual property (IP). The Company stopped
using the IP during the three months ended December 31, 2009.
(4) This adjustment pertains to impairment recorded on goodwill
for the year ended December 31, 2009.
(5) This adjustment relates to 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.
(6) Non-GAAP related items for Q4 2008 and for the year ended
December 31, 2008 are not tax-effected as our effective tax rate
results in a benefit for those periods. The tax adjustments for
the three months ended December 31, 2009 and September 30, 2009
and for the year ended December 31, 2009 includes the impact of
the net valuation allowance on deferred tax assets.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Unaudited
December 31,
2009 2008
Assets
Current Assets:
Cash and cash equivalents $ 29,756 $ 95,414
Short-term investments 120,866 89,591
Accounts receivable, net 21,664 5,922
Inventories 7,746 12,775
Prepaid expenses and other current assets 29,641 15,275
Deferred income taxes 231 6,665
Total current assets 209,904 225,642
Property and equipment, net 14,449 19,394
Deferred income taxes, non-current 1,998 28,193
Intangible assets, net 150 32,921
Goodwill - 19,210
Other assets 675 1,181
Total assets $ 227,176 $ 326,541
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 10,141 $ 7,278
Accrued and other liabilities 28,150 23,023
Deferred license revenue 3,111 2,348
Deferred margin on sales to distributors 2,944 6,881
Total current liabilities 44,346 39,530
Other long-term liabilities 8,994 8,064
Total liabilities 53,340 47,594
Stockholders' Equity:
Total stockholders' equity 173,836 278,947
Total liabilities and stockholders' equity $ 227,176 $ 326,541
SILICON IMAGE, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Year ended December 31,
2009 2008
Cash flows from operating activities:
Net income (loss) $ (126,792) $ 10,063
Adjustments to reconcile net income (loss) to cash provided by (used
in) operating activities:
Deferred income taxes 32,629 (10,896)
Impairment of intangible assets 28,296 -
Impairment of goodwill 19,210 -
Stock-based compensation expense 18,101 19,486
Depreciation 8,960 10,349
Amortization of intangible assets 4,478 6,348
Amortization of investment premium 3,045 1,189
Non-cash restructuring expenses 649 1,063
Loss on disposal and retirement of property and equipment 180 554
Tax benefit (deficiency) from employee stock-based compensation plans 56 (810)
Provision for doubtful accounts 23 1,218
Excess tax benefits from employee stock-based transactions (85) (548)
Realized gain on sale of short-term investments (7) (301)
Changes in assets and liabilities:
Accounts receivable (15,756) 14,114
Inventories 5,029 7,423
Prepaid expenses and other current assets (13,897) (1,303)
Accounts payable 3,600 (10,684)
Accrued liabilities and other current liabilities 5,791 (550)
Deferred license revenue 763 (1,512)
Deferred margin on sales to distributors (3,937) (19,562)
Cash provided by (used in) operating activities (29,664) 25,641
Cash flows from investing activities:
Purchases of short-term investments (165,144) (224,499)
Proceeds from sales of short-term investments 131,082 246,370
Proceeds from sale of property and equipment 120 -
Purchases of property and equipment (4,124) (7,046)
Cash provided by (used in) investing activities (38,066) 14,825
Cash flows from financing activities:
Proceeds from issuances of common stock 2,805 4,758
Excess tax benefits from employee stock-based transactions 85 548
Payments for vendor financed purchases of software and intangibles (1,250) (19,278)
Repurchase of restricted stock units for income tax withholding (286) -
Payments to acquire treasury stock - (68,180)
Cash provided by (used in) financing activities 1,354 (82,152)
Effect of exchange rate changes on cash and cash equivalents 718 (722)
Net decrease in cash and cash equivalents (65,658) (42,408)
Cash and cash equivalents - beginning of year 95,414 137,822
Cash and cash equivalents - end of year $ 29,756 $ 95,414
Supplemental cash flow information:
Refund (cash payment) for income taxes $ 8,236 $ (3,624)
Restricted stock units vested $ 793 $ -
Property and equipment purchased but not paid for $ 779 $ 79
Unrealized net gain on short-term investments $ 251 $ 219
SOURCE: Silicon Image, Inc.
Silicon Image, Inc.
Kasey Holman, 408-616-4192
Media Relations
kasey.holman@siliconimage.com
or
The Blueshirt Group
Mike Bishop, 415-217-4968
Investor Relations
mike@blueshirtgroup.com
|