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SUNNYVALE, Calif., April 26, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Silicon Image, Inc. (Nasdaq: SIMG), the leader in the secure distribution, presentation and storage of high-definition content, today reported financial results for its first quarter ended March 31, 2006.
-- Total revenues for the first quarter of 2006 were $59.1 million, an
increase of 33% from $44.3 million in the first quarter of 2005 and a
decrease of 4% from $61.4 million in the fourth quarter of 2005.
-- Net income prepared in accordance with generally accepted accounting
principles, or GAAP, for the first quarter of 2006 was $2.4 million, or
$0.03 per diluted share, a decrease of $14.2 million from $16.6
million, or $0.19 per diluted share in the first quarter of 2005 and a
decrease of $10.2 million from $12.6 million, or $0.15 per diluted
share, in the fourth quarter of 2005. Net income for the first
quarter of 2006 includes $7.3 million, or $0.09 per share, of stock-
based compensation expense under SFAS No. 123R. Conversely, net income
for the first quarter of 2005 included stock-based compensation benefit
of $9.3 million, or $0.11 per share. Net income for the fourth quarter
of 2005 included stock compensation expense of $0.9 million, or $0.01
per share.
-- On a non-GAAP (1) basis, first quarter net income was $11.3 million, or
$0.13 per diluted share, a year over year increase of 47% from $7.7
million, or $0.09 per diluted share in the first quarter of 2005 and a
sequential decrease of 18% compared to fourth quarter 2005 net income
of $13.8 million, or $0.16 per diluted share.
-- Cash, cash equivalents and short- term investments at March 31, 2006
were $167.5 million, up $15.9 from $151.6 million at December 31, 2005.
"Silicon Image continues to drive growth and innovation like few companies in our business while improving operational results," said Steve Tirado, CEO and President. "Our focus as a company is to continue driving the system architecture for the storage, distribution and presentation of high definition content in the consumer environment."
(1) Silicon Image reports net income and basic and diluted net income per
share in accordance with GAAP and supplementally on a non-GAAP basis
for informational purposes only. Silicon Image believes that the non-
GAAP reporting, giving effect to the adjustments shown in the attached
reconciliation, addresses the lack of comparability between periods
presented with respect to stock-based compensation as a result of the
adoption of SFAS No. 123R and provides management with meaningful
information to evaluate operations, manage and monitor performance and
determine bonus compensation. Silicon Image's presentation of non-
GAAP financial information excludes stock-based compensation,
amortization of intangible assets recorded in connection with our
acquisitions; and the non-cash portion of the income tax provision
recorded to additional paid in capital. Silicon Image has chosen to
provide this supplemental information to investors, analysts and other
interested parties to enable them to perform additional analyses of
our operating results and to illustrate the results of operations
giving effect to such non-GAAP adjustments. Management excludes the
tax expense (benefit) when reviewing our performance because it
depends upon the timing of stock option exercises, which are outside
of our control and are unrelated to our ongoing business operations.
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.
The company will host a conference call at 2:00 p.m. Pacific time today to discuss its first quarter 2006 results and business outlook. The call will be broadcast over the Internet and can be accessed on the investor relation site located at www.siliconimage.com. To access the conference call, dial 719-457-2699 and enter pass code 4711751. A replay of the conference call will be available until midnight (PT), May 5, 2006. To access the replay, dial 719-457-0820 or 888-203-1112, and enter pass code 4711751.
About Silicon Image
Headquartered in Sunnyvale, Calif., Silicon Image, Inc. is a leader in the secure distribution, presentation and storage of high-definition content. Silicon Image creates and drives industry standards for digital content delivery such as DVI, HDMI and UDI, leveraging strategic partnerships with global leaders in consumer electronics and personal computing. Silicon Image offers robust, high-bandwidth semiconductors in the global PC/display, consumer electronics and storage arenas based on its innovative digital interconnect technology and has become one of the top ten IP licensing vendors in the world. For more information on Silicon Image, visit www.siliconimage.com.
Safe Harbor Statement
This news release contains forward-looking information within the meaning of federal securities regulations. These forward-looking statements include statements related to Silicon Image's driving of growth and innovation, improvement of operational results, and company focus. These forward-looking statements involve risks and uncertainties, including those described from time to time in Silicon Image's filings with the Securities and Exchange Commission (SEC) that could cause the actual results to differ materially from those anticipated by these forward-looking statements. In particular, Silicon Image's driving of growth and innovation, improvement of operational results, and company focus may differ materially from what is currently anticipated. In addition, see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting Future Results" in the most recent Annual Report, Form 10-K or 10-Q filed by Silicon Image with the SEC. Silicon Image assumes no obligation to update this forward-looking information.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(In thousands, except per share amounts) March March December
31, 31, 31,
2006 2005 2005
(unaudited)
Revenue:
Product $53,280 $40,808 $55,349
Development, licensing and
royalties 5,819 3,512 6,007
Total revenue 59,099 44,320 61,356
Cost and operating expenses:
Cost of revenue (1) 25,348 15,505 25,745
Research and development (2) 15,566 8,122 12,526
Selling, general and
administrative (3) 15,461 3,953 11,186
Amortization of intangible assets 274 274 274
Total cost and operating
expenses 56,649 27,854 49,731
Income from operations 2,450 16,466 11,625
Interest income and other, net 1,538 498 1,278
Income before provision for income taxes 3,988 16,964 12,903
Provision for income taxes 1,636 331 350
Net income $2,352 $16,633 $12,553
Net income per share - basic $0.03 $0.21 $0.16
Net income per share - diluted $0.03 $0.19 $0.15
Weighted average shares - basic 80,986 78,307 80,315
Weighted average shares - diluted 85,398 83,963 84,042
(1) includes stock compensation
expense (benefit) $628 $(1,196) $24
(2) includes stock compensation
expense (benefit) $2,812 $(4,438) $495
(3) includes stock compensation
expense (benefit) $3,843 $(3,693) $422
SILICON IMAGE, INC.
GAAP NET INCOME TO NON-GAAP NET INCOME RECONCILIATION
Three Months Ended
(In thousands, except per share amounts) March March December
31, 31, 31,
2006 2005 2005
(unaudited)
GAAP Net income $2,352 $16,633 $12,553
Non-GAAP adjustments:
Stock-based compensation expense
(benefit) (1) 7,283 (9,327) 941
Amortization of intangible assets (2) 274 274 274
Tax benefit from employee stock
transactions (3) 1,356 -- 81
Net realized loss on investment
security (4) -- 119 --
Non-GAAP net income $11,265 $7,699 $13,849
Non-GAAP net income per share - basic $0.14 $0.10 $0.17
Non-GAAP net income per share - diluted $0.13 $0.09 $0.16
Weighted average shares - basic 80,986 78,307 80,315
Weighted average shares - diluted 85,398 83,963 84,042
(1) For March 31, 2006, this adjustment represents the non-cash
amortization of stock-based compensation associated with the adoption
of SFAS No. 123R. For December 31, 2005 and March 31, 2005, this
adjustment represents stock-based compensation (benefit) associated
with stock option modifications, including repricings, and certain
stock options issued to employees of acquired companies and to non-
employees in exchange for services. Stock-based compensation
(benefit) in 2005 fluctuated in large part based on changes in our
stock price. Management excludes this expense (benefit) because of
the lack of comparability between periods as a result of the adoption
of SFAS 123R. In addition, when reviewing our cost of revenue and
operating expenses management does not consider this expense (benefit)
to be relevant to an assessment of our ongoing operations.
(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 non-cash tax benefits from employee
stock transactions included in the tax provision and recorded to
additional paid in capital.
(4) This adjustment relates to warrants and stock received by the company
from a transaction involving the licensing of certain of our
intellectual property. These types of losses are infrequent and
unusual, and reflect market and other conditions unrelated to our
ongoing business operations.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) March 31, December 31,
2006 2005
(unaudited)
Assets
Current assets:
Cash and short-term investments $167,490 $151,562
Accounts receivable, net 37,339 30,141
Inventories 18,039 17,072
Prepaid expenses and other current assets 3,065 3,037
Total current assets 225,933 201,812
Property, plant and equipment, net 9,518 9,613
Goodwill and intangible assets, net 13,332 13,606
Other assets 7,900 7,990
Total assets $256,683 $233,021
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $16,029 $13,372
Debt and other current liabilities 21,915 22,465
Deferred margin on sales to distributors 19,026 13,771
Total current liabilities 56,970 49,608
Other liabilities 6,927 6,867
Total liabilities 63,897 56,475
Stockholders' equity 192,786 176,546
Total liabilities and stockholders' equity $256,683 $233,021
SOURCE Silicon Image, Inc.
Robert R. Freeman, Chief Financial Officer, +1-408-616-1571, or fax, +1-408-830-9531, or Gloria Lee, Investor Relations, +1-408-962-4282, or fax, +1-408-830-9531, both of Silicon Image, Inc.
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