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SUNNYVALE, Calif., Nov 01, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Silicon Image, Inc. (Nasdaq: SIMG), a leader in semiconductors for the secure storage, distribution and presentation of high-definition content, today announced that revenue for the third quarter ended September 30, 2007 was $86.3 million, an 8.2% increase compared with the $79.8 million in revenue reported in the prior quarter ended June 30, 2007 and a 10.2% increase over the $78.3 million in revenue reported for the same period last year.
GAAP net income was $4.1 million, or $0.05 per diluted share, compared to $4.4 million, or $0.05 per diluted share, in the prior quarter and $8.0 million, or $0.09 per diluted share, for the third quarter 2006.
Non-GAAP net income, which excludes stock-based compensation expense and amortization of intangible assets, was $8.3 million, or $0.10 per diluted share, compared to $8.5 million, or $0.10 per diluted share, in the second quarter and $21.4 million, or $0.24 per diluted share, for the third quarter 2006. A reconciliation GAAP and non-GAAP items is provided in a table immediately following the Condensed Consolidated Statement of Operations.
"We experienced strong sequential growth over the June quarter for semiconductors used in a variety of consumer electronic applications, such as digital televisions, DVD devices, digital still cameras and HD camcorders," said Steve Tirado, Silicon Image's president and chief executive officer. "Higher CE semiconductor sales were driven by an increased mix of our industry leading HDMI 1.3 products and contributed to the improvement in our product gross margin," continued Tirado.
Fourth Quarter 2007 Financial Outlook
-- Revenue ranging between $77 to $79 million.
-- GAAP and non-GAAP gross margin ranging between 55 to 57 percent.
-- GAAP operating expenses ranging between $40 to $42 million.
-- Non-GAAP operating expenses ranging between $32 to $34 million.
Use of Non-GAAP Financial Information
Silicon Image presents and discusses gross profit, total and product gross margins, 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. 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. For instance, management excludes the stock-based compensation expense when reviewing our cost of revenue and operating expenses, because it is unrelated to our ongoing business operations, and because it does not consider this expense to be relevant to an assessment of Silicon Image's ongoing 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.
Conference Call
Silicon Image will host a conference call to discuss its financial results at 2:00 p.m. Pacific Time on Nov. 1, 2007. To access the conference call, dial (719) 457-2692 and enter pass code 7130954. A replay of the conference call will be available until midnight Pacific Time, Nov. 15, 2007. To access the replay, dial (719) 457-0820 or (888) 203-1112, and enter pass code 7130954. A webcast of the call will also be available on the investor relations' site located at http://www.SiliconImage.com.
About Silicon Image, Inc.
Headquartered in Sunnyvale, Calif., Silicon Image, Inc. is a leader in driving the architecture and semiconductor implementations for the secure storage, distribution and presentation of high-definition content in the consumer electronics and personal computing markets. Silicon Image creates and drives industry standards for digital content delivery such as DVI, HDMI(TM) and Serial ATA (SATA), leveraging partnerships with global leaders in the consumer electronics and personal computing markets to meet the growing digital content needs of consumers worldwide. With a proven track record of improving cross-product interoperability, Silicon Image has shipped more than 100 million HDMI/HDCP and DVI/HDCP semiconductor solutions and offers one of the most robust and comprehensively tested technology platforms in the consumer electronics industry through the Simplay HD(TM) Testing Program of Simplay Labs. Simplay Labs, LLC, a wholly-owned subsidiary of Silicon Image, is a leading provider of testing technologies, tools and services for high-definition consumer electronics devices such as HDTVs, set-top boxes, audio/video receivers and DVD players, helping manufacturers to achieve compatibility and deliver the highest-quality HDTV experience to consumers. Silicon Image is the leading provider of semiconductor intellectual property solutions for high-definition multimedia and data storage applications. For more information, please visit http://www.siliconimage.com.
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 margins and operating expenses in the fourth quarter. 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 addition, see the Risk Factors section of the most recent Form 10-K or Form 10-Q filed by Silicon Image with the SEC. Silicon Image assumes no obligation to update any forward-looking information contained in this press release.
NOTE: Silicon Image and Simplay HD are trademarks, registered trademarks or service marks of Silicon Image, Inc. in the United States and other countries. HDMI(TM) and High-Definition Multimedia Interface are trademarks or registered trademarks of HDMI Licensing, LLC in the United States and other countries, and are used under license from HDMI Licensing, LLC. All other trademarks and registered trademarks are the property of their respective owners.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (unaudited)
September 30, December 31,
2007 2006
Assets
Current Assets:
Cash and cash equivalents $130,658 $81,921
Short-term investments 95,031 168,724
Accounts receivable, net 45,597 39,931
Inventories 19,741 28,287
Prepaid expenses and other current
assets 4,512 4,895
Deferred income taxes 10,239 12,793
Total current assets 305,778 336,551
Property and equipment, net 23,272 18,431
Goodwill 19,210 13,021
Intangible assets, net 1,566 78
Deferred income taxes, non current 15,250 10,580
Other assets 19,825 1,570
Total assets $384,901 $380,231
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $22,382 $14,187
Accrued liabilities 19,871 37,308
Deferred license revenue 5,346 5,264
Deferred margin on sales to
distributors 30,564 17,712
Total current liabilities 78,163 74,471
Other long-term liabilities 5,168 538
Total liabilities 83,331 75,009
Stockholders' Equity:
Total stockholders' equity 301,570 305,222
Total liabilities and stockholders'
equity $384,901 $380,231
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September June 30, September September 30,
30, 2007 2007 30, 2006 2007 2006
Revenue:
Product $74,173 $65,875 $69,149 $195,715 $184,096
Development,
licensing and
royalties 12,109 13,896 9,178 39,457 23,909
Total revenue 86,282 79,771 78,327 235,172 208,005
Cost of revenue and
operating expenses:
Cost of revenue (1) 37,500 36,938 32,721 105,196 87,854
Research and development
(2) 20,489 19,025 16,866 56,709 47,611
Selling, general and
administrative (3) 16,827 17,151 17,472 51,122 49,496
Amortization of intangible
assets 540 537 78 1,692 430
Total cost of
revenue and operating
expenses 75,356 73,651 67,137 214,719 185,391
Income from operations 10,926 6,120 11,190 20,453 22,614
Interest income and other,
net 2,302 3,290 2,623 8,618 6,181
Income before provision for
income taxes 13,228 9,410 13,813 29,071 28,795
Provision for income taxes 9,118 5,038 5,771 17,673 12,603
Net income $4,110 $4,372 $8,042 $11,398 $16,192
Net income per share -
basic $0.05 $0.05 $0.10 $0.13 $0.19
Net income per share -
diluted $0.05 $0.05 $0.09 $0.13 $0.18
Weighted average shares -
basic 84,489 86,737 83,439 86,008 83,424
Weighted average shares -
diluted 85,937 88,817 87,433 88,063 87,577
_________________________
(1) Includes stock-based
compensation expense $421 $443 $772 $1,210 $1,954
(2) Includes stock-based
compensation expense 2,181 2,056 3,781 6,545 9,393
(3) Includes stock-based
compensation expense 2,731 2,687 4,073 6,796 11,113
SILICON IMAGE, INC.
GAAP NET INCOME TO NON-GAAP NET INCOME RECONCILIATION
Three Months Ended Nine Months Ended
September September September September
30, June 30, 30, 30, 30,
(In thousands, except per 2007 2007 2006 2007 2006
share amounts)
(unaudited)
GAAP Net income $4,110 $4,372 $8,042 $11,398 $16,192
Non-GAAP adjustments:
Stock-based compensation
expense (1) 5,333 5,186 8,626 14,551 22,460
Amortization of intangible
assets (2) 540 537 78 1,692 430
Non-GAAP Net income before
tax adjustments 9,983 10,095 16,746 27,641 39,082
Income tax effects on above
adjustments (1,712) (1,560) (4,519)
Tax benefit from employee
stock transactions (3) 4,621 9,866
Non-GAAP net income $8,271 $8,535 $21,367 $23,122 $48,948
Non-GAAP net income per
share - basic $0.10 $0.10 $0.26 $0.27 $0.59
Non-GAAP net income per
share - diluted $0.10 $0.10 $0.24 $0.26 $0.56
Weighted average shares -
basic 84,489 86,737 83,439 86,008 83,424
Weighted average shares -
diluted 85,937 88,817 87,433 88,063 87,577
(1) For the three months and nine months ended September 30, 2007 and
2006, and for the three months ended June 30, 2007, these adjustments
represent the non-cash amortization of stock-based compensation
associated with SFAS No. 123 (R) Share-based Payment.
Cost of Revenue $421 $443 $772 $1,210 $1,954
Research and Development 2,181 2,056 3,781 6,545 9,393
Selling, General and
Administrative 2,731 2,687 4,073 6,796 11,113
Total $5,333 $5,186 $8,626 $14,551 $22,460
(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 and other discrete items included in the tax
provision and recorded to additional paid in capital.
SOURCE Silicon Image, Inc.
http://www.siliconimage.com
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