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SUNNYVALE, Calif., Apr 23, 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 first quarter ended March 31, 2009.
Revenue for the first quarter of 2009 was $40.5 million, compared to $59.4 million for the fourth quarter of 2008 and $67.1 million for the first quarter of 2008.
GAAP net loss for the first quarter of 2009 was $33.3 million, or $0.45 per diluted share, compared to a net income of $5.0 million, or $0.07 per diluted share, for the fourth quarter of 2008 and net loss of $562,000, or $0.01 per diluted share, for the first quarter of 2008. GAAP net loss for the first quarter of 2009 includes a goodwill impairment charge of $19.2 million. GAAP net income for the fourth quarter of 2008 includes pre-tax restructuring expenses of $4.0 million.
Non-GAAP net loss for the first quarter of 2009 was $3.6 million, or $0.05 per diluted share, compared to net income of $15.7 million, or $0.21 per diluted share, for the fourth quarter of 2008 and net income of $3.4 million, or $0.04 per diluted share, for the first quarter of 2008. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, restructuring charges, and goodwill impairment.
A reconciliation of GAAP and non-GAAP items is provided in a table following the Condensed Consolidated Statements of Income.
"During the first quarter of 2009 we continued to make good progress capturing design wins and working with industry leaders to form new technology standards consortiums," said Steve Tirado, president and chief executive officer of Silicon Image. "Our financial performance for the first quarter was in line with our internal plan and reflective of the global economic environment."
The following are Silicon Image's financial performance estimates for the second quarter of 2009: |
| Revenue: $40 million - $42 million |
Gross margin: 54% - 55% |
GAAP operating expenses: $35 million - $36 million |
Non-GAAP operating expenses: $29 million - $30 million |
Interest income: $0.8 million - $0.9 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 first quarter 2009 results at 2:00 p.m. Pacific Time and will Web cast that event. To access the conference call, dial 877-741-4248 or 719-325-4815 and enter pass code 5534052. The Web cast 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 April 28, 2009. To access the replay, please dial 888-203-1112 or 719-457-0820 and enter pass code 5534052.
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, Taiwan and the United Kingdom. For more information, please visit www.siliconimage.com.
NOTE: Silicon Image, the Silicon Image logo, LiquidHD, LiquidPlay, and MHL are trademarks, registered trademarks or service marks of Silicon Image, Inc. in the United States and/or other countries. HDMI is a trademark or registered trademark 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, tax rates and use of cash. These forward-looking statements involve risks and uncertainties, including the risks of uncertain economic conditions, competition in our markets, the Company's ability to 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 | ||||||||||||
| March 31, 2009 | December 31, 2008 | March 31, 2008 | ||||||||||
| Revenue: | ||||||||||||
| Product | $ | 34,595 | $ | 49,204 | $ | 57,187 | ||||||
| Licensing | 5,917 | 10,239 | 9,926 | |||||||||
| Total revenue | 40,512 | 59,443 | 67,113 | |||||||||
| Cost of revenue and operating expenses: | ||||||||||||
| Cost of product revenue (1) | 18,219 | 24,618 | 27,788 | |||||||||
| Cost of license revenue | 196 | 123 | 349 | |||||||||
| Research and development (2) | 17,734 | 20,265 | 21,542 | |||||||||
| Selling, general and administrative (3) | 13,715 | 16,866 | 18,318 | |||||||||
| Impairment of goodwill | 19,210 | - | - | |||||||||
| Amortization of intangible assets | 1,473 | 1,587 | 1,587 | |||||||||
| Restructuring expense (4) | 759 | 3,982 | - | |||||||||
| Total cost of revenue and operating expenses | 71,306 | 67,441 | 69,584 | |||||||||
| Loss from operations | (30,794 | ) | (7,998 | ) | (2,471 | ) | ||||||
| Interest income and other, net | 939 | 1,151 | 1,916 | |||||||||
| Loss before provision for income taxes | (29,855 | ) | (6,847 | ) | (555 | ) | ||||||
| Provision (benefit) for income taxes | 3,474 | (11,860 | ) | 7 | ||||||||
| Net income (loss) | $ | (33,329 | ) | $ | 5,013 | $ | (562 | ) | ||||
| Net income (loss) per share - basic and diluted | $ | (0.45 | ) | $ | 0.07 | $ | (0.01 | ) | ||||
| Weighted average shares - basic | 74,421 | 74,068 | 80,987 | |||||||||
| Weighted average shares - diluted | 74,421 | 74,940 | 80,987 | |||||||||
| _________________ | ||||||||||||
| (1) Includes stock compensation expense | $ | 199 | $ | 313 | $ | 350 | ||||||
| (2) Includes stock compensation expense | 1,374 | 1,934 | 1,234 | |||||||||
| (3) Includes stock compensation expense | 1,992 | 2,836 | 2,439 | |||||||||
| (4) Includes stock compensation expense | - | 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 | |||||||||||
| March 31, 2009 | December 31, 2008 | March 31, 2008 | |||||||||
| GAAP net income (loss) | $ | (33,329 | ) | $ | 5,013 | $ | (562 | ) | |||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense (1) | 3,565 | 5,097 | 4,023 | ||||||||
| Amortization of intangible assets (2) | 1,473 | 1,587 | 1,587 | ||||||||
| Goodwill impairment (3) | 19,210 | - | - | ||||||||
| Restructuring expense | 759 | 3,968 | - | ||||||||
| Non-GAAP net income (loss) before tax adjustments | (8,322 | ) | 15,665 | 5,048 | |||||||
| Income tax effects on above adjustments (4) | 4,686 | - | (1,683 | ) | |||||||
| Non-GAAP net income (loss) | $ | (3,636 | ) | $ | 15,665 | $ | 3,365 | ||||
| Non-GAAP net income (loss) per share -- basic and diluted | $ | (0.05 | ) | $ | 0.21 | $ | 0.04 | ||||
| Weighted average shares -- basic | 74,421 | 74,068 | 80,987 | ||||||||
| Weighted average shares -- diluted | 74,421 | 74,940 | 81,574 | ||||||||
(1) For the three months ended March 31, 2009, December 31 and March 31, 2008, these adjustments represent the non-cash amortization of stock-based compensation associated with SFAS No. 123 (R) Share-based Payment. | |||||||||||
| Cost of Revenue | $ | 199 | $ | 313 | $ | 350 | |||||
| Research and Development | 1,374 | 1,934 | 1,234 | ||||||||
| Selling, General and Administrative | 1,992 | 2,836 | 2,439 | ||||||||
| Restructuring expense | - | 14 | - | ||||||||
| Total | $ | 3,565 | $ | 5,097 | $ | 4,023 | |||||
(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. | |||||||||||
| (4) Non-GAAP related items for Q4 2008 were not tax-effected as our tax effective rate results in a benefit for these periods. | |||||||||||
SILICON IMAGE, INC. | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands) | ||||||
| Unaudited | ||||||
| March 31, 2009 | December 31, 2008 | |||||
| Assets | ||||||
| Current Assets: | ||||||
| Cash and cash equivalents | $ | 21,099 | $ | 95,414 | ||
| Short-term investments | 147,908 | 89,591 | ||||
| Accounts receivable, net | 17,505 | 5,922 | ||||
| Inventories | 12,249 | 12,775 | ||||
| Prepaid expenses and other current assets | 21,621 | 15,275 | ||||
| Deferred income taxes | 6,252 | 6,665 | ||||
| Total current assets | 226,634 | 225,642 | ||||
| Property and equipment, net | 17,527 | 19,394 | ||||
| Goodwill | - | 19,210 | ||||
| Intangible assets, net | 31,448 | 32,921 | ||||
| Deferred income taxes, non-current | 19,584 | 28,193 | ||||
| Other assets | 984 | 1,181 | ||||
| Total assets | $ | 296,177 | $ | 326,541 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current Liabilities: | ||||||
| Accounts payable | $ | 10,692 | $ | 7,278 | ||
| Accrued and other liabilities | 20,566 | 23,023 | ||||
| Deferred license revenue | 3,530 | 2,348 | ||||
| Deferred margin on sales to distributors | 3,127 | 6,881 | ||||
| Total current liabilities | 37,915 | 39,530 | ||||
| Other long-term liabilities | 8,304 | 8,064 | ||||
| Total liabilities | 46,219 | 47,594 | ||||
| Stockholders' Equity: | ||||||
| Total stockholders' equity | 249,958 | 278,947 | ||||
| Total liabilities and stockholders' equity | $ | 296,177 | $ | 326,541 | ||
SILICON IMAGE, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS | ||||||||
| (In thousands) | ||||||||
| Unaudited | ||||||||
| Three Months Ended March 31, | ||||||||
| 2009 | 2008 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (33,329 | ) | $ | (562 | ) | ||
| Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||
| Depreciation | 2,281 | 2,722 | ||||||
| Provision for doubtful accounts | 27 | 265 | ||||||
| Gain on recovery of accounts receivable previously written off | (107 | ) | - | |||||
Amortization/(accretion) of investment premium/(discount) | 829 | (43 | ) | |||||
| Amortization of intangible assets | 1,473 | 1,587 | ||||||
| Impairment of goodwill | 19,210 | - | ||||||
| Stock-based compensation expense | 3,565 | 4,023 | ||||||
| Tax deficiency from employee based compensation plans | (580 | ) | (647 | ) | ||||
| Excess tax benefits from employee stock transactions | (8 | ) | (42 | ) | ||||
| Deferred income taxes | 9,022 | (774 | ) | |||||
Loss on disposal of property and equipment | 199 | 7 | ||||||
Gain on derivative transactions | (22 | ) | - | |||||
Realized (gain)/loss on sale of short-term investments | 15 | (49 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (11,541 | ) | (6,022 | ) | ||||
| Inventories | 526 | 6,082 | ||||||
| Prepaid expenses and other assets | (6,081 | ) | 1,582 | |||||
| Accounts payable | 2,720 | 199 | ||||||
| Accrued and other liabilities | (1,141 | ) | (1,327 | ) | ||||
| Deferred revenue | 1,182 | 1,111 | ||||||
| Deferred margin on sales to distributors | (3,754 | ) | (983 | ) | ||||
| Cash provided by (used in) operating activities | (15,514 | ) | 7,129 | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of short-term investments | (93,453 | ) | (75,134 | ) | ||||
| Proceeds from sales of short-term investments | 34,460 | 118,265 | ||||||
Purchases of property and equipment | (491 | ) | (2,597 | ) | ||||
| Proceeds from sales of property and equipment | 97 | - | ||||||
| Cash provided by (used in) investing activities | (59,387 | ) | 40,534 | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuances of common stock, net | 1,627 | 1,838 | ||||||
| Payments for vendor financed software and intangibles purchased | (625 | ) | - | |||||
| Excess tax benefits from employee stock transactions | 8 | 42 | ||||||
| Repurchase of restricted stock units for income tax withholding | (224 | ) | - | |||||
| Repurchase of common stock | - | (62,000 | ) | |||||
| Cash provided by (used in) financing activities | 786 | (60,120 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (200 | ) | 139 | |||||
| Net decrease in cash and cash equivalents | (74,315 | ) | (12,318 | ) | ||||
| Cash and cash equivalents -- beginning of period | 95,414 | 137,822 | ||||||
| Cash and cash equivalents -- end of period | $ | 21,099 | 125,504 | |||||
| Supplemental cash flow information: | ||||||||
| Restricted stock units vested | $ | 625 | $ | - | ||||
| Cash payment for income taxes, net of refunds | $ | 655 | $ | 222 | ||||
| Unrealized net gain on short-term investments | $ | 168 | $ | 57 | ||||
| Property and equipment purchased but not paid for | $ | 323 | $ | 515 | ||||
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
Copyright Business Wire 2009