MILPITAS, CA — (Marketwired) — 06/12/13 — Sigma Designs®, Inc. (NASDAQ: SIGM), a leader in connected media platforms, today reported financial results and business highlights for its first fiscal quarter of fiscal year 2014 ended May 4, 2013.
Net revenues for the first quarter of fiscal 2014 were $52.5 million, up $8.3 million, or 19%, from $44.2 million reported in the previous quarter and up $12.3 million, or 31%, from $40.3 million reported for the same period last year.
GAAP net loss for the first quarter of fiscal 2014 was $4.5 million, or a net loss of $0.13 per diluted share. This compares to GAAP net loss of $35.2 million, or net loss of $1.05 per diluted share, for the previous quarter and GAAP net loss of $13.7 million, or a net loss of $0.42 per diluted share, for the same period last year.
Non-GAAP net income for the first quarter of fiscal 2014 was $0.3 million, or $0.01 per diluted share. This compares to non-GAAP net loss of $16.8 million, or $0.50 per diluted share, for the previous quarter and non-GAAP net loss of $8.5 million, or $0.26 per diluted share, during the same period last year. Non-GAAP adjustments for the first quarter consisted of $1.8 million in amortization expense for acquired intangibles related to acquisitions, $2.0 million in non-cash stock-based compensation expenses, $0.3 million of inventory mark-up related to acquisition, $0.3 million in restructuring expense, $0.2 million in impairment of purchased IP and design tools, $1.1 million in gain on the sale of an R&D project to a third party and $1.3 million in non-cash tax adjustments. The tax amounts included in Sigma-s non-GAAP results approximate its operating cash tax expense, similar to the liability reported on Sigma-s tax returns. While the Company has historically not presented its non-GAAP tax provision in this manner, it believes this approach will enhance the ability of investors to understand the Company-s actual tax expense on its current operations and provide improved modeling accuracy for analysts and investors. The Company intends to report its non-GAAP tax provision in this manner in future periods. The reconciliation between GAAP and non-GAAP net income (loss) for all referenced periods is provided in a table immediately following the GAAP financial tables below.
“We are very pleased about reaching non-GAAP profitability in the first quarter. In the first quarter of FY14, we achieved $52.5 million in revenue at a 54.7% non-GAAP gross margin which is 51.3% GAAP gross margin. We remain focused on sustaining our non-GAAP profitability in fiscal year 2014 as well as achieving profitable revenue growth throughout the remainder of the fiscal year. We are continuing to execute on our plan to achieve our targeted $45.0 million cost reduction plan for fiscal 2014,” said Thinh Tran, President and CEO of Sigma Designs.
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
We issued a multi-part series of announcements about our revolutionary next generation Z-Wave product portfolio, which features a number of new elements, including Z-Ware software, reference designs, and the Z-Wave® Next Gen 500-Series SoCs and modules which feature 50% longer range, 250% higher data rate, and 67% lower standby power.
We began shipping of our HomePlugAV and Z-Wave components in support of AT&T-s announced deployments of the AT&T Digital Life program.
We began shipping our Mediaroom certified SMP8652 SoCs to key OEMs and service providers in support of their transition to next generation platforms.
We announced that ZTE, T&W and ZyXEL have selected our G.hn certified CG5200 devices for their powerline network adapters.
The conference call relating to Sigma-s first quarter fiscal year 2014 financial results will take place following this announcement at 5:00 PM ET today, June 12, 2013. Investors will have the opportunity to listen live to the conference call via the Internet through or . Institutional investors can access the call via Thomson StreetEvents at . To listen to the live call, please go to the website at least 10 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call via the internet through or . The audio replay will be available for one week after the call.
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income (loss), which excludes amortization of acquired intangibles, stock-based compensation, the mark-up on purchased inventory sold during the period, acquisition-related expenses, restructuring charges, impairment of pre-production purchased IP and design tools, impairment of purchased IP and mask sets used in production, the gain on the sale of an R&D development project to a third party and the gain upon acquisition of the DTV business that Sigma recognized in accordance with GAAP. The tax amounts included in Sigma-s non-GAAP results approximate its operating cash tax expense, similar to the liability reported on Sigma-s tax returns. While the Company has historically not presented its non-GAAP tax provision in this manner, it believes this approach will enhance the ability of investors to understand the Company-s actual tax expense on its current operations and provide improved modeling accuracy for analysts and investors. The Company intends to report its non-GAAP tax provision in this manner in future periods. Prior periods included in this release have been updated to reflect this new methodology. Sigma believes that its non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma-s management has no control over certain variables that have a major influence in the determination of stock-based compensation such as the volatility of its stock price and changing interest rates. Sigma believes that all of these excluded expenses do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma-s GAAP financial results in the foreseeable future.
The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of Sigma-s activities. Sigma-s non-GAAP net income (loss) is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements about sustaining non-GAAP profitability in fiscal year 2014 as well as achieving profitable revenue growth throughout the remainder of the fiscal year, our ability to take the actions required to achieve our targeted $45.0 million cost reduction plan for fiscal 2014, our expectation to see revenue increases in most of our target markets and our estimated financial results for the second fiscal quarter of fiscal 2014, including our estimated revenue, non-GAAP gross margins and non-GAAP operating expenses for the second fiscal quarter. Actual results may vary materially due to a number of factors including, but not limited to, the risk that, upon completion of further closing procedures and audit, the financial results for the first quarter of fiscal 2014 are different than the results set forth in this press release, including any adjustments as a result of an unresolved claim of $1.8 million related to Sigma-s digital TV acquisition from Trident Microsystems, general economic conditions, the ability to recognize the anticipated savings from our restructuring efforts, the rate of growth of the Set-Top Box, home networking, digital TV, and home control and energy management markets in general, the ramp in demand from Sigma-s set-top box, television and telecommunication customers, Sigma-s ability to deploy and achieve market acceptance for Sigma products, and the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, and other risks detailed from time to time in Sigma-s SEC reports, including Sigma-s annual report on Form 10-K as filed with the SEC on April 12, 2013. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Sigma Designs, Inc. (NASDAQ: SIGM) is a leader in connected media platforms. The company designs and builds the essential semiconductor technologies that serve as the foundation for the world-s leading IPTV set-top boxes, connected televisions, connected media players, residential gateways, home control systems and more. For more information about Sigma Designs, please visit .
:
Elias Nader
interim CFO
Sigma Designs, Inc.
Tel: (408) 957-9847
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