Silicon Image, Inc. (NASDAQ: SIMG), a leading provider of HD
connectivity solutions, today reported financial results for its
fourth quarter and fiscal year ended December 31, 2012.
Revenue for the fourth quarter of 2012 was $59.6 million,
approximately a 2% increase from revenue of $58.7 million in the
fourth quarter of 2011, and a 19% decrease from $73.9 million in
the third quarter of 2012. Revenue for fiscal year 2012 was $252.4
million compared with $221.0 million for fiscal year 2011.
“During 2012, Silicon Image achieved a significant number of
milestones,” said Camillo Martino, chief executive officer of
Silicon Image, Inc. “We shipped nearly 200 million product units,
including more than 140 million MHL transmitters for smartphones
and tablets. We also successfully launched our UltraGig™ product
line, a complete 60GHz WirelessHD® solution for mobile
devices.”
GAAP net loss for the fourth quarter of 2012 was $0.3 million,
or $0.00 per diluted share, compared with a net loss of $0.4
million, or $0.00 per diluted share, for the third quarter of 2012
and a net loss of $10.2 million, or $0.12 per diluted share, for
the fourth quarter of 2011. GAAP net loss for fiscal year 2012 was
$11.2 million, or $0.14 per diluted share, compared with a net loss
for fiscal year 2011 of $11.6 million, or $0.14 per diluted
share.
Non-GAAP net income for the fourth quarter of 2012 was $6.2
million, or $0.08 per diluted share, compared with a net income of
$8.8 million, or $0.11 per diluted share, for the third quarter of
2012 and a net income of $4.8 million, or $0.06 per diluted share,
for the fourth quarter of 2011. Non-GAAP net income for fiscal year
2012 was $18.5 million, or $0.22 per share, compared with a net
income for fiscal year 2011 of $16.4 million, or $0.20 per diluted
share. Non-GAAP net income for these periods excludes stock-based
compensation expense, impairment of investment in an unconsolidated
affiliate, impairment of intangible asset, write-off certain
unsalable inventory, amortization of intangible assets,
restructuring charges, business acquisition related expenses and
reversal of a subsidiary’s foreign currency translation
adjustment.
“Our non-GAAP net income exceeded our expectations for the
quarter, and our revenue for the full year increased 14% from the
year before,” said Mr. Martino. “Additionally, our non-GAAP
earnings per share grew year over year and we remain committed to
executing our strategy as planned and driving shareholder
value.”
During the fourth quarter of 2012, pursuant to the share
repurchase plan announced in April 2012, Silicon Image repurchased
approximately 751,000 shares of its common stock for approximately
$3.3 million. In addition, pursuant to the $30 million accelerated
share repurchase agreement entered in November 2012, Silicon Image
received approximately 5 million shares of its common stock and
expects to receive an additional 1 million to 1.5 million shares
when the program concludes. The company’s cash and short-term
investments balance as of December 31, 2012 was $107.5 million.
A reconciliation of GAAP and non-GAAP items is provided in a
table following the Condensed Consolidated Statements of
Operations.
The following are Silicon Image’s financial performance
estimates for the first quarter of 2013:
Revenue: approximately $59 million to $61 millionGross Margin:
approximately 58%GAAP operating expenses: approximately $37.5
millionNon-GAAP operating expenses: approximately $34.5
millionDiluted shares outstanding: approximately 77 millionNon-GAAP
tax rate: approximately 30% of non-GAAP pre-tax income
Use of Non-GAAP Financial Information
Silicon Image presents and discusses gross margin, operating
expenses, net income (loss) and basic and diluted net income (loss)
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, impairment
of investment in an unconsolidated affiliate, impairment of
intangible asset, write-off certain unsalable inventory,
restructuring charges, business acquisition related expenses and
reversal of a subsidiary’s foreign currency translation adjustment
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
Silicon Image will host an investor conference call today to
discuss its fourth quarter of 2012 results at 2:00 p.m. Pacific
Time and will webcast the event. To access the conference call,
dial 877-941-8416 or 480-629-9808 and enter pass code 4588511. The
webcast and replay will be accessible on Silicon Image's investor
relations website at http://ir.siliconimage.com. A replay of the
conference call will be available within two hours of the
conclusion of the conference call through February 19, 2013. To
access the replay, please dial 800-406-7325 or 303-590-0303 and
enter pass code 4558851.
About Silicon Image, Inc.
Silicon Image is a leading provider of connectivity solutions
that enable the reliable distribution and presentation of
high-definition content for consumer electronics, mobile, and PC
markets. The company delivers its technology via semiconductor and
intellectual property products that are compliant with global
industry standards and feature market leading Silicon Image
innovations such as InstaPort™ and InstaPrevue™. Silicon Image’s
products are deployed by the world’s leading electronics
manufacturers in devices such as mobile phones, tablets, DTVs,
Blu-ray Disc™ players, audio-video receivers, digital cameras, as
well as desktop and notebook PCs. Silicon Image has driven the
creation of the highly successful HDMI® and DVI™ industry
standards, the latest standard for mobile devices – MHL®, and the
leading 60GHz wireless HD video standard – WirelessHD®. Via its
wholly-owned subsidiary, Simplay Labs, Silicon Image offers
manufacturers comprehensive standards interoperability and
compliance testing services. For more information, visit us at
http://www.siliconimage.com/.
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. All other trademarks and
registered trademarks are the property of their respective owners
in the United 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, tax rates,
company growth, progress and stock repurchases. These
forward-looking statements involve risks and uncertainties,
including the risks of uncertain economic conditions, competition
in our markets, Silicon Image'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 U.S. 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 SEC.
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, September 30,
December 31, December 31, December 31,
2012 2012 2011 2012
2011 Revenue: Product
$ 46,808 $
62,197 $ 45,029
$ 203,487 $ 174,234 Licensing
12,796 11,722 13,704
48,877 46,775 Total revenue
59,604 73,919 58,733
252,364 221,009
Cost of revenue and
operating expenses: Cost of product revenue (1)
30,105
30,760 22,824
109,815 90,035 Cost of licensing revenue
220 99 150
626 794 Research and development (2)
17,305 17,848 17,646
77,372 66,533 Selling, general
and administrative (3)
12,279 14,834 13,865
57,446
55,277 Amortization of acquisition-related intangible assets
(889) 496 496
599 1,585 Restructuring expense
(54) 73 812
110 2,269 Impairment of intangible asset
- - 8,500
-
8,500 Total cost of revenue and operating expenses
58,966 64,110 64,293
245,968 224,993 Income (loss) from
operations
638 9,809 (5,560)
6,396 (3,984) Impairment
of investment in an unconsolidated affiliate
- (7,467) -
(7,467) - Interest income and other, net
555
323 384
1,661
1,918 Income (loss) before provision for income taxes and
equity in net loss of an unconsolidated affiliate
1,193
2,665 (5,176)
590 (2,066) Income tax expense
1,458
2,464 4,047
9,979 8,583 Equity in net loss of an
unconsolidated affiliate
- 609
994
1,803 994 Net loss
$ (265) $ (408) $ (10,217)
$
(11,192) $ (11,643) Net loss per share – basic
and diluted
$ (0.00) $ (0.00) $ (0.12)
$
(0.14) $ (0.14) Weighted average shares – basic and diluted
79,564 82,504 82,050
81,872 80,603 (1)
Includes stock-based compensation expense
$ 104 $ 97
$ 84
$ 523 $ 670 (2) Includes stock-based
compensation expense
$ 871 $ 812 $ 777
$
3,585 $ 3,774 (3) Includes stock-based compensation expense
$ 1,200 $ 1,124 $ 1,135
$ 5,096 $ 5,076
SILICON IMAGE, INC. GAAP NET LOSS TO NON-GAAP NET
INCOME RECONCILIATION (In thousands, except per share amounts)
Unaudited
Three Months
Ended Twelve Months Ended December 31,
September 30, December 31, December 31,
December 31, 2012 2012
2011 2012 2011 GAAP net loss
$
(265 ) $ (408 ) $ (10,217 )
$ (11,192
) $ (11,643 ) Non-GAAP adjustments: Stock-based compensation
expense (1)
2,175 2,033 1,996
9,204 9,520
Amortization of intangible assets (2)
(639 ) 671 496
1,024 1,585 Amortization of intangible assets of an
unconsolidated affiliate (2)
- 134 232
402 232
Business strategic initiative and acquisition related expenses (2)
- 201 -
3,257 814 Impairment of investment in an
unconsolidated affiliate (3)
- 7,467 -
7,467 -
Impairment of intangible asset (3)
- - 8,500
- 8,500
Write-down of certain unsalable inventory
(3)
6,245 - -
6,245 - Restructuring expense (3)
(54 ) 73 812
110 2,269 Reversal of a
subsidiary's foreign currency translation adjustment (3)
- - -
- 132 Non-GAAP net income
before tax adjustments
7,462 10,171 1,819
16,517
11,409 Tax adjustments (4)
(1,218 )
(1,327 ) 2,992
2,030
4,984 Non-GAAP net income
$
6,244 $ 8,844 $ 4,811
$ 18,547 $ 16,393
Non-GAAP net income per share — basic
$ 0.08 $ 0.11 $
0.06
$ 0.23 $ 0.20 Non-GAAP net income per share —
diluted
$ 0.08 $ 0.11 $ 0.06
$ 0.22 $
0.20 Weighted average shares — basic
79,564 82,504 82,050
81,872 80,603 Weighted average shares — diluted
80,389 83,353 83,406
82,871 83,195 Stock-based
compensation expense is composed of the following: Cost of revenue
$ 104 $ 97 $ 84
$ 523 $ 670 Research
and development
871 812 777
3,585 3,774 Selling,
general and administrative
1,200
1,124 1,135
5,096
5,076 Total
$ 2,175
$ 2,033 $ 1,996
$ 9,204
$ 9,520
Discussion of Non-GAAP Financial Measures
(1)
Stock-Based Compensation Related Items:
Stock-based compensation expense relates primarily to equity
awards, such as stock options and restricted stock units.
Stock-based compensation is a non-cash expense that varies in
amount from period to period and is dependent on market forces that
are often beyond our control. As such, management excludes this
item from our internal operating forecasts and models. Management
believes that non-GAAP measures adjusted for stock-based
compensation provide investors with a basis to measure our core
performance against the performance of other companies without the
variability created by stock-based compensation as a result of the
variety of equity awards used by companies and the varying
methodologies and subjective assumptions used in determining such
non-cash expense.
(2)
Business Strategic Initiative and
Acquisition Related Items: We exclude certain expense items
resulting from our business strategic initiative and acquisitions
including the following, when applicable:(i) amortization of
purchased intangible assets associated with our acquisitions; or
relating to our unconsolidated affiliates and (ii) business
strategic initiative and acquisition-related charges. The
amortization of purchased intangible assets associated with our
acquisitions results in our recording expenses in our GAAP
financial statements that were already expensed by the acquired
company before the acquisition and for which we have not expended
cash. Moreover, had we internally developed the products acquired,
the amortization of intangible assets, and the expenses of
uncompleted research and development would have been expensed in
prior periods. Accordingly, we analyze the performance of our
operations in each period without regard to such expenses. In
addition, our business strategic initiatives and acquisitions
result in non-continuing operating expenses, which would not
otherwise have been incurred by us in the normal course of our
business operations. During January 2012, we established a research
and development center in Hyderabad, India, whereby we hired 75
employees from our subcontractor and had to incur a onetime fee of
approximately $3.056 million towards acquiring these employees. We
amortized this fee over the first two quarters of 2012 amounting to
$1,528 million per quarter. We do not expect a fee of similar
nature to be paid in our normal course of business and consider it
infrequent and non-recurring. We believe that providing non-GAAP
information for business strategic initiative and
acquisition-related expense items in addition to the corresponding
GAAP information allows the users of our financial statements to
better review and understand the historic and current results of
our continuing operations, and also facilitates comparisons to less
acquisitive peer companies.
(3)
Other Items: We exclude certain other
items that are the result of either unique or unplanned events
including the following, when applicable:(i) impairment
charges, (ii) write-down of certain unsalable inventory due
to defects in the material used by one of our assembly vendors in
the packaging process, (iii) restructuring and related costs
and (iv) reversal of a subsidiary’s foreign currency
translation adjustment. It is difficult to estimate the amount or
timing of these items in advance. Restructuring charges result from
events which arise from unforeseen circumstances, which often occur
outside of the ordinary course of continuing operations. The
inventory write-down is an unusual and one-time event for which we
are seeking recovery from the vendor. Although these events are
reflected in our GAAP financials, these unique transactions may
limit the comparability of our on-going operations with prior and
future periods. As such, we believe that these expenses do not
accurately reflect the underlying performance of our continuing
operations for the period in which they are incurred. Reversal of a
subsidiary’s foreign currency translation adjustment relates to the
reversal from accumulated Other Comprehensive Income (OCI) to
income of the accumulated foreign currency translation adjustment
of our wholly owned subsidiary in Germany whose facilities and
offices had been substantially liquidated during 2010. Our decision
to take the accumulated foreign currency translation adjustment to
income was based on the provisions of FASB ASC. No. 830-30-40,
which states that currency translation adjustment should not be
released from accumulated OCI into income until complete or
substantially complete liquidation of an investment in a foreign
entity. As this was a one-time income and that this unique
transaction limits the comparability of our on-going operations
with prior and future periods, we believe that this income does not
accurately reflect the underlying performance of our continuing
operations in the period in which this income was incurred. We
assess our operating performance both with these amounts included
and excluded, and by providing this information, we believe the
users of our financial statements are better able to understand the
financial results of what we consider our continuing
operations.
(4)
Tax adjustments: For the three and twelve
months ended December 31, 2012 and for the three months ended
September 30, 2012, our non-GAAP tax rate was approximately 30% of
non-GAAP pre-tax income. For the three and twelve months ended
December 31, 2011, our non-GAAP tax rate was approximately 18% of
non-GAAP pre-tax income. Non-GAAP tax rate is primarily based on
net expected cash flow for income taxes.
SILICON IMAGE, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands) Unaudited
December 31,
2012 December 31, 2011 ASSETS Current Assets:
Cash and cash equivalents
$ 29,069 $ 37,125
Short-term investments
78,398 124,301 Accounts receivable,
net
37,936 27,368 Inventories
11,268 10,062 Prepaid
expenses and other current assets
8,105 9,101 Deferred
income taxes
841 708 Total current assets
165,617 208,665 Property and equipment, net
14,840
12,772 Deferred income taxes, non-current
4,144 4,706
Intangible assets, net
11,452 11,915 Goodwill
21,646
18,646 Other assets
9,043 9,369 Total assets
$ 226,742 $ 266,073
LIABILITIES AND STOCKHOLDERS'
EQUITY Current Liabilities: Accounts payable
$
10,690 $ 10,133 Accrued and other current liabilities
19,600 26,116 Deferred margin on sales to distributors
10,340 7,809 Deferred license revenue
2,185
2,684 Total current liabilities
42,815 46,742 Other
long-term liabilities
16,827 14,815 Total
liabilities
59,642 61,557 Stockholders’ equity
167,100 204,516 Total liabilities and stockholders’
equity
$ 226,742 $ 266,073
SILICON IMAGE,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) Unaudited
Year Ended December 31,
2012 2011 Cash flows from operating
activities: Net loss
$ (11,192) $ (11,643)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation
6,107 6,416 Stock-based compensation expense
9,204 9,520 Amortization of investment premium
1,995
2,610 Tax benefits from employee stock-based transactions
498 2,125 Impairment of investment in an unconsolidated
affiliate
7,467 - Impairment of intangible asset
-
8,500 Amortization of intangible assets
1,331 1,585 Deferred
income taxes
429 389 Reversal of a subsidiary's accumulated
foreign currency translation adjustment
- 132 Excess tax
benefits from employee stock-based transactions
(498)
(2,125) Realized loss on sale of short-term investments
(139) (177) Equity in net loss of unconsolidated affiliate
1,803 994 Others
340 240 Changes in assets and
liabilities: Accounts receivable
(10,503) (4,353)
Inventories
(1,206) 1,701 Prepaid expenses and other assets
1,124 (2,844) Accounts payable
(529) (2,521) Accrued
and other liabilities
(4,635) 4,829 Deferred margin on sales
to distributors
2,531 (5,675) Deferred license revenue
(505) (2,245) Cash provided by
operating activities
3,622 7,458
Cash flows from investing activities: Proceeds from
maturities and sales of short-term investments
104,765
147,032 Purchases of short-term investments
(60,612)
(113,319) Cash used in business acquisitions
- (15,910)
Purchases of property and equipment
(8,885) (7,821)
Cash paid for investment in an
unconsolidated affiliate
(2,750) (7,514)
Investment in privately held companies
(6,000) -
Cash paid for assets purchased from
privately-held company
(1,200) - Advances for intellectual properties
(1,242) (7,805) Repayment of secured notes
-
575 Cash provided by (used in) investing activities
24,076 (4,762)
Cash flows from
financing activities:
Proceeds from employee stock programs
5,631 6,203 Excess tax benefits from employee stock-based
transactions
498 2,125 Payment to acquire treasury shares
(39,684) - Repurchases of restricted stock units for income
tax withholding
(2,179) (3,304) Payment of a line of credit
assumed in business acquisition
- (523)
Cash provided by (used in) financing activities
(35,734) 4,501 Effect of exchange rate changes
on cash and cash equivalents
(20) (14)
Net increase (decrease) in cash and cash equivalents
(8,056)
7,183
Cash and cash equivalents — beginning of
year
37,125 29,942
Cash and cash equivalents — end of
year
$ 29,069 $ 37,125
Supplemental cash flow
information: Common stock issued in connection with business
acquisition (1.3 million shares)
$ - $ 10,429 Cash
payment for income taxes
$ (6,389) $ (6,722)
Restricted stock units vested
$ 6,276 $ 9,626
Property and equipment and other assets purchased but not paid for
$ 2,380 $ 1,132 Unrealized gain (loss) on short term
investments
$ 40 $ (90)
(MM) (NASDAQ:SIMG)
Historical Stock Chart
From Jun 2024 to Jul 2024
(MM) (NASDAQ:SIMG)
Historical Stock Chart
From Jul 2023 to Jul 2024