Sigma Designs, Inc. Reports Third Quarter Fiscal 2014 Results

About Sigma Designs, Inc.

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 www.sigmadesigns.com.

                                                                            
                                                                            
                             SIGMA DESIGNS, INC.                            
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS              
                                   (GAAP)                                   
                               (In thousands)                               
                                                 November 2,    February 2, 
                                                    2013           2013     
                                               -------------- --------------
Assets                                                                      
                                                                            
Current Assets:                                                             
  Cash and cash equivalents                    $       50,326 $       51,218
  Short-term marketable securities                     11,412         17,455
  Restricted cash                                       1,771          1,769
  Accounts receivable, net                             39,256         21,648
  Inventory                                            19,176         24,929
  Deferred tax assets                                   4,683          5,868
  Prepaid expenses and other current assets             8,845         13,578
                                               -------------- --------------
    Total current assets                              135,469        136,465
                                                                            
Long-term marketable securities                        24,574         14,253
Software, equipment and leasehold                                           
 improvements, net                                     16,398         17,106
Intangible assets, net                                 31,696         36,573
Deferred tax assets, net of current portion                       43                    2,681
Long-term  investments  and  notes  receivable,                                                                  
  net  of  current  portion                                                                  4,144                    8,943
Other  non-current  assets                                                                4,803                    4,810
                                                                                              --------------  --------------
                                                                                                                                                        
        Total  assets                                                              $            217,127  $            220,831
                                                                                              ==============  ==============
                                                                                                                                                        
Liabilities  and  Shareholders'  Equity                                                                                
                                                                                                                                                        
Current  Liabilities:                                                                                                                
    Accounts  payable                                                          $              12,580  $              11,046
    Accrued  compensation  and  related  benefits                          8,381                    8,773
    Accrued  liabilities                                                                    19,749                  20,018
                                                                                              --------------  --------------
        Total  current  liabilities                                                    40,710                  39,837
                                                                                                                                                        
    Other  long-term  liabilities                                                    20,210                  18,976
                                                                                              --------------  --------------
        Total  liabilities                                                                    60,920                  58,813
                                                                                                                                                        
Shareholders'  equity                                                                    156,207                162,018
                                                                                              --------------  --------------
                                                                                                                                                        
        Total  liabilities  and  shareholders'  equity  $            217,127  $            220,831
                                                                                              ==============  ==============
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                          SIGMA  DESIGNS,  INC                                                          
                  UNAUDITED  CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS                    
                                                                      (GAAP)                                                                      
                                      (In  thousands,  except  per  share  data)                                        
                                                                                                                                                        
                                                                Three  months  ended                Nine  months  ended  
                                                      ----------------------------    ------------------  
                                                      November      August        October    November      October  
                                                        2,  2013      3,  2013    27,  2012      2,  2013    27,  2012  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Net  revenue                                $  54,394    $  53,762    $  63,905    $160,696    $172,414  
Cost  of  revenue                            23,311        25,696        38,423        74,601        95,257  
                                                      --------    --------    --------    --------    --------  
Gross  profit                                  31,083        28,066        25,482        31,083        77,157  
Gross  margin  percent                      57.1%          52.2%          39.9%          19.3%          44.8%
                                                                                                                                                        
Operating  expenses:                                                                                                                  
    Research  and  development      17,555        18,769        26,741        56,528        76,505  
    Sales  and  marketing                  5,608          5,527        12,774        16,817        27,457  
    General  and                                                                                                                              
      administrative                          5,212          4,937          6,007        14,911        21,874  
    Gain  on  acquisition                          -                  -                  -                  -        (1,417)
    Restructuring  charges              1,104              680              821          1,994              821  
    Impairment  of  IP,  mask                                                                                                        
      sets  and  design  tools                150                  -                  -              338                  -  
                                                      --------    --------    --------    --------    --------  
        Total  operating                                                                                                                  
          expenses                                29,629        29,913        46,343        29,629      125,240  
                                                                                                                                                        
Income  (loss)  from                                                                                                                    
  operations                                      1,454        (1,847)    (20,861)        1,454      (48,083)
Gain  on  sale  of                                                                                                                          
  development  project                            -                  -                  -          1,079                  -  
Interest  and  other  income                                                                                                      
  (expense),  net                                (254)            121              299              558          1,032  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Income  (loss)  before                                                                                                                
  income  taxes                                  1,200        (1,726)    (20,562)        3,091      (47,051)
Provision  for  income  taxes        4,178          3,065        18,889          9,446        19,520  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Net  loss                                      $  (2,978)  $  (4,791)  $(39,451)  $  (6,355)  $(66,571)
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
Net  loss  per  share:                                                                                                                  
    Basic                                        $    (0.09)  $    (0.14)  $    (1.18)  $    (0.19)  $    (2.02)
    Diluted                                    $    (0.09)  $    (0.14)  $    (1.18)  $    (0.19)  $    (2.02)
                                                                                                                                                        
Shares  used  in  computing                                                                                                        
  net  loss  per  share:                                                                                                                
    Basic                                            34,518        34,259        33,383        34,129        33,032  
    Diluted                                        34,518        34,259        33,383        34,129        33,032  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        SIGMA  DESIGNS,  INC.                                                          
              RECONCILIATION  OF  GAAP  NET  LOSS  TO  NON-GAAP  NET  INCOME  (LOSS)                
                                                                (Unaudited)                                                                  
                                      (In  thousands,  except  per  share  data)                                        
                                                                                                                                                        
                                                                Three  months  ended                Nine  months  ended  
                                                      ----------------------------    ------------------  
                                                      November      August        October    November      October  
                                                            3,                3,                27,              3,                27,      
                                                          2013            2013            2012            2013            2012      
                                                      --------    --------    --------    --------    --------  
GAAP  net  loss                            $  (2,978)  $  (4,791)  $(39,451)  $(12,302)  $(66,571)
                                                                                                                                                        
Items  reconciling  GAAP  net                                                                                                    
  loss  to  non-GAAP  net                                                                                                              
  income  (loss):                                                                                                                          
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                      1,668          1,686          2,503          5,387          8,078  
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                1,782          1,783          1,985          5,380          5,858  
                                                                                                                                                        
    Impairment  of  purchased                                                                                                      
      IP,  mask  sets,  designs                                                                                                      
      tools  and  other  assets              561                  -                  -              749                  -  
                                                                                                                                                        
    Restructuring  charges,                                                                                                        
      net                                                1,104              680              821          2,027              821  
                                                                                                                                                        
    Mark-up  on  inventory                                                                                                            
      acquired  in  business                                                                                                          
      combinations  sold                                                                                                                
      during  the  period                                                                                                                
      during  the  period                            -              176          1,078              436          3,607  
                                                                                                                                                        
    Realized  gain  on  sale  of                                                                                                    
      development  project                        -                  -                  -        (1,079)                -  
                                                                                                                                                        
    Gain  on  acquisition                          -                  -                  -                  -        (1,417)
                                                                                                                                                        
    Facility  exit  legal                                                                                                              
      expenses                                              8              288                  -              296                  -  
                                                                                                                                                        
    Settlement  expenses                      100                  -          5,700              100          5,700  
                                                                                                                                                        
    Impairment  of                                                                                                                          
      investments,  net                          163                  -                  -              163                  -  
                                                                                                                                                        
    Acquisition  expenses                        -                  -              352                  -          4,276  
                                                                                                                                                        
    Income  tax  adjustments                901          2,222        17,548          4,466        17,421  
                                                      --------    --------    --------    --------    --------  
Total  GAAP  to  Non-GAAP                                                                                                            
  adjustments                                    6,287          6,835        29,987        17,925        44,344  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Non-GAAP  net  income  (loss)  $    3,309    $    2,044    $  (9,464)  $    5,623    $(22,227)
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
Diluted  net  income  (loss)                                                                                                      
  per  share                                  $      0.10    $      0.06    $    (0.28)  $      0.16    $    (0.67)
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
Shares  used  in  calculating                                                                                                    
  diluted  net  income  (loss)                                                                                                    
  per  share:                                    34,564        34,135        33,383        34,176        33,032  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
Diluted  net  income  (loss)                                                                                                      
  per  share:                                                                                                                                  
                                                                                                                                                        
Diluted  GAAP  net  loss  per                                                                                                      
  share                                          $    (0.09)  $    (0.14)  $    (1.18)  $    (0.36)  $    (2.02)
                                                                                                                                                        
Diluted  GAAP  to  non-GAAP                                                                                                        
  adjustments                              $      0.19    $      0.20    $      0.90    $      0.52    $      1.35  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Diluted  Non-GAAP  net                                                                                                                
  income  (loss)  per  share      $      0.10    $      0.06    $    (0.28)  $      0.16    $    (0.67)
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
Reconciliation  of  shares                                                                                                        
  used  in  calculating  non-                                                                                                      
  GAAP  net  income  (loss)                                                                                                          
  per  share:                                                                                                                                  
                                                                                                                                                        
Shares  used  in  calculating                                                                                                    
  basic  net  income  (loss)                                                                                                        
  per  share                                      34,518        34,259        33,383        34,129        33,032  
                                                                                                                                                        
Adjustment  for  dilutive                                                                                                          
  securities                                            46            (124)                -                47                  -  
                                                      --------    --------    --------    --------    --------  
                                                                                                                                                        
Non-GAAP  shares  used  in                                                                                                          
  calculating  diluted  net                                                                                                        
  income  (loss)  per  share          34,564        34,135        33,383        34,176        33,032  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        SIGMA  DESIGNS,  INC.                                                          
                          SECHEDULE  OF  SELECTED  GAAP  TO  NON-GAAP  ADJUSTMENTS                          
                                                                (Unaudited)                                                                  
                                      (In  thousands,  except  per  share  data)                                        
                                                                                                                                                        
The  following  schedule  reconciles  selected  line  items  from  the  GAAP  basic      
  statements  of  operations  to  non-GAAP  statements  of  operations:                          
                                                                                                                                                        
                                                                                                                                                        
                                                                Three  months  ended                Nine  months  ended  
                                                      ----------------------------    ------------------  
                                                      November      August        October    November      October  
                                                            3,                3,                27,              3,                27,      
                                                          2013            2013            2012            2013            2012      
                                                      --------    --------    --------    --------    --------  
GROSS  PROFIT:                                                                                                                              
                                                                                                                                                        
GAAP  gross  profit                    $  31,083    $  28,066    $  25,482    $  86,095    $  77,157  
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                            64                67              131              214              380  
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                1,403          1,403          1,591          4,241          4,676  
                                                                                                                                                        
    Acquisition  expenses                        -                  -              101                  -              101  
                                                                                                                                                        
    Restructuring  charges,                                                                                                        
      net                                                        -                  -                  -                33                  -  
                                                                                                                                                        
    Mark-up  on  inventory                                                                                                            
      acquired  in  business                                                                                                          
      combinations  sold                                                                                                                
      during  the  period                                                                                                                
      during  the  period                            -              176          1,078              436          3,607  
                                                      --------    --------    --------    --------    --------  
Non-GAAP  gross  profit            $  32,550    $  29,712    $  28,383    $  91,019    $  85,921  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
OPERATING  EXPENSES:                                                                                                                  
                                                                                                                                                        
GAAP  operating  expenses        $  29,629    $  29,913    $  46,343    $  90,588    $125,240  
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                    (1,604)      (1,619)      (2,372)      (5,173)      (7,698)
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                  (379)          (380)          (394)      (1,139)      (1,182)
                                                                                                                                                        
    Impairment  of  purchased                                                                                                      
      IP,  mask  sets,  designs                                                                                                      
      tools  and  other  assets            (561)                -                  -            (749)                -  
                                                                                                                                                        
    Restructuring  charges,                                                                                                        
      net                                              (1,104)          (680)          (821)      (1,994)          (821)
                                                                                                                                                        
    Gain  on  acquisition                          -                  -                  -                  -          1,417  
                                                                                                                                                        
    Facility  exit  legal                                                                                                              
      expenses                                            (8)          (288)                -            (296)                -  
                                                                                                                                                        
    Settlement  expenses                    (100)                -        (5,700)          (100)      (5,700)
                                                                                                                                                        
                                                                                                                                                        
    Acquisition  expenses                        -                  -            (251)                -        (4,175)
                                                      --------    --------    --------    --------    --------  
Non-GAAP  operating                                                                                                                    
  expenses                                    $  25,873    $  26,946    $  36,805    $  81,137    $107,081  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
INCOME  TAX  EXPENSE:                                                                                                                  
                                                                                                                                                        
GAAP  income  tax  expenses      $    4,178    $    3,065    $  18,889    $    9,446    $  19,520  
                                                                                                                                                        
    Income  tax  adjustments              (901)      (2,222)    (17,548)      (4,466)    (17,421)
                                                      --------    --------    --------    --------    --------  
Non-GAAP  income  tax                                                                                                                  
  expenses                                    $    3,277    $        843    $    1,341    $    4,980    $    2,099  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
RESEARCH  AND  DEVELOPMENT:                                                                                                      
                                                                                                                                                        
GAAP  research  and                                                                                                                      
  development                              $  17,555    $  18,769    $  26,741    $  56,528    $  76,505  
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                        (778)          (853)      (1,375)      (2,721)      (4,346)
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                    (33)            (33)            (34)            (99)          (100)
                                                                                                                                                        
    Acquisition  expenses                        -                  -                  -                  -        (1,417)
                                                      --------    --------    --------    --------    --------  
Non-GAAP  research  and                                                                                                              
  development                              $  16,744    $  17,883    $  25,332    $  53,708    $  70,642  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
SALES  AND  MARKETING:                                                                                                                
                                                                                                                                                        
GAAP  sales  and  marketing      $    5,608    $    5,527    $  12,774    $  16,817    $  27,457  
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                        (365)          (315)          (458)      (1,029)      (1,412)
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                  (346)          (347)          (360)      (1,040)      (1,082)
                                                                                                                                                        
    Settlement  expenses                    (100)                -        (5,700)          (100)      (5,700)
                                                                                                                                                        
    Acquisition  expenses                        -                  -                  -                  -            (257)
                                                      --------    --------    --------    --------    --------  
Non-GAAP  sales  and                                                                                                                    
  marketing                                  $    4,797    $    4,865    $    6,256    $  14,648    $  19,006  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
                                                                                                                                                        
GENERAL  AND                                                                                                                                  
  ADMINISTRATIVE:                                                                                                                        
                                                                                                                                                        
GAAP  general  and                                                                                                                        
  administrative                        $    5,212    $    4,937    $    6,007    $  14,911    $  21,874  
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                        (461)          (451)          (539)      (1,423)      (1,940)
                                                                                                                                                        
    Impairment  of  purchased                                                                                                      
      IP,  mask  sets,  designs                                                                                                      
      tools  and  other  assets            (411)                -                  -            (411)                -  
                                                                                                                                                        
    Acquisition  expenses                        -                  -            (251)                -        (2,501)
                                                                                                                                                        
    Facility  exit  legal                                                                                                              
      expenses                                            (8)          (288)                -            (296)                -  
                                                      --------    --------    --------    --------    --------  
Non-GAAP  general  and                                                                                                                
  administrative                        $    4,332    $    4,198    $    5,217    $  12,781    $  17,433  
                                                      ========    ========    ========    ========    ========  
                                                                                                                                                        
 




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