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 stock-based compensation expense, amortization of intangible assets, business acquisition related expenses, other than temporary impairment of a privately-held company investment, proceeds from legal settlement, restructuring charges, impairment of intangible assets and write-down (recovery) of certain unsalable inventory 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 fiscal 2013 and fourth quarter of 2013 results at 2:00 p.m. Pacific Time and will webcast the event. To access the conference call, dial 877-941-1427 or 480-629-9664 and enter pass code 4662072. The webcast and replay will be accessible on Silicon Image's investor relations website 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 February 13, 2014. To access the replay, please dial 800-406-7325 or 303-590-3030 and enter pass code 4662072.
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 mobile, consumer electronics, 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, |
|||||||||||||||||
| 2013 | 2013 | 2012 | 2013 |
2012 |
|||||||||||||||||
| Revenue: | |||||||||||||||||||||
| Product | $ | 46,949 | $ | 66,337 | $ | 46,808 | $ | 227,308 | $ | 203,487 | |||||||||||
| Licensing | 14,428 | 12,974 | 12,796 | 49,098 | 48,877 | ||||||||||||||||
| Total revenue | 61,377 | 79,311 | 59,604 | 276,406 | 252,364 | ||||||||||||||||
| Cost of revenue and operating expenses: | |||||||||||||||||||||
| Cost of product revenue (1)(2)(3) | 22,897 | 33,222 | 30,105 | 112,940 | 109,815 | ||||||||||||||||
| Cost of licensing revenue | 267 | 185 | 220 | 881 | 626 | ||||||||||||||||
| Research and development (4) | 19,787 | 18,424 | 17,305 | 76,994 | 77,372 | ||||||||||||||||
| Selling, general and administrative (5) | 16,046 | 16,191 | 12,279 | 64,736 | 57,446 | ||||||||||||||||
| Restructuring expense | 1,307 | 483 | (54 | ) | 1,783 | 110 | |||||||||||||||
| Amortization and impairment of acquisition-related intangible assets | 230 | 405 | (889 | ) | 1,116 | 599 | |||||||||||||||
| Total cost of revenue and operating expenses | 60,534 |
68,910 |
58,966 | 258,450 | 245,968 | ||||||||||||||||
| Income from operations | 843 | 10,401 | 638 | 17,956 | 6,396 | ||||||||||||||||
| Proceeds from legal settlement | - | - | - | 1,275 | - | ||||||||||||||||
| Other than temporary impairment of a privately-held company investment | - | - | - | (1,500 | ) | (7,467 | ) | ||||||||||||||
| Interest income and other, net | 144 | 168 | 555 | 1,203 | 1,661 | ||||||||||||||||
| Income before provision for income taxes and equity in net loss of an unconsolidated affiliate | 987 | 10,569 | 1,193 | 18,934 | 590 | ||||||||||||||||
| Income tax expense | 1,837 | 1,488 | 1,458 | 6,955 | 9,979 | ||||||||||||||||
| Equity in net loss of an unconsolidated affiliate | 114 | 116 | - | 489 | 1,803 | ||||||||||||||||
| Net income (loss) | $ | (964 | ) | $ | 8,965 | $ | (265 | ) | $ | 11,490 | $ | (11,192 | ) | ||||||||
| Net income (loss) per share – basic | $ | (0.01 | ) | $ | 0.12 | $ | (0.00 | ) | $ | 0.15 | $ | (0.14 | ) | ||||||||
| Net income (loss) per share – diluted | $ | (0.01 | ) | $ | 0.11 | $ | (0.00 | ) | $ | 0.15 | $ | (0.14 | ) | ||||||||
| Weighted average shares – basic | 77,417 | 77,530 | 79,564 | 77,399 | 81,872 | ||||||||||||||||
| Weighted average shares – diluted | 77,417 | 78,995 | 79,564 | 79,065 | 81,872 | ||||||||||||||||
| (1) Includes restructuring expense | $ | 284 | $ | - | $ | - | $ | 284 | $ | - | |||||||||||
| (2) Includes amortization of acquisition-related intangible assets | $ | 225 | $ | 250 | $ | 250 | $ | 975 | $ | 425 | |||||||||||
| (3) Includes stock-based compensation expense | $ | 152 | $ | 163 | $ | 104 | $ | 603 | $ | 523 | |||||||||||
| (4) Includes stock-based compensation expense | $ | 852 | $ | 879 | $ | 871 | $ | 3,576 | $ | 3,585 | |||||||||||
| (5) Includes stock-based compensation expense | $ | 1,687 | $ | 1,440 | $ | 1,200 | $ | 6,336 | $ | 5,096 | |||||||||||
| SILICON IMAGE, INC. | ||||||||||||
| GAAP NET INCOME (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, |
||||||||
| 2013 |
2013 |
2012 | 2013 |
2012 |
||||||||
| GAAP net income (loss) | $ (964) | $ 8,965 | $ (265) | $ 11,490 | $ (11,192) | |||||||
| Non-GAAP adjustments: | ||||||||||||
| Stock-based compensation expense (1) | 2,691 | 2,482 | 2,175 | 10,515 | 9,204 | |||||||
| Amortization of intangible assets (2) | 455 | 480 | (639) | 1,916 | 1,024 | |||||||
| Amortization of intangible assets of an unconsolidated affiliate (2) | 40 | 52 | - | 168 | 402 | |||||||
| Strategic initiative and acquisition related expenses (2) | 1,000 | - | - | 1,000 | 3,257 | |||||||
| Restructuring expense (3) | 1,591 | 483 | (54) | 2,067 | 110 | |||||||
| Other than temporary impairment of a privately-held company investment (3) | - | - | - | 1,500 | 7,467 | |||||||
| Impairment of intangible asset (3) | - | 175 | - | 175 | - | |||||||
| Write-down (recovery) of certain unsalable inventory (3) | (825) | (960) | 6,245 | (1,785) | 6,245 | |||||||
| Proceeds from legal settlement (3) | - | - | - | (1,275) | ||||||||
| Non-GAAP net income before tax adjustments | 3,988 | 11,677 | 7,462 | 25,771 | 16,517 | |||||||
| Tax adjustments (4) | 89 | (2,462) | (1,218) | (2,864) | 2,030 | |||||||
| Non-GAAP net income | $ 4,077 | $ 9,215 | $ 6,244 | $ 22,907 | $ 18,547 | |||||||
| Non-GAAP net income per share — basic | $ 0.05 | $ 0.12 | $ 0.08 | $ 0.30 | $ 0.23 | |||||||
| Non-GAAP net income per share — diluted | $ 0.05 | $ 0.12 | $ 0.08 | $ 0.29 | $ 0.22 | |||||||
| Weighted average shares — basic | 77,417 | 77,530 | 79,564 | 77,399 | 81,872 | |||||||
| Weighted average shares — diluted | 78,990 | 78,995 | 80,389 | 79,065 | 82,871 | |||||||
| Stock-based compensation expense is composed of the following: | ||||||||||||
| Cost of revenue | $ 152 | $ 163 | $ 104 | $ 603 | $ 523 | |||||||
| Research and development | 852 | 879 | 871 | 3,576 | 3,585 | |||||||
| Selling, general and administrative | 1,687 | 1,440 | 1,200 | 6,336 | 5,096 | |||||||
| Total | $ 2,691 | $ 2,482 | $ 2,175 | $ 10,515 | $ 9,204 | |||||||
