This release contains forward-looking statements, including, without
limitation, the statements in Bruce Walicek's quote with respect to the
Company’s growth opportunities, product shipments, product demand,
customer engagements, and the Company’s potential and position for the
future, within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements may be identified by use of terms such as
“begin,” “continue,” “will,” “believe,” and similar terms or the
negative of such terms. All statements other than statements of
historical fact are forward-looking statements for purposes of this
release, including any projections of revenue or other financial items
or any statements regarding the plans and objectives of management for
future operations. Such statements are based on management's current
expectations, estimates and projections about the Company's business.
These statements are not guarantees of future performance and involve
numerous risks, uncertainties and assumptions that are difficult to
predict. Actual results could vary materially from those contained in
forward looking statements due to many factors, including, without
limitation: our ability to deliver new products in a timely fashion; our
new product yield rates; changes in estimated product costs; product
mix; supply of products from third-party foundries; failure or
difficulty in achieving design wins; timely customer transition to new
product designs; competitive factors, such as rival chip architectures,
introduction or traction by competing designs, or pricing pressures;
risks related to licensing our intellectual property; the success of our
products in expanded markets; current global economic challenges; levels
of inventory at distributors and customers; changes in the digital
display and projection markets; changes in customer ordering patterns or
lead times; seasonality in the consumer electronics market; our efforts
to achieve profitability from operations; insufficient, excess or
obsolete inventory and variations in inventory valuation; the outcome of
any litigation related to our intellectual property rights; our limited
financial resources and our ability to attract and retain key personnel.
More information regarding potential factors that could affect the
Company's financial results and could cause actual results to differ
materially is included from time to time in the Company's Securities and
Exchange Commission filings, including our Annual Report on Form 10-K
for the year ended December 31, 2014 as well as subsequent SEC filings.
The forward-looking statements contained in this release speak as of
the date of this release, and we do not undertake any obligation to
update any such statements, whether as a result of new information,
future events or otherwise.
|
|
|
|
|
PIXELWORKS, INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Revenue, net
|
|
|
$
|
15,078
|
|
|
|
$
|
14,392
|
|
|
|
$
|
15,166
|
|
|
|
$
|
29,470
|
|
|
|
$
|
28,707
|
|
|
Cost of revenue (1)
|
|
|
|
7,844
|
|
|
|
|
7,425
|
|
|
|
|
7,505
|
|
|
|
|
15,269
|
|
|
|
|
13,051
|
|
|
Gross profit
|
|
|
|
7,234
|
|
|
|
|
6,967
|
|
|
|
|
7,661
|
|
|
|
|
14,201
|
|
|
|
|
15,656
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development (2)
|
|
|
|
6,105
|
|
|
|
|
6,318
|
|
|
|
|
5,887
|
|
|
|
|
12,423
|
|
|
|
|
12,272
|
|
|
Selling, general and administrative (3)
|
|
|
|
3,584
|
|
|
|
|
3,887
|
|
|
|
|
3,709
|
|
|
|
|
7,471
|
|
|
|
|
7,758
|
|
|
Total operating expenses
|
|
|
|
9,689
|
|
|
|
|
10,205
|
|
|
|
|
9,596
|
|
|
|
|
19,894
|
|
|
|
|
20,030
|
|
|
Loss from operations
|
|
|
|
(2,455
|
)
|
|
|
|
(3,238
|
)
|
|
|
|
(1,935
|
)
|
|
|
|
(5,693
|
)
|
|
|
|
(4,374
|
)
|
|
Interest expense and other, net
|
|
|
|
(105
|
)
|
|
|
|
(107
|
)
|
|
|
|
(130
|
)
|
|
|
|
(212
|
)
|
|
|
|
(252
|
)
|
|
Loss before income taxes
|
|
|
|
(2,560
|
)
|
|
|
|
(3,345
|
)
|
|
|
|
(2,065
|
)
|
|
|
|
(5,905
|
)
|
|
|
|
(4,626
|
)
|
|
Provision for income taxes
|
|
|
|
236
|
|
|
|
|
19
|
|
|
|
|
317
|
|
|
|
|
255
|
|
|
|
|
263
|
|
|
Net loss
|
|
|
$
|
(2,796
|
)
|
|
|
$
|
(3,364
|
)
|
|
|
$
|
(2,382
|
)
|
|
|
$
|
(6,160
|
)
|
|
|
$
|
(4,889
|
)
|
|
Net loss per share - basic and diluted
|
|
|
$
|
(0.12
|
)
|
|
|
$
|
(0.14
|
)
|
|
|
$
|
(0.11
|
)
|
|
|
|
(0.26
|
)
|
|
|
|
(0.22
|
)
|
|
Weighted average shares outstanding - basic and diluted
|
|
|
|
23,539
|
|
|
|
|
23,328
|
|
|
|
|
22,667
|
|
|
|
|
23,434
|
|
|
|
|
22,437
|
|
|
——————
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
$
|
42
|
|
|
|
$
|
53
|
|
|
|
$
|
41
|
|
|
|
$
|
95
|
|
|
|
$
|
130
|
|
|
Additional amortization of non-cancelable prepaid royalty
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
35
|
|
|
|
|
—
|
|
|
|
|
91
|
|
|
(2) Includes stock-based compensation
|
|
|
|
429
|
|
|
|
|
489
|
|
|
|
|
413
|
|
|
|
|
918
|
|
|
|
|
1,239
|
|
|
(3) Includes stock-based compensation
|
|
|
|
422
|
|
|
|
|
536
|
|
|
|
|
487
|
|
|
|
|
958
|
|
|
|
|
1,275
|
|
|
|
|
|
|
PIXELWORKS, INC.
|
|
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION *
|
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Reconciliation of GAAP and non-GAAP gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
7,234
|
|
|
|
$
|
6,967
|
|
|
|
$
|
7,661
|
|
|
|
$
|
14,201
|
|
|
|
$
|
15,656
|
|
|
Stock-based compensation
|
|
|
|
42
|
|
|
|
|
53
|
|
|
|
|
41
|
|
|
|
|
95
|
|
|
|
|
130
|
|
|
Additional amortization of non-cancelable prepaid royalty
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
35
|
|
|
|
|
—
|
|
|
|
|
91
|
|
|
Total reconciling items included in cost of revenue
|
|
|
|
42
|
|
|
|
|
53
|
|
|
|
|
76
|
|
|
|
|
95
|
|
|
|
|
221
|
|
|
Non-GAAP gross profit
|
|
|
$
|
7,276
|
|
|
|
$
|
7,020
|
|
|
|
$
|
7,737
|
|
|
|
$
|
14,296
|
|
|
|
$
|
15,877
|
|
|
Non-GAAP gross profit margin
|
|
|
|
48.3
|
%
|
|
|
|
48.8
|
%
|
|
|
|
51.0
|
%
|
|
|
|
48.5
|
%
|
|
|
|
55.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
$
|
9,689
|
|
|
|
$
|
10,205
|
|
|
|
$
|
9,596
|
|
|
|
$
|
19,894
|
|
|
|
$
|
20,030
|
|
|
Reconciling item included in research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
429
|
|
|
|
|
489
|
|
|
|
|
413
|
|
|
|
|
918
|
|
|
|
|
1,239
|
|
|
Reconciling item included in selling, general and administrative:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
422
|
|
|
|
|
536
|
|
|
|
|
487
|
|
|
|
|
958
|
|
|
|
|
1,275
|
|
|
Total reconciling items included in operating expenses
|
|
|
|
851
|
|
|
|
|
1,025
|
|
|
|
|
900
|
|
|
|
|
1,876
|
|
|
|
|
2,514
|
|
|
Non-GAAP operating expenses
|
|
|
$
|
8,838
|
|
|
|
$
|
9,180
|
|
|
|
$
|
8,696
|
|
|
|
$
|
18,018
|
|
|
|
$
|
17,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(2,796
|
)
|
|
|
$
|
(3,364
|
)
|
|
|
$
|
(2,382
|
)
|
|
|
$
|
(6,160
|
)
|
|
|
$
|
(4,889
|
)
|
|
Reconciling items included in cost of revenue
|
|
|
|
42
|
|
|
|
|
53
|
|
|
|
|
76
|
|
|
|
|
95
|
|
|
|
|
221
|
|
|
Reconciling items included in operating expenses
|
|
|
|
851
|
|
|
|
|
1,025
|
|
|
|
|
900
|
|
|
|
|
1,876
|
|
|
|
|
2,514
|
|
|
Tax effect of non-GAAP adjustments
|
|
|
|
(46
|
)
|
|
|
|
(20
|
)
|
|
|
|
(47
|
)
|
|
|
|
(66
|
)
|
|
|
|
(85
|
)
|
|
Non-GAAP net loss
|
|
|
$
|
(1,949
|
)
|
|
|
$
|
(2,306
|
)
|
|
|
$
|
(1,453
|
)
|
|
|
$
|
(4,255
|
)
|
|
|
$
|
(2,239
|
)
|
|
Non-GAAP net loss per share - basic and diluted
|
|
|
$
|
(0.08
|
)
|
|
|
$
|
(0.10
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
(0.18
|
)
|
|
|
$
|
(0.10
|
)
|
|
Non-GAAP weighted average shares outstanding - basic and diluted
|
|
|
|
23,539
|
|
|
|
|
23,328
|
|
|
|
|
22,667
|
|
|
|
|
23,434
|
|
|
|
|
22,437
|
|
|
* Our non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP
operating expenses, non-GAAP net loss and non-GAAP net loss per
share differs from GAAP gross profit, GAAP operating expenses, GAAP
net loss and GAAP net loss per share due to the exclusion of
stock-based compensation expense and additional amortization of a
non-cancelable prepaid royalty. Pixelworks' management believes the
presentation of non-GAAP gross profit, non-GAAP operating expenses,
non-GAAP net loss and non-GAAP net loss per share provides useful
information to investors regarding Pixelworks' results of operations
by allowing investors to better evaluate underlying cash flow
dynamics. Pixelworks' management also uses each of these non-GAAP
measures internally to better evaluate underlying cash flow
dynamics. Pixelworks, however, cautions investors to consider these
non-GAAP financial measures in addition to, and not as a substitute
for, our GAAP financial measures.
|
|
|
|
|
|
PIXELWORKS, INC.
|
|
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION *
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Reconciliation of GAAP net loss and adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(2,796
|
)
|
|
|
$
|
(3,364
|
)
|
|
|
$
|
(2,382
|
)
|
|
|
$
|
(6,160
|
)
|
|
|
$
|
(4,889
|
)
|
|
Stock-based compensation
|
|
|
|
893
|
|
|
|
|
1,078
|
|
|
|
|
941
|
|
|
|
|
1,971
|
|
|
|
|
2,644
|
|
|
Additional amortization of non-cancelable prepaid royalty
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
35
|
|
|
|
|
—
|
|
|
|
|
91
|
|
|
Tax effect of non-GAAP adjustments
|
|
|
|
(46
|
)
|
|
|
|
(20
|
)
|
|
|
|
(47
|
)
|
|
|
|
(66
|
)
|
|
|
|
(85
|
)
|
|
Non-GAAP net loss
|
|
|
$
|
(1,949
|
)
|
|
|
$
|
(2,306
|
)
|
|
|
$
|
(1,453
|
)
|
|
|
$
|
(4,255
|
)
|
|
|
$
|
(2,239
|
)
|
|
EBITDA adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
$
|
1,041
|
|
|
|
$
|
1,098
|
|
|
|
$
|
1,141
|
|
|
|
$
|
2,139
|
|
|
|
$
|
2,285
|
|
|
Interest expense and other, net
|
|
|
|
105
|
|
|
|
|
107
|
|
|
|
|
130
|
|
|
|
|
212
|
|
|
|
|
252
|
|
|
Non-GAAP provision for income taxes
|
|
|
|
282
|
|
|
|
|
39
|
|
|
|
|
364
|
|
|
|
|
321
|
|
|
|
|
348
|
|
|
Adjusted EBITDA
|
|
|
$
|
(521
|
)
|
|
|
$
|
(1,062
|
)
|
|
|
$
|
182
|
|
|
|
$
|
(1,583
|
)
|
|
|
$
|
646
|
|
|
* Adjusted EBITDA differs from GAAP net loss due to the exclusion of
stock-based compensation expense, additional amortization of a
non-cancelable prepaid royalty, interest expense and other, net,
income tax provision and depreciation and amortization. Pixelworks'
management believes the presentation of adjusted EBITDA provides
useful information to investors regarding Pixelworks' results of
operations by allowing investors to better evaluate underlying cash
flow dynamics and core operating results and are used by Pixelworks'
management for these purposes. Pixelworks, however, cautions
investors to consider these non-GAAP financial measures in addition
to, and not as a substitute for, our GAAP financial measures.
|
|
|
|
|
|
PIXELWORKS, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
June 30,
2015
|
|
|
December 31,
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
14,432
|
|
|
$
|
17,926
|
|
Accounts receivable, net
|
|
|
|
4,733
|
|
|
|
4,648
|
|
Inventories
|
|
|
|
2,875
|
|
|
|
2,898
|
|
Prepaid expenses and other current assets
|
|
|
|
1,239
|
|
|
|
888
|
|
Total current assets
|
|
|
|
23,279
|
|
|
|
26,360
|
|
Property and equipment, net
|
|
|
|
7,030
|
|
|
|
6,402
|
|
Other assets, net
|
|
|
|
926
|
|
|
|
1,382
|
|
Total assets
|
|
|
$
|
31,235
|
|
|
$
|
34,144
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
4,004
|
|
|
$
|
3,154
|
|
Accrued liabilities and current portion of long-term liabilities
|
|
|
|
9,185
|
|
|
|
8,539
|
|
Current portion of income taxes payable
|
|
|
|
187
|
|
|
|
197
|
|
Short-term line of credit
|
|
|
|
3,000
|
|
|
|
3,000
|
|
Total current liabilities
|
|
|
|
16,376
|
|
|
|
14,890
|
|
Long-term liabilities, net of current portion
|
|
|
|
919
|
|
|
|
1,476
|
|
Income taxes payable, net of current portion
|
|
|
|
2,079
|
|
|
|
2,094
|
|
Total liabilities
|
|
|
|
19,374
|
|
|
|
18,460
|
|
Shareholders’ equity
|
|
|
|
11,861
|
|
|
|
15,684
|
|
Total liabilities and shareholders’ equity
|
|
|
$
|
31,235
|
|
|
$
|
34,144
|
