Sigma Designs, Inc. Reports Third Quarter Fiscal Year 2017 Financial Results

Sigma Designs is a registered trademark of Sigma Designs, Inc. in the United States and other countries.

About Sigma Designs, Inc.

Sigma Designs, Inc.® (NASDAQ: SIGM) is a world leader in enabling smart home convergence. The company designs and builds the essential semiconductor technologies that serve as the foundation for the world's leading Connected Smart TV platforms and Internet of Things (IoT) for smart home devices. For more information about Sigma Designs, please visit www.sigmadesigns.com.

                                                                            
                             SIGMA DESIGNS, INC.                            
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS              
                                   (GAAP)                                   
                                                                            
                               (In thousands)                               
                                                                            
                                                    October 29,  January 30,
                                                       2016         2016    
                                                   ------------ ------------
Assets                                                                      
                                                                            
Current Assets:                                                             
  Cash and cash equivalents                         $    64,833  $    63,790
  Short-term marketable securities                        4,794        4,805
  Restricted cash                                           316          900
  Accounts receivable, net                               49,619       30,362
  Inventory                                              20,184       26,709
  Prepaid expenses and other current assets               8,451       14,085
                                                   ------------ ------------
    Total current assets                                148,197      140,651
                                                                            
Long-term marketable securities                               -        3,527
Software, equipment and leasehold improvements, net      19,562       14,086
Intangible assets, net                                   31,465       37,050
Goodwill                                                                       10,594              11,068
Deferred  tax  assets                                                                                  958                    911
Long-term  investments                                                                          2,000                2,884
Other  non-current  assets                                                                    6,056                6,492
                                                                                                      ------------  ------------
                                                                                                                                                        
        Total  assets                                                                        $      218,832    $      216,669
                                                                                                      ============  ============
                                                                                                                                                        
Liabilities  and  Shareholders'  Equity                                                                                
                                                                                                                                                        
Current  Liabilities:                                                                                                                
    Accounts  payable                                                                    $        20,559    $        26,181
    Accrued  compensation  and  related  benefits                            10,287                7,360
    Accrued  liabilities                                                                        15,152              14,632
                                                                                                      ------------  ------------
        Total  current  liabilities                                                        45,998              48,173
                                                                                                                                                        
    Other  long-term  liabilities                                                        22,861              15,691
                                                                                                      ------------  ------------
        Total  liabilities                                                                        68,859              63,864
                                                                                                                                                        
Shareholders'  equity                                                                        149,973            152,805
                                                                                                      ------------  ------------
                                                                                                                                                        
        Total  liabilities  and  shareholders'  equity            $      218,832    $      216,669
                                                                                                      ============  ============
                                                                                                                                                        
 
 
                                                                                                                                                        
                                                          SIGMA  DESIGNS,  INC.                                                        
                    UNAUDITED  CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS                  
                                                                      (GAAP)                                                                      
                                                                                                                                                        
                                        (In  thousands,  except  per  share  data)                                      
                                                                                                                                                        
                                                    Three  months  ended                        Nine  months  ended      
                                    ----------------------------------  -----------------------
                                    October  29,    July  30,    October  31,  October  29,  October  31,
                                            2016              2016                2015                2016                2015      
                                    -----------  ----------  -----------  -----------  -----------
                                                                                                                                                        
Net  revenue                $      62,729  $      61,316    $      61,581    $    177,820    $    175,800
Cost  of  revenue                31,734          31,734            30,794            93,242            87,141
                                    -----------  ----------  -----------  -----------  -----------
Gross  profit                      30,995          29,582            30,787            84,578            88,659
Gross  margin                                                                                                                                
  percent                                49.4%            48.2%              50.0%              47.6%              50.4%
                                                                                                                                                        
Operating                                                                                                                                      
  expenses:                                                                                                                                    
    Research  and                                                                                                                            
      development                  18,264          18,836            17,339            56,255            49,754
    Sales  and                                                                                                                                  
      marketing                        5,984            5,939              5,875            17,646            16,940
    General  and                                                                                                                              
      administrative              4,578            4,820              5,314            14,536            16,100
    Impairment  of                                                                                                                          
      IP,  mask  sets                                                                                                                        
      and  design                                                                                                                              
      tools                                        -                300                  795                  300              1,783
                                    -----------  ----------  -----------  -----------  -----------
        Total                                                                                                                                      
          operating                                                                                                                            
          expenses                    28,826          29,895            29,323            88,737            84,577
                                                                                                                                                        
Income  (loss)  from                                                                                                                    
  operations                          2,169            (313)              1,464          (4,159)              4,082
Gain  on  sale  of                                                                                                                          
  development                                                                                                                                
  project                                        -                    -              7,551                      -              7,551
Interest  and  other                                                                                                                    
  income  (expense),                                                                                                                    
  net                                            179                415                    37              (157)                  821
                                    -----------  ----------  -----------  -----------  -----------
                                                                                                                                                        
Income  (loss)                                                                                                                              
  before  income                                                                                                                            
  taxes                                    2,348                102              9,052          (4,316)            12,454
Provision  for                                                                                                                              
  income  taxes                      2,127            1,824              2,617              5,283              6,105
                                    -----------  ----------  -----------  -----------  -----------
                                                                                                                                                        
Net  income  (loss)    $            221  $    (1,722)    $        6,435    $    (9,599)    $        6,349
                                    ===========  ==========  ===========  ===========  ===========
                                                                                                                                                        
Net  income  (loss)                                                                                                                      
  per  share:                                                                                                                                  
    Basic                        $          0.01  $      (0.05)    $          0.18    $      (0.26)    $          0.18
    Diluted                    $          0.01  $      (0.05)    $          0.17    $      (0.26)    $          0.17
Shares  used  in                                                                                                                            
  computing  net                                                                                                                            
  income  (loss)  per                                                                                                                    
  share:                                                                                                                                          
    Basic                                37,666          37,182            36,046            37,241            35,670
    Diluted                            38,001          37,182            36,785            37,241            36,515
                                                                                                                                                        
 
 
                                                                                                                                                        
                                                          SIGMA  DESIGNS,  INC.                                                        
      RECONCILIATION  OF  GAAP  NET  INCOME  (LOSS)  TO  NON-GAAP  NET  INCOME  (LOSS)      
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                        (In  thousands,  except  per  share  data)                                      
                                                                                                                                                        
                                                    Three  months  ended                        Nine  months  ended      
                                  -----------------------------------  -----------------------
                                  October  29,      July  30,    October  31,  October  29,  October  31,
                                          2016                2016                2015                2016                2015      
                                  -----------  -----------  -----------  -----------  -----------
                                                                                                                                                        
GAAP  Net  Revenue    $      62,729    $      61,316    $      61,581    $    177,820    $    175,800
Items  reconciling                                                                                                                      
  GAAP  Net  Revenue                                                                                                                      
  to  Non-GAAP:                                                                                                                              
  Reversal  of                                                                                                                                
    rebate                                      -                      -                      -                      -          (1,027)
                                  -----------  -----------  -----------  -----------  -----------
  GAAP  to  Non-GAAP                                                                                                                      
    adjustments                            -                      -                      -                      -          (1,027)
  Non-GAAP  Net                                                                                                                              
    Revenue                  $      62,729    $      61,316    $      61,581    $    177,820    $    174,773
                                                                                                                                                        
GAAP  Cost  of                                                                                                                                
  Revenue                    $      31,734    $      31,734    $      30,794    $      93,242    $      87,141
Items  reconciling                                                                                                                      
  GAAP  Cost  of                                                                                                                              
  Revenue  to  Non-                                                                                                                        
  GAAP:                                                                                                                                            
  Stock  based                                                                                                                                
    compensation                                                                                                                            
    expense                              (61)                (74)                (78)              (239)              (158)
  Amortization  of                                                                                                                        
    acquired                                                                                                                                    
    intangibles                    (938)              (940)              (965)          (2,827)          (2,995)
                                  -----------  -----------  -----------  -----------  -----------
  GAAP  to  Non-GAAP                                                                                                                      
    adjustments                    (999)          (1,014)          (1,043)          (3,066)          (3,153)
  Non-GAAP  Cost  of                                                                                                                      
    Revenue                  $      30,735    $      30,720    $      29,751    $      90,176    $      83,988
                                                                                                                                                        
  GAAP  Gross                                                                                                                                  
    Profit                    $      30,995    $      29,582    $      30,787    $      84,578    $      88,659
  GAAP  Gross                                                                                                                                  
    Margin  %                          49.4%              48.2%              50.0%              47.6%              50.4%
  Non-GAAP  Gross                                                                                                                          
    Profit                    $      31,994    $      30,596    $      31,830    $      87,644    $      90,785
  Non-GAAP  Gross                                                                                                                          
    Margin  %                          51.0%              49.9%              51.7%              49.3%              51.9%
                                                                                                                                                        
GAAP  Operating                                                                                                                            
  Expenses                  $      28,826    $      29,895    $      29,323    $      88,737    $      84,577
Items  reconciling                                                                                                                      
  GAAP  Operating                                                                                                                          
  Expenses  to  Non-                                                                                                                      
  GAAP:                                                                                                                                            
  Stock  based                                                                                                                                
    compensation                                                                                                                            
    expense                        (1,432)          (1,677)          (1,814)          (4,897)          (4,723)
  Amortization  of                                                                                                                        
    acquired                                                                                                                                    
    intangibles                    (692)              (696)              (318)          (2,087)              (979)
  Impairment  of                                                                                                                            
    IP,  mask  sets                                                                                                                          
    and  design                                                                                                                                
    tools                                        -              (300)              (795)              (300)          (1,783)
  One  time  legal                                                                                                                          
    fee  expenses                          -                      -              (357)                (11)          (1,611)
                                  -----------  -----------  -----------  -----------  -----------
  GAAP  to  Non-GAAP                                                                                                                      
    adjustments                (2,124)          (2,673)          (3,284)          (7,295)          (9,096)
  Non-GAAP                                                                                                                                      
    Operating                                                                                                                                  
    Expenses                $      26,702    $      27,222    $      26,039    $      81,442    $      75,481
                                                                                                                                                        
GAAP  Other  Income                                                                                                                      
  (Expense)  and                                                                                                                            
  Tax                            $    (1,948)    $    (1,409)    $        4,971    $    (5,440)    $        2,267
Items  reconciling                                                                                                                      
  GAAP  Other                                                                                                                                  
  Income  (Expense)                                                                                                                      
  and  Tax  to  Non-                                                                                                                        
  GAAP:                                                                                                                                            
  Impairment  (gain                                                                                                                      
    on  sale)  of                                                                                                                              
    privately  held                                                                                                                        
    instruments,                                                                                                                            
    net                                            1                  584                      -                  885              (392)
  Gain  on  sale  of                                                                                                                        
    development                                                                                                                              
    project                                    -                      -          (7,551)                      -          (7,551)
  Income  tax                                                                                                                                  
    adjustments                            -                      -              1,494                      -              2,696
                                  -----------  -----------  -----------  -----------  -----------
  GAAP  to  Non-GAAP                                                                                                                      
    adjustments                            1                  584          (6,057)                  885          (5,247)
  Non-GAAP  Other                                                                                                                          
    Income                                                                                                                                        
    (Expense)  and                                                                                                                          
    Tax                          $    (1,947)    $        (825)    $    (1,086)    $    (4,555)    $    (2,980)
                                                                                                                                                        
Non-GAAP  Net                                                                                                                                
  Income                      $        3,345    $        2,549    $        4,705    $        1,647    $      12,324
                                  ===========  ===========  ===========  ===========  ===========
                                                                                                                                                        
Non-GAAP  Net                                                                                                                                
  Income  (Loss)                                                                                                                            
  per  share:                                                                                                                                  
  Basic                        $          0.09    $          0.07    $          0.13    $          0.04    $          0.35
  Diluted                    $          0.09    $          0.07    $          0.13    $          0.04    $          0.34
Shares  used  in                                                                                                                            
  computing  Non-                                                                                                                          
  GAAP  net  income                                                                                                                        
  (loss)  per                                                                                                                                  
  share:                                                                                                                                          
  Basic                                37,666            37,182            36,046            37,241            35,670
  Diluted                            38,001            37,527            36,785            37,626            36,515
                                                                                                                                                        
 




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