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 improvements in Silicon Image's business processes, Silicon Image's future operating results, including revenue, gross margins, operating expenses and tax rates in the first quarter and full fiscal year 2008, customer design wins and future growth opportunities, the implementation of the company's accelerated stock repurchase program within the time frame indicated and the effectuation of the company's new stock repurchase program. These forward-looking statements involve risks and uncertainties, including the company's ability to maintain its improved business processes, the company ability to enter into an agreement with a counterparty to implement its accelerated stock repurchase program, the company's ability to generate sufficient resources to effectuate its new stock repurchase program and other risks and uncertainties described from time to time in Silicon Image's filings with the 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 or Form 10-Q filed by Silicon Image with the SEC. Silicon Image assumes no obligation to update any forward-looking information contained in this press release.
NOTE: Silicon Image and Simplay HD are trademarks, registered trademarks or service marks of Silicon Image, Inc. in the United States and other countries. HDMI(TM) and High-Definition Multimedia Interface are trademarks or registered trademarks of HDMI Licensing, LLC in the United States and other countries, and are used under license from HDMI Licensing, LLC. All other trademarks and registered trademarks are the property of their respective owners.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except
per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December September December December 31,
31, 2007 30, 2007 31, 2006 2007 2006
Revenue:
Product $73,986 $74,173 $66,278 $269,700 $250,374
Development, licensing
and royalties 11,345 12,109 20,675 50,803 44,584
Total revenue 85,331 86,282 86,953 320,503 294,958
Cost of revenue and
operating expenses:
Cost of revenue (1) 35,247 37,500 33,393 140,443 121,247
Research and
development (2) 21,285 20,489 15,987 77,994 63,598
Selling, general and
administrative (3) 19,240 16,827 18,226 70,340 67,597
Amortization of
intangible assets 1,857 540 78 3,549 508
Reimbursement of patent
assertion costs, net - - (5,369) 22 (5,244)
Total cost of revenue
and operating
expenses 77,629 75,356 62,315 292,348 247,706
Income from operations 7,702 10,926 24,638 28,155 47,252
Interest income and
other, net 2,779 2,302 3,024 11,397 9,205
Income before provision
for income taxes 10,481 13,228 27,662 39,552 56,457
Provision for income taxes 2,872 9,118 1,389 20,545 13,992
Net income $7,609 $4,110 $26,273 $19,007 $42,465
Net income per share -
basic $0.09 $0.05 $0.31 $0.22 $0.51
Net income per share -
diluted $0.09 $0.05 $0.29 $0.22 $0.49
Weighted average shares -
basic 84,218 84,489 85,618 85,557 82,787
Weighted average shares -
diluted 85,228 85,937 89,113 87,388 86,791
(1) Includes stock
compensation expense $387 $421 $473 $1,597 $2,427
(2) Includes stock
compensation expense 1,866 2,181 1,715 8,411 11,108
(3) Includes stock
compensation expense 2,646 2,731 2,583 9,442 13,696
SILICON IMAGE, INC.
GAAP NET INCOME TO NON-GAAP NET INCOME RECONCILIATION
Three Months Ended Twelve Months
December September December Ended
(In thousands, except 31, 30, 31, December 31,
per share amounts) 2007 2007 2006 2007 2006
(unaudited)
GAAP Net income $7,609 $4,110 $26,273 $19,007 $42,465
Non-GAAP adjustments:
Stock-based compensation
expense (1) 4,899 5,333 4,771 19,450 27,231
Amortization of intangible
assets (2) 1,857 540 78 3,549 508
Adjustments related to
Genesis Settlement (3) - - (13,831) - (11,113)
Adjustments related to
change in recognition of
distributor revenue (4) (4,105) - - (4,105) -
Non-GAAP Net income before
tax adjustments 10,260 9,983 17,291 37,901 59,091
Income tax effects on
above adjustments (713) (1,712) (3,469) (5,232) (6,356)
Tax benefit from employee
stock transactions (5) - - 4,467 - 16,181
Non-GAAP net income $9,547 $8,271 $18,289 $32,669 $68,916
Non-GAAP net income per
share - basic $0.11 $0.10 $0.21 $0.38 $0.83
Non-GAAP net income per
share - diluted $0.11 $0.10 $0.21 $0.37 $0.79
Weighted average shares -
basic 84,218 84,489 85,618 85,557 82,787
Weighted average shares -
diluted 85,228 85,937 89,113 87,388 86,791
(1) For the three months ended December 31, 2006, September 30, 2007 and
December 31, 2007, and for the twelve months ended December 31, 2006
and 2007, these adjustments represent the non-cash amortization of
stock-based compensation associated with SFAS No. 123 (R) Share-based
Payment.
Cost of Revenue $387 $421 $473 $1,597 $2,427
Research and Development 1,866 2,181 1,715 8,411 11,108
Selling General and
Administrative 2,646 2,731 2,583 9,442 13,696
Total $4,899 $5,333 $4,771 $19,450 $27,231
(2) This adjustment represents expenses for the amortization of
intangible assets recorded in connection with our acquisitions. These
on-going expenses pertain to intangible assets that are not expected
to be replaced when fully amortized, as might a depreciable tangible
asset.
(3) This adjustment represents the reversal of royalty revenue and
reversal of contra expense for reimbursement of litigation expenses
for the quarter ended December 31, 2006.
(4) This adjustment represents the change in recognition of distributor
revenue and related standard cost of sales.
(5) This adjustment represents the non-cash tax benefits from employee
stock transactions and other discrete items included in the tax
provision and recorded to additional paid in capital.
SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Unaudited December 31,
2007 2006
Assets
Current Assets:
Cash and cash equivalents $137,822 $81,921
Short-term investments 111,889 168,724
Accounts receivable, net 21,254 39,931
Inventories 20,198 28,287
Prepaid expenses and other current assets 14,149 4,895
Deferred income taxes 3,567 12,793
Total current assets 308,879 336,551
Property and equipment, net 24,191 18,431
Goodwill 19,210 13,021
Intangible assets, net 39,269 78
Deferred income taxes, non-current 19,978 10,580
Other assets 1,421 1,570
Total assets $412,948 $380,231
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $17,892 $14,187
Accrued liabilities and other current
liabilities 36,996 37,308
Deferred license revenue 3,860 5,264
Deferred margin on sales to
distributors 26,443 17,712
Current liabilities 85,191 74,471
Other long-term liabilities 13,910 538
Total liabilities 99,101 75,009
Stockholders' Equity:
Total stockholders' equity 313,847 305,222
Total liabilities and
stockholders' equity $412,948 $380,231
Web site: http://www.siliconimage.com/
