SUNNYVALE, Calif., July 29, 2010 /PRNewswire via COMTEX News Network/ — Trident Microsystems, Inc. (Nasdaq: TRID), a leader in high-performance semiconductor system solutions for the connected home, today announced results for its second quarter ended June 30, 2010. The second quarter included the full benefit of the TV and Set-Top Box product lines acquired from NXP in February 2010.
For the quarter, the company reported net revenues of $171.6 million, which compares with $90.4 million in the prior sequential quarter and $14.9 million in the quarter ended June 30, 2009. On a generally accepted accounting principles (“GAAP”) basis, the company reported a net loss for the quarter of $49.0 million, or $0.28 per share. The net loss for the second quarter of 2010 compares with a net loss of $7.6 million, or $0.06 per share in the prior sequential quarter and a net loss of $21.1 million, or $0.32 per share, in the quarter ended June 30, 2009.
Non-GAAP Results
Non-GAAP net loss for the quarter was $14.8 million, or $0.09 per share, which compares with a non-GAAP net loss of $25.8 million, or $0.20 per share, in the prior sequential quarter and a non-GAAP net loss of $15.7 million, or $0.24 per share, in the quarter ended June 30, 2009. A detailed reconciliation between GAAP and non-GAAP net loss is provided in a table following the non-GAAP consolidated statements of operations.
Sylvia Summers, Trident’s chief executive officer, said, “For the second consecutive quarter, Trident exceeded expectations for revenues and gross margins, driving a substantially lower operating loss in the first full quarter since the acquisition of NXP’s Set-Top Box and TV product lines. Our integration activities are on track. Despite supply constraints that are limiting our ability to meet strong upside demand in TV, we remain committed to our goal of achieving non-GAAP operating breakeven by year-end. We expect in the second half of 2010 to begin production of our industry-leading Apollo 45nm Set-Top Box SOC, a product that we believe will be a platform for significant growth in 2011. In addition, we currently are demonstrating to customers our new fully integrated SOC for the value range of the DTV market and will know more about potential design wins in this segment over the next several months.”
Outlook
For the quarter ending Sept. 30, 2010, Trident is providing the following outlook. The company’s outlook for any period is based on current expectations and is subject to various factors, including those set forth in the Forward-Looking Information statement below. Actual results may differ materially.
- Quarter ending Sept. 30, 2010:
- Net revenues are expected to be in the range of $170 million to $180 million.
- Non-GAAP gross margins are expected to be in the range of 32% to 34%.
- Non-GAAP operating expenses are expected to be in the range of $59 million to $62 million, with research and development expenses in the range of $42 million to $44 million and selling, general and administrative expenses of approximately $17 million to $18 million.
- Non-GAAP operating loss is expected to be in the range of $2 million to $6 million.
- Provision for income taxes is expected to be approximately $1 million.
- Adjustments to GAAP net income are expected to be in the range of $25 million to $30 million, including restructuring charges in the range of $7 million to $9 million. These charges are not included in the guidance for non-GAAP operating loss.
- Cash as of the end of the quarter is expected to be in the range of $85 million to $95 million.
Investor Conference Call
Date: Thursday, July 29, 2010
Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)
Domestic Dial-In: 800-798-2884
International Dial-In: 617-614-6207
Passcode: 39471759
A replay of the conference call will be available for two weeks, beginning on July 29, 2010 and will be accessible by calling 888-286-8010 (domestic) or +1-617-801-6888 (international) using access code 59351339. This call is being webcast by Thomson/CCBN and can be accessed at Trident’s web site at: http://www.tridentmicro.com. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).
Use of Non-GAAP Financial Information
To supplement the consolidated financial results prepared under GAAP, Trident uses a non-GAAP conforming, or non-GAAP, measure of net loss that is GAAP net loss adjusted to exclude certain costs, expenses and gains. Non-GAAP net loss gives an indication of Trident’s baseline performance before gains, losses or other charges that are considered by management to be outside the company’s core operating results. In addition, non-GAAP net loss is among the primary indicators management uses as a basis for planning and forecasting future periods. These measures are not in accordance with, or an alternative for, GAAP and may be materially different from non-GAAP measures used by other companies. Trident computes non-GAAP net loss by adjusting GAAP net loss for acquisition-related expenses, stock-based compensation expense, expenses related to the stock option investigation and related matters, legal settlements, restructuring charges, expenses related to software license fees adjustment, amortization and impairment of intangible assets from acquisitions, impairment loss, backlog amortization, capital gains and losses and dividend income. A detailed reconciliation between net loss on a GAAP basis and non-GAAP net loss is provided in a table following non-GAAP Consolidated Statements of Operations.
Forward-Looking Information
This press release contains forward-looking statements, including statements regarding financial expectations for the third quarter of fiscal year 2010, expected restructuring activity, and our ability to breakeven by the end of 2010. The forward-looking statements made above are subject to certain risks and uncertainties, and actual results could vary materially depending on a number of factors. These risks include, in particular, our ability to realize the benefits from our acquisition of product lines from NXP, our ability to build upon our core strengths, including our technology, engineering team, competitive cost structure and strong balance sheet, the timing of product introductions, the ability to obtain design wins among major OEMs for Trident’s products, the availability of wafers from our suppliers, and competitive pressures, including pricing and competitors’ new product introductions, the impact of the uncertain global macroeconomic environment, the increasingly competitive DTV market and our ability to retain key employees. Additional factors that may affect Trident’s business are described in detail in Trident’s filings with the Securities and Exchange Commission available at http://www.sec.gov.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Sunnyvale, California, is a leading force in the digital home entertainment market, delivering an extensive range of platform solutions that enhance the consumer experience in the Connected Home. As one of the top-three semiconductor providers to both the TV and set-top box markets, Trident’s solutions can be found in the products of leading OEMs and channel partners worldwide. The company’s extensive IP portfolio of more than 2,000 patents has been driving key innovations in image quality, 3D TV, low power consumption, and 45nm designs. For further information about Trident and its products, please consult the Company’s web site: www.tridentmicro.com.
NOTE: Trident is a trademark of Trident Microsystems, Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice.
TRID-IR
TRIDENT MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
------------------
June 30, March 31, June 30,
(In thousands, except per
share data) 2010 2010 2009
---- ---- ----
Net revenues 171,648 90,404 14,912
Cost of revenues 138,722 76,618 10,290
----- ---- ----
Gross profit 32,926 13,786 4,622
% of net revenues 19.2% 15.2% 31.0%
Research and development
expenses 49,866 37,215 15,802
% of net revenues 29.1% 41.2% 106.0%
Selling, general and
administrative expenses 22,311 20,136 7,421
% of net revenues 13.0% 22.3% 49.8%
In-process research and
development 0 0 697
% of net revenues 0.0% 0.0% 4.7%
Goodwill impairment 7,851 0 0
% of net revenues 0 0 0
Restructuring charges 4,470 8,395 8
% of net revenues 2.6% 9.3% 0.1%
Operating loss (51,572) (51,960) (19,306)
% of net revenues (30.0)% (57.5)% (129.5)%
Gain (loss) on investment 0 (209) 12
Gain on acquisition (a) 0 44,784 0
Interest and other income
(expense), net 287 527 (818)
--- --- ----
Loss before income taxes (51,285) (6,858) (20,112)
% of net revenues (29.9)% (7.6)% (134.9)%
Provision for (benefit
from) income taxes (2,255) 726 963
% of net revenues (1.3)% 0.8% 6.5%
Net loss (49,030) (7,584) (21,075)
======= ====== =======
% of net revenues (28.6)% (8.4)% (141.3)%
Basic and diluted net loss
per share (0.28) (0.06) (0.32)
Shares used in basic and
diluted per share
computation 174,018 129,969 65,565
Six Months Ended
----------------
June 30, June 30,
(In thousands, except per
share data) 2010 2009
---- ----
Net revenues 262,052 21,764
Cost of revenues 215,340 16,681
----- ----
Gross profit 46,712 5,083
% of net revenues 17.8% 23.4%
Research and development
expenses 87,081 27,236
% of net revenues 33.2% 125.1%
Selling, general and
administrative expenses 42,447 11,047
% of net revenues 16.2% 50.8%
In-process research and
development 0 697
% of net revenues 0.0% 3.2%
Goodwill impairment 7,851 1,432
% of net revenues 0 0
Restructuring charges 12,865 49
% of net revenues 4.9% 0.2%
Operating loss (103,532) (35,378)
% of net revenues (39.5)% (162.6)%
Gain (loss) on investment (209) 19
Gain on acquisition (a) 44,784 0
Interest and other income
(expense), net 814 462
--- ---
Loss before income taxes (58,143) (34,897)
% of net revenues (22.2)% (160.3)%
Provision for (benefit
from) income taxes (1,529) 2,782
% of net revenues (0.6)% 12.8%
Net loss (56,614) (37,679)
======= =======
% of net revenues (21.6)% (173.1)%
Basic and diluted net loss
per share (0.37) (0.59)
Shares used in basic and
diluted per share
computation 152,059 63,708
(a) See "Reconciliation of GAAP to Non-GAAP Financial Measures"
footnote 8.
TRIDENT MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December
June 30, March 31, 31,
(In thousands) 2010 2010 2009
---- ---- ----
ASSETS
Current assets
Cash and cash equivalents $96,915 $129,983 $147,995
Accounts receivable, net 97,813 32,415 4,582
Accounts receivable from related
parties 8,488 52,620 -
Inventories 32,475 26,631 14,536
Note receivable from related party 7,476 10,126 -
Prepaid expenses and other current
assets 27,159 33,463 13,962
------ ------ ------
Total current assets 270,326 285,238 181,075
Property and equipment, net 33,544 36,014 26,168
Goodwill 0 7,851 7,851
Intangible assets, net 107,183 127,180 5,635
Long-term note receivable from
related party 20,882 20,348 -
Other assets 19,180 15,722 7,764
Total assets $451,115 $492,353 $228,493
======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable $20,242 $20,278 $18,883
Accounts payable to related
parties 38,362 34,887 2,401
Accrued expenses and other
current liabilities 71,235 66,852 27,068
Income taxes payable 2,532 4,372 1,696
----- ----- -----
Total current liabilities 132,371 126,389 50,048
Long-term income taxes payable 22,265 21,597 22,262
Deferred income tax liabilities 94 94 94
Other long-term liabilities 3,768 4,870
Total liabilities 158,498 152,950 72,404
------- ------- ------
Stockholders' equity
Preferred stock - - -
Common stock 176 175 71
Additional paid-in capital 430,864 428,621 237,827
Accumulated deficit (138,423) (89,393) (81,809)
-------- ------- -------
Total stockholders' equity 292,617 339,403 156,089
Total liabilities and
stockholders' equity $451,115 $492,353 $228,493
======== ======== ========
TRIDENT MICROSYSTEMS, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
------------------
June 30, March 31, June 30,
(In thousands, except per share data) 2010 2010 2009
---- ---- ----
Net revenues $171,648 $90,404 $14,912
Cost of revenues 120,801 65,068 9,354
------- ------ -----
Gross profit 50,847 25,336 5,558
% of net revenues 29.6% 28.0% 37.3%
Research and development expenses 48,140 35,850 12,886
% of net revenues 28.0% 39.7% 86.4%
Selling, general and administrative
expenses 18,411 15,117 5,865
% of net revenues 10.7% 16.7% 39.3%
---- ---- ----
In-process research and development - - 697
% of net revenues - - 4.7%
--- --- ---
Operating loss (15,704) (25,631) (13,890)
% of net revenues (9.1)% (28.4)% (93.1)%
Interest and other income (expense),
net (1,387) 527 (818)
------ --- ----
Loss before income taxes (17,091) (25,104) (14,708)
% of net revenues (10.0)% (27.8)% (98.6)%
Provision for income taxes (2,255) 726 963
% of net revenues (1.3)% 0.8% 6.5%
Net loss ($14,836) ($25,830) ($15,671)
======== ======== ========
(8.6)% (28.6)% (105.1)%
Basic and diluted net loss per share $(0.09) $(0.20) $(0.24)
Shares used in basic and diluted per
share computation 174,018 129,969 65,565
Six Months Ended
----------------
June 30, June 30,
(In thousands, except per share data) 2010 2009
---- ----
Net revenues $262,052 $21,764
Cost of revenues 185,869 14,972
------- ------
Gross profit 76,183 6,792
% of net revenues 29.1% 31.2%
Research and development expenses 83,990 23,268
% of net revenues 32.1% 106.9%
Selling, general and administrative
expenses 33,528 11,172
% of net revenues 12.8% 51.3%
---- ----
In-process research and development - 697
% of net revenues - 3.2%
--- ---
Operating loss (41,335) (28,345)
% of net revenues (15.8)% (130.2)%
Interest and other income (expense),
net (860) 462
---- ---
Loss before income taxes (42,195) (27,883)
% of net revenues (16.1)% (128.1)%
Provision for income taxes (1,529) 2,782
% of net revenues (0.6)% 12.8%
Net loss (40,666) (30,665)
======= =======
(15.5)% (140.9)%
Basic and diluted net loss per share $(0.27) $(0.48)
Shares used in basic and diluted per
share computation 152,059 63,708
TRIDENT MICROSYSTEMS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
------------------
June 30, March 31, June 30,
(In thousands, except per share
data) 2010 2010 2009
---- ---- ----
GAAP gross profit $32,926 $13,786 $4,622
Amortization of acquisition-
related intangible assets (1) 16,972 10,216 787
Stock-based compensation expense
(2) 86 104 149
Impairment of intangible assets
other than goodwill (3) 863 1,230 -
Non-GAAP gross profit $50,847 $25,336 $5,558
======= ======= ======
GAAP Research and development
expenses $49,866 $37,215 $15,802
Amortization of acquisition-
related intangible assets (1) 824 485 -
Stock-based compensation expense
(2) 902 880 1,710
Impairment of intangible assets
other than goodwill (3) - - 1,706
Software license fees (4) - - (500)
Non-GAAP Research and development
expenses $48,140 $35,850 $12,886
======= ======= =======
GAAP Selling, general and
administrative expenses $22,311 $20,136 $7,421
Amortization of acquisition-
related intangible assets (1) 1,339 755 51
Stock-based compensation expense
(2) 1,246 (320) 1,401
Stock options related professional
fees (5) 525 226 104
Acquisition-related expenses (6) 790 4,358 -
Non-GAAP Selling, general and
administrative expenses $18,411 $15,117 $5,865
======= ======= ======
GAAP net loss $(49,030) $(7,584) $(21,075)
Gross profit reconciliation 17,921 11,550 936
Research and development expenses
reconciliation 1,726 1,365 2,916
Selling, general and administrative
expenses reconciliation 3,900 5,019 1,556
Restructuring Charges (7) 4,470 8,395 8
Impairment of goodwill (3) 7,851 - -
Legal settlements (10) (1,674)
(Gain) loss on investment (9) - 209 (12)
(Gain) on acquisition (8) - (44,784) -
Non-GAAP net loss $(14,836) $(25,830) $(15,671)
======== ======== ========
GAAP basic and diluted net loss per
share $(0.28) $(0.06) $(0.32)
====== ====== ======
Non-GAAP basic and diluted net
loss per share $(0.09) $(0.20) $(0.24)
====== ====== ======
Shares used in basic and diluted
per share computation 174,018 129,969 65,565
======= ======= ======
Six Months Ended
----------------
June 30, June 30,
(In thousands, except per share
data) 2010 2009
---- ----
GAAP gross profit $46,712 $5,083
Amortization of acquisition-
related intangible assets (1) 27,188 1,415
Stock-based compensation expense
(2) 190 294
Impairment of intangible assets
other than goodwill (3) 2,093 -
Non-GAAP gross profit $76,183 $6,792
======= ======
GAAP Research and development
expenses $87,081 $27,236
Amortization of acquisition-
related intangible assets (1) 1,309 -
Stock-based compensation expense
(2) 1,782 3,050
Impairment of intangible assets
other than goodwill (3) - 1,706
Software license fees (4) - (788)
Non-GAAP Research and development
expenses $83,990 $23,268
======= =======
GAAP Selling, general and
administrative expenses $42,447 $11,047
Amortization of acquisition-
related intangible assets (1) 2,094 127
Stock-based compensation expense
(2) 926 2,719
Stock options related professional
fees (5) 751 (2,971)
Acquisition-related expenses (6) 5,148 -
Non-GAAP Selling, general and
administrative expenses $33,528 $11,172
======= =======
GAAP net loss $(56,614) $(37,679)
Gross profit reconciliation 29,471 1,709
Research and development expenses
reconciliation 3,091 3,968
Selling, general and administrative
expenses reconciliation 8,919 (125)
Restructuring Charges (7) 12,865 49
Impairment of goodwill (3) 7,851 1,432
Legal settlements (10) (1,674)
(Gain) loss on investment (9) 209 (19)
(Gain) on acquisition (8) (44,784) -
Non-GAAP net loss $(40,666) $(30,665)
======== ========
GAAP basic and diluted net loss per
share $(0.37) $(0.59)
====== ======
Non-GAAP basic and diluted net
loss per share $(0.27) $(0.48)
====== ======
Shares used in basic and diluted
per share computation 152,059 63,708
======= ======
(1) Amortization of acquisition-related intangible assets represents
the amortization of identifiable intangible assets. Management
deemed that
these acquisition-related charges are not related to Trident's core
operating performance and it is appropriate to exclude those charges
from Trident's non-GAAP financial measures, as it enhances the
ability of investors to compare Trident's period-over-period
operating results.
(2) Stock-based compensation expense relates primarily to the equity
awards such as stock options and restricted stock. This is non-cash
expense that
varies in amount from period to period and is dependent on market
forces that are often beyond Trident's control. Hence, management
excludes this item
from the non-GAAP financial measures.
(3) Charges for impairment of goodwill and intangible assets incurred
as a result of their carrying value exceeding the fair value.
Management believes that these charges are not directly associated
with the Company's core operating performance.
(4) Software license fees represent an adjustment for prior years'
software usage.
(5) Stock options related professional fees are excluded from the
non-GAAP net loss calculation. Management believes that these
professional fees are
not related to the Company's ongoing business and operating
performance of Trident.
(6) Acquisition-related expenses represent external costs incurred
in connection with our acquisition, which we generally would not
have incurred in the
normal course of business.
(7) Management believes that restructuring charges are not directly
associated with the Company's core operating performance.
(8) The preliminary purchase price allocation assigned $48.5 million
to gain on acquisition. Subsequently, in accordance with applicable
accounting guidance, the preliminary estimate was reduced by $3.7
million as a result of new information received by the Company
subsequent to March 31, 2010. Management believes that gain on
acquisition is not related to the ongoing business and operating
performance of Trident.
(9) Management believes that (Gain) loss on investments are not
related to the ongoing business and operating performance of
Trident.
(10) Management believes that legal settlements are not related to
the ongoing business and operating performance of Trident.