EX-99.01 2 f40065exv99w01.htm EXHIBIT 99.01 exv99w01
 

Exhibit 99.1
(SILICON IMAGE LOGO)
MEDIA CONTACT:
Kasey Holman
Media Relations — Silicon Image, Inc.
Phone: 1-408-616-4192
Kasey.Holman@SiliconImage.com
INVESTOR CONTACT:
David H. Allen
Investor Relations — Silicon Image, Inc.
Phone: 1-408-616-4003
David.Allen@SiliconImage.com
SILICON IMAGE REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS
SUNNYVALE, Calif., April 22, 2008 — Silicon Image, Inc. (Nasdaq: SIMG), a leader in semiconductors for the secure storage, distribution and presentation of high-definition content, today reported financial results for its first quarter ended March 31, 2008.
Revenue for the first quarter was $67.1 million, compared to $85.3 million for the fourth quarter ended Dec. 31, 2007 and $69.1 million for the first quarter of 2007. Revenue for the fourth quarter of 2007 included $6.7 million of product revenue from distributor sales during the month of December. Historically, the company deferred the recognition of sell-through revenue from distributor sales during the third month of a quarter until the following quarter due to the lack of information sufficient to recognize such revenue. As a result of improved business processes, the company was able to eliminate this delay in revenue recognition beginning in the fourth quarter of 2007. Therefore, 2007 fourth quarter revenue includes an additional month of product revenue from distributor sales in December.
GAAP net loss for the first quarter was $0.6 million, or $0.01 per diluted share, compared to a GAAP net profit of $7.6 million, or $0.09 per diluted share, for the fourth quarter of 2007 and $2.9 million, or $0.03 per diluted share, for the first quarter of 2007.
Non-GAAP net income for the first quarter was $3.4 million, or $0.04 per diluted share, compared to $9.5 million, or $0.11 per diluted share, for the fourth quarter of 2007 and $6.3 million, or $0.07 per diluted share, for the first quarter of 2007. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, and the impact of the one-time change in distributor sell-through revenue in the fourth quarter of 2007.
A reconciliation of GAAP and non-GAAP items is provided in a table immediately following the Condensed Consolidated Statements of Operations.
Pursuant to the company’s previously announced $100 million share repurchase program, on February 12, 2008, Silicon Image entered into an accelerated stock repurchase agreement (ASR), to purchase shares of common stock for an aggregate purchase price of approximately $62 million. As of March 31, 2008, Silicon Image received 11,538,462 shares. Silicon Image will receive additional shares on June 30, 2008, or an earlier accelerated completion date. To-date, the company has repurchased 16.5 million shares under the $100 million share repurchase program announced on February 8, 2007.
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1060 E. Arques Avenue, Sunnyvale, CA 94085  408.616.4000  www.siliconimage.com

 

 

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As previously announced on Feb. 7, 2008, the company’s Board of Directors has authorized an additional stock repurchase program for the repurchase, in the open market from time to time as business conditions warrant, of up to $100 million of the company’s common stock over a three-year period commencing upon the completion of the aforementioned stock repurchase program. Purchases under this program may be increased, decreased or discontinued at any time without prior notice.
“Our financial results for the first quarter represent a solid start down the path of achieving our targeted financial goals for 2008,” said Steve Tirado, Silicon Image’s president and chief executive officer. “We are particularly pleased with our gross margin performance for the quarter at 58 percent of revenue. Our focus throughout 2008 will continue to be on delivering financial performance in line with our stated goals. At the same time, we will be bringing new products and technologies to market that will position Silicon Image for growth over the next several years.”
Financial Outlook
Based upon Silicon Image’s current visibility into the second quarter, the following is the financial outlook for the second quarter of 2008:
  •   Revenue $66 million - $68 million
 
  •   Gross margin 57% - 58%
 
  •   GAAP operating expenses $41 million - $42 million
 
  •   Non-GAAP operating expenses $35 million - $36 million
 
  •   Interest Income $1.0 million - $1.2 million
 
  •   Tax rate 30% - 35%
 
  •   Diluted shares outstanding approximately 73 million
For the full year of 2008, Silicon Image expects
  •   Revenue $270 million - $290 million
 
  •   Gross margin 55% - 57%
 
  •   GAAP operating expenses $165 million - $168 million
 
  •   Non-GAAP operating expenses $142 million - $144 million
 
  •   Tax rate 30% - 35%
 
  •   Diluted shares outstanding approximately 72 million
Use of Non-GAAP Financial Information
Silicon Image presents and discusses gross margins, operating expenses, net income 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 amortization of intangibles and stock based compensation 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
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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
The company will host an investor conference call and web cast that event at 2:00 p.m. Pacific Time on April 22. To access the conference call, dial 719-325-4790 and enter pass code 4344545. The webcast will be accessible on Silicon Image’s investor relations website at http://www.SiliconImage.com. A replay of the conference call will be available until midnight Pacific Time, May 6, 2008. To access the replay, dial 719-457-0820 or 888-203-1112, and enter pass code 4344545.
About Silicon Image, Inc.
Silicon Image, Inc. is a global leader in driving the architecture and semiconductor implementation for the secure storage, distribution and presentation of high-definition content in the consumer electronics, personal computing, and mobile device markets. With a rich history of technology innovation that includes creating industry standards such as SATA, DVI and HDMI, Silicon Image partners with the world’s leading entertainment creators and electronics manufacturers to deliver digital HD content to consumers anytime, anywhere, on any device. Silicon Image is also a leading provider of semiconductor intellectual property solutions for high-definition multimedia and data storage applications. Additionally, Simplay Labs, LLC, a wholly-owned subsidiary of Silicon Image, offers robust testing tools, technologies, support services, consulting and product certification to electronics manufacturers to maximize performance, interoperability and ensure the highest-quality HD experience to consumers. With engineering, sales and customer support facilities located throughout North America, Asia and Europe, Silicon Image (NASDAQ: SIMG) is globally headquartered in Sunnyvale, California. For more information, please visit www.SiliconImage.com.
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, interest income, tax rates and diluted shares outstanding in the second quarter of 2008 and for the full year of 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 completion of the Company’s 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 filed by Silicon Image with the U.S. Securities and Exchange Commission. 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™ 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.
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SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
                         
    Three Months Ended  
    March 31, 2008     December 31, 2007     March 31, 2007  
Revenue:
                        
Product
   $ 57,187     $ 74,676     $ 56,339  
Development, licensing and royalties
     9,926       10,655       12,780  
 
                  
Total revenue
     67,113       85,331       69,119  
 
                  
Cost of revenue and operating expenses:
                        
Cost of revenue (1)
     28,137       35,247       30,758  
Research and development (2)
     21,542       21,285       17,195  
Selling, general and administrative (3)
     18,318       19,240       17,144  
Amortization of intangible assets
     1,587       1,857       615  
           
Total cost of revenue and operating expenses
     69,584       77,629       65,712  
           
Income (loss) from operations
     (2,471 )     7,702       3,407  
Interest income and other, net
     1,916       2,779       3,026  
 
                  
Income (loss) before provision for income taxes
     (555 )     10,481       6,433  
Provision for income taxes
     7       2,878       3,517  
 
                  
Net income (loss)
   $ (562 )   $ 7,603     $ 2,916  
 
                  
 
                        
Net income per share — basic and diluted
   $ (0.01 )   $ 0.09     $ 0.03  
Weighted average shares — basic
     80,987       84,218       86,825  
Weighted average shares — diluted
     80,987       85,228       89,549  
 
(1) Includes stock compensation expense
   $ 350     $ 387     $ 346  
(2) Includes stock compensation expense
     1,234       1,866       2,308  
(3) Includes stock compensation expense
     2,439       2,646       1,378  
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SILICON IMAGE, INC.
GAAP NET INCOME TO NON-GAAP NET INCOME RECONCILIATION
(In thousands, except per share amounts)
(unaudited)
                         
    Three Months Ended
    March 31, 2008   December 31, 2007   March 31, 2007
GAAP net income (loss)
   $ (562 )   $ 7,603     $ 2,916  
 
                        
Non-GAAP adjustments:
                        
Stock-based compensation expense (1)
     4,023       4,899       4,032  
Amortization of intangible assets (2)
     1,587       1,857       615  
Adjustments related to change in recognition of distributor revenue (3)
     —       (4,105 )     —  
     
Non-GAAP net income before tax adjustments
     5,048       10,254       7,563  
 
                        
Income tax effects on above adjustments
     (1,683 )     (707 )     (1,247 )
     
Non-GAAP net income
   $ 3,365     $ 9,547     $ 6,316  
     
 
                        
Non-GAAP net income per share — basic and diluted
   $ 0.04     $ 0.11     $ 0.07  
 
                        
Weighted average shares — basic
     80,987       84,218       86,825  
Weighted average shares — diluted
     81,574       85,228       89,549  
 
(1)   For the three months ended March 31, 2008, December 31 and March 31, 2007, these adjustments represent the non-cash amortization of stock-based compensation associated with SFAS No. 123 (R) Share-based Payment.
                         
Cost of Revenue
   $ 350     $ 387     $ 346  
Research and Development
     1,234       1,866       2,308  
Selling General and Administrative
     2,439       2,646       1,378  
     
Total
   $ 4,023     $ 4,899     $ 4,032  
     
     
(2)   These adjustments represent 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 change in recognition of distributor revenue and related standard cost of sales.
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SILICON IMAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Unaudited
                 
    March 31, 2008     December 31, 2007  
Assets
                
Current Assets:
                
Cash and cash equivalents
   $ 125,504     $ 137,822  
Short-term investments
     68,910       111,889  
Accounts receivable, net
     27,011       21,254  
Inventories
     14,116       20,198  
Prepaid expenses and other current assets
     11,966       13,732  
Deferred income taxes
     4,147       3,984  
 
            
Total current assets
     251,654       308,879  
 
            
Property and equipment, net
     24,574       24,191  
Goodwill
     19,210       19,210  
Intangible assets, net
     37,682       39,269  
Deferred income taxes, non-current
     20,589       19,978  
Other assets
     1,605       1,421  
 
            
Total assets
   $ 355,314     $ 412,948  
 
            
Liabilities and Stockholders’ Equity
                
Current Liabilities:
                
Accounts payable
   $ 18,395     $ 17,892  
Accrued liabilities and other current liabilities
     38,972       36,996  
Deferred license revenue
     4,971       3,860  
Deferred margin on sales to distributors
     25,460       26,443  
 
            
Current liabilities
     87,798       85,191  
Other long-term liabilities
     10,818       13,910  
 
            
Total liabilities
     98,616       99,101  
     
Stockholders’ Equity:
                
Total stockholders’ equity
     256,698       313,847  
 
            
Total liabilities and stockholders’ equity
   $ 355,314     $ 412,948  
 
            
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