EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Investors and Shareholders:

Geoff Ribar

SiRF Technology Holdings, Inc.

(408) 392-8342

gribar@sirf.com

FOR IMMEDIATE RELEASE

SiRF Technology Holdings Inc. Announces Financial Results for First Quarter 2006

First quarter revenue nearly doubles from prior year period

SAN JOSE, Calif.— April 25, 2006/PRNewswire/ — SiRF Technology Holdings, Inc. (NASDAQ: SIRF), a leading provider of GPS-enabled silicon and premium software location platforms, today reported unaudited financial results for its first quarter ended March 31, 2006.

Net revenue in the first quarter of fiscal 2006 was $52.7 million, an increase of 95 percent from $27.0 million reported in the first quarter of 2005. Gross margin in the first quarter ended March 31, 2006 was 55.2 percent, as compared to 55.9 percent in the corresponding prior year period.

Net loss for the first quarter of fiscal 2006 was $10.4 million or $0.19 per diluted share based on 55.8 million weighted average shares outstanding. The first quarter loss includes a one-time charge of $13.3 million for acquired in-process research and development attributable to the acquisition of TrueSpan and $4.7 million of stock compensation expense. This compares with net income of $1.6 million or $0.03 per diluted share based on 51.6 million weighted average shares outstanding in the first quarter of fiscal 2005.

SiRF reports net income (loss) and basic and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of amortization of employee stock compensation expense, amortization of acquisition-related intangibles, acquired in-process research and development and acquisition-related contingent payments. Non-GAAP net income for the first quarter of fiscal 2006 was $9.3 million or $0.17 per diluted share, as compared to non-GAAP net income of $3.4 million, or $0.07 per diluted share for the first quarter of fiscal 2005. Non-GAAP net income for the first quarter of fiscal 2006 excludes $1.3 million in amortization of acquisition-related intangibles, $4.7 million in employee stock compensation expense, a one-time charge of $13.3 million for acquired in-process research and development and $383,000 of acquisition-related contingent payments. Non-GAAP net income for the first quarter of fiscal 2005 excludes $1.2 million in amortization of acquisition-related intangibles and $614,000 in stock compensation expense. Weighted average shares outstanding used in computing diluted non-GAAP net income per share for the first quarter of fiscal 2006 were 55.8 million, compared with 51.6 million for the first quarter of fiscal 2005.

Total cash, cash equivalents and short-term investments were $110.0 million at March 31, 2006, compared with $117.9 million at December 31, 2005. Long-term investments were $17.9 million at March 31, 2006, compared with $20.8 million at December 31, 2005. During the first quarter of 2006, SiRF acquired TrueSpan, which contributed to the decline in cash, cash equivalents and investments.

“I am pleased to report that Q1 was yet another strong quarter for SiRF. As expected, revenues were only slightly impacted by seasonality as the strong market growth in portable navigation and consumer devices continued,” said Mr. Michael Canning, President and CEO.


Quarterly conference call details:

SiRF will host a conference call on Tuesday, April 25, 2006, at approximately 4:30 PM EDT/1:30 PM PDT to discuss its first quarter fiscal 2006 results. The conference call will be webcast live via the Internet in the investor relations section of the SiRF website at http:www.sirf.com. Interested parties should access the site, downloading any necessary audio software, at least ten minutes prior to the call. An archived webcast replay of the call will be available at the web site for twelve months.

To listen to the call, please dial (800) 867-4593 (domestic) or (785) 832-1508 (international) approximately 10 minutes prior to the start time. The pass code is: SIRF. A telephonic replay will be available approximately two hours following the earnings call and will remain available for one week. The telephone playback of the conference call can be accessed by dialing (800) 283-8520.

About SiRF Technology Holdings, Inc.:

SiRF Technology Holdings, Inc. develops and markets semiconductor and premium software products that are designed to enable location-awareness utilizing GPS and other location technologies in high-volume mobile consumer devices and commercial applications. SiRF’s technology has been integrated into mobile consumer devices, such as automobile navigation systems, mobile phones, PDAs, GPS-based peripherals and handheld GPS navigation devices, and into commercial applications, such as asset tracking devices and fleet management systems. SiRF markets and sells its products in four target platforms: automotive, consumer electronics, mobile computing, and wireless devices. Founded in 1995, SiRF is headquartered in San Jose, Calif., and has sales offices, design centers and research facilities around the world. The company trades on the Nasdaq Stock Exchange under the symbol SIRF. Additional information about SiRF and its Location Technology solutions can be found at www.sirf.com.

USE OF NON-GAAP FINANCIAL INFORMATION:

To supplement the company’s condensed consolidated financial statements presented on a GAAP basis, SiRF uses non-GAAP additional measures of operating results, net income and net income per share adjusted to exclude certain expenses it believes appropriate to enhance an overall understanding of SiRF’s past financial performance and also its prospects for the future. For each of these non-GAAP measurements, these adjustments to SiRF’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and the company’s marketplace performance. The non-GAAP results, for each of these measurements, are an indication of SiRF’s baseline performance before stock compensation expense and amortization of acquisition-related intangibles that are considered by management to be outside of the company’s business operational results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.

FORWARD-LOOKING STATEMENTS:

Except for the historical information contained herein, the matters set forth in this press release, including but not limited to, statements regarding our revenue and the impact of seasonality and the portable navigation devices market growth, the benefits of using non-GAAP measurements and the impacts of our recent acquisition are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “to,” “being,” “possible,” “may,” “address,” “designed to,” “provide,” “anticipate,” “believe,” “expect,” “plan,” “will,” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and reported results should not be considered as an indication of future performance. SiRF’s actual results could differ materially from those discussed in these forward-looking statements as a result of risks and uncertainties, including, among others, the market for GPS-based location awareness capabilities, our ability to keep pace with rapid technological change, the semiconductor industry, international operations and our ability to compete, and other risks and uncertainties discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 and from time to time in SiRF’s SEC reports. These forward-looking statements speak only as of the date hereof. We do not undertake any obligation to update forward-looking statements.


SiRF TECHNOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

     Three months ended
March 31,
     2006     2005

Revenue:

    

Product revenue

   $ 50,163     $ 25,021

License royalty revenue

     2,517       2,010
              

Net revenue

     52,680       27,031

Cost of revenue:

    

Cost of product revenue (a)

     23,625       11,908
              

Gross profit

     29,055       15,123

Operating expenses:

    

Research and development(b)

     17,025       6,258

Sales and marketing(b)

     4,449       3,266

General and administrative(b)

     3,767       2,947

Amortization of acquisition-related intangibles

     1,323       1,158

In-process research and development

     13,251       —  
              

Total operating expenses

     39,815       13,629
              

Operating (loss) income

     (10,760 )     1,494

Other income, net

     1,302       855
              

Net (loss) income before provision for income taxes

     (9,458 )     2,349

Provision for income taxes

     937       720
              

Net (loss) income

   $ (10,395 )   $ 1,629
              

Net (loss) income per share:

    

Basic

   $ (0.21 )   $ 0.03
              

Diluted

   $ (0.19 )   $ 0.03
              

Weighted average number of shares used in per share calculations:

    

Basic

     50,179       47,113
              

Diluted

     55,828       51,606
              

_____________

    

(a)      Cost of product revenue includes:

    

Stock compensation expense

   $ 65     $ 56
              

(b)      Operating expenses include the following stock compensation expense:

    

Research and development

     3,310       219

Sales and marketing

     658       158

General and administrative

     684       181
              
   $ 4,652     $ 558
              


An itemized reconciliation between net (loss) income on a GAAP basis and non-GAAP basis is as follows:

 

     Three months ended
March 31,
     2006     2005(1)

GAAP net (loss) income

   $ (10,395 )   $ 1,629

Amortization of acquisition-related intangibles

     1,323       1,158

Stock compensation expense

     4,717       614

In-process research and development

     13,251       —  

Acquisition-related contingent payments

     383       —  
              

Non-GAAP net income

   $ 9,279     $ 3,401
              

Weighted average number of shares used in non-GAAP diluted per share calculations

     55,828       51,606

Non-GAAP diluted net income per share

   $ 0.17     $ 0.07

(1) Certain changes in presentation have been made to prior period amounts in order to conform to the current year presentation.


SiRF TECHNOLOGY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

 

     March 31,
2006
(Unaudited)
   

December 31,
2005

(1) (2)

 
ASSETS     

Current Assets:

    

Cash and cash equivalents

   $ 73,682     $ 83,882  

Marketable securities

     36,340       34,060  

Accounts receivable, net

     22,829       11,918  

Inventories

     9,236       13,567  

Current deferred tax assets

     13,827       15,495  

Prepaid expenses and other current assets

     5,908       5,575  
                

Total current assets

     161,822       164,497  

Long-term investments

     17,887       20,844  

Property and equipment, net

     8,570       9,063  

Goodwill

     53,790       53,790  

Identified intangible assets, net

     23,534       23,865  

Long-term deferred tax assets

     28,544       12,347  

Other long-term assets

     1,221       1,409  
                

Total assets

   $ 295,368     $ 285,815  
                
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current Liabilities:

    

Accounts payable

   $ 7,480     $ 9,711  

Accrued payroll and related benefits

     5,838       5,363  

Other accrued liabilities

     3,099       2,628  

Deferred margin on shipments to distributors

     1,863       1,196  

Advance contract billings

     207       470  

Deferred revenue

     278       25  

Rebates payable

     1,213       2,964  

Current portion of long-term obligations

     8       14  
                

Total current liabilities

     19,986       22,371  

Long-term deferred tax liability

     163       169  

Long-term obligations

     282       439  
                

Total liabilities

     20,431       22,979  
                

Commitments and Contingencies

    

Stockholders’ Equity:

    

Common stock

     5       5  

Additional paid-in-capital

     316,330       305,544  

Deferred stock-based compensation

     —         (11,697 )

Accumulated other comprehensive loss

     (393 )     (406 )

Accumulated deficit

     (41,005 )     (30,610 )
                

Total stockholders’ equity

     274,937       262,836  
                

Total liabilities and stockholders’ equity

   $ 295,368     $ 285,815  
                

(1) The condensed consolidated balance sheet information was derived from SiRF Technology Holdings, Inc. audited consolidated financial statements for the year ended December 31, 2005.
(2) Certain reclassifications have been made to prior year amounts in order to conform to the current year presentation.