* Revenue for the third quarter was at a record $56.0 million, an increase of 10.4% from $50.7 million in the second quarter of 2005 and an increase of 17.0% from $47.9 million in the third quarter of 2004. * Revenue from Consumer Electronics IC's grew 23% from the prior quarter to $31 million * Licensing revenue increased 65% from the prior quarter to $5.6 million * IC bookings grew to a record of over $76 million * HDMI signed 49 new adopters to a total of over 290 * Bill George, VP of Operations at On Semiconductor, joined the Silicon Image board of directors * Pre-tax income for the third quarter was $15.7 million, an increase of 47.0% from $10.7 million in the second quarter of 2005 and an increase of 90.8% from $8.2 million in the third quarter of 2004. Pre-tax income for the third quarter includes a stock compensation benefit of $1.4 million, as compared to a stock compensation expense of $1.3 million in the second quarter of 2005 and a stock compensation expense of $1.5 million in the third quarter of 2004.
During the quarter the Company determined that, based on favorable operating results in 2005, it may be appropriate to release a portion of the valuation allowance against certain deferred tax assets. As a result the Company is performing an analysis to determine the extent to which the allowance should be released. Because this analysis has not been completed, the Company has limited this release to a discussion of income before provision for income taxes.
Cash, cash equivalents and short-term investments, at the end of the third quarter was $134.1 million, an increase of $40.6 million from December 31, 2004.
"We continue to achieve record revenue, earnings, bookings, and growth in cash from operations as we enable digital content delivery systems in the home," stated Steve Tirado, president and chief executive officer of Silicon Image.
"While our ongoing evaluation of the deferred tax allowance prevented us from reporting net income in this release, the fact that we are undertaking this task at this time is an affirmation of our continuing profitable performance and our confidence that we will be able to use this deferred tax asset to offset future income," added Robert Freeman, interim chief financial officer.
The company will host a conference call at 2:00 p.m. Pacific time today to discuss its third quarter 2005 results and business outlook. The call will be broadcast over the Internet and can be accessed on the investor relation site located at www.siliconimage.com. To access the conference call, dial (719) 457-2625 and enter pass code 1471991. A replay of the conference call will be available until midnight (PT), November 3, 2005. To access the replay, dial (719) 457-0820 or (888) 203-1112, and enter pass code 1471991.
About Silicon Image
Headquartered in Sunnyvale, Calif., Silicon Image, Inc. is a leader in the secure distribution, presentation and storage of high-definition content. Silicon Image creates and drives industry standards for digital content delivery such as DVI, HDMI and SATA, leveraging strategic partnerships with global leaders in consumer electronics and personal computing. Silicon Image offers robust, high-bandwidth semiconductors in the global PC/display, consumer electronics and storage arenas based on its innovative digital interconnect technology and has become one of the top ten IP licensing vendors in the world. For more information on Silicon Image, visit www.siliconimage.com.
Safe Harbor Statement
This news release contains forward-looking information within the meaning of federal securities regulations. These forward-looking statements include statements related to future financial results and business outlook. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward- looking statements. In particular, future demand in PC, display, consumer electronics and storage markets may differ from current expectations, adversely affecting expected future results for the company, new product introductions may not be timely or successful, and standards may not be adopted at the rates anticipated. In addition, see "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Factors Affecting Future Results" included in the Form 10-Q for the quarter ended June 30, 2005, and Form 10-K for the year ended December 31, 2004 which are on file with the Securities and Exchange Commission. Silicon Image, Inc. assumes no obligation to update this forward-looking information.
SILICON IMAGE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRE-TAX GAAP BASIS) Three Months Ended Nine Months Ended (unaudited) (unaudited) Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (In thousands) 2005 2005 2004 2005 2004 Revenue: Product $50,443 $47,323 $41,474 $138,574 $110,350 Development, licensing and royalties 5,559 3,398 6,394 12,469 16,737 Total revenue 56,002 50,721 47,868 151,043 127,087 Cost and operating expenses: Cost of product revenue (1) 20,868 20,987 18,204 57,360 50,414 Research and development (2) 12,309 11,903 12,180 32,334 45,223 Selling, general and administrative (3) 7,722 8,873 9,028 20,548 31,009 Amortization of intangible assets 274 274 357 822 1,070 Total cost and operating expenses 41,173 42,037 39,769 111,064 127,716 Income (loss) from operations 14,829 8,684 8,099 39,979 (629) Interest income and other, net 908 641 211 2,166 399 Gain (loss) on investment security -- 1,382 (64) 1,263 926 Income before provision for income taxes 15,737 10,707 8,246 43,408 696