MILPITAS, Calif. — (BUSINESS WIRE) — August 25, 2010 — Sigma Designs®, Inc. (NASDAQ: SIGM) (“Sigma”), a leading provider of highly integrated system-on-chip, or SoC, solutions used to deliver multimedia entertainment throughout the home, today reported financial results and business highlights for its second fiscal quarter ended July 31, 2010.
Net revenue for the second quarter was $73.3 million, up $8.1 million, or 12%, from $65.2 million reported in the previous quarter and up $22.0 million, or 43%, from $51.3 million reported for the same period last year.
GAAP net income for the second quarter was $0.5 million, or $0.02 per diluted share. This compares to GAAP net income of $1.1 million, or $0.04 per diluted share, for the previous quarter and $4.8 million, or $0.18 per diluted share, in the same period last year. In the second quarter, Sigma wrote off $5.2 million associated with a strategic investment in a privately held company which reduced Sigma’s net income after taxes for the quarter by approximately $0.10 per diluted share.
At the end of Sigma’s second quarter, cash, cash equivalents and marketable securities totaled $163.9 million, or $5.24 per share outstanding, an increase of $16.0 million, or $0.45 per share outstanding for the first half of this fiscal year. This increase was primarily generated by profits from Sigma’s operating activities.
Non-GAAP net income for the second quarter was $8.2 million, or $0.26 per diluted share. Excluding the $5.2 million investment write-off, Sigma’s non-GAAP net income for the second quarter would have been $11.6 million, or $0.36 per diluted share. This compares to non-GAAP net income of $9.2 million, or $0.29 per diluted share for the previous quarter and non-GAAP net income of $8.0 million, or $0.29 per diluted share during the same period one year ago. Non-GAAP adjustments for the second quarter consisted of $4.6 million in amortization expense for acquired intangibles related to acquisitions, $3.1 million in non-cash share-based compensation expenses and $0.1 million of gross profit reduction resulting from the mark-up on inventory purchased as part of Sigma’s Zensys acquisition. The reconciliation between GAAP and non-GAAP net income for all referenced periods is provided in a table immediately following the GAAP financial tables below.
“We are pleased to report over $73 million in revenue for the second quarter, representing more than 12% growth over our first quarter, with contributions from all three of our primary business segments. Our largest increase came from sales in our IPTV media processor segment, representing the bulk of this quarter’s growth, and reflecting a fundamentally strong market. Connected media players were also up this quarter and continue to provide a substantial revenue contribution, demonstrating the popularity of consumer products such as network players that enable Internet access for playback of over-the-top content. Likewise, revenues from our Home Connectivity Business Group were up, largely a result of our continued leadership in all-wire network solutions. Moving forward, we are continuing to pursue major design wins in our current market segments with special initiatives for penetrating the hybrid IP Cable set-top box industry and the increased adoption of Z-Wave based home control solutions,” stated Thinh Tran, chairman and chief executive officer, Sigma Designs.
Second Quarter Highlights