Sigma Designs, Inc. Reports First Quarter 2015 Financial Results

About Sigma Designs, Inc.

Sigma Designs, Inc. (NASDAQ: SIGM) is a leader in intelligent media platforms. The company designs and builds the essential semiconductor technologies that serve as the foundation for the world's leading IPTV set-top boxes, connected televisions, connected media players, residential gateways, home control systems and more. For more information about Sigma Designs, please visit www.sigmadesigns.com.

                                                                            
                             SIGMA DESIGNS, INC.                            
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS              
                                   (GAAP)                                   
                               (In thousands)                               
                                                                            
                                                      May 3,     February 1,
                                                       2014         2014    
                                                   ------------ ------------
Assets                                                                      
                                                                            
Current Assets:                                                             
  Cash and cash equivalents                        $     63,431 $     64,326
  Short-term marketable securities                        6,920        7,791
  Restricted cash                                         1,540        1,775
  Accounts receivable, net                               23,776       27,647
  Inventory                                              19,473       20,403
  Deferred tax assets                                     4,270        4,144
  Prepaid expenses and other current assets               7,180        8,069
                                                   ------------ ------------
    Total current assets                                126,590      134,155
                                                                            
Long-term marketable securities                           9,864       15,505
Software, equipment and leasehold improvements,                             
 net                                                     23,991       27,089
Intangible assets, net                                   28,617        29,780
Deferred  tax  assets,  net  of  current  portion                                  253                    439
Long-term  investments  and  notes  receivable,  net  of                                                    
  current  portion                                                                                    3,872                3,873
Other  non-current  assets                                                                    4,945                4,934
                                                                                                      ------------  ------------
                                                                                                                                                        
        Total  assets                                                                      $        198,132  $        215,775
                                                                                                      ============  ============
                                                                                                                                                        
Liabilities  and  Shareholders'  Equity                                                                                
                                                                                                                                                        
Current  Liabilities:                                                                                                                
    Accounts  payable                                                                  $          11,596  $          16,184
    Accrued  compensation  and  related  benefits                              6,315                6,288
    Accrued  liabilities                                                                        15,064              19,813
                                                                                                      ------------  ------------
        Total  current  liabilities                                                        32,975              42,285
                                                                                                                                                        
    Other  long-term  liabilities                                                        14,317              15,099
                                                                                                      ------------  ------------
        Total  liabilities                                                                        47,292              57,384
                                                                                                                                                        
Shareholders'  equity                                                                        150,840            158,391
                                                                                                      ------------  ------------
                                                                                                                                                        
        Total  liabilities  and  shareholders'  equity          $        198,132  $        215,775
                                                                                                      ============  ============
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        SIGMA  DESIGNS,  INC.                                                          
                  UNAUDITED  CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS                    
                                                                      (GAAP)                                                                      
                                      (In  thousands,  except  per  share  data)                                        
                                                                                                                                                        
                                                                                                Three  months  ended                    
                                                                            -------------------------------------  
                                                                                  May  3,        February  1,          May  4,      
                                                                                    2014                  2014                  2013        
                                                                            -----------    -----------    -----------  
                                                                                                                                                        
Net  revenue                                                      $        36,873    $        38,497    $        52,540  
Cost  of  revenue                                                        16,648              16,451              25,594  
                                                                            -----------    -----------    -----------  
Gross  profit                                                              20,225              22,046              26,946  
Gross  margin  percent                                                  54.9%                57.3%                51.3%
                                                                                                                                                        
Operating  expenses:                                                                                                                  
    Research  and  development                                  17,103              16,634              20,204  
    Sales  and  marketing                                              5,450                4,820                5,682  
    General  and  administrative                                5,031                4,729                4,762  
    Restructuring  and  impairment                                                                                            
      charges                                                                    1,084                    942                    398  
                                                                            -----------    -----------    -----------  
        Total  operating  expenses                              28,668              27,125              31,046  
                                                                                                                                                        
Loss  from  operations                                              (8,443)            (5,079)            (4,100)
Gain  on  sale  of  development  project                          -                        -                1,079  
Interest  and  other  income  (expense),                                                                                
  net                                                                                    (52)                (164)                  691  
                                                                            -----------    -----------    -----------  
                                                                                                                                                        
Loss  before  income  taxes                                      (8,495)            (5,243)            (2,330)
Provision  (benefit)  for  income  taxes                1,419              (6,496)              2,203  
                                                                            -----------    -----------    -----------  
                                                                                                                                                        
Net  income  (loss)                                          $        (9,914)  $          1,253    $        (4,533)
                                                                            ===========    ===========    ===========  
                                                                                                                                                        
                                                                                                                                                        
Net  income  (loss)  per  share:                                                                                                
    Basic                                                              $          (0.29)  $            0.04    $          (0.13)
    Diluted                                                          $          (0.29)  $            0.04    $          (0.13)
                                                                                                                                                        
Shares  used  in  computing  net  income                                                                                  
  (loss)  per  share:                                                                                                                    
    Basic                                                                        34,367              34,421              33,912  
    Diluted                                                                    34,367              34,502              33,912  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                        SIGMA  DESIGNS,  INC.                                                          
      RECONCILIATION  OF  GAAP  NET  INCOME  (LOSS)  TO  NON-GAAP  NET  INCOME  (LOSS)      
                                                                (Unaudited)                                                                  
                                      (In  thousands,  except  per  share  data)                                        
                                                                                                                                                        
                                                                                            Three  months  ended                        
                                                                      ----------------------------------------  
                                                                            May  3,            February  1,          May  4,        
                                                                              2014                    2014                    2013          
                                                                      ------------    ------------    ------------  
GAAP  net  income  (loss)                          $          (9,914)  $            1,253    $          (4,533)
                                                                                                                                                        
Items  reconciling  GAAP  net  income                                                                                      
  (loss)  to  non-GAAP  net  income                                                                                            
  (loss):                                                                                                                                        
                                                                                                                                                        
    Stock-based  compensation                                                                                                    
      expenses                                                              1,488                  1,427                  2,033  
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                                        1,441                  1,772                  1,815  
                                                                                                                                                        
    Restructuring  and  impairment                                                                                            
      charges                                                                1,135                      954                      438  
                                                                                                                                                        
    Mark-up  on  inventory  acquired  in                                                                                    
      business  combinations  sold                                                                                              
      during  the  period  during  the                                                                                          
      period                                                                          -                          -                      260  
                                                                                                                                                        
    Realized  gain  on  sale  of                                                                                                    
      development  project                                                -                          -                (1,079)
                                                                                                                                                        
    Facility  exit  legal  expenses                            190                        91                          -  
                                                                                                                                                        
    Settlement  expenses                                              107                          -                          -  
                                                                                                                                                        
    Impairment  of  investments,  net                            -                      270                          -  
                                                                                                                                                        
    Income  tax  adjustments                                        582              (10,292)                1,343  
                                                                                                                                                        
                                                                      ------------    ------------    ------------  
Total  GAAP  to  Non-GAAP  adjustments                4,943                (5,778)                4,810  
                                                                      ------------    ------------    ------------  
                                                                                                                                                        
Non-GAAP  net  income  (loss)                  $          (4,971)  $          (4,525)  $                277  
                                                                      ============    ============    ============  
                                                                                                                                                        
Diluted  net  income  (loss)  per                                                                                              
  share                                                          $            (0.14)  $            (0.13)  $              0.01  
                                                                      ============    ============    ============  
                                                                                                                                                        
Shares  used  in  calculating  diluted                                                                                    
  net  income  (loss)  per  share:                        34,367                34,421                33,937  
                                                                      ============    ============    ============  
                                                                                                                                                        
Diluted  net  income  (loss)  per                                                                                              
  share:                                                                                                                                          
                                                                                                                                                        
Diluted  GAAP  net  income  (loss)  per                                                                                    
  share                                                          $            (0.29)  $              0.04    $            (0.13)
                                                                                                                                                        
Diluted  GAAP  to  non-GAAP                                                                                                        
  adjustments                                              $              0.15    $            (0.17)  $              0.14  
                                                                      ------------    ------------    ------------  
                                                                                                                                                        
Diluted  Non-GAAP  net  income  (loss)                                                                                    
  per  share                                                  $            (0.14)  $            (0.13)  $              0.01  
                                                                      ============    ============    ============  
                                                                                                                                                        
                                                                                                                                                        
Reconciliation  of  shares  used  in                                                                                        
  calculating  non-GAAP  net  income                                                                                        
  (loss)  per  share:                                                                                                                    
                                                                                                                                                        
Shares  used  in  calculating  basic                                                                                        
  net  income  (loss)  per  share                          34,367                34,421                33,912  
                                                                                                                                                        
Adjustment  for  dilutive  securities                        -                          -                        25  
                                                                      ------------    ------------    ------------  
                                                                                                                                                        
Non-GAAP  shares  used  in                                                                                                          
  calculating  diluted  net  income                                                                                          
  (loss)  per  share                                                34,367                34,421                33,937  
                                                                      ============    ============    ============  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                          SIGMA  DESIGNS,  INC.                                                        
                            SCHEDULE  OF  SELECTED  GAAP  TO  NON-GAAP  ADJUSTMENTS                          
                                                                  (Unaudited)                                                                
                                        (In  thousands,  except  per  share  data)                                      
                                                                                                                                                        
The  following  schedule  reconciles  selected  line  items  from  the  GAAP  basic      
  statements  of  operations  to  non-GAAP  statements  of  operations:                          
                                                                                                                                                        
                                                                                                Three  months  ended                    
                                                                              ------------------------------------  
                                                                                  May  3,          February  1,        May  4,      
                                                                                    2014                  2014                  2013        
                                                                              ----------    ------------    ----------  
GROSS  PROFIT:                                                                                                                              
                                                                                                                                                        
GAAP  gross  profit                                            $      20,225    $          22,046    $      26,946  
                                                                                                                                                        
    Stock-based  compensation  expense                          50                        53                    83  
                                                                                                                                                        
    Amortization  of  acquired  intangibles            1,095                  1,403              1,435  
                                                                                                                                                        
    Restructuring  and  impairment  charges                  51                        12                    40  
                                                                                                                                                        
    Mark-up  on  inventory  acquired  in                                                                                    
      business  combinations  sold  during                                                                                
      the  period                                                                      -                          -                  260  
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  gross  profit                                    $      21,421    $          23,514    $      28,764  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
OPERATING  EXPENSES:                                                                                                                  
                                                                                                                                                        
GAAP  operating  expenses                                $      28,668    $          27,125    $      31,046  
                                                                                                                                                        
    Stock-based  compensation  expense                  (1,438)              (1,374)          (1,950)
                                                                                                                                                        
    Amortization  of  acquired  intangibles              (346)                  (369)              (380)
                                                                                                                                                        
    Restructuring  and  impairment  charges          (1,084)                  (942)              (398)
                                                                                                                                                        
    Facility  exit  legal  expenses                              (190)                    (91)                    -  
                                                                                                                                                        
    Settlement  expenses                                                (107)                        -                      -  
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  operating  expenses                        $      25,503    $          24,349    $      28,318  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
INCOME  TAX  EXPENSE:                                                                                                                  
                                                                                                                                                        
GAAP  income  tax  expense                                $        1,419    $          (6,496)  $        2,203  
                                                                                                                                                        
    Income  tax  adjustments                                          (582)              10,292            (1,343)
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  income  tax  expense                        $            837    $            3,796    $            860  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
RESEARCH  AND  DEVELOPMENT:                                                                                                      
                                                                                                                                                        
GAAP  research  and  development                    $      17,103    $          16,634    $      20,204  
                                                                                                                                                        
    Stock-based  compensation  expense                      (691)                  (660)          (1,090)
                                                                                                                                                        
    Amortization  of  acquired  intangibles                    -                      (22)                (33)
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  research  and  development            $      16,412    $          15,952    $      19,081  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
SALES  AND  MARKETING:                                                                                                                
                                                                                                                                                        
GAAP  sales  and  marketing                              $        5,450    $            4,820    $        5,682  
                                                                                                                                                        
    Stock-based  compensation  expense                      (240)                  (246)              (349)
                                                                                                                                                        
    Amortization  of  acquired  intangibles              (346)                  (347)              (347)
                                                                                                                                                        
    Settlement  expenses                                                (107)                        -                      -  
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  sales  and  marketing                      $        4,757    $            4,227    $        4,986  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
                                                                                                                                                        
GENERAL  AND  ADMINISTRATIVE:                                                                                                  
                                                                                                                                                        
GAAP  general  and  administrative                $        5,031    $            4,729    $        4,762  
                                                                                                                                                        
    Stock-based  compensation  expense                      (507)                  (468)              (511)
                                                                                                                                                        
    Facility  exit  legal  expenses                              (190)                    (91)                    -  
                                                                                                                                                        
                                                                              ----------    ------------    ----------  
Non-GAAP  general  and  administrative        $        4,334    $            4,170    $        4,251  
                                                                              ==========    ============    ==========  
 




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