Sigma Designs, Inc. Reports Third Quarter 2015 Financial Results

MILPITAS, CA -- (Marketwired) -- Dec 10, 2014 -- Sigma Designs®, Inc. (NASDAQ: SIGM), a leader in intelligent media platforms, today reported financial results and business highlights for its third quarter of fiscal year 2015 ended November 1, 2014.

Financial Results

Net revenues for the third quarter of fiscal 2015 were $53.8 million, up $11.0 million, or 25.7%, from $42.8 million reported in the previous quarter and down $0.6 million, or 1.1%, from $54.4 million reported for the same period last year.

GAAP net loss for the third quarter of fiscal 2015 was $0.6 million, or $0.02 per share. This compares to GAAP net loss of $7.6 million, or $0.22 per share, for the previous quarter and GAAP net loss of $3.0 million, or $0.09 per share, for the same period last year.

Non-GAAP net income for the third quarter of fiscal 2015 was $1.5 million, or $0.04 per diluted share. This compares to a non-GAAP net loss of $2.0 million, or $0.06 per diluted share, for the previous quarter and non-GAAP net income of $3.3 million, or $0.10 per diluted share, during the same period last year.

The reconciliation between GAAP and non-GAAP net income (loss) for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Management Comment

"We are pleased to report a 25.7% sequential growth in revenue along with pro forma profitability of $1.5 million, or $0.04 per share," said Thinh Tran, President and CEO of Sigma Designs. He continued, "We achieved this growth through a combination of increased customer volumes for our new DTV chipsets, additional growth in our home control products, the continued strength of our home networking products, and increases in set-top box deployments. We are committed to sustaining this momentum by securing increased customer deployments to continue to drive the top line while maintaining our focus on profitability."

Recent Highlights

  • We have successfully ramped volume shipments of our UXL DTV SoC as well as our latest smart TV products, the SX6 SoC and FRCX frame-rate conversion processor, which allow our customers to launch new 4K TVs with improved video quality along with BOM cost reductions.
  • We have begun volume shipments of our SMP8756, a new member of our software-compatible series of set-top box chipsets that feature an ARM CPU, HEVC decoding, and 3D graphics, all supported by robust software stacks under Linux and Android operating systems.
  • We have announced that Orange France launched their new Homelive smart home solution, based on Z-Wave technology, and made it available in Orange stores and online.
  • We have announced that leading European powerline communications provider Devolo AG has launched its new modular, plug-and-play line of home control products based on Z-Wave technology.

Investor Conference Call

The conference call relating to Sigma's third quarter fiscal year 2015 financial results will take place following this announcement at 5:00 PM ET today, December 10, 2014. Investors will have the opportunity to listen live to the conference call via the Internet through Institutional investors can access the call via Thomson StreetEvents at To listen to the live call, please go to the website at least 10 minutes prior to the commencement of the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call via the internet through The audio replay will be available for one week after the call.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income (loss), which excludes amortization of acquired intangibles, stock-based compensation, the mark-up on purchased inventory sold during the period, facility exit legal expenses, settlement expenses, net impairment of privately-held investments, restructuring charges, impairment of purchased IP, mask sets, design tools used in production and other assets and the gain on the sale of an R&D development project to a third party that Sigma recognized in accordance with GAAP. The tax amounts included in Sigma's non-GAAP results approximate its operating cash tax expense, similar to the liability reported on Sigma's tax returns. In the GAAP to non-GAAP reconciliation at the end of this press release, we have disclosed the impact of these income tax adjustments in our calculation of our non-GAAP financial results. Sigma believes that its non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma's management has no control over certain variables that have a major influence in the determination of stock-based compensation such as the volatility of its stock price and changing interest rates. Sigma believes that all of these excluded expenses may not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma's GAAP financial results in the foreseeable future.

The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures may not reflect the full economic impact of Sigma's activities. Sigma's non-GAAP net income (loss) is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including our commitment to sustaining momentum by securing increased customer deployments to continue to drive our top line while maintaining our focus on profitability. Actual results may vary materially due to a number of factors including, but not limited to, the risk that, upon completion of further closing procedures and audit, the financial results for the third fiscal quarter of fiscal 2015 are different than the results set forth in this press release, our ability to recognize revenue from design wins, general economic conditions, the ability to recognize the anticipated savings from our restructuring efforts, the rate of growth of the set-top box, home networking, digital TV, and home control markets in general, the ramp in demand from our set-top box, television and telecommunication customers, our ability to deploy and achieve market acceptance for our products, and the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, and other risks detailed from time to time in our SEC reports, including our report on Form 10-Q as filed with the SEC on September 10, 2014. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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

                                                          SIGMA  DESIGNS,  INC.                                                        
                              UNAUDITED  CONDENSED  CONSOLIDATED  BALANCE  SHEETS                            
                                                              (In  thousands)                                                              
                                                                                                        November  1,    February  1,
                                                                                                                2014                  2014      
                                                                                                        -----------    -----------
Current  Assets:                                                                                                                          
    Cash  and  cash  equivalents                                                  $        81,296    $        64,326
    Short-term  marketable  securities                                                8,752                7,791
    Restricted  cash                                                                                  1,500                1,775
    Accounts  receivable,  net                                                              25,966              27,647
    Inventory                                                                                            20,109              20,403
    Deferred  tax  assets                                                                          7,206                4,144
    Prepaid  expenses  and  other  current  assets                              6,064                8,069
                                                                                                        -----------    -----------
        Total  current  assets                                                                150,893            134,155
Long-term  marketable  securities                                                      4,265              15,505
Software,  equipment  and  leasehold  improvements,  net            22,318              27,089
Intangible  assets,  net                                                                      24,743              29,780
Deferred  tax  assets,  net  of  current  portion                                  313                    439
Long-term  investments  and  notes  receivable,  net  of                                                    
  current  portion                                                                                    3,267                3,873
Other  non-current  assets                                                                    4,740                4,934
                                                                                                        -----------    -----------
        Total  assets                                                                        $      210,539    $      215,775
                                                                                                        ===========    ===========
Liabilities  and  Shareholders'  Equity                                                                                
Current  Liabilities:                                                                                                                
    Accounts  payable                                                                    $        21,691    $        16,184
    Accrued  compensation  and  related  benefits                              7,424                6,288
    Accrued  liabilities                                                                        22,751              19,813
                                                                                                        -----------    -----------
        Total  current  liabilities                                                        51,866              42,285
    Other  long-term  liabilities                                                        13,314              15,099
                                                                                                        -----------    -----------
        Total  liabilities                                                                        65,180              57,384
Shareholders'  equity                                                                        145,359            158,391
                                                                                                        -----------    -----------
            Total  liabilities  and  shareholders'  equity        $      210,539    $      215,775
                                                                                                        ===========    ===========
                                                          SIGMA  DESIGNS,  INC                                                          
                                      (In  thousands,  except  per  share                                                    
                                                    Three  months  ended                        Nine  months  ended      
                                    ---------------------------------    ----------------------  
                                    November  1,  August  2,    November  2,  November  1,  November  2,
                                          2014              2014                2013                2014                2013    
                                    ----------    ---------    ----------    ----------    ----------  
Net  revenue              $      53,784    $    42,810    $      54,394    $    133,467    $    160,696  
Cost  of  revenue              27,272          20,921            23,311            64,841            74,601  
                                    ----------    ---------    ----------    ----------    ----------  
Gross  profit                    26,512          21,889            31,083            68,626            86,095  
Gross  margin                                                                                                                                
  percent                                49.3%            51.1%              57.1%              51.4%              53.6%
    Research  and                                                                                                                            
      development                16,603          16,452            17,555            50,158            56,528  
    Sales  and                                                                                                                                  
      marketing                      5,559            5,475              5,608            16,484            16,817  
    General  and                                                                                                                              
      administrative            4,808            4,555              5,212            14,394            14,911  
      charges                              (18)                46              1,104              1,002              1,994  
    Write  down  of                                                                                                                          
    and  acquired-                                                                                                                          
      in-process  R&D                    -                    -                      -                      -                      -  
    Impairment  of                                                                                                                          
      IP,  mask  sets                                                                                                                        
      and  design                                                                                                                              
      tools                                  856            1,156                  150              2,122                  338  
                                    ----------    ---------    ----------    ----------    ----------  
          expenses                  27,808          27,684            29,629            84,160            90,588  
Loss  from                                                                                                                                      
  operations                      (1,296)        (5,795)            1,454          (15,534)          (4,493)
Gain  on  sale  of                                                                                                                          
  project                                      -                    -                      -                      -              1,079  
Interest  and                                                                                                                                
  other  income,                                                                                                                            
  net                                          188                372                (254)                508                  558  
                                    ----------    ---------    ----------    ----------    ----------  
Loss  before                                                                                                                                  
  income  taxes                  (1,108)        (5,423)            1,200          (15,026)          (2,856)
Provision  for                                                                                                                              
  income  taxes                      (551)          2,197              4,178              3,065              9,446  
                                    ----------    ---------    ----------    ----------    ----------  
Net  loss                    $          (557)  $    (7,620)  $      (2,978)  $    (18,091)  $    (12,302)
                                    ==========    =========    ==========    ==========    ==========  
Net  loss  per                                                                                                                                
    Basic                      $        (0.02)  $      (0.22)  $        (0.09)  $        (0.52)  $        (0.36)
    Diluted                  $        (0.02)  $      (0.22)  $        (0.09)  $        (0.52)  $        (0.36)
Shares  used  in                                                                                                                            
  computing  net                                                                                                                            
  loss  per  share:                                                                                                                        
    Basic                              34,790          34,622            34,518            34,578            34,129  
    Diluted                          34,790          34,622            34,518            34,578            34,129  
                                                        SIGMA  DESIGNS,  INC.                                                          
              RECONCILIATION  OF  GAAP  NET  LOSS  TO  NON-GAAP  NET  INCOME  (LOSS)                
                                      (In  thousands,  except  per  share  data)                                        
                                                    Three  months  ended                        Nine  months  ended      
                                    ---------------------------------    ----------------------  
                                    November  1,  August  2,    November  2,  November  1,  November  2,
                                          2014              2014                2013                2014                2013    
                                    ----------    ---------    ----------    ----------    ----------  
GAAP  net  loss          $          (557)  $    (7,620)  $      (2,978)  $    (18,091)  $    (12,302)
Items  reconciling                                                                                                                      
  GAAP  net  loss  to                                                                                                                      
  non-GAAP  net                                                                                                                              
  income  (loss):                                                                                                                          
      expenses                        1,703            1,386              1,668              4,577              5,387  
    Amortization  of                                                                                                                      
      intangibles                  1,407            1,408              1,782              4,256              5,380  
      and  impairment                                                                                                                      
      charges                              838            1,202              1,665              3,175              2,776  
    Mark-up  on                                                                                                                                
      acquired  in                                                                                                                            
      sold  during                                                                                                                            
      the  period                                                                                                                              
    sold  during  the                                                                                                                      
      period                                    -                    -                                              -                  436  
    Realized  gain                                                                                                                          
      on  sale  of                                                                                                                              
      project                                  -                    -                      -                      -            (1,079)
    Facility  exit                                                                                                                          
      legal  expenses                133                  33                      8                  356                  296  
      expenses                                -                    -                  100                  107                  100  
    Impairment  on                                                                                                                          
      sale  of                                                                                                                                    
      privately  held                                                                                                                      
      investments                        (3)              601                  163                  598                  163  
    Income  tax                                                                                                                                
      adjustments                (2,055)              952                  901                (521)            4,466  
                                    ----------    ---------    ----------    ----------    ----------  
Total  GAAP  to                                                                                                                              
  adjustments                      2,023            5,582              6,287            12,548            17,925  
                                    ----------    ---------    ----------    ----------    ----------  
Non-GAAP  net                                                                                                                                
  income  (loss)        $        1,466    $    (2,038)  $        3,309    $      (5,543)  $        5,623  
                                    ==========    =========    ==========    ==========    ==========  
Diluted  net                                                                                                                                  
  income  (loss)                                                                                                                            
  per  share                $          0.04    $      (0.06)  $          0.10    $        (0.16)  $          0.16  
                                    ==========    =========    ==========    ==========    ==========  
Shares  used  in                                                                                                                            
  diluted  net                                                                                                                                
  income  (loss)                                                                                                                            
  per  share:                      34,878          34,622            34,564            34,578            34,176  
  Investor  Relations  Contact  :
Elias  Nader
Chief  Financial  Officer  &  Corporate  Secretary
Sigma  Designs,  Inc.
1778  McCarthy  Blvd.
Milpitas,  CA  95035
Tel:  (408)  957-9847

  Email  Contact    


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