SigmaTel Reports Fourth Quarter 2007 Results

AUSTIN, Texas—(BUSINESS WIRE)—February 4, 2008— SigmaTel, Inc. (NASDAQ: SGTL) today announced results for the quarter ended December 31, 2007.

Fourth Quarter Financial Review

Revenues for the fourth quarter of 2007 were $33.2 million with a GAAP net loss of $4.0 million or $0.11 per share. The non-GAAP adjusted net loss for the fourth quarter of 2007 was $2.0 million or a non-GAAP adjusted net loss of $0.06 per share. GAAP gross margin for the quarter was 42.3 percent and non-GAAP gross margin was 43.3 percent. See the reconciling charges set forth in the reconciliation of GAAP to non-GAAP results provided below.

As of December 31, 2007 SigmaTel had cash, cash equivalents, restricted cash and short-term investments of $71.4 million.

Business Update

"In 2007, we continued our aggressive cost management and restructured the company," said Phil Pompa, CEO of SigmaTel. "We have achieved new design wins across all the product lines and begun to transition to our PMP solutions, the 3600 and 3700 product families. SigmaTel shipped over 1 million 3700 SoCs to OEM/ODMs worldwide, last year."

Executive Summary:

-- 5.0 Software Development Kit for the 3700 product family available for the mass market

-- GPS reference design units showcased at CES 2008

-- Kodak launched the ESP3, based on SigmaTel technology, at CES

-- SGTV5900 adopted by Samsung and shipping in mass production

"Development has begun on solutions for different consumer markets," said Phil Pompa, CEO of SigmaTel. "New product announcements are expected later on in this quarter with more details available at that time."

First Quarter 2008 Outlook

For the first quarter of 2008, the company anticipates revenue of $17 million to $22 million with non-GAAP gross margins of approximately 44 percent, plus or minus a couple of points. SigmaTel's gross margin percentage varies primarily with product mix, pricing, and unit costs.

GAAP diluted loss per share is expected to be $0.40 to $0.30 with non-GAAP adjusted net loss per share expected to be $0.35 to $0.25, based on 36.1 million diluted weighted average shares outstanding.

Conference Call Today

A conference call will be held today, February 4th, 2007, at 3:30 p.m. Central Time (CST) and will be simulcast over the Internet at and A replay will be available from February 6, 2008 until February 29, 2008, at the websites listed above and by phone at 888-203-1112 for domestic calls or 719-457-0820 for international calls. Please use passcode 4057885 when accessing the replay by phone.

For more information on SigmaTel, please visit

About SigmaTel: SigmaTel is a fabless semiconductor company which designs, develops, and markets mixed-signal ICs for the consumer electronics market. The Company's target market segments include portable media players, printers and digital televisions. SigmaTel provides complete, system-level solutions that include highly-integrated ICs, customizable firmware and software, software development tools and reference designs. The Company's focus is on enabling customers to rapidly introduce and offer electronic products that are small, light-weight, power-efficient, reliable, and cost-effective. SigmaTel is ISO 9001:2000 certified and is committed to providing customers with high performance, quality products along with superior, worldwide customer service.

Cautionary Language: This press release contains forward-looking statements based on current SigmaTel expectations. The words "expect," "will," "should," "would," "anticipate," "project," "outlook," "believe," "intend," and similar phrases as they relate to SigmaTel or future events are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of SigmaTel, but are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. A number of important factors could cause actual results to differ materially from those in the forward-looking statements, and there will be events in the future that SigmaTel is not able to accurately predict or control. These risks and uncertainties include, but are not limited to: SigmaTel's ability to effectively implement changes which will increase operational efficiencies, reduce costs as planned, and ultimately improve SigmaTel's financial results; SigmaTel's ability to succeed in its more narrowly-defined market emphasis and the ability of those markets to support SigmaTel's business objectives; SigmaTel's ability to gain continued market acceptance of its 3600 and 3700 families of products, and to achieve additional product wins with those products; and SigmaTel's ability to correctly identify and pursue new market segments and to successfully develop new products for those segments. For a more thorough discussion of the risks to which the forward-looking statements are subject, please refer to recent SigmaTel filings with the SEC, particularly the Form 10-Q that was filed on August 9, 2007.

Discussion of Non-GAAP Financial Measures: SigmaTel provides a non-GAAP measure of gross profit, net loss income and net loss income per share in its earnings release. The presentation of gross profit is intended to be a supplemental measure of performance and excludes a non-cash charge related to amortization of intangible assets from acquisitions. The presentation of net loss and net loss per share is intended to be a supplemental measure of performance and excludes: : (i) a non-cash charge related to impairment of goodwill and other long-lived assets; (ii) a non-cash charge related to amortization of intangible assets from acquisitions; (iii) a non-cash charge related to stock-based compensation; (iv) a charge related to the abandonment of leased facilities; (v) a charge related to accrual for severance payable to our former CEO; (vi) a gain on the sale of the PC Audio product line and a loss on the disposition of assets in conjunction with the lease abandonment; (vii) a non-cash charge related to a tax valuation allowance against our deferred tax asset; (viii) a non-cash benefit related to a release of a tax reserve; (ix) a non-cash benefit related to tax benefits of unwinding our IP migration strategy. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The non-GAAP financial measures included in the press release have been reconciled to the corresponding GAAP financial measures as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures.

SigmaTel is a registered trademark of SigmaTel, Inc. All other products and brand names as they appear in this release are trademarks or registered trademarks of their respective holders. All specifications may be changed without notice.
                            SIGMATEL, INC.
                (in thousands, except per share data)
                                  Three Months Ended    Year Ended
                                     December 31,      December 31,
                                  ------------------ -----------------
                                    2007      2006     2007     2006
                                  --------- -------- -------- --------
Gross profit as reported           $14,045  $13,822  $51,081  $64,679
   Amortization of intangible
    assets from acquisitions           342      783    1,707    3,133
                                  --------- --------  --------  --------
Non-GAAP  gross  profit                            $14,387    $14,605    $52,788    $67,812
                                                                    =========  ========  ========  ========
Non-GAAP  gross  profit  percentage            43.3%        38.9%        41.5%        42.6%
                                                                    ---------  --------  --------  --------

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