Trident Microsystems Reports Results for First Quarter Ended Mar. 31, 2010

Trident Microsystems, Inc., with headquarters in Sunnyvale, California, is a leading force in the digital home entertainment market, delivering an extensive range of innovative multimedia semiconductor solutions for digital televisions and set-top boxes — at the heart of today's digital home. Trident has been making bold moves to expand its market, deepen and more fully leverage its Intellectual Property (IP) portfolio, and drive the evolution of the "connected home." Its acquisition of NXP Semiconductors' set-top box and television product lines in 2010 establishes Trident as one of the top three semiconductor providers to both the TV and set-top box markets. For further information about Trident and its products, please consult the Company's web site: http://www.tridentmicro.com.

NOTE: Trident is a trademark of Trident Microsystems, Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice.

TRID-IR

(Tables to Follow)

TRIDENT MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)










March 31,


December 31,

(In thousands)

2010


2009













ASSETS





Current assets





Cash and cash equivalents

$129,983


$147,995


Accounts receivable, net

84,553


4,582


Inventories

26,631


14,536


Note receivable from related party

10,126


-


Prepaid expenses and other current assets

33,945


13,962









Total current assets

285,238


181,075







Property and equipment, net

36,014


26,168

Intangible assets, net

127,180


5,635

Goodwill


7,851


7,851

Long-term note receivable from related party

20,348


-

Other assets

19,428


7,764









Total assets

$496,059


$228,493







LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities





Accounts payable

$  20,278


$  18,883


Accounts payable to related party

34,887


2,401


Accrued  expenses and other current liabilities

66,852


27,068


Income taxes payable

4,372


1,696









Total current liabilities

126,389


50,048

Long-term income taxes payable

21,597


22,262

Deferred income tax liabilities

94


94

Other long-term liabilities

4,870


-









Total liabilities

152,950


72,404







Stockholders' equity





Preferred stock

-


-


Common stock

175


71


Additional paid-in capital

428,621


237,827


Accumulated deficit

(85,687)


(81,809)









Total stockholders' equity

343,109


156,089









Total liabilities and stockholders' equity

$496,059


$228,493



TRIDENT MICROSYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)








Three Months Ended


March 31,


December 31,


March 31,

(In thousands, except per share data)

2010


2009


2009

Net revenues

$90,404


$31,918


$6,852

Cost of revenues

76,618


26,673


6,391

Gross profit

13,786


5,245


461

% of net revenues

15.2%


16.4%


6.7%

Research and development expenses

37,215


16,162


11,434

% of net revenues

41.2%


50.6%


166.9%

Selling, general and administrative expenses

20,136


11,143


3,626

% of net revenues

22.3%


34.9%


52.9%

Goodwill impairment



1,432

% of net revenues



20.9%

Restructuring charges

8,395


50


41

% of net revenues

9.3%


0.2%


0.6%

Operating loss

(51,960)


(22,110)


(16,072)

% of net revenues

(57.5)%


(69.3)%


(234.6)%

Loss on investment

(209)



Gain on acquisition

48,490



Interest and other income (expense), net

526


(561)


1,287

Loss before income taxes

(3,152)


(22,671)


(14,785)

% of net revenues

(3.5)%


(71.0)%


(215.8)%

Provision for (benefit from) income taxes

726


700


1,819

% of net revenues

0.8%


2.2%


26.5%

Net loss

($3,878)


($23,371)


($16,604)

% of net revenues

(4.3)%


(73.2)%


(242.3)%







Basic and diluted net loss per share

$  (0.03)


$  (0.34)


$  (0.27)

Shares used in basic and diluted per share computation

129,969


69,506


61,829



TRIDENT MICROSYSTEMS, INC.

NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)






Three Months Ended


March 31,


December 31,


March 31,

(In thousands, except per share data)

2010


2009


2009

Net revenues

$90,404


$31,918


$6,852

Cost of revenues

65,068


25,579


5,321

Gross profit

25,336


6,339


1,531

% of net revenues

28.0%


19.9%


22.3%

Research and development expenses

35,850


15,217


10,382

% of net revenues

39.7%


47.7%


151.5%

Selling, general and administrative expenses

15,117


5,437


5,004

% of net revenues

16.7%


17.0%


73.0%

Operating loss

(25,630)


(14,315)


(13,855)

% of net revenues

(28.4)%


(44.8)%


(202.2)%

Interest and other income (expense), net

508


(561)


1,280

Loss before income taxes

(25,122)


(14,876)


(12,575)

% of net revenues

(27.8)%


(46.6)%


(183.5)%

Provision for income taxes

726


700


1,819

% of net revenues

0.8%


2.2%


26.5%

Net loss

($25,848)


($15,576)


($14,394)


(28.6)%


(48.8)%


(210.1)%







Basic and diluted net loss per share

$  (0.20)


$  (0.22)


$  (0.23)

Shares used in basic and diluted per share computation

129,969


69,506


61,829



TRIDENT MICROSYSTEMS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)






Three Months Ended


March 31,


December 31,


March 31,

(In thousands, except per share data)

2010


2009


2009







GAAP gross profit

$  13,786


$    5,245


$       461

 Amortization of acquisition-related intangible assets (1)

10,216


974


628

 Stock-based compensation expense (2)

104


120


145

 Impairment of goodwill and intangible assets (3)

1,230


-


294

 Restructuring Charges (7)

-


-


3

Non-GAAP gross profit

$  25,336


$    6,339


$    1,531







GAAP Research and development expenses

$  37,215


$  16,162


$  11,434

 Amortization of acquisition-related intangible assets (1)

485


-


-

 Stock-based compensation expense (2)

880


945


1,340

 Software license fees (4)

-


-


(288)

Non-GAAP Research and development expenses

$  35,850


$  15,217


$  10,382







GAAP Selling, general and administrative expenses

$  20,136


$  11,143


$    5,058

 Amortization of acquisition-related intangible assets (1)

755


51


76

 Stock-based compensation expense (2)

(320)


1,146


1,318

 Impairment of goodwill and intangible assets (3)

-


-


1,735

 Stock options related professional fees (5)

226


(66)


(3,075)

 Acquisition-related expenses (6)

4,358


4,575


-

Non-GAAP Selling, general and administrative expenses

$  15,117


$    5,437


$    5,004







GAAP net loss

$   (3,878)


$ (23,371)


$ (16,604)

 Gross profit reconciliation

11,550


1,094


1,070

 Research and development expenses reconciliation

1,365


945


1,052

 Selling, general and administrative expenses reconciliation

5,019


5,706


54

 Restructuring Charges (7)

8,395


50


41

(Gain) loss on investment

209


-


(7)

(Gain) on acquisition (8)

(48,508)


-


-

Non-GAAP net loss

$ (25,848)


$ (15,576)


$ (14,394)













GAAP basic and diluted net loss per share

$     (0.03)


$     (0.34)


$     (0.27)

Non-GAAP basic and diluted net loss per share

$     (0.20)


$     (0.22)


$     (0.23)

Shares used in basic and diluted per share computation

129,969


69,506


61,829













(1) Amortization of acquisition-related intangible assets represents the amortization of identifiable intangible assets. Management deemed that these acquisition-related charges are not related to Trident's core operating performance and it is appropriate to exclude those charges from Trident's non-GAAP financial measures, as it enhances the ability of investors to compare Trident's period-over-period operating results.


(2) Stock-based compensation expense relates primarily to the equity awards such as stock options and restricted stock. This is non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Trident's control. Hence, management excludes this item from the non-GAAP financial measures.


(3) Charges for impairment of goodwill and intangible assets incurred as a result of their carrying value exceeding the fair value.  Management believes that these charges are not directly associated with the Company's core operating performance.


(4) Software license fees represent an adjustment for prior years' software usage.


(5) Stock options related professional fees are excluded from the non-GAAP net loss calculation.  Management believes that these  professional fees are not related to the Company's ongoing business and operating performance of Trident.


(6) Acquisition-related expenses represent external costs incurred in connection with our acquisition, which we generally would not have incurred in the normal course of business.


(7) Management believes that restructuring charges are not directly associated with the Company's core operating performance.


(8) Management believes that Gain on acquisition is not directly associated with the Company's core operating performance.







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