For the quarter, the company reported net revenues of $118.6 million, which compares with $176.6 million in the prior sequential quarter and $31.9 million in the quarter ended Dec. 31, 2009. On a generally accepted accounting principles ("GAAP") basis, the company reported a net loss for the quarter of $53.8 million, or $0.31 per share. This compares with a net loss of $17.5 million, or $0.10 per share in the prior sequential quarter and a net loss of $23.4 million, or $0.34 per share, in the quarter ended Dec. 31, 2009.
Non-GAAP net loss for the quarter was $25.4 million, or $0.15 per share, which compares with a non-GAAP net loss of $0.0 million, or $0.00 per share, in the prior sequential quarter and a non-GAAP net loss of $15.6 million, or $0.22 per share, in the quarter ended Dec. 31, 2009. A detailed reconciliation between GAAP and non-GAAP net income (loss) is provided as a supplement to the attached financial statements.
Philippe Geyres, Trident's interim chief executive officer and board member, said, "The disappointing results for the quarter reflected the industry-wide inventory correction in LCD TV, which particularly impacted the mid-range and high-end of our product line, as well as softness in our legacy standard definition retail set-top box products and delayed customer ramps of certain new set-top box programs. These same factors are expected to negatively impact our revenues in the first quarter of 2011, which is seasonally our weakest period."
Mr. Geyres continued, "In the near term, we are focused on serving customers, securing designs for 2012 revenues, and continuing our integration activities to lower the breakeven point. At the same time, we are assessing how best to leverage Trident's technology assets and market presence for profitable growth. The first half of 2011 will be very challenging. We expect to ramp new products and customer programs in the second half and continue ongoing cost reductions, with the goal of positioning the company for cash flow positive operations in the second half of the year and greater success in 2012."
The company's outlook for any period is based on current expectations and is subject to various factors, including those set forth in the Forward-Looking Information statement below. Actual results may differ materially. For the quarter ending Mar. 31, 2011, the company offered the following guidance:
- Net revenues are expected to be in the range of $75 million to $85 million.
- Non-GAAP gross margins are expected to be in the range of 27% to 28%.
- Non-GAAP operating expenses are expected to be in the range of $50 million to $54 million, with research and development expenses in the range of $34 million to $37 million and selling, general and administrative expenses in the range of $16 million to $17 million.
- Non-GAAP operating loss is expected to be in the range of $27 million to $32 million.
- Provision for income taxes is expected to be approximately $1 million.
- Adjustments to GAAP net income are expected to be in the range of $20 million to $23 million, including cash restructuring charges in the range of $6 million to $8 million.
- Cash balance as of the end of the quarter is expected to be in the range of $55 million to $65 million.
Investor Conference Call
Date: Thursday, Feb. 3, 2011
Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)
Domestic Dial-In: 866-788-0547
International Dial-In: 857-350-1685
A replay of the conference call will be available for two weeks following the call and will be accessible by calling 888-286-8010 (domestic) or +1-617-801-6888 (international) using access code 98007998. This call is being webcast by Thomson/CCBN and can be accessed at Trident's web site at: http://www.tridentmicro.com. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents ( www.streetevents.com).
Use of Non-GAAP Financial Information
To supplement the consolidated financial results prepared under GAAP, Trident uses a non-GAAP conforming, or non-GAAP, measure of net income (loss) that is GAAP net income (loss) adjusted to exclude certain costs, expenses and gains. Non-GAAP net loss, non-GAAP gross margin and non-GAAP expenses give an indication of Trident's baseline performance before gains, losses or other charges that are considered by management to be outside the company's core operating results. In addition, these non-GAAP measures as a percentage of net revenues are used to identify key trends in performance and measure key results against objectives. These non-GAAP measures are among the primary indicators management uses as a basis for planning and forecasting future periods. These measures are not in accordance with, or an alternative for, GAAP and may be materially different from non-GAAP measures used by other companies. Trident computes non-GAAP net income (loss) by adjusting GAAP net income (loss) for acquisition-related expenses, stock-based compensation expense, expenses related to the stock option investigation and related matters, legal settlements, restructuring charges, expenses related to software license fees, amortization and impairment of intangible assets from acquisitions, impairment loss, backlog amortization, capital gains and losses and dividend income. A detailed reconciliation between net loss on a GAAP basis and non-GAAP net income (loss) is provided in an attached table.
This press release contains forward-looking statements, including statements regarding financial expectations for the fourth quarter of fiscal year 2010, expected restructuring activity, and our outlook for 2011. The forward-looking statements made above are subject to certain risks and uncertainties, and actual results could vary materially depending on a number of factors. These risks include, in particular, our ability to realize the benefits from our acquisition of product lines and IP from NXP, our ability to reduce expenses, the timing of new product introductions, the ability to obtain design wins among major OEMs for Trident's products, the availability of wafers from our suppliers, and competitive pressures, including pricing and competitors' new product introductions, the impact of the uncertain global macroeconomic environment, the increasingly competitive TV and Set Top Box semiconductor markets and our ability to retain key employees globally. Additional factors that may affect Trident's business are described in detail in Trident's filings with the Securities and Exchange Commission available at http://www.sec.gov.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Sunnyvale, California, is a leading force in the digital home entertainment market, delivering an extensive range of platform solutions that enhance the consumer experience in the Connected Home. As one of the top-three semiconductor providers to both the TV and set-top box markets, Trident's solutions can be found in the products of leading OEMs and channel partners worldwide. The company's extensive IP portfolio of more than 2,000 patents has been driving key innovations in image quality, 3D TV, low power consumption, and 45nm designs. For further information about Trident and its products, please consult the Company's web site: