Trident Microsystems Reports Results for First Quarter of Fiscal Year 2010

SANTA CLARA, Calif., Oct. 26 /PRNewswire-FirstCall/ -- Trident Microsystems, Inc. (NASDAQ: TRID), a leader in high-performance semiconductor system solutions for the digital home, today announced results for its fiscal first quarter ended Sept. 30, 2009. For the fiscal first quarter, the company reported net revenues of $31.1 million, which compares with net revenues of $14.9 million in the prior sequential quarter and $34.8 million in the same quarter a year ago. The sequential increase is primarily attributable to the full quarter's impact of product lines acquired during the fiscal fourth quarter of 2009.

For the fiscal first quarter, the company reported a net loss of $17.2 million, or $0.25 per share, on a generally accepted accounting principles ("GAAP") basis. This compares with a net loss of $21.1 million, or $0.32 per share in the prior sequential quarter and a net loss of $18.0 million, or $0.29 per share, in the same quarter one year ago.

Non-GAAP Results

Non-GAAP net loss for the fiscal first quarter was $11.6 million, or $0.17 per share. This compares with a non-GAAP net loss of $15.7 million, or $0.24 per share, in the prior sequential quarter and a non-GAAP net loss of $3.3 million, or $0.05 per share, in the same quarter a year ago. A detailed reconciliation between GAAP and non-GAAP net loss is provided in a table following the non-GAAP consolidated statements of operations.

Tier-One DTV Design Win

The company also announced today that its SoC has been selected for 2010 production by one of the largest global manufacturers of LCD televisions. Trident's product will be used in the customer's value product line serving the North American and European markets. Production shipments are expected to commence as early as December 2009.

Sylvia Summers, Trident's chief executive officer and president, said, "Over the past several months, we have dramatically transformed Trident. In May, our acquisition of key product lines and IP from Micronas significantly strengthened our SoC capabilities and enabled us to win the large, strategic OEM socket we are announcing today. Earlier this month, we announced the proposed acquisition of NXP's television and set-top box product lines, which will dramatically increase our scale and diversify our revenues, positioning Trident to leverage its R&D investment and IP across multiple served markets and to gain share in the fast-growing markets that serve the digital home. We believe that these transactions will accelerate our return to breakeven, which we now believe is achievable as early as the end of calendar 2010."

Outlook

Trident's outlook for the fiscal second quarter ending Dec. 31, 2009, described below, 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.

    --  Net revenues are expected to be in the range of $31 million to $34
        million.
    --  Non-GAAP gross margins are expected to be in the range of 27% to 30%.
    --  Non-GAAP operating expenses are expected to be in the range of $21
        million to $22 million, with research and development expenses in the
        range of $15 million to $16 million and selling, general and
        administrative expenses of approximately $6 million.
    --  Non-GAAP operating loss is expected to be in the range of $11 million to
        $14 million.
    --  Provision for income taxes is expected to be approximately $0.5 million.
    --  The company expects to end the quarter with a cash balance of
        approximately $135 million to $140 million.   This reflects the impact
        of expected operating losses as well as a one-time tax withholding
        payment of $12 million related to liquidation of a foreign subsidiary.

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 loss that is GAAP net loss adjusted to exclude certain costs, expenses and gains. Non-GAAP net loss gives 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, non-GAAP net loss is 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 loss by adjusting GAAP net loss for acquisition-related expenses, stock-based compensation expense, expenses related to the stock option investigation and related matters, restructuring charges, expenses related to software license fees adjustment, 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 loss is provided in a table following non-GAAP Consolidated Statements of Operations.

Investor Conference Call

Management will host a conference call at 2:00 pm Pacific Time today. The domestic dial in is 866-383-8009; the international dial-in is 617-597-5342. Passcode: 84683680. A replay of the conference call will be available for two weeks, beginning on Oct. 27, 2009 and will be accessible by calling 888-286-8010 (domestic) or 617-801-6888 (international) using access code 15024244. This call is being webcast by Thomson/CCBN and can be accessed at Trident's web site at: www.tridentmicro.com The webcast also is being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com; institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com).

Forward-Looking Information

This press release contains forward-looking statements, including statements regarding financial expectations for the second quarter of fiscal year 2010, expected shipments to a large global manufacturer of LCD televisions, as well as our ability to gain market share as a result of our acquisition. 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 close and realize the benefits from our acquisition of product lines from NXP, our ability to build upon our core strengths, including our technology, engineering team, competitive cost structure and strong balance sheet, the timing of product introductions, the ability to obtain design wins among major OEMs for Trident's products, and competitive pressures, including pricing and competitors' new product introductions, the impact of the uncertain global macroeconomic environment, the increasingly competitive DTV market and our ability to retain key employees. 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.

Important Additional Information

This communication is being made in respect of a proposed transaction involving Trident Microsystems, Inc. and NXP B.V. In connection with the proposed acquisition of the television systems and set top box lines by Trident from NXP, Trident plans to file with the SEC a Proxy Statement. The definitive Proxy Statement will be mailed to the stockholders of Trident after clearance with the SEC. Trident will also file with the SEC from time to time other documents relating to the proposed combination. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE PROXY STATEMENT WHEN IT IS FILED WITH THE SEC, AND OTHER DOCUMENTS FILED BY TRIDENT WITH THE SEC RELATING TO THE PROPOSED ACQUISITION WHEN THEY ARE FILED, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION.

Investors and security holders may obtain a copy of the proxy statement (when available) and other documents filed with the SEC by Trident free of charge at the SEC's website at www.sec.gov. Investors and security holders may also obtain copies of the proxy statement (when available) and other documents filed with the SEC by Trident free of charge from Trident by directing a request to Trident, Attention: Investor Relations, (408) 764-8808, or by going to Trident's website at www.tridentmicro.com.

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