For the quarter, the company reported net revenues of $90.4 million, which compares with $31.9 million in the prior sequential quarter and $6.9 million in the quarter ended Mar. 31, 2009. The company reported a net loss for the quarter of $3.9 million, or $0.03 per share, on a generally accepted accounting principles ("GAAP") basis. Net loss for the quarter includes a net benefit of $33.5 million related to the NXP transaction, consisting of negative goodwill of $48.5 million offset by $15.0 million of intangibles amortization and acquisition-related expenses. Net loss for the quarter also includes $8.4 million of restructuring charges related to previously announced integration plans. The net loss for the first quarter of 2010 compares with a net loss of $23.4 million, or $0.34 per share in the prior sequential quarter and a net loss of $16.6 million, or $0.27 per share, in the quarter ended Mar. 31, 2009.
Non-GAAP Results
Non-GAAP net loss for the quarter was $25.8 million, or $0.20 per share, which compares with a non-GAAP net loss of $15.6 million, or $0.22 per share, in the prior sequential quarter and a non-GAAP net loss of $14.4 million, or $0.23 per share, in the quarter ended Mar. 31, 2009. A detailed reconciliation between GAAP and non-GAAP net loss is provided in a table following the non-GAAP consolidated statements of operations.
Sylvia Summers, Trident's chief executive officer, said, "We accomplished the first phase of a significant integration in the first quarter, successfully closing the NXP transaction and completing approximately eight weeks of combined operations. We are on track to deliver a June quarter in line with earlier guidance and to achieve non-GAAP operating breakeven as early as the end of the year."
Outlook
For the quarter ending June 30, 2010 (the first full quarter reflecting the contribution of the acquired NXP product lines) Trident is providing the following outlook. 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.
- Quarter ending June 30, 2010:
- Net revenues are expected to be in the range of $150 million to $165 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 $67 million to $70 million, with research and development expenses in the range of $47 million to $49 million and selling, general and administrative expenses of approximately $20 million to $21 million.
- Non-GAAP operating loss is expected to be in the range of $23 million to $26 million.
- Provision for income taxes is expected to be approximately $1 million.
- Restructuring charges are expected to be in the range of $3 million to $6 million. These charges are not included in the guidance for non-GAAP operating loss.
- Cash as of the end of the quarter is expected to be in the range of $95 million to $105 million.
Investor Conference Call | |
Date: Wednesday, May 5, 2010 | |
Time: 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) | |
Domestic Dial-In: 866-761-0748 | |
International Dial-In: 617-614-2706 | |
Passcode: 74564440 | |
A replay of the conference call will be available for two weeks, beginning on May 5, 2010 and will be accessible by calling 888-286-8010 (domestic) or +1-617-801-6888 (international) using access code 27096394. 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 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.
Forward-Looking Information
This press release contains forward-looking statements, including statements regarding financial expectations for the second quarter of fiscal year 2010, expected restructuring activity, and our ability to breakeven by the end of 2010. 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 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, 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 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.
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 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. | ||||||
SOURCE Trident Microsystems, Inc.
| Contact: |
| Trident Microsystems, Inc.
John Swenson, Director, Corporate Finance & Investor Relations of Trident Microsystems, Inc. Phone: +1-408-962-8252 Email Contact Web: http://www.tridentmicro.com |