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Pixelworks Reports First Quarter 2016 Financial Results; Names Todd DeBonis Chief Executive Officer
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Previously announced restructuring expected to generate
For the first quarter of 2016, revenue was
On a GAAP basis, gross profit margin in the first quarter of 2016 was
32.2%, compared to 50.6% in the fourth quarter of 2015 and 48.4% in the
first quarter of 2015. First quarter 2016 GAAP operating expenses were
For the first quarter of 2016, the Company recorded a GAAP net loss of
On a non-GAAP basis, gross profit margin in the first quarter of 2016
was 48.0%, compared to 50.9% in the fourth quarter of 2015 and 48.8% in
the first quarter of 2015. First quarter 2016 gross margin was lower
compared to the prior periods due to a less favorable product mix and
reduced overhead coverage. First quarter 2016 operating expenses on a
non-GAAP basis were
For the first quarter of 2016, the Company recorded a non-GAAP net loss
of
“Consistent with the Company’s announcement of preliminary results on
Restructuring
On
Business Outlook for the Second Quarter of 2016
The Company’s expectations for the second quarter of 2016 include:
-
Revenue to be between
$11.5 million and $12.5 million ; - Gross profit margin of approximately 48% to 50% on a GAAP basis and non-GAAP basis; and
-
Operating expenses of
$8.5 million to $9.5 million on a GAAP basis and$7.5 million to $8.5 million on a non-GAAP basis.
Conference Call Information
About
For more information, please visit the Company’s Web site at www.pixelworks.com.
Note:
Non-GAAP Financial Measures
This earnings release makes reference to non-GAAP gross profit
margins, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net
loss per share, which excludes restructuring charges and stock-based
compensation expense, which are both required under GAAP. The press
release also reconciles GAAP net loss and adjusted EBITDA, which
Safe Harbor Statement
This release contains forward-looking statements, including, without
limitation, statements with respect to the Company’s growth
opportunities, product shipments, product demand, customer engagements,
and the Company’s potential and position for the future, statements with
respect to the Company’s restructuring plan, including the Company’s
expected cost savings, the achievement of cash flow break-even, and
future charges, and statements with respect to the business outlook for
the second quarter of 2016, including revenue, gross margin and
operating expenses, within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements may be identified by use of terms
such as “begin,” “continue,” “will,” “believe,” “expect” and similar
terms or the negative of such terms. All statements other than
statements of historical fact are forward-looking statements for
purposes of this release, including any projections of revenue or other
financial items or any statements regarding the plans and objectives of
management for future operations. Such statements are based on
management's current expectations, estimates and projections about the
Company's business. These statements are not guarantees of future
performance and involve numerous risks, uncertainties and assumptions
that are difficult to predict. Actual results could vary materially from
those contained in forward-looking statements due to many factors,
including, without limitation: our ability to deliver new products in a
timely fashion; our new product yield rates; changes in estimated
product costs; product mix; supply of products from third-party
foundries; failure or difficulty in achieving design wins; timely
customer transition to new product designs; competitive factors, such as
rival chip architectures, introduction or traction by competing designs,
or pricing pressures; risks related to licensing our intellectual
property; the success of our products in expanded markets; current
global economic challenges; levels of inventory at distributors and
customers; changes in the digital display and projection markets;
changes in customer ordering patterns or lead times; seasonality in the
consumer electronics market; our efforts to achieve profitability from
operations; insufficient, excess or obsolete inventory and variations in
inventory valuation; the outcome of any litigation related to our
intellectual property rights; our limited financial resources and our
ability to attract and retain key personnel; and risks related to our
restructuring plan, including whether the expected amount of the costs
associated with the restructuring program will differ from or exceed the
Company's forecasts and whether the Company will be able to realize the
full amount of estimated savings from the restructuring program or in
the timeframe expected. More information regarding potential factors
that could affect the Company's financial results and could cause actual
results to differ materially is included from time to time in the
Company's
The forward-looking statements contained in this release speak as of the date of this release, and we do not undertake any obligation to update any such statements, whether as a result of new information, future events or otherwise.
| PIXELWORKS, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||
| 2016 | 2015 | 2015 | |||||||||||||
| Revenue, net | $ | 11,167 | $ | 13,477 | $ | 14,392 | |||||||||
| Cost of revenue (1) | 7,575 | 6,663 | 7,425 | ||||||||||||
| Gross profit | 3,592 | 6,814 | 6,967 | ||||||||||||
| Operating expenses: | |||||||||||||||
| Research and development (2) | 5,675 | 6,076 | 6,318 | ||||||||||||
| Selling, general and administrative (3) | 3,865 | 3,648 | 3,887 | ||||||||||||
| Restructuring | 2,538 | — | — | ||||||||||||
| Total operating expenses | 12,078 | 9,724 | 10,205 | ||||||||||||
| Loss from operations | (8,486 | ) | (2,910 | ) | (3,238 | ) | |||||||||
| Interest expense and other, net | (99 | ) | (129 | ) | (107 | ) | |||||||||
| Loss before income taxes | (8,585 | ) | (3,039 | ) | (3,345 | ) | |||||||||
| Provision for income taxes | 57 | 128 | 19 | ||||||||||||
| Net loss | $ | (8,642 | ) | $ | (3,167 | ) | $ | (3,364 | ) | ||||||
| Net loss per share - basic and diluted | $ | (0.31 | ) | $ | (0.11 | ) | $ | (0.14 | ) | ||||||
| Weighted average shares outstanding - basic and diluted | 27,936 | 27,697 | 23,328 | ||||||||||||
| —————— | |||||||||||||||
| (1) Includes: | |||||||||||||||
| Restructuring | $ | 1,723 | $ | — | $ | — | |||||||||
| Stock-based compensation | 44 | 49 | 53 | ||||||||||||
| (2) Includes stock-based compensation | 429 | 485 | 489 | ||||||||||||
| (3) Includes stock-based compensation | (107 | ) | 397 | 536 | |||||||||||
| PIXELWORKS, INC. | |||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||
| 2016 | 2015 | 2015 | |||||||||||||
| Reconciliation of GAAP and non-GAAP gross profit | |||||||||||||||
| GAAP gross profit | $ | 3,592 | $ | 6,814 | $ | 6,967 | |||||||||
| Restructuring | 1,723 | — | — | ||||||||||||
| Stock-based compensation | 44 | 49 | 53 | ||||||||||||
| Total reconciling items included in cost of revenue | 1,767 | 49 | 53 | ||||||||||||
| Non-GAAP gross profit | $ | 5,359 | $ | 6,863 | $ | 7,020 | |||||||||
| Non-GAAP gross profit margin | 48.0 | % | 50.9 | % | 48.8 | % | |||||||||
| Reconciliation of GAAP and non-GAAP operating expenses | |||||||||||||||
| GAAP operating expenses | $ | 12,078 | $ | 9,724 | $ | 10,205 | |||||||||
| Reconciling item included in research and development: | |||||||||||||||
| Stock-based compensation | 429 | 485 | 489 | ||||||||||||
| Reconciling item included in selling, general and administrative: | |||||||||||||||
| Stock-based compensation | (107 | ) | 397 | 536 | |||||||||||
| Restructuring | 2,538 | — | — | ||||||||||||
| Total reconciling items included in operating expenses | 2,860 | 882 | 1,025 | ||||||||||||
| Non-GAAP operating expenses | $ | 9,218 | $ | 8,842 | $ | 9,180 | |||||||||
| Reconciliation of GAAP and non-GAAP net loss | |||||||||||||||
| GAAP net loss | $ | (8,642 | ) | $ | (3,167 | ) | $ | (3,364 | ) | ||||||
| Reconciling items included in cost of revenue | 1,767 | 49 | 53 | ||||||||||||
| Reconciling items included in operating expenses | 2,860 | 882 | 1,025 | ||||||||||||
| Tax effect of non-GAAP adjustments | (2 | ) | — | (20 | ) | ||||||||||
| Non-GAAP net loss | $ | (4,017 | ) | $ | (2,236 | ) | $ | (2,306 | ) | ||||||
| Non-GAAP net loss per share - basic and diluted | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.10 | ) | ||||||
| Non-GAAP weighted average shares outstanding - basic and diluted | 27,936 | 27,697 | 23,328 | ||||||||||||
| * Our non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share differs from GAAP gross profit, GAAP operating expenses, GAAP net loss and GAAP net loss per share due to the exclusion of restructuring charges and stock-based compensation expense. Pixelworks' management believes the presentation of non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share provides useful information to investors regarding Pixelworks' results of operations by allowing investors to better evaluate underlying cash flow dynamics. Pixelworks' management also uses each of these non-GAAP measures internally to better evaluate underlying cash flow dynamics. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, our GAAP financial measures. |
| PIXELWORKS, INC. | |||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * | |||||||||||||||
| (In thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||
| 2016 | 2015 | 2015 | |||||||||||||
| Reconciliation of GAAP net loss and adjusted EBITDA | |||||||||||||||
| GAAP net loss | $ | (8,642 | ) | $ | (3,167 | ) | $ | (3,364 | ) | ||||||
| Restructuring | 4,261 | — | — | ||||||||||||
| Stock-based compensation | 366 | 931 | 1,078 | ||||||||||||
| Tax effect of non-GAAP adjustments | (2 | ) | — | (20 | ) | ||||||||||
| Non-GAAP net loss | $ | (4,017 | ) | $ | (2,236 | ) | $ | (2,306 | ) | ||||||
| EBITDA adjustments: | |||||||||||||||
| Depreciation and amortization | $ | 990 | $ | 1,038 | $ | 1,098 | |||||||||
| Interest expense and other, net | 99 | 129 | 107 | ||||||||||||
| Non-GAAP provision for income taxes | 59 | 128 | 39 | ||||||||||||
| Adjusted EBITDA | $ | (2,869 | ) | $ | (941 | ) | $ | (1,062 | ) | ||||||
| * Adjusted EBITDA differs from GAAP net loss due to the exclusion of restructuring charges, stock-based compensation expense, interest expense and other, net, income tax provision and depreciation and amortization. Pixelworks' management believes the presentation of adjusted EBITDA provides useful information to investors regarding Pixelworks' results of operations by allowing investors to better evaluate underlying cash flow dynamics and core operating results and are used by Pixelworks' management for these purposes. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, our GAAP financial measures. |
| PIXELWORKS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
|
March 31, |
December 31, |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,935 | $ | 26,591 | ||||
| Accounts receivable, net | 5,694 | 5,988 | ||||||
| Inventories | 2,197 | 3,266 | ||||||
| Prepaid expenses and other current assets | 681 | 644 | ||||||
| Total current assets | 31,507 | 36,489 | ||||||
| Property and equipment, net | 4,320 | 6,543 | ||||||
| Other assets, net | 756 | 810 | ||||||
| Total assets | $ | 36,583 | $ | 43,842 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,179 | $ | 2,944 | ||||
| Accrued liabilities and current portion of long-term liabilities | 11,471 | 8,528 | ||||||
| Current portion of income taxes payable | 164 | 221 | ||||||
| Short-term line of credit | 3,000 | 3,000 | ||||||
| Total current liabilities | 15,814 | 14,693 | ||||||
| Long-term liabilities, net of current portion | 629 | 831 | ||||||
| Income taxes payable, net of current portion | 1,860 | 1,942 | ||||||
| Total liabilities | 18,303 | 17,466 | ||||||
| Shareholders’ equity | 18,280 | 26,376 | ||||||
| Total liabilities and shareholders’ equity | $ | 36,583 | $ | 43,842 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160428006779/en/
Source:
Investor Contact
Shelton Group
Brett Perry, +1-214-272-0070
bperry@sheltongroup.com
or
Company
Contact
Pixelworks, Inc.
Steven Moore, +1-408-200-9221
smoore@pixelworks.com