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Pixelworks Reports First Quarter 2017 Financial Results
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First Quarter Highlights
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Revenue of
$22.7 million , including$9.2 million related to End of Life (EOL) products -
Achieved GAAP net income of
$0.09 per diluted share, non-GAAP net income of$0.12 per diluted share -
Recorded adjusted EBITDA of
$5.0 million , and net cash balance of$19.6 million
For the first quarter 2017, revenue was
On a GAAP basis, gross profit margin in the first quarter of 2017 was
54.6%, compared to 53.2% in the fourth quarter of 2016 and 32.2% in the
first quarter of 2016. First quarter 2017 GAAP operating expenses were
For the first quarter of 2017, GAAP net income was
On a non-GAAP basis, first quarter 2017 gross profit margin was 54.8%,
compared to 53.6% in the fourth quarter of 2016 and 48.0% in the first
quarter of 2016. First quarter 2017 gross profit margin increased
compared to the prior periods due to a decrease in direct material cost
as a percentage of revenue related to a more favorable mix of products
sold. First quarter 2017 operating expenses on a non-GAAP basis were
For the first quarter of 2017, the Company recorded non-GAAP net income
of
President and CEO of
Business Outlook for the Second Quarter of 2017
The Company’s expectations for the second quarter of 2017 include:
-
Revenue to be between
$20 million and $21 million , including approximately$5.0 million of revenue related to End of Life (EOL) products; - Gross profit margin of approximately 53% to 55% on both 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.
The difference in estimated operating expenses on a GAAP basis, versus a
non-GAAP basis, is stock-based compensation expense, of which a range
between
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 income (loss) and
non-GAAP net income (loss) per share, which excludes restructuring
charges and stock-based compensation expense, which are required under
GAAP. The press release also reconciles GAAP net income (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 made
by Mr. DeBonis about the Company’s digital projection and mobile
businesses, and statements with respect to the business outlook for the
second quarter and the full year of 2017, including revenue, gross
margin, operating expenses and profitability, 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, | |||||||||||||
| 2017 | 2016 | 2016 | |||||||||||||
| Revenue, net | $ | 22,710 | $ | 15,987 | $ | 11,167 | |||||||||
| Cost of revenue (1) | 10,318 | 7,483 | 7,575 | ||||||||||||
| Gross profit | 12,392 | 8,504 | 3,592 | ||||||||||||
| Operating expenses: | |||||||||||||||
| Research and development (2) | 4,906 | 4,415 | 5,675 | ||||||||||||
| Selling, general and administrative (3) | 4,139 | 3,653 | 3,865 | ||||||||||||
| Restructuring | — | — | 2,538 | ||||||||||||
| Total operating expenses | 9,045 | 8,068 | 12,078 | ||||||||||||
| Income (loss) from operations | 3,347 | 436 | (8,486 | ) | |||||||||||
| Interest expense and other, net | (93 | ) | (101 | ) | (99 | ) | |||||||||
| Income (loss) before income taxes | 3,254 | 335 | (8,585 | ) | |||||||||||
| Provision (benefit) for income taxes | 433 | (2 | ) | 57 | |||||||||||
| Net income (loss) | $ | 2,821 | $ | 337 | $ | (8,642 | ) | ||||||||
| Net income (loss) per share: | |||||||||||||||
| Basic | $ | 0.10 | $ | 0.01 | $ | (0.31 | ) | ||||||||
| Diluted | $ | 0.09 | $ | 0.01 | $ | (0.31 | ) | ||||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 29,283 | 28,684 | 27,936 | ||||||||||||
| Diluted | 31,146 | 30,244 | 27,936 | ||||||||||||
|
—————— |
|||||||||||||||
| (1) Includes: | |||||||||||||||
| Stock-based compensation | $ | 53 | $ | 51 | $ | 44 | |||||||||
| Restructuring | — | 7 | 1,723 | ||||||||||||
| (2) Includes stock-based compensation | 314 | 378 | 429 | ||||||||||||
| (3) Includes stock-based compensation | 422 | 377 | (107 | ) | |||||||||||
| 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, | |||||||||||||
| 2017 | 2016 | 2016 | |||||||||||||
| Reconciliation of GAAP and non-GAAP gross profit | |||||||||||||||
| GAAP gross profit | $ | 12,392 | $ | 8,504 | $ | 3,592 | |||||||||
| Stock-based compensation | 53 | 51 | 44 | ||||||||||||
| Restructuring | — | 7 | 1,723 | ||||||||||||
| Total reconciling items included in cost of revenue | 53 | 58 | 1,767 | ||||||||||||
| Non-GAAP gross profit | $ | 12,445 | $ | 8,562 | $ | 5,359 | |||||||||
| Non-GAAP gross profit margin | 54.8 | % | 53.6 | % | 48.0 | % | |||||||||
| Reconciliation of GAAP and non-GAAP operating expenses | |||||||||||||||
| GAAP operating expenses | $ | 9,045 | $ | 8,068 | $ | 12,078 | |||||||||
| Reconciling item included in research and development: | |||||||||||||||
| Stock-based compensation | 314 | 378 | 429 | ||||||||||||
| Reconciling item included in selling, general and administrative: | |||||||||||||||
| Stock-based compensation | 422 | 377 | (107 | ) | |||||||||||
| Restructuring | — | — | 2,538 | ||||||||||||
| Total reconciling items included in operating expenses | 736 | 755 | 2,860 | ||||||||||||
| Non-GAAP operating expenses | $ | 8,309 | $ | 7,313 | $ | 9,218 | |||||||||
| Reconciliation of GAAP and non-GAAP net income (loss) | |||||||||||||||
| GAAP net income (loss) | $ | 2,821 | $ | 337 | $ | (8,642 | ) | ||||||||
| Reconciling items included in cost of revenue | 53 | 58 | 1,767 | ||||||||||||
| Reconciling items included in operating expenses | 736 | 755 | 2,860 | ||||||||||||
| Tax effect of non-GAAP adjustments | 155 | 8 | (2 | ) | |||||||||||
| Non-GAAP net income (loss) | $ | 3,765 | $ | 1,158 | $ | (4,017 | ) | ||||||||
| Non-GAAP net income (loss) per share: | |||||||||||||||
| Basic | $ | 0.13 | $ | 0.04 | $ | (0.14 | ) | ||||||||
| Diluted | $ | 0.12 | $ | 0.04 | $ | (0.14 | ) | ||||||||
| Non-GAAP weighted average shares outstanding: | |||||||||||||||
| Basic | 29,283 | 28,684 | 27,936 | ||||||||||||
| Diluted | 31,146 | 30,244 | 27,936 | ||||||||||||
* Our non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP
operating expenses, non-GAAP net income (loss) and non-GAAP net income
(loss) per share differs from GAAP gross profit, GAAP operating
expenses, GAAP net income (loss) and GAAP net income (loss) per share
due to the exclusion of restructuring expenses and stock-based
compensation expense.
| PIXELWORKS, INC. | ||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * | ||||||||||||||
| (In thousands) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| 2017 | 2016 | 2016 | ||||||||||||
| Reconciliation of GAAP net income (loss) and adjusted EBITDA | ||||||||||||||
| GAAP net income (loss) | $ | 2,821 | $ | 337 | $ | (8,642 | ) | |||||||
| Stock-based compensation | 789 | 806 | 366 | |||||||||||
| Restructuring | — | 7 | 4,261 | |||||||||||
| Tax effect of non-GAAP adjustments | 155 | 8 | (2 | ) | ||||||||||
| Non-GAAP net income (loss) | $ | 3,765 | $ | 1,158 | $ | (4,017 | ) | |||||||
| EBITDA adjustments: | ||||||||||||||
| Depreciation and amortization | $ | 839 | $ | 828 | $ | 990 | ||||||||
| Interest expense and other, net | 93 | 101 | 99 | |||||||||||
| Non-GAAP provision (benefit) for income taxes | 278 | (10 | ) | 59 | ||||||||||
| Adjusted EBITDA | $ | 4,975 | $ | 2,077 | $ | (2,869 | ) | |||||||
* Adjusted EBITDA differs from GAAP net income (loss) due to the
exclusion of restructuring expenses, stock-based compensation expense,
interest expense and other, net, income tax provision (benefit) and
depreciation and amortization.
| PIXELWORKS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 19,640 | $ | 19,622 | ||||
| Accounts receivable, net | 9,608 | 3,118 | ||||||
| Inventories | 2,478 | 2,803 | ||||||
| Prepaid expenses and other current assets | 5,258 | 736 | ||||||
| Total current assets | 36,984 | 26,279 | ||||||
| Property and equipment, net | 5,528 | 3,793 | ||||||
| Other assets, net | 760 | 785 | ||||||
| Total assets | $ | 43,272 | $ | 30,857 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,225 | $ | 1,734 | ||||
| Accrued liabilities and current portion of long-term liabilities | 14,187 | 7,860 | ||||||
| Current portion of income taxes payable | 460 | 140 | ||||||
| Total current liabilities | 15,872 | 9,734 | ||||||
| Long-term liabilities, net of current portion | 1,240 | 194 | ||||||
| Income taxes payable, net of current portion | 1,844 | 1,880 | ||||||
| Total liabilities | 18,956 | 11,808 | ||||||
| Shareholders’ equity | 24,316 | 19,049 | ||||||
| Total liabilities and shareholders’ equity | $ | 43,272 | $ | 30,857 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427006510/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