UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  January 27, 2005

 

PIXELWORKS, INC.

(Exact name of registrant as specified in its charter)

 

OREGON

 

000-30269

 

91-1761992

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(I.R.S. Employer
Identification No.)

 

8100 SW Nyberg Road

Tualatin, Oregon 97062

(503) 454-1750

(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

PIXELWORKS, INC. AND SUBSIDIARIES

 

Item 2.02.                      RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On January 27, 2005, Pixelworks, Inc. (the “Company”) issued a press release announcing preliminary financial results for the fourth quarter and year ended December 31, 2004.  The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

 

The press release issued January 27, 2005 is furnished herewith as Exhibit No. 99.1 to this Report, and shall not be deemed filed for purposes of Section 18 of the Exchange Act.

 

Item 9.01.                      FINANCIAL STATEMENTS AND EXHIBITS

 

(c)          Exhibits.

 

99.1   Press Release issued by Pixelworks, Inc. dated January 27, 2005.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

PIXELWORKS, INC.

 

(Registrant)

 

 

 

 

 

By

/s/ Jeffrey B. Bouchard

Date: January 27, 2005

 

Jeffrey B. Bouchard

 

 

Vice President, Finance and Chief Financial Officer

 

3


 

Exhibit 99.1

 

 

Financial News Release

For Immediate Release

 

Contact Information:

 

Investor Inquiries

 

Media Inquiries

 

 

Jeff Bouchard

 

Chris Bright

 

 

Pixelworks, Inc.

 

Pixelworks, Inc.

 

 

Tel: (503) 454-1771

 

Tel: (503) 454-1770

 

 

E-mail: jeffb@pixelworks.com

 

E-mail: cbright@pixelworks.com

 

 

Web site: www.pixelworks.com

 

 

 

Conference Call at 2 p.m. PST, January 27, 2005 – Pixelworks will host a conference call at 2 p.m. PST, January 27, 2005, which can be accessed at (913) 981-5520 and using pass code 6449709.  The conference call will also be available through a Web broadcast that can be accessed by visiting the Investor Relations section at www.pixelworks.com.  A replay of the conference call will be available through January 30, 2005 and can be accessed by calling (719) 457-0820 and using pass code 6449709.  A replay of the Web broadcast will be available through February 26, 2005.

 

 

Pixelworks Reports Fourth Quarter and

2004 Financial Results

 

2004 Highlights:

 

      Record revenue of $176.2 million increased 25% over $140.9 million in 2003, with the advanced television business leading the way with 102% revenue growth.

 

      Record GAAP net income of $21.8 million, or $0.45 per diluted share, improved from a GAAP net loss of ($530,000), or ($0.01) per share in 2003; record pro forma net income of $23.1 million, or $0.47 per diluted share, more than doubled from pro forma net income of $10.2 million, or $0.22 per diluted share, in 2003.

 

Fourth Quarter Highlights:

 

      Revenue of $38.5 million decreased 6% year-over-year; record advanced television revenue represented approximately 54% of total revenue, marking the first time that advanced televisions represented a majority of the company’s total revenue.

 

      GAAP net income was $4.0 million, or $0.08 per diluted share, pro forma* net income was $4.3 million, or $0.09 per diluted share.

 

—more—

 



 


*Pro forma gross profit, income before income taxes, and net income (loss), which differs from gross profit, income before income taxes, and net income (loss) in accordance with U.S. generally accepted accounting principles (GAAP), excludes merger-related and restructuring expenses, and non-cash expenses for amortization of purchased developed technology, in-process research and development expense, and stock-based compensation and amortization of assembled workforce.  A schedule reconciling these amounts for the three months ended December 31, 2004 and 2003, and the years ended December 31, 2004 and 2003 are included in this news release.  Pixelworks’ management believes the presentation of these non-GAAP financial measures provides useful information to investors regarding Pixelworks’ results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance. Pixelworks’ management also uses these non-GAAP financial measures internally to monitor performance of the business. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

 

Tualatin, Ore., January 27, 2005 — Pixelworks, Inc. (NASDAQ:PXLW), a leading provider of system-on-chip ICs for the advanced display industry, today announced financial results for the fourth quarter and year ended December 31, 2004.

 

Revenue for the fourth quarter of 2004 was $38.5 million, a 6 percent decrease from revenue of $40.8 million in the fourth quarter of 2003 and a 13 percent decrease from revenue of $44.0 million in the third quarter of 2004.  For the year, record revenue of $176.2 million increased 25 percent over revenue of $140.9 million in 2003.

 

Net income in accordance with generally accepted accounting principles (GAAP) in the fourth quarter of 2004 was $4.0 million, or $0.08 per diluted share, compared with net income of $2.9 million, or $0.06 per diluted share, in the fourth quarter of 2003 and net income of $5.4 million or $0.11 per diluted share, in the third quarter of 2004.  For the year, the Company reported record net income of $21.8 million, or $0.45 per diluted share, and achieved GAAP net income in each of the four quarters of the year for the first time in the Company’s history.  In 2003, the Company reported a net loss of ($530,000), or ($0.01) per share.

 

Pro forma net income in the fourth quarter of 2004 was $4.3 million, or $0.09 per diluted share, compared to pro forma net income of $5.2 million, or $0.11 per diluted share in the fourth quarter of 2003 and pro forma net income of $5.8 million, or $0.12 per diluted share, in the third quarter of 2004.  For the year, record pro forma net income increased to $23.1 million, or $0.47 per diluted share, an increase of 127 percent compared with pro forma net income of $10.2 million, or $0.22 per diluted share, in 2003.

 

The Company was required to adopt EITF 04-8, “The Effect of Contingently Convertible Instruments on Diluted Earnings Per Share” in the fourth quarter of 2004.  As a result, the Company must now include the effect of the conversion of the debentures into common stock in

 

2



 

the weighted average share and net income per share calculations using the if-converted method, as long as the effect is dilutive.  The effect was dilutive for the year ended December 31, 2004 on a GAAP and pro forma basis, therefore GAAP and pro forma weighted average shares outstanding and net income per share include the effect of conversion of the debentures.

 

“The strength of our advanced television business in 2004, led by sales of products for use in LCD televisions, propelled us to our eighth consecutive year of record revenues,” said Allen Alley, President, CEO and Chairman of Pixelworks.  “Our focus on relentless innovation resulted in our introduction of a broad range of new products at the Consumer Electronics Show in January.  We believe the outstanding product portfolio with which we enter 2005 brings our vision of supplying the entire signal path for advanced displays closer to reality.  As we expand our footprint along the signal path, we are helping each of our customers achieve superior picture quality and performance at price points that will accelerate mass consumer adoption of advanced televisions in the years ahead,” Alley concluded.

 

 

Business Outlook for First Quarter 2005

 

The following statements are based on current expectations.  These statements are forward-looking, subject to risks and uncertainties, and actual results may differ materially.  These statements do not include the potential impact of any investments outside the ordinary course of business, or mergers or acquisitions that may be completed after December 31, 2004.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The inclusion of any statement in this release does not constitute a suggestion by the Company or any other person that the events or circumstances described in such statements are material.  The Company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in this release will not be realized.

 

 

The Company estimates net income per share in the first quarter of 2005 will be $0.00 to $0.02 on a GAAP basis and $0.01 to $0.03 on a pro forma basis, based on the following estimates:

 

      Revenue of $37.0 to $40.0 million. Revenue is highly dependent on a number of factors including, but not limited to, general economic conditions, timely new product

 

3



 

introductions, the Company’s ability to secure additional design wins with customers, growth rates in the flat panel monitor, multimedia projector, and advanced television markets, levels of inventory at distributors and customers and increased supply of products from the Company’s third party foundries.

 

      GAAP gross profit margin of 43.0 to 45.0 percent. Pro forma gross profit margin, which excludes an estimated $132,000 in non-cash expense for the amortization of acquired developed technology, of 43.3 to 45.3 percent. Gross profit margin may be higher or lower than expected due to many factors including, but not limited to, competitive pricing actions, changes in estimated product costs, revenue levels and changes in estimated product mix.

 

      R&D and SG&A expenses, combined, of $16.5 to $17.0 million.

 

      Non-cash expenses for stock-based compensation and amortization of assembled workforce of approximately $150,000 (excluded for pro forma reporting purposes).

 

      Interest income of approximately $850,000.

 

      Effective tax rate of 24 to 28 percent of net income before income taxes on a pro forma basis.  Due to FASB Statement 123 (Revised) “Share Based Payment” becoming effective in 2005 as well as other factors, the effective tax rate on a GAAP basis cannot be reasonably estimated at this time.  Both the pro forma and GAAP effective tax rates are subject to significant variation on an ongoing basis due to changes in the level of income before taxes, research and development tax credits and other factors.

 

About Pixelworks, Inc.

 

Pixelworks, headquartered in Tualatin, Oregon, is a leading provider of system-on-chip ICs for the advanced display industry. Pixelworks’ solutions provide the intelligence for advanced televisions, multimedia projectors and flat panel monitors by processing and optimizing video and computer graphics signals to produce high quality images.  Many of the world’s leading manufacturers of consumer electronics and computer display products utilize our technology to enhance image quality and ease of use of their products.

 

For more information, please visit the Company’s Web site at www.pixelworks.com.

 

#####

 

Pixelworks is a trademark of Pixelworks, Inc. All other trademarks and registration marks are the property of their respective corporations.

 

4



 

Safe Harbor Statement

 

The statements by Allen Alley and the statements in the Business Outlook for First Quarter 2005 above are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company’s business. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict.  Actual results could vary materially from the description contained herein due to many factors including those described above and the following: changes in growth in the multimedia projector, advanced television, and flat panel monitor industries; changes in customer ordering patterns or lead times; competitive factors, such as rival chip architectures, introduction or traction by competing designs, or pricing pressures; insufficient, excess or obsolete inventory and variations in inventory valuation; lack of continued success in technological advances; shortages of manufacturing capacity from our third-party foundries; litigation involving intellectual property or other matters, non-acceptance of the combined technologies by leading manufacturers, and other risk factors listed from time to time in the Company’s Securities and Exchange Commission filings.  The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. If the Company does update one or more forward-looking statements, investors and others should not conclude that the Company will make additional updates with respect thereto or with respect to other forward-looking statements.

 

5



 

PIXELWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS)

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

38,462

 

$

40,841

 

$

176,211

 

$

140,921

 

Cost of revenue (1)

 

21,057

 

21,903

 

89,655

 

77,528

 

Gross profit

 

17,405

 

18,938

 

86,556

 

63,393

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

7,900

 

6,038

 

30,407

 

26,014

 

Selling, general and administrative

 

7,261

 

6,124

 

27,281

 

22,465

 

Merger related expenses

 

 

 

 

8,949

 

Restructuring

 

 

1,122

 

 

5,049

 

Stock-based compensation and amortization of assembled workforce

 

133

 

2,390

 

839

 

3,530

 

Total operating expenses

 

15,294

 

15,674

 

58,527

 

66,007

 

Income (loss) from operations

 

2,111

 

3,264

 

28,029

 

(2,614

)

 

 

 

 

 

 

 

 

 

 

Interest income

 

1,585

 

250

 

3,823

 

1,188

 

Interest expense

 

(657

)

 

(1,609

)

(11

)

Amortization of debt issuance costs

 

(178

)

 

(472

)

 

Interest income, net

 

750

 

250

 

1,742

 

1,177

 

Income (loss) before income taxes

 

2,861

 

3,514

 

29,771

 

(1,437

)

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) income taxes

 

(1,159

)

571

 

7,990

 

(907

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

4,020

 

$

2,943

 

$

21,781

 

$

(530

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

$

0.06

 

$

0.47

 

$

(0.01

)

Diluted

 

$

0.08

 

$

0.06

 

$

0.45

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

46,902

 

45,753

 

46,673

 

45,337

 

Diluted

 

48,220

 

47,433

 

52,062

 

45,337

 

 


(1)          Includes amortization of acquired developed technology of $132 for each of the three months ended December 31, 2004 and 2003, and $529 for each of the years ended December 31, 2004 and 2003.

 

6



 

PIXELWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRO FORMA BASIS)

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

38,462

 

$

40,841

 

$

176,211

 

$

140,921

 

Cost of revenue

 

20,925

 

21,771

 

89,126

 

76,999

 

Pro forma gross profit

 

17,537

 

19,070

 

87,085

 

63,922

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

7,900

 

6,038

 

30,407

 

26,014

 

Selling, general and administrative

 

7,261

 

6,124

 

27,281

 

22,465

 

Total operating expenses

 

15,161

 

12,162

 

57,688

 

48,479

 

Pro forma income from operations

 

2,376

 

6,908

 

29,397

 

15,443

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

1,585

 

250

 

3,823

 

1,188

 

Interest expense

 

(657

)

 

(1,609

)

(11

)

Amortization of debt issuance costs

 

(178

)

 

(472

)

 

Interest income, net

 

750

 

250

 

1,742

 

1,177

 

Pro forma income before income taxes

 

3,126

 

7,158

 

31,139

 

16,620

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) income taxes

 

(1,159

)

1,912

 

7,990

 

6,408

 

 

 

 

 

 

 

 

 

 

 

Pro forma net income

 

$

4,285

 

$

5,246

 

$

23,149

 

$

10,212

 

 

 

 

 

 

 

 

 

 

 

Pro forma net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

$

0.11

 

$

0.50

 

$

0.23

 

Diluted

 

$

0.09

 

$

0.11

 

$

0.47

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

46,902

 

45,753

 

46,673

 

45,337

 

Diluted

 

48,220

 

47,433

 

52,062

 

46,673

 

 

The above pro forma financial statements are presented for informational purposes only.  Our presentation of pro forma financial information excludes non-cash expenses resulting from acquisitions and the issuance of stock options, as well as unusual or infrequent expenses that are not directly attributable to our ongoing operations and are expected to be incurred over a limited period of time.  Because of these exclusions, our presentation is not in accordance with U.S. generally accepted accounting principles (GAAP). Additionally, our presentation of pro forma financial information may not be consistent with that of other companies.

 

We believe that the exclusion of non-cash charges may help the investor better understand our liquidity position and the use of tangible resources in our operations.  Additionally the exclusion of unusual or infrequent items provides an alternative measure which may help the investor evaluate our underlying operating performance.  Pro forma information is not, and should not be considered, a substitute for financial information prepared in accordance with GAAP.

 

7



 

PIXELWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF GAAP TO PRO FORMA BASIS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
December 31, 2004

 

Three Months Ended
December 31, 2003

 

 

 

GAAP

 

Adjustments

 

Pro forma

 

GAAP

 

Adjustments

 

Pro forma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

38,462

 

$

 

$

38,462

 

$

40,841

 

$

 

$

40,841

 

Cost of revenue

 

21,057

 

(132

)(1)

20,925

 

21,903

 

(132

)(1)

21,771

 

Gross profit

 

17,405

 

132

 

17,537

 

18,938

 

132

 

19,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

7,900

 

 

7,900

 

6,038

 

 

6,038

 

Selling, general and administrative

 

7,261

 

 

7,261

 

6,124

 

 

6,124

 

Restructuring

 

 

 

 

1,122

 

(1,122

)(2)

 

Stock-based compensation and amortization of assembled workforce

 

133

 

(133

)(3)

 

2,390

 

(2,390

)(3)

 

Total operating expenses

 

15,294

 

(133

)

15,161

 

15,674

 

(3,512

)

12,162

 

Income from operations

 

2,111

 

265

 

2,376

 

3,264

 

3,644

 

6,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

1,585

 

 

1,585

 

250

 

 

250

 

Interest expense

 

(657

)

 

(657

)

 

 

 

Amortization of debt issuance costs

 

(178

)

 

(178

)

 

 

 

Interest income, net

 

750

 

 

750

 

250

 

 

250

 

Income before income taxes

 

2,861

 

265

 

3,126

 

3,514

 

3,644

 

7,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) income taxes

 

(1,159

)

 

(1,159

)

571

 

1,341

(4)

1,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,020

 

$

265

 

$

4,285

 

$

2,943

 

$

2,303

 

$

5,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

 

$

0.09

 

$

0.06

 

 

 

$

0.11

 

Diluted

 

$

0.08

 

 

 

$

0.09

 

$

0.06

 

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

46,902

 

 

 

46,902

 

45,753

 

 

 

45,753

 

Diluted

 

48,220

 

 

 

48,220

 

47,433

 

 

 

47,433

 

 


(1)          Non-cash expenses for amortization of value assigned to an acquired company’s developed and other core technology at time of acquisition.

(2)          One-time expenses associated with corporate restructuring.

(3)          Non-cash expenses associated with certain stock options issued to employees prior to the Company’s Initial Public Offering and to employees of acquired companies.  Also includes non-cash expense associated with amortization of the intangible assembled workforce asset recorded in connection with the Jaldi Semiconductor asset acquisition.

(4)          Adjustment to record the tax effect of pro forma expense adjustments.

 

8



 

PIXELWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF GAAP TO PRO FORMA BASIS

(In thousands, except per share data)

(Unaudited)

 

 

 

Year Ended
December 31, 2004

 

Year Ended
December 31, 2003

 

 

 

GAAP

 

Adjustments

 

Pro forma

 

GAAP

 

Adjustments

 

Pro forma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

176,211

 

$

 

$

176,211

 

$

140,921

 

$

 

$

140,921

 

Cost of revenue

 

89,655

 

(529

)(1)

89,126

 

77,528

 

(529

)(1)

76,999

 

Gross profit

 

86,556

 

529

 

87,085

 

63,393

 

529

 

63,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

30,407

 

 

30,407

 

26,014

 

 

26,014

 

Selling, general and administrative

 

27,281

 

 

27,281

 

22,465

 

 

22,465

 

Merger related expenses

 

 

 

 

8,949

 

(8,949

)(2)

 

Restructuring

 

 

 

 

5,049

 

(5,049

)(3)

 

Stock-based compensation and amortization of assembled workforce

 

839

 

(839

)(4)

 

3,530

 

(3,530

)(4)

 

Total operating expenses

 

58,527

 

(839

)

57,688

 

66,007

 

(17,528

)

48,479

 

Income (loss) from operations

 

28,029

 

1,368

 

29,397

 

(2,614

)

18,057

 

15,443

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

3,823

 

 

3,823

 

1,188

 

 

1,188

 

Interest expense

 

(1,609

)

 

(1,609

)

(11

)

 

(11

)

Amortization of debt issuance costs

 

(472

)

 

(472

)

 

 

 

Interest income, net

 

1,742

 

 

1,742

 

1,177

 

 

1,177

 

Income (loss) before income taxes

 

29,771

 

1,368

 

31,139

 

(1,437

)

18,057

 

16,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) income taxes

 

7,990

 

 

7,990

 

(907

)

7,315

(5)

6,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

21,781

 

$

1,368

 

$

23,149

 

$

(530

)

$

10,742

 

$

10,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

 

 

$

0.50

 

$

(0.01

)

 

 

$

0.23

 

Diluted

 

$

0.45

 

 

 

$

0.47

 

$

(0.01

)

 

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

46,673

 

 

 

46,673

 

45,337

 

 

 

45,337

 

Diluted

 

52,062

 

 

 

52,062

 

45,337

 

 

 

46,673

 

 


(1)          Non-cash expenses for amortization of value assigned to an acquired company’s developed and other core technology at time of acquisition.

(2)          Expenses related to proposed (now terminated) merger with Genesis Microchip.

(3)          One-time expenses associated with corporate restructuring.

(4)          Non-cash expenses associated with certain stock options issued to employees prior to the Company’s Initial Public Offering and to employees of acquired companies.  Also includes non-cash expense associated with amortization of the intangible assembled workforce asset recorded in connection with the Jaldi Semiconductor asset acquisition.

(5)          Adjustment to record the tax effect of pro forma expense adjustments.

 

9



 

PIXELWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

December 31,
2004

 

December 31,
2003

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

105,085

 

$

75,165

 

Short-term marketable securities

 

87,713

 

5,656

 

Accounts receivable, net

 

14,605

 

8,468

 

Inventories, net

 

18,575

 

10,478

 

Prepaid expenses and other current assets

 

4,856

 

4,826

 

Total current assets

 

230,834

 

104,593

 

 

 

 

 

 

 

Long-term marketable securities

 

79,483

 

19,875

 

Property and equipment, net

 

12,444

 

6,561

 

Other assets, net

 

8,101

 

12,511

 

Debt issuance costs, net

 

4,483

 

 

Deferred tax assets, net

 

4,868

 

3,694

 

Acquired intangible assets, net

 

2,520

 

3,535

 

Goodwill

 

81,946

 

82,548

 

Total assets

 

$

424,679

 

$

233,317

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

5,946

 

$

4,330

 

Accrued liabilities and current portion of long term-liabilities

 

12,842

 

8,582

 

Income taxes payable

 

3,503

 

 

Total current liabilities

 

22,291

 

12,912

 

 

 

 

 

 

 

Long-term liabilities

 

365

 

100

 

Long-term debt

 

150,000

 

 

Total liabilities

 

172,656

 

13,012

 

 

 

 

 

 

 

Shareholders’ equity

 

252,023

 

220,305

 

Total liabilities and shareholders’ equity

 

$

424,679

 

$

233,317

 

 

10