PortalPlayer, Inc. Reports Q2 2005 Financial Results; Q2 Revenue Nearly Quadrupled Year-Over-Year.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif. -- PortalPlayer PortalPlayer (NASDAQ: PLAY) is a fabless semiconductor company that supplies system-on-a-chip semiconductors, firmware and software for personal media players. The company handles semiconductor design and firmware development, while subcontracting the actual semiconductor , Inc (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :PLAY), a leading supplier of advanced semiconductor, firmware A category of memory chips that hold their content without electrical power. Firmware includes flash, ROM, PROM, EPROM and EEPROM technologies. When holding program instructions, firmware can be thought of as "hard software." See flash memory, ROM, PROM, EPROM, EEPROM and FOTA. and software solutions for the MP3 personal media player market, today announced financial results for the second quarter of fiscal 2005, ended June June: see month. 30, 2005. Net revenue for the second quarter of 2005 was $44.6 million, compared with $44.5 million in the first quarter of 2005 and $12.0 million in the second quarter of 2004. Net income for the second quarter of 2005 was $6.3 million, or $0.25 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, based on 25.1 million weighted average shares outstanding. Net income in the first quarter of 2005 was $7.8 million, or $0.31 per diluted share, based on 25.0 million weighted average shares outstanding. Net loss in the second quarter of 2004 was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $880,000, or $0.64 per share, based on 1.4 million basic weighted average shares outstanding. PortalPlayer reports net income (loss) and basic and diluted net income (loss) per share in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and additionally on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation charges. In the second quarter of 2005, non-GAAP net income was $6.8 million, or $0.27 per diluted share. This compares with non-GAAP net income of $8.2 million, or $0.33 per diluted share, in the first quarter of 2005 and a net income of approximately $780,000, or $0.05 per diluted share, in the second quarter of 2004. "The second quarter of 2005 was another great quarter for PortalPlayer," said Gary Johnson Gary Johnson may refer to:
"During the quarter, we smoothly ramped production on our new PP5022 device and, as of today, we reached a significant milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. of shipping more than six million of the devices. We have completed the design win activity for our customers' exciting new models intended to ship in the second half of 2005. In addition, we worked with the supply chain to prepare our operations for significant demand in the second half of the year. During the second quarter, we also accelerated our investment in innovative wireless technologies that we believe will help fuel our growth in 2006 and beyond." "We are excited about the upcoming back-to-school and holiday season and believe we are very well positioned for significant growth in the second half of the year. We believe that our revenue for the third quarter of 2005, which is the quarter we expect to begin to recognize revenue from flash-based designs, could be in the range of $50 million to $60 million," said Mr. Johnson. Highlights --PortalPlayer quickly ramped production of its PP5022 device, which is based on the 0.13 micron micron: see micrometer. One micrometer, which is one millionth of a meter or approximately 1/25,000 of an inch. The tiny elements that make up a transistor on a chip are measured in micrometers and nanometers. See process technology. manufacturing process. With the strength and support of its world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. partners, United Microelectronic The miniaturization of electronic circuits. See chip. Corp. and LSI LSI: see integrated circuit. (Large Scale Integration) Between 3,000 and 100,000 transistors on a chip. See SSI, MSI, VLSI and ULSI. Logic, ramping production on the 0.13 micron process was fast and seamless See seamless integration. . The company achieved full volume production in about three months. By adding the 0.13 micron process to its existing 0.18 micron process, PortalPlayer further extends its lead over its competition. --During the second quarter, PortalPlayer successfully taped out Refers to the completion of the design of a chip. The next stage is to put it into production. The term comes from the early days when designs were transferred to the fabricator via magnetic tape. the next generation of its technology, in preparation for the 2006 product cycle. --The company believes that the high-capacity flash player market (one gigabyte One billion bytes. Also GB, Gbyte and G-byte. See giga and space/time. (unit) gigabyte - 2^30 = 1,073,741,824 bytes = 1024 megabytes. Roughly the amount of data required to encode a human gene sequence (including all the redundant codons). See prefix. or greater) could ramp faster than originally expected. Due to NAND flash See flash memory. price declines, PortalPlayer believes that market demand for high-capacity flash players has accelerated, and could now exceed 20 percent of the total flash player run rate some time before the end of 2005. --PortalPlayer recently acquired real estate in Hyderabad Hyderabad, former state and modern city, India Hyderabad (hī`dərəbăd'), former princely state, S central India. The former princedom of Hyderabad is now divided among the states of Karnataka, Maharashtra, and Andhra Pradesh. , India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , where it expects to complete the construction of a new building in the second half of 2006 to support its planned future growth. Current Financial Outlook for Third Quarter 2005 The following outlook statements are based upon current expectations. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results could differ materially. The company expects revenue to be in the range of $50 million to $60 million. GAAP net income per diluted share for the third quarter is expected to be in the range of $0.28 to $0.36, based on approximately 26 million weighted average shares outstanding. The effective tax rate for the second quarter is expected to be about 25 percent, which takes into consideration, among other factors, the company's net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. for income tax purposes. Non-GAAP net income per diluted share, which excludes approximately $520,000 of stock-based compensation charges, is expected to be in the range of $0.30 to $0.38. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are expected to be approximately $13.2 million. Conference Call The company will hold a conference call at 2:30 pm Pacific Time today, July July: see month. 25, 2005, to discuss the second quarter 2005 financial results. To participate, please dial (913) 981-5510 at approximately 2:20 pm PT. A live webcast of the conference call will be available via the investor relations Investor relations The process by which the corporation communicates with its investors. page of the company's website at www.portalplayer.com. Access the web site 15 minutes prior to the start of the call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A recording of the conference call will be available for one week, starting one hour after the completion of the call, until August 1, 2005. The phone number to access the recording is (719) 457-0820, and the passcode is 6446864. An archived webcast replay will be available on the web site for 12 months. About PortalPlayer PortalPlayer is a leading supplier of advanced semiconductor, firmware and software solutions for the MP3 personal media player market. These products empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems consumers to easily purchase, rent, manage, listen to and watch large amounts of digital music, photos and video content. PortalPlayer is headquartered in San Jose, Calif., with offices in Kirkland Kirkland, city (1990 pop. 40,052), King co., W Wash., a suburb of Seattle on Lake Washington; inc. 1905. The city produces semiconductors, transformers, prefabricated metal buildings, heating and navigation equipment, computer peripherals, motor vehicles, apparel, , Wash., and Hyderabad, India. For more information, visit www.portalplayer.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Except for the historical information contained herein, the statements in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements include, but are not limited to, statements as to our strategic roadmap, our design win activity for our customers' models intending to ship in the second half of 2005, our work with our supply chain to prepare our operations for significant demand in the second half of the year, our belief that our investment in wireless technologies will help fuel our growth in 2006 and beyond, our belief that we are very well positioned for significant growth in the second half of the year, our belief regarding our revenue for the third quarter of 2005 and our belief that we will begin to recognize revenue from flash-based designs in the third quarter of 2005, the impact of adding the 0.13 micron process on extending PortalPlayer's lead over its competition, the successful tapeout of the next generation of its technology in preparation for the 2006 product cycle, our belief that the high-capacity flash player market (one gigabyte or greater) could ramp faster than originally expected and future financial results, both GAAP and non-GAAP, including revenue, net income, operating expenses, tax rates, weighted average shares outstanding, and stock-based compensation expense. Words such as "intends," "expect," "believe," "anticipates," "going forward", "plans," "will", "prepare", "increases," "could" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed in these statements. These risks and uncertainties include, but are not limited to, the growth of the market for personal media players, cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. or reduction of orders, component shortages, successful development of new platforms and other products, market acceptance of our products and technologies, delays in product introductions, product defects, decreases in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. , impact of technological advances, our ability to compete and other risks detailed in our SEC filings, including our Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2005. These forward-looking statements speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . PortalPlayer disclaims any intent or obligation to update these forward-looking statements. PortalPlayer and the PortalPlayer logo are trademarks of PortalPlayer, Inc. All other trademarks or registered trademarks are the property of their respective owners.
PORTALPLAYER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenue $44,567 $12,035 $89,035 $22,231
Cost of revenue 25,402 6,915 50,693 13,503
-------- -------- -------- --------
Gross profit 19,165 5,120 38,342 8,728
Operating expenses:
Research and development 7,900 2,986 14,251 5,594
Selling, general and
administrative 3,476 1,345 6,408 2,791
Stock-based compensation 470 1,660 854 3,637
-------- -------- -------- --------
Total operating expenses 11,846 5,991 21,513 12,022
Operating income (loss) 7,319 (871) 16,829 (3,294)
Interest and other income
(expense), net 1,119 (9) 2,027 3
-------- -------- -------- --------
Income (loss) before income taxes 8,438 (880) 18,856 (3,291)
Provision for income taxes 2,105 - 4,714 -
-------- -------- -------- --------
Net income (loss) $6,333 $(880) $14,142 $(3,291)
======== ======== ======== ========
Basic net income (loss) per share $0.27 $(0.64) $0.61 $(4.32)
======== ======== ======== ========
Diluted net income (loss) per
share $0.25 $(0.64) $0.56 $(4.32)
======== ======== ======== ========
Shares used in computing basic
and non-GAAP basic net income
(loss) per share 23,258 1,368 23,203 762
======== ======== ======== ========
Shares used in computing
diluted net income (loss) per
share 25,103 1,368 25,068 762
======== ======== ======== ========
Shares used in computing non-GAAP
diluted net income per share 25,103 17,161 25,068 17,006
======== ======== ======== ========
Non-GAAP net income (1) $6,803 $780 $14,996 $346
Non-GAAP basic net income (loss)
per share (1) $0.29 $0.57 $0.65 $0.45
======== ======== ======== ========
Non-GAAP diluted net income (loss)
per share (1) $0.27 $0.05 $0.60 $0.02
======== ======== ======== ========
Reconciliation of GAAP Net Income
(Loss)to Non-GAAP Net Income (Loss)
-----------------------------------
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
GAAP net income (loss) $6,333 $(880) $14,142 $(3,291)
Stock-based compensation 470 1,660 854 3,637
-------- -------- -------- --------
Non-GAAP net income $6,803 $780 $14,996 $346
======== ======== ======== ========
(1) To supplement our consolidated financial statements presented
in accordance with GAAP, we have shown above a non-GAAP measure of net
income, which is adjusted from results based on GAAP to exclude
stock-based compensation. This non-GAAP measure is provided to enhance
the user's overall understanding of our historical financial
performance. Specifically, we believe the non-GAAP results provide
useful information to both management and investors by excluding
stock-based compensation expenses.
PORTALPLAYER, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
June 30, Dec. 31,
2005 2004
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $45,831 $58,892
Short-term investments 104,625 64,708
Accounts receivable, net 25,165 20,080
Inventory, net 1,050 1,762
Prepaid expenses and other current assets 3,379 1,872
--------- ---------
Total current assets 180,050 147,314
Property and equipment, net 1,930 661
Other assets 672 521
--------- ---------
Total assets $182,652 $148,496
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable $15,585 $1,290
Accrued liabilities 7,204 4,195
Deferred income 5,013 4,024
Deferred rent 15 55
Income taxes payable - 479
--------- ---------
Total current liabilities 27,817 10,043
Deferred rent, long-term 231 5
--------- ---------
Total liabilities 28,048 10,048
--------- ---------
Stockholders' equity:
Common stock 209,619 205,468
Deferred stock-based compensation (6,794) (4,799)
Accumulated other comprehensive loss (179) (37)
Accumulated deficit (48,042) (62,184)
--------- ---------
Total stockholders' equity 154,604 138,448
--------- ---------
Total liabilities and stockholders'
equity $182,652 $148,496
========= =========
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