Sigma Designs, Inc. Reports Second Quarter Results.MILPITAS, Calif. -- Sigma Designs(R), Inc. (Nasdaq:SIGM), a leader in digital media processors for consumer appliances, announced results for its second fiscal quarter ended July 31, 2005. Net revenues for the second quarter were $7,961,000, up 25% from $6,375,000 for the previous quarter and down 2% from $8,088,000 reported for the same period last year. Sigma reported a net profit of $163,000 or $0.00 per basic and 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 in the second quarter. This compares to a net loss of $717,000, or $0.03 per basic and diluted share, for the previous quarter, and net profit of $1,169,000 or $0.06 per basic share and $0.05 per diluted share during the same period one year ago. The increase in revenue is primarily attributable to increased sales of IP video applications and higher development contract revenues. "We are pleased to report a substantial increase in revenue this quarter, with many accounts showing steady demand for our chipsets. Our design activity is at an all-time high with the majority of our efforts placed on top-tier accounts across multiple segments. Our heaviest focus remains on IPTV (Internet Protocol TV) Also called "TV over IP," IPTV delivers scheduled TV programs and video-on-demand (VOD) via the IP protocol and digital streaming techniques used to watch video on the Internet. set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. opportunities, where we enjoy a leadership position in both technology and market share. The announcement of our new SMP (Symmetric MultiProcessing) A multiprocessing architecture in which multiple CPUs, residing in one cabinet, share the same memory. SMP systems provide scalability. As business increases, additional CPUs can be added to absorb the increased transaction volume. 8634 sampling has further demonstrated our technological superiority and galvanized gal·va·nize tr.v. gal·va·nized, gal·va·niz·ing, gal·va·niz·es 1. To stimulate or shock with an electric current. 2. our position at multiple accounts. Looking forward, we see meaningful top-line growth potential starting in our fourth quarter, and moving into our next fiscal year," stated Thinh Tran, chairman and chief executive officer, Sigma Designs. Recent business developments include: --Began sampling the new SMP8634 media processor, designed for the latest Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. Television (IPTV) set-top boxes, and high-definition DVD See high-def DVD formats and HD DVD. players. The SMP8634 represents a milestone for the media processor industry, providing the first system-on-chip processor that not only decodes H.264 (AVC (1) (Advanced Video Coding) The video compression techniques used in the H.264 standard, jointly developed by ISO and the ITU-T. See H.264. (2) (Audio Visual C ), VC-1 and MPEG-2, but also supports multi-stream decoding de·code tr.v. de·cod·ed, de·cod·ing, de·codes 1. To convert from code into plain text. 2. To convert from a scrambled electronic signal into an interpretable one. 3. of any format, up to the equivalent of two simultaneous high-definition streams, along with full-screen graphics. --Announced that TISNet, a subsidiary of Tatung Company Tatung Company, also known as Tatung, is a multinational corporation established in 1918 and headquartered in Taipei, Taiwan. Tatung also maintains a regional headquarters in Long Beach, California for the U.S. market. , currently responsible for Tatung Company's worldwide DSTB DSTB Digital Set Top Box DSTB Division Special Troops Battalion DSTB Decision Support Toolbox (USMC) DSTB Direct Support Tactical Broadcast , NPVR NPVR Network-Based Personal Video Recording NPVR Network Personal Video Recording , digital home product sales, and software development and technical support, launched its set-top box (STB See set-top box. STB - set-top box ), the STB4000C, based on Sigma Designs' EM8620 and EM8622 media processors. The conference call relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc second quarter results will take place following this announcement at 5:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, August 30. The dial-in number is 800-901-5231 (international callers dial 617-786-2961) and the passcode is 53172610. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com/investors/overview or over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call by dialing into 1-888-286-8010 (international callers dial 617-801-6888) and use passcode 44654396. The audio replay will be available for one week after the call. For further information, please see the link on our website at www.sigmadesigns.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 This press release contains 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 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expected operating performance and business prospects as we move into next year. Actual results may vary materially due to a number of factors including, but not limited to, general economic conditions, including continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of the current economic conditions specific to the semiconductor industry, the rate of growth of the set-top box market in general, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our REALmagic MPEG (Moving Pictures Experts Group) An ISO/ITU standard for compressing digital video. Pronounced "em-peg," it is the universal standard for digital terrestrial, cable and satellite TV, DVDs and digital video recorders (DVRs). silicon to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes. Other risk factors are detailed from time to time in our SEC reports, including the report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January 31, 2005 and the report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended April 30, 2005. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. About Sigma Designs, Inc. Sigma Designs (Nasdaq:SIGM) specializes in silicon-based media processors for IPTV set-top boxes, digital media receivers, high definition DVD players A stand-alone device that plays DVDs. It contains a DVD drive and the electronics to decode the digital video. The device may play only manufactured DVDs, or it may be able to play DVD-R, DVD-RW and DVD+RW discs. DVD players are cabled to a TV or home theater system for display. , HDTV (High Definition TV) A set of digital television (DTV) standards that offer the highest resolution and sharpest picture. Although some HDTV sets are available in standard (rather square) screen sizes, the overwhelming majority of sets are wide screen, which eliminates , and portable media players. The company's award-winning REALmagic(R) Video Streaming See streaming video and video stream. Technology is used in a variety of consumer applications providing highly integrated solutions for high-quality decoding of H.264, WMV (Windows Media Video) A family of digital video compression technologies from Microsoft based on MPEG-4. Version 9 of the WMV codec was released to the SMPTE organization and became the SMPTE 421M standard, otherwise known as VC-1 (see VC-1). 9, MPEG-4, MPEG-2 and MPEG-1. Headquartered in Milpitas, Calif., the company also has sales offices in China, Europe, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Japan, Korea and Taiwan. For more information, please visit the company's web site at www.sigmadesigns.com/. REALmagic and Sigma Designs are registered trademarks of Sigma Designs. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.
Following are comparative, unaudited highlights of the second quarter
and first half of fiscal 2006 and 2005:
Quarter ended July 31, 2005 2004
----------------------------------------- ------------ -------------
Net revenues $ 7,961,000 $ 8,088,000
Net income $ 163,000 $ 1,169,000
Basic net income per share $ - $ 0.06
Basic weighted average shares 21,286,000 20,750,000
Diluted net income per share $ - $ 0.05
Diluted weighted average shares 23,948,000 23,135,000
Six months ended July 31, 2005 2004
----------------------------------------- ------------ -------------
Net revenues $ 14,336,000 $ 15,872,000
Net income (loss) $ (554,000) $ 1,332,000
Basic net income (loss) per share $ (0.03) $ 0.06
Basic weighted average shares 21,237,000 20,712,000
Diluted net income (loss) per share $ (0.03) $ 0.06
Diluted weighted average shares 21,237,000 23,230,000
SIGMA DESIGNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 31, January 31,
2005 2005(1)
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 11,288 $ 10,250
Short-term investments 7,570 8,529
Accounts receivable - net 5,457 6,417
Notes receivable - related party 500 -
Inventories 3,279 3,675
Prepaid expenses and other 603 764
----------- -----------
Total current assets 28,697 29,635
Equipment and leasehold improvements, net 1,776 1,756
Long-term investments 3,313 3,313
Other assets 168 233
----------- -----------
Total $ 33,954 $ 34,937
----------- -----------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable 1,968 3,540
Accrued liabilities and other 1,943 2,097
Current portion of bank lines of credit 179 -
----------- -----------
Total current liabilities 4,090 5,637
Bank line of credit 343 -
Other - long term liabilities 148 188
Shareholders' equity:
Common stock 89,034 88,207
Accumulated other comprehensive income 16 28
Accumulated deficit (59,677) (59,123)
----------- -----------
Total shareholders' equity 29,373 29,112
----------- -----------
Total $ 33,954 $ 34,937
----------- -----------
(1)Derived from audited balance sheet included in the Company's annual
report on Form 10-K for the year ended January 31, 2005.
SIGMA DESIGNS, INC,
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
July 31, July 31,
-------------------- -------------------
2005 2004 2005 2004
Net revenues $ 7,961 $ 8,088 $ 14,336 $ 15,872
Costs and expenses:
Costs of revenues 2,421 2,300 4,683 4,935
Research and development 3,472 2,848 7,037 5,952
Sales and marketing 1,242 1,222 2,454 2,426
General and administrative 788 935 2,023 1,649
-------- -------- -------- --------
Total costs and expenses 7,923 7,305 16,197 14,962
Income from operations 38 783 (1,861) 910
Gain on sales of long-term
investment - - 1,083 -
Interest and other income
(expense), net 126 416 228 453
-------- -------- -------- --------
Income (loss) before
income taxes 164 1,199 (550) 1,363
Provision for income taxes 1 30 4 31
-------- -------- -------- --------
Net income (loss) $ 163 $ 1,169 $ (554) $ 1,332
======== ======== ======== ========
Basic net income (loss)
per share $ - $ 0.06 $ (0.03) $ 0.06
Shares used in computing
per share amount 21,286 20,750 21,237 20,712
Diluted net income (loss)
per share $ - $ 0.05 $ (0.03) $ 0.06
Shares used in computing
per share amount 23,948 23,135 21,237 23,230
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