Sigma Designs, Inc. Reports Third Quarter Results.MILPITAS, Calif. -- Sigma SIGMA - A scientific visual programming environment from NASA. http://fi-www.arc.nasa.gov/fia/projects/sigma/. Designs(R), Inc. (Nasdaq:SIGM), a leader in digital media processors for consumer appliances, announced results for its third fiscal quarter ended October 31, 2005. Net revenues for the third quarter were $8,497,000 up 7% from $7,961,000 for the previous quarter and up 11% from $7,677,000 reported for the same period last year. Sigma reported a net profit of $1,948,000 or $0.09 per basic and $0.08 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 in the third quarter. This compares to a net profit of $163,000, or $0.00 per basic and diluted share, for the previous quarter, and net profit of $525,000 or $0.03 per basic share and $0.02 per diluted share during the same period one year ago. The increase in revenue is primarily attributable to increased sales of EM8620L chipsets, and the third quarter net profit includes a one-time investment gain of $1.5 million. "We are pleased to report another sequential increase in quarterly revenue, with many accounts showing steady or increasing 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. We remain heavily focused 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. and Blu-ray/HD-DVD player opportunities, where we enjoy a technology leadership position. Looking forward, we maintain our expectation of meaningful top-line growth for our fourth fiscal quarter, as well as our next fiscal year," stated Thinh Tran, chairman and chief executive officer, Sigma Designs. Recent business developments include: --Jointly announced with Microsoft a collaboration to enable the production of low-cost, high-definition-capable devices optimized for the Microsoft(R) TV 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) Edition software platform. The 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 media processor from Sigma Designs will enable set-top box, and consumer electronics manufacturers to create a range of products for broadband service providers An ISP, telephone company, cable company or other carrier that offers high-speed communications to homes and businesses, typically for Internet access. Cable modems, DSL and T1 lines are the common technologies. See broadband, cable modem, DSL and T1. to deliver IPTV services to the home. Microsoft and Sigma Designs have worked closely together to extend the processing functionality of Sigma Design's open standards-based SMP8634 media processor, to achieve a feature set that delivers the full power of the Microsoft TV Microsoft TV is a division within Microsoft Corporation that develops software platforms for use in set top boxes to access programming over a Cable TV network. It provides integrated audio, video and data services over a single network. platform. --Announced that Sharp Corporation has selected Sigma Designs' media processors to power its newest network LCD monitor A flat panel display that uses liquid crystals. Although laptops have used LCDs as their flat panel technology almost exclusively, LCD is also the most popular for flat panel desktop monitors. Toward the end of 2003, sales of LCD displays for desktops overtook CRTs for the first time. , the IT-32X2. Sigma's EM8620L media processor streamlines the networkability for Sharp's new LCD monitor. Sharp's new large screen network LCD monitor provides a high-resolution, 32-inch liquid crystal display liquid crystal display (LCD) Optoelectronic device used in displays for watches, calculators, notebook computers, and other electronic devices. Current passed through specific portions of the liquid crystal solution causes the crystals to align, blocking the passage of light. (LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. ) that consumers can use as a TV, PC monitor and display for digital photographs. --Announced that Scientific-Atlanta's advanced IPTV set-tops were demonstrated at the IBC IBC International Building Code IBC Iraq Body Count IBC Institutional Biosafety Committee IBC Inflammatory Breast Cancer IBC International Business Company IBC Independence Blue Cross IBC Insurance Bureau of Canada IBC International Broadcasting Convention conference using the company's SMP8634 media processors. The demonstration of this new class of system-on-chip (SOC) based set-top box platforms was shown at the Scientific-Atlanta stand to address telco opportunities on a worldwide basis. The conference call relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc third 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, November 22. The dial-in number is 888-362-4820 (international callers dial 617-597-5345) and the passcode is 14686979. 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 99167440. 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 July 31, 2005. Readers are cautioned not to place undue reliance on these forward-looking statements, which 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" . 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 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 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 third quarter
and nine-months results of fiscal 2006 and 2005:
Quarter ended October 31, 2005 2004
-------------------------------------------- ------------ ------------
Net revenues $8,497,000 $7,677,000
Net income $1,948,000 $525,000
Basic net income per share $0.09 $0.03
Basic weighted average shares 21,447,000 20,838,000
Diluted net income per share $0.08 $0.02
Diluted weighted average shares 24,401,000 23,629,000
Nine months ended October 31, 2005 2004
-------------------------------------------- ------------ ------------
Net revenues $22,833,000 $23,549,000
Net income (loss) $1,394,000 $1,857,000
Basic net income (loss) per share $0.07 $0.09
Basic weighted average shares 21,307,000 20,754,000
Diluted net income (loss) per share $0.06 $0.08
Diluted weighted average shares 23,179,000 23,363,000
SIGMA DESIGNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, January 31,
2005 2005(a)
------------ -----------
Assets
Current assets:
Cash and cash equivalents $15,074 $10,250
Short-term investments 9,395 8,529
Accounts receivable - net 4,512 6,417
Notes receivable - related party 500 -
Inventories 2,990 3,675
Prepaid expenses and other 648 764
------------ -----------
Total current assets 33,119 29,635
Equipment and leasehold improvements, net 1,762 1,756
Long-term investments 1,282 3,313
Other assets 166 233
------------ -----------
Total $36,329 $34,937
------------ -----------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable 1,769 3,540
Accrued liabilities and other 2,037 2,097
Current portion of bank lines of credit 205 -
------------ -----------
Total current liabilities 4,011 5,637
Bank line of credit 288 -
Other - long term liabilities 127 188
Shareholders' equity:
Common stock 89,618 88,207
Accumulated other comprehensive income 14 28
Accumulated deficit (57,729) (59,123)
------------ -----------
Total shareholders' equity 31,903 29,112
------------ -----------
Total $36,329 $34,937
------------ -----------
(a) 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 Nine months ended
October 31, October 31,
-------------------- ------------------
2005 2004 2005 2004
Net revenues $8,497 $7,677 $22,833 $23,549
Costs and expenses:
Costs of revenues 2,666 2,155 7,349 7,090
Research and development 3,613 2,762 10,650 8,714
Sales and marketing 1,259 1,137 3,713 3,563
General and administrative 880 1,165 2,903 2,814
----------- -------- -------- ---------
Total costs and
expenses 8,418 7,219 24,615 22,181
Income from operations 79 458 (1,782) 1,368
Gain on sales of long-term
investment 1,466 - 2,549 -
Interest and other income
(expense), net 401 63 629 516
----------- -------- -------- ---------
Income (loss) before income
taxes 1,946 521 1,396 1,884
Provision for income taxes (2) (4) 2 27
----------- -------- -------- ---------
Net income (loss) $1,948 $525 $1,394 $1,857
=========== ======== ======== =========
Basic net income (loss) per
share $0.09 $0.03 $0.07 $0.09
Shares used in computing per
share amount 21,447 20,838 21,307 20,754
Diluted net income (loss) per
share $0.08 $0.02 $0.06 $0.08
Shares used in computing per
share amount 24,401 23,629 23,179 23,363
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