Sigma Designs, Inc. Reports Third Quarter Results.Business Editors MILPITAS, Calif.--(BUSINESS WIRE)--Nov. 25, 2003 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, 2003. Net revenues for the third quarter were $7,470,000, down from $7,874,000 for the previous quarter and up 58% from $4,720,000 reported for the same period last year. Sigma reported a net profit of $149,000 or $0.01 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. This compares to a net profit of $671,000, or $0.04 per basic shares and $0.03 per diluted share for the previous quarter, and a net loss of $871,000, or $(0.05) per basic and diluted share during the same period one year ago. The decline in revenue is primarily attributable to unexpected delays in customer orders. "We are disappointed to report this quarter's revenue decline, the first in five consecutive quarters, a result of delays in certain customer orders. However, we believe this decline is an anomaly Abnormality or deviation. Pronounced "uh-nom-uh-lee," it is a favorite word among computer people when complex systems produce output that is inexplicable. See software conflict and anomaly detection. , and we have all indications that market demand is continuing to grow in our primary markets. On the positive side, we are pleased that our gross margins remained strong, our 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. were stable, and this represents our third consecutive quarter of profitability. Moving forward, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op in our ability to resume sequential growth for the current quarter, and also anticipate a period of overall profitability for this year and next," stated Thinh Tran, Chairman and Chief Executive Officer, Sigma Designs. Recent business developments include: -- Announced that Pinnacle's new ShowCenter product is based on Sigma's EM8551 media processor. The ShowCenter is a new product in the digital media adapter See digital media hub. category, which provides consumers who have a multimedia home network with instant access to digital libraries, without moving the PC into the living room. -- Announced that Sigma's EM8610 digital media processor will be used in two separate Plasma TVs A flat panel TV that uses the plasma display technology. See flat panel TV, plasma display and LCD vs. plasma. . First, KiSS Technology's new PD342 42-inch Plasma, high-definition TV See HDTV. (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 ) with built-in DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. and wireless Internet. KiSS is one of the world's leading companies in the field of DVD products and DVB (Digital Video Broadcasting) An international digital television (DTV) standard that is the European and Far Eastern counterpart of the North American ATSC standard. receivers. Second, Jamo's new HDP HDP High Density Polyethylene HDP High Density Plasma HDP Human Dimensions of Global Environmental Change Programme HDP Hazardous Duty Pay HDP Hurricane Destruction Potential HDP Hydrocarbon Dew Point HDP Hard Drive Password 4250 Plasma HDTV. Jamo is the leading European manufacturer of loudspeakers. -- Announced that several new IP video appliances from multiple vendors, based on Sigma's decoder A hardware device or software that converts coded data back into its original form. See decode and MPEG decoder. chips, will enter the market over the next six months, including an increasing number of large brand manufacturers. These included the announcements from Lenovo Consume PC (formerly Legend Group Limited), Vertex Link, Beijing Golden Yuxing Electronics and Technology Co., Ltd., and Shenzhen Tsinghua Tongfang. -- Announced that Sigma's EM8550 digital media processor will power I-O Data's new AveL LinkPlayer, network media player. I-O Data is the leading Japanese manufacturer of PC peripherals and a provider of high-quality interface products. 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 EST EST electroshock therapy. EST abbr. electroshock therapy today, November 25. The dial-in number is 1-877-353-2646 or 1-706-679-3463. Investors will have the opportunity to listen to the conference call via the Internet live or up to one year afterward af·ter·ward also af·ter·wards adv. At a later time; subsequently. Adv. 1. afterward - happening at a time subsequent to a reference time; "he apologized subsequently"; "he's going to the store but he'll be back here through www.sigmadesigns.com/investors 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 1-800-642-1687 or 1-706-645-9291 and use conference ID 390 2566. The audio replay will be available for one week after November 25. About Sigma Designs, Inc. Sigma Designs (Nasdaq:SIGM) specializes in silicon-based 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). 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. for streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. , progressive DVD See progressive scan DVD. playback and advanced digital set-top boxes 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. . Sigma's award-winning REALmagic(R) Video Technology is used in both commercial and consumer applications providing highly integrated solutions for high-quality decoding of MPEG-1, MPEG-2 and MPEG-4. Headquartered in Milpitas, Calif., Sigma 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 our 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. 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 the anticipation of a return to sequential revenue growth for the current quarter and continued profitability for the current quarter and next year, the use of our EM8610 in KiSS and Jamo plasma TVs, and the entry of several new IP video appliances based on Sigma decoder chips into the market over the next six months. 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 uncertainty in technology spending, and economic conditions specific to the semiconductor industry, the rate of growth of the set-top box market in general, our ability to deploy Sigma products in these markets, the ability of our REALmagic MPEG silicon to compete with other technologies 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 and other risks including delays in the manufacturers' deployment of set-top boxes or other factors leading to delays in customer orders. 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, 2003 and on Form 10-Q Form 10-Q See 10-Q. for the quarter ended July 31, 2003. 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.
Following are comparative, unaudited highlights of the third quarter
and nine-month results of fiscal 2004:
Quarter ended October 31, 2003 2002
------------------------------------------- ------------ ------------
Net revenues $ 7,470,000 $ 4,720,000
Net income (loss) $ 149,000 $ (871,000)
Basic net income (loss) per share $ 0.01 $ (0.05)
Basic weighted average shares 20,402,000 16,508,000
Diluted net income (loss) per share $ 0.01 $ (0.05)
Diluted weighted average shares 23,533,000 16,508,000
Nine months ended October 31, 2003 2002
------------------------------------------- ------------ ------------
Net revenues $23,179,000 $11,430,000
Net income (loss) $ 1,246,000 $(5,730,000)
Basic net income (loss) per share $ 0.07 $ (0.35)
Basic weighted average shares 19,060,000 16,454,000
Diluted net income (loss) per share $ 0.06 $ (0.35)
Diluted weighted average shares 22,092,000 16,454,000
SIGMA DESIGNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October January
31, 31,
2003 2003*
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 18,967 $ 755
Accounts receivable - net 4,762 4,366
Inventories 2,986 2,472
Restricted cash - 12,000
Prepaid expenses & other 359 176
--------- ---------
Total current assets 27,074 19,769
Equipment and leasehold improvements, net 1,070 1,331
Long term investments 1,050 -
Other assets 96 317
--------- ---------
Total $ 29,290 $ 21,417
--------- ---------
Liabilities and shareholders' equity
Current liabilities:
Bank line of credit $ - $ 12,000
Accounts payable 1,388 1,502
Accrued liabilities and other 2,337 1,681
Current portion of capital lease obligations 6 127
--------- ---------
Total current liabilities 3,731 15,310
Other long-term liabilities 276 305
Shareholders' equity:
Common stock 86,511 68,295
Accumulated other comprehensive income 32 13
Accumulated deficit (61,260) (62,506)
--------- ---------
Total shareholders' equity 25,283 5,802
--------- ---------
Total $ 29,290 $ 21,417
--------- ---------
* Derived from audited balance sheet included in the Company's annual
report on Form 10-K for the year ended January 31, 2003
SIGMA DESIGNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three months Nine months
ended ended
October 31, October 31,
2003 2002 2003 2002
------- -------- -------- --------
Net revenues $ 7,470 $ 4,720 $23,179 $11,430
Costs and expenses:
Costs of revenues 2,868 2,038 8,848 5,360
Research and development 2,512 1,821 7,586 6,018
Sales and marketing 1,225 1,086 3,583 3,324
General and administrative 731 659 1,887 2,280
------- -------- -------- --------
Total costs and expenses 7,336 5,604 21,904 16,982
Income (loss) from operations 134 (884) 1,275 (5,552)
Interest and other income
(expense), net 15 (24) (19) (213)
------- -------- -------- --------
Income (loss) before income taxes 149 (908) 1,256 (5,765)
Provision for income taxes - (37) 10 (35)
------- -------- -------- --------
Net income (loss) $ 149 $ (871) $ 1,246 $(5,730)
------- -------- -------- --------
Basic net income (loss) per share $ 0.01 $ (0.05) $ 0.07 $ (0.35)
Shares used in computing per share
amount 20,402 16,508 19,060 16,454
Diluted net income (loss) per share$ 0.01 $ (0.05) $ 0.06 $ (0.35)
Shares used in computing per share
amount 23,533 16,508 22,092 16,454
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