SANTA CLARA, Calif., Aug. 7 /PRNewswire-FirstCall/ -- Trident Microsystems, Inc. , a leading provider of digital TV technology for the consumer digital video marketplace, today announced that it achieved net revenues of $70,593,000 for the fourth fiscal quarter of 2007, ending June 30, 2007, representing a sequential increase of 17% from the $60,579,000 reported in the March quarter and a 33% year over year increase from the $52,882,000 reported in the quarter ended June 30, 2006. The Company announced net revenues for all of fiscal 2007 of $270,795,000, a year over year increase of 58% from the $171,442,000 reported for fiscal 2006.
Net income of $6,650,000 was recorded in the fourth quarter ended June 30, 2007, on a generally accepted accounting principles (GAAP) basis, or $0.10 per share on a diluted basis, which included expenses of $4,467,000 for amortization of stock based compensation, $1,653,000 charged to cost of revenues relating to amortization of intangibles and $ 3,756,000 of legal and accounting expenses related to the Company's stock option investigation. This compares to net income on a GAAP basis of $7,753,000, or $0.12 per share on a diluted basis, in the June 30, 2006 quarter, which included expenses of $3,356,000 for amortization of stock based compensation, and $1,523,000 for amortization of intangibles.
Non-GAAP net income in the quarter ended June 30, 2007 was $16,526,000, or $ 0.26 per share on a diluted basis, and excludes the items noted above. This compares to non-GAAP net income of $12,683,000, or $0.20 per share on a diluted basis, in the fourth quarter of fiscal 2006.
Net income of $30,118,000 was recorded for the year ended June 30, 2007, on a GAAP basis, or $0.48 per share on a diluted basis. This compares to net income on a GAAP basis of $ 26,176,000, or $ 0.42 per share, on a diluted basis for the year ended June 30, 2006. For the year ended June 30, 2007, non-GAAP net income was $68,931,000, or $1.09 per share on a diluted basis, which excludes $15,606,000 for amortization of stock based compensation, $6,345,000 charged to cost of revenues relating to amortization of intangibles and $ 16,761,000 of legal and accounting expenses related to the Company's stock option investigation, $127,000 related to bonuses paid to compensate for increasing stock option exercise prices related to IRS Code Section 409A and $216,000 for gains on the sale of an investment and a $190,000 charge resulting from an adjustment to the cumulative effect of a change in accounting principle. This compares to non-GAAP net income of $43,568,000, or $0.70 per fully diluted share, for the fiscal year ended June 30, 2006, which excludes expenses of $13,182,000 for amortization of stock based compensation, $5,469,000 for amortization of intangibles and $560,000 from a loss on investments, as well as $1,819,000 in income from the cumulative effect of adopting SFAS 123R. A reconciliation between net income on a GAAP basis and non-GAAP net income/loss is provided in a table following the non-GAAP consolidated statement of operations.
"We are pleased to announce that we are again able to report our full financial results to you today. We filed our Form 10-K for fiscal 2006 with the Securities and Exchange Commission today, which includes our restated financials, findings and financial adjustments following our extensive stock option investigation. We reported a cumulative net charge of approximately $56 million covering 14 years of stock option activity. We view this filing as a significant milestone and as a signal that we are beginning to move ahead, focused on continued growth and development of our business," said Mr. John Edmunds, Trident's CFO.
The Company ended the June 2007 quarter with $70.6 million of revenues, a sequential increase of 17% from the March quarter and in line with its expectations.
Revenues from top-tier OEMs, Sony, Samsung, Sharp and Philips, continue to account for the majority, of the total revenues, collectively representing approximately 85% for the recently concluded quarter.
In the June quarter, all of the Company's new products, including SVP(TM) UX, SVP(TM) WX, SVP(TM) PXP, and SVP(TM) CX, ramped up and the total volume accounted for 61% of total shipments. Shipments of SVP(TM) UX and SVP(TM) WX, the Company's ME/MC enabled technology, represented 39% of revenues for the quarter. The SVP(TM) UX and SVP(TM) WX are the world's first display processor chips to have integrated motion-estimation motion-compensation (ME/MC) technology to remove motion-judder artifacts from motion video. In the June quarter, the Company began sampling a second generation ME/MC which is integrated into a new SVP(TM) WX 170 product that includes a high speed 170MHz ADC. "The SVP-WX 170 has been well received by all of our top-tier OEM customers as we have made significant strides in pushing the envelope of integrated ME/MC video quality," said Dr. JH Chang, Trident's President.
On the digital front, the Company recently received its next generation digital SOC product family back from the foundry, comprised of the HiDTV(TM) Pro UX, HiDTV(TM) Pro WX and HiDTV(TM) Pro QX products. This product family will feature integrated HDMI 1.3, 170MHz ADC, second-generation ME/MC technology for 100/120Hz in a single chip, and SOC 90nm technology. "We are beginning to sample our new digital SOC chip with customers this month. With our strong market position in Full HD 1080P technology, now further extended by our lead in integrated ME/MC technology and a new digital SOC, we believe that a significant percentage of mid-range and high-end models manufactured by top-tier OEMs next year will have our ME/MC technology built-in for the world-wide market," continued Dr Chang.
In the June quarter, the Company announced the design win of HiDTV(TM) Pro LX at Westinghouse for its new line of 1080P LCDTV. In the September quarter, the Company expects several other OEM customers, including one top-tier OEM, to start mass production with its HiDTV(TM) Pro products as the Company continues building up its market momentum with the HiDTV(TM) Pro product family. Also, the Company is accelerating its pace of integration to counter competitive pressure. The Company is already integrating additional technology into its digital SOC product family which is expected to tape out this fall and further reduce its customers' system BOM cost. With the HiDTV Pro UX, HiDTV(TM) Pro WX, HiDTV(TM) Pro QX and the upcoming cost reduced version of the digital SOC, the Company expects to continue strengthening its product position to become the leading supplier in digital SOC among the top-tier OEM group in 2008.
Although the Company's market is dynamic and challenging, it continues to make strides in technology innovation which strengthen its position among the high quality Tier I digital TV manufacturers.
September quarter forecast
As the market begins to shift gears into the seasonally stronger half of the calendar year, and competitive pressures continue to manifest themselves in the form of ASP erosion, the Company now expects to deliver revenues in the range of approximately $88 to $92 million in the September quarter, a 25 to 30% sequential increase from the June quarter, with gross margin targeted at approximately 48%.
About non-GAAP adjustments
To supplement the consolidated financial results prepared under GAAP, Trident uses a non-GAAP conforming measure of net income that is GAAP net income adjusted to exclude certain costs, expenses and gains. Non-GAAP net income gives an indication of Trident's baseline performance before gains, losses or other charges that are considered by management to be outside the company's core operating results. In addition, non-GAAP net income is among the primary indicators management uses as a basis for planning and forecasting future periods. These measures are neither in accordance with, nor an alternative for, GAAP and may be materially different from non-GAAP measures used by other companies. Trident computes non-GAAP net income by adjusting GAAP net income for the impact of certain investment gains (or losses) and excluding various items, including stock-based compensation, expenses related to the stock option investigation and related matters and those related to the acquisition of the Company's minority interest held in its Taiwanese subsidiary, including, amortization of intangible assets and charges for in- process research and development costs. A reconciliation between net income/loss on a GAAP basis and non-GAAP net income is provided in a table following non-GAAP consolidated financial statements.
Webcast, Teleconference and Taped Replay
The Company also announced that it will hold a conference call to discuss its earnings, which will be held on Tuesday, August 7, 2007 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Shareholders may participate in the call by calling 617-213-8857 using passcode 22164351. The conference call will also be webcast by Thomson/CCBN and can be accessed at Trident's web site at: http://www.tridentmicro.com/. A replay of the conference call will be available from 5:00 p.m. Pacific Time August 7, 2007, until midnight Pacific Time August 14, 2007, and can be accessed by calling 617-801-6888 using passcode 72266452.
Forward-Looking Information
This press release contains forward-looking statements, including statements which use the words "expect," "anticipate," "believe," and similar words, including our statements regarding financial expectations and our expectations regarding market leadership, product introductions and design wins. The forward-looking statements above are subject to certain risks, and actual results could vary materially depending on a number of factors. These risks include, in particular, changes in trends in the DPTV industries, whether the Company is able to achieve timely product introductions, the failure to obtain design wins among major OEMs for the Company products, and competitive pressures, including pricing and competitors' new product introductions. Additional factors that may affect the Company's business are described in detail in the Company's filings with the Securities and Exchange Commission, which may be found at http://www.sec.gov/.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Santa Clara, California, designs, develops and markets digital media for the masses in the form of integrated circuits (ICs) for HDTV, LCD TV, PDP TV, DLP TV, DCRT and digital set-top boxes. Trident's products are sold to a network of OEMs, original design manufacturers and system integrators worldwide. For further information about Trident and its products, please consult the company's web site: http://www.tridentmicro.com/.
NOTE: Trident is a registered trademark of Trident Microsystems, Inc., HiDTVTM, DPTVTM, SVPTM WX, SVPTM UX, SVPTM PXP and SVPTM CX are trademarks of Trident Microsystems, Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice.
Trident Microsystems, Inc.
Consolidated Statement of Operations
Three Months Ended
(in thousands, except per June 30 March 31 June 30
share data, unaudited) 2007 2007 2006
Net revenue $70,593 $60,579 $52,882
Cost of revenue 35,985 29,507 24,336
Cost of revenues -
amortization of intangibles 1,486 1,486 1,389
Gross profit 33,122 29,586 27,157
% of net revenue 46.9% 48.8% 51.4%
Research and development expenses 12,856 11,284 9,497
% of net revenue 18.2% 18.6% 18.0%
Selling, general and
administrative expenses 11,605 10,865 7,135
% of net revenue 16.4% 17.9% 13.5%
In-process research and
development expenses -- -- --
% of net revenue -- -- --
Income from operations 8,661 7,437 10,525
% of net revenue 12.3% 12.3% 19.9%
(Loss) gain on investments, net -- 216 (51)
Interest and other income, net 1,586 1,442 1,116
Minority interests in subsidiaries -- -- --
Income before income taxes 10,247 9,095 11,590
% of net revenue 14.5% 15.0% 21.9%
Provision for income taxes 3,597 3,369 3,837
% of net revenue 5.1% 5.6% 7.3%
Net income before cumulative effect
of change in accounting principle 6,650 5,726 7,753
% of net revenue 9.4% 9.5% 14.7%
Cumulative effect of change
in accounting principle -- -- --
% of net revenue 0.0% 0.0% 0.0%
Net income $6,650 $5,726 $7,753
% of net revenue 9.4% 9.5% 14.7%
Basic net income per share
Prior to cumulative effect of
change in accounting principle $0.12 $0.10 $0.14
Cumulative effect of change in
accounting principle -- -- --
Basic net income per share $0.12 $0.10 $0.14
Common shares used in
computing basic per share amounts 57,748 57,748 57,160
Diluted net income per share
Prior to cumulative effect
of change in accounting principle $0.10 $0.09 $0.12
Cumulative effect of change in
accounting principle -- -- --
Diluted net income per share $0.10 $0.09 $0.12
Common and common equivalent
shares used in computing diluted
per share amounts 63,571 63,440 63,738
Twelve Months Ended
June 30 June 30
(in thousands, except per
share data, unaudited) 2007 2006
Net revenue $270,795 $171,442
Cost of revenue 132,400 77,933
Cost of revenues - amortization of
intangibles 5,742 5,128
Gross profit 132,653 88,381
% of net revenue 49.0% 51.6%
Research and development expenses 44,517 33,809
% of net revenue 16.4% 19.7%
Selling, general and administrative
expenses 47,993 26,178
% of net revenue 17.7% 15.3%
In-process research and development
expenses -- --
% of net revenue -- --
Income from operations 40,143 28,394
% of net revenue 14.8% 16.6%
(Loss) gain on investments, net 216 (560)
Interest and other income, net 6,622 2,840
Minority interests in subsidiaries -- --
Income before income taxes 46,981 30,674
% of net revenue 17.3% 17.9%
Provision for income taxes 16,673 6,317
% of net revenue 6.2% 3.7%
Net income before cumulative effect
of change in accounting principle 30,308 24,357
% of net revenue 11.2% 14.2%
Cumulative effect of change in
accounting principle (190) 1,819
% of net revenue (0.1)% 1.1%
Net income $30,118 $26,176
% of net revenue 11.1% 15.3%
Basic net income per share
Prior to cumulative effect of
change in accounting principle $0.52 $0.45
Cumulative effect of change in
accounting principle -- $0.03
Basic net income per share $0.52 $0.48
Common shares used in computing
basic per share amounts 57,637 54,822
Diluted net income per share
Prior to cumulative effect of
change in accounting principle $0.48 $0.39
Cumulative effect of change in
accounting principle -- $0.03
Diluted net income per share $0.48 $0.42
Common and common equivalent shares
used
in computing diluted per share
amounts 63,380 62,526
Trident Microsystems, Inc.
Consolidated Balance Sheets
June 30 March 31 June 30
(in thousands, unaudited) 2007 2007 2006
ASSETS
Current assets
Cash and cash equivalents $147,562 $134,366 $103,046
Short-term investment - UMC 50,667 48,223 49,612
Short-term investment - Others 1,076 1,142 --
Accounts receivable, net 9,161 14,685 4,278
Inventories, net 16,263 14,892 14,641
Deferred income taxes 83 622 622
Prepaid expenses and other
current assets 17,997 19,004 5,037
Total current assets 242,809 232,934 177,236
Property and equipment, net 19,581 17,926 3,451
Intangible assets, net 12,845 14,499 19,190
Investments - other 3,089 3,089 3,780
Non-current deferred income taxes 339 948 948
Other assets 5,216 4,698 2,585
Total assets $283,879 $274,094 $207,190
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $20,684 $23,150 $19,472
Accrued liabilities 23,095 23,898 21,332
Deferred income taxes 139 0 0
Income taxes payable 36,171 38,346 11,125
Total current liabilities 80,089 85,394 51,929
Non-current deferred income tax
liabilities 1,942 1,425 1,604
Minority interests in subsidiaries 0 0 0
Total liabilities 82,031 86,819 53,533
Stockholders' equity
Capital stock 179,448 173,277 162,858
Retained earnings 18,798 12,148 (11,320)
Accumulated other comprehensive
income 3,602 1,850 2,119
Total stockholders' equity 201,848 187,275 153,657
Total liabilities and
stockholders' equity $283,879 $274,094 $207,190
Trident Microsystems, Inc.
Non-GAAP Consolidated Statement of Operations
Three Months Ended
June 30 March 31 June 30
(in thousands, except per
share data, unaudited) 2007 2007 2006
Net revenue $70,593 $60,579 $52,882
Cost of revenue 35,985 29,507 24,336
Cost of revenues - amortization
of intangibles 1,486 1,486 1,389
Gross profit 33,122 29,586 27,157
% of net revenue 46.9% 48.8% 51.4%
Research and development expenses 12,856 11,284 9,497
% of net revenue 18.2% 18.6% 18.0%
Selling, general and
administrative expenses 11,605 10,865 7,135
% of net revenue 16.4% 17.9% 13.5%
In-process research and
development expenses -- -- --
% of net revenue -- -- --
Income from operations 8,661 7,437 10,525
% of net revenue 12.3% 12.3% 19.9%
(Loss) gain on investments, net -- 216 (51)
Interest and other income, net 1,586 1,442 1,116
Minority interests in subsidiaries -- -- --
Income before income taxes 10,247 9,095 11,590
% of net revenue 14.5% 15.0% 21.9%
Provision for income taxes 3,597 3,369 3,837
% of net revenue 5.1% 5.6% 7.3%
Net income before cumulative effect
of change in accounting principle 6,650 5,726 7,753
% of net revenue 9.4% 9.5% 14.7%
Cumulative effect of change
in accounting principle -- -- --
% of net revenue 0.0% 0.0% 0.0%
Net income $6,650 $5,726 $7,753
% of net revenue 9.4% 9.5% 14.7%
Basic net income per share
Prior to cumulative effect
of change in accounting
principle $0.12 $0.10 $0.14
Cumulative effect of change in
accounting principle -- -- --
Basic net income per share $0.12 $0.10 $0.14
Common shares used in
computing basic per share amounts 57,748 57,748 57,160
Diluted net income per share
Prior to cumulative effect
of change in accounting principle $0.10 $0.09 $0.12
Cumulative effect of change in
accounting principle -- -- --
Diluted net income per share $0.10 $0.09 $0.12
Common and common equivalent
shares used in computing diluted
per share amounts 63,571 63,440 63,738
Twelve Months Ended
(in thousands, except per share data, June 30 June 30
unaudited) 2007 2006
Net revenue $270,795 $171,442
Cost of revenue 132,400 77,933
Cost of revenues - amortization of
intangibles 5,742 5,128
Gross profit 132,653 88,381
% of net revenue 49.0% 51.6%
Research and development expenses 44,517 33,809
% of net revenue 16.4% 19.7%
Selling, general and administrative
expenses 47,993 26,178
% of net revenue 17.7% 15.3%
In-process research and development expenses -- --
% of net revenue -- --
Income from operations 40,143 28,394
% of net revenue 14.8% 16.6%
(Loss) gain on investments, net 216 (560)
Interest and other income, net 6,622 2,840
Minority interests in subsidiaries -- --
Income before income taxes 46,981 30,674
% of net revenue 17.3% 17.9%
Provision for income taxes 16,673 6,317
% of net revenue 6.2% 3.7%
Net income before cumulative effect
of change in accounting principle 30,308 24,357
% of net revenue 11.2% 14.2%
Cumulative effect of change in
accounting principle (190) 1,819
% of net revenue (0.1)% 1.1%
Net income $30,118 $26,176
% of net revenue 11.1% 15.3%
Basic net income per share
Prior to cumulative effect of
change in accounting principle $0.52 $0.45
Cumulative effect of change in
accounting principle -- $0.03
Basic net income per share $0.52 $0.48
Common shares used in computing
basic per share amounts 57,637 54,822
Diluted net income per share
Prior to cumulative effect of
change in accounting principle $0.48 $0.39
Cumulative effect of change in
accounting principle -- $0.03
Diluted net income per share $0.48 $0.42
Common and common equivalent shares
used in computing diluted per share
amounts 63,380 62,526
A reconciliation between net income (loss) on a GAAP basis
and non-GAAP net income is as follows:
Three Months Ended
(in thousands, except per June 30 March 31 June 30
share data, unaudited) 2007 2007 2006
GAAP net income $6,650 $5,726 $7,753
Amortization of intangibles
Cost of revenues 1,486 1,486 1,389
Selling, general and
administrative expenses 167 167 134
Total amortization of intangibles 1,653 1,653 1,523
In-process research and
development expenses -- -- --
Amortization of stock-based compensation
Cost of revenues 159 131 34
Research and development 2,568 2,282 2,312
Selling, general and
administrative expenses 1,740 1,626 1,010
Total amortization of stock-
based compensation 4,467 4,039 3,356
Loss (gain) on investments, net -- (216) 51
Benefit for income taxes -- -- --
Section 409A stock compensation
Stock options related legal fees 3,756 3,056 --
Cumulative effect of change
in accounting principle -- -- --
Pro forma net income $16,526 $14,258 $12,683
Basic net income per share $0.29 $0.25 $0.22
Common shares used in
computing basic per share amounts 57,748 57,748 57,160
Diluted net income per share $0.26 $0.22 $0.20
Common and common equivalent
shares used in computing diluted
per share amounts 63,571 63,440 63,738
Twelve Months Ended
(in thousands, except per June 30 June 30
share data, unaudited) 2007 2006
GAAP net income $30,118 $26,176
Amortization of intangibles
Cost of revenues 5,742 5,128
Selling, general and
administrative expenses 603 341
Total amortization of intangibles 6,345 5,469
In-process research and development expenses -- --
Amortization of stock-based compensation
Cost of revenues 526 113
Research and development 9,270 8,911
Selling, general and
administrative expenses 5,810 4,158
Total amortization of stock-based
compensation 15,606 13,182
Loss (gain) on investments, net (216) 560
Benefit for income taxes -- --
Section 409A stock compensation 127
Stock options related legal fees 16,761 --
Cumulative effect of change in
accounting principle 190 (1,819)
Pro forma net income $68,931 $43,568
Basic net income per share $1.20 $0.79
Common shares used in computing
basic per share amounts 57,637 54,822
Diluted net income per share $1.09 $0.70
Common and common equivalent shares
used in computing diluted per share
amounts 63,380 62,526
