Trident Microsystems Reports Results for Fourth Quarter of Fiscal Year 2009
SANTA CLARA, Calif., July 27, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Trident Microsystems, Inc. (Nasdaq: TRID), a leader in high-performance semiconductor system solutions for the multimedia and digital television market, today announced results for its fiscal fourth quarter ended June 30, 2009. For the fiscal fourth quarter, the company reported net revenues of $14.9 million, which compares with net revenues of $6.9 million in the prior sequential quarter and $39.5 million in the same quarter a year ago. The sequential increase over the third fiscal quarter is primarily attributable to the addition of certain Micronas product lines, which was completed during the fiscal fourth quarter.
The company reported a net loss of $21.1 million, or $0.32 per basic share, for the fiscal fourth quarter on a generally accepted accounting principles ("GAAP") basis. This compares with a net loss of $16.6 million, or $0.27 per basic share, in the prior sequential quarter and a net loss of $6.9 million, or $0.11 per basic share, for the same quarter a year ago.
Non-GAAP Results
Non-GAAP net loss for the fourth quarter of fiscal 2009 was $15.7 million, or $0.24 per basic share. This compares with a non-GAAP net loss of $14.4 million, or $0.23 per basic share, in the prior sequential quarter and non-GAAP net income of $7.0 million, or $0.11 per diluted share, in the same quarter a year ago. A detailed reconciliation between GAAP and non-GAAP net income/loss is provided in a table following the non-GAAP consolidated statements of operations.
Sylvia Summers Couder, Trident's chief executive officer and president, said, "In the fiscal fourth quarter we completed the acquisition of three Micronas product lines and achieved our stated financial and operating objectives for the quarter, including the initial integration steps following the acquisition. We believe that Trident's opportunity to close tier one DTV design wins in 2010 has been significantly strengthened by the addition of the newly acquired Micronas technologies and our internal development efforts in fiscal year 2009."
Summers Couder continued, "Despite our optimism, the long cycle from product development to production, the competitive nature of our markets, and weak demand will continue to pose near-term challenges. As a result, we are taking the steps necessary to realize the synergies from the acquisition and minimize cash burn while sustaining the investment necessary to realize our long-term goals."
Outlook for Fiscal First Quarter Ending September 30, 2009
Trident's outlook for the first quarter of fiscal year 2010, described below, is based on current expectations and is subject to various factors, including those set forth in the Forward-Looking Information statement below. Actual results may differ materially.
-- Net revenues are expected to be in the range of $22 million to $25
million.
-- Non-GAAP gross margins are expected to be in the range of 31% to 33%.
-- Non-GAAP operating expenses are expected to be in the range of $20
million to $21 million, with research and development expenses in the
range of $14 million to $15 million and selling, general and
administrative expenses of approximately $6 million.
-- To align its workforce with the opportunities in fiscal 2010, the
company this week will implement a 10% reduction in its global
workforce, which is expected to result in restructuring charges of
approximately $1.5 million.
-- Non-GAAP operating loss is expected to be in the range of $12 to $14
million.
-- Provision for income taxes is expected to be approximately $0.3 million.
-- The company expects to end the quarter with a cash balance of
approximately $165 million to $170 million.
Summers Couder concluded, "Our market continues to be attractive because it is large, responsive to innovation, and lacks a clear leader. We expect to see further consolidation in our market in the future and we will continue to explore strategic acquisitions that could accelerate our revenue growth and a return to profitability."
Use of Non-GAAP Financial Information
To supplement the consolidated financial results prepared under GAAP, Trident uses a non-GAAP conforming, or non-GAAP, measure of net income (loss) that is GAAP net income (loss) adjusted to exclude certain costs, expenses and gains. Non-GAAP net income (loss) 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 (loss) is among the primary indicators management uses as a basis for planning and forecasting future periods. These measures are not in accordance with, or an alternative for, GAAP and may be materially different from non-GAAP measures used by other companies. Trident computes non-GAAP net income (loss) by adjusting GAAP net income (loss) for stock-based compensation expense, expenses related to the stock option investigation and related matters, restructuring charges, expenses related to software license fees adjustment, amortization of intangible assets from the acquisition of Trident's Beijing subsidiary and the purchase of the minority interests of Trident's Taiwan subsidiary (Trident Technologies, Inc.), impairment loss, backlog amortization, capital gains and losses and dividend income. A detailed reconciliation between net income (loss) on a GAAP basis and non-GAAP net income (loss) is provided in a table following non-GAAP Consolidated Statements of Operations.
Investor Conference Call
Management will host a conference call at 2:00 pm Pacific Time today. The domestic dial in is 866-314-9013; the international dial-in is 617-213-8053. Passcode: 24116244. A replay of the conference call will be available for two weeks, beginning approximately two hours following the conference call and will be accessible by calling 888-286-8010 (domestic) or 617-801-6888 (international) using access code 52648914. This call is being webcast by Thomson/CCBN and can be accessed at Trident's web site at: http://www.tridentmicro.com. The webcast also is being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com; institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com).
Forward-Looking Information
This press release contains forward-looking statements, including statements regarding financial expectations for the first quarter of fiscal year 2010, as well as our ability to close tier one DTV design wins in 2010 and beyond, grow through further acquisitions, realize the synergies from the Micronas acquisition and reduce our cash burn rate. The forward-looking statements made above are subject to certain risks and uncertainties, and actual results could vary materially depending on a number of factors. These risks include, in particular, our ability to realize the benefits from our acquisition of product lines from Micronas, our ability to build upon our core strengths, including our technology, engineering team, competitive cost structure and strong balance sheet, the timing of product introductions, the ability to obtain design wins among major OEMs for Trident's products, and competitive pressures, including pricing and competitors' new product introductions, the impact of the deteriorating global macroeconomic environment, the increasingly competitive DTV market and our ability to retain key employees. Additional factors that may affect Trident's business are described in detail in Trident's filings with the Securities and Exchange Commission available at http://www.sec.gov.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Santa Clara, California, designs, develops and markets integrated circuits, or ICs for digital media applications, such as digital television and LCD television. 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. 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.
(Tables to follow)
Trident Microsystems, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
June 30, March 31, June 30,
(In thousands) 2009 2009 2008
---- ---- ----
ASSETS
Current assets
Cash and cash equivalents $187,937 $202,581 $213,296
Short-term investments - - 26,704
Accounts receivable, net 9,375 812 4,510
Inventories 6,828 1,650 8,680
Prepaid expenses and other current
assets 9,425 10,918 12,863
-------------------- ------- ------- -------
Total current assets 213,565 215,961 266,053
Property and equipment, net 27,587 23,381 23,425
Intangible assets, net 7,685 4,298 8,428
Goodwill 7,708 - 1,432
Other assets 6,767 9,664 9,977
------------ -------- -------- --------
Total assets $263,312 $253,304 $309,315
============ ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $10,485 $4,794 $10,889
Accrued expenses and other current
liabilities 25,059 15,830 22,910
Income taxes payable 13,107 12,320 16,309
------------------------- ------ ------ ------
Total current liabilities 48,651 32,944 50,108
Long-term income taxes payable 21,658 21,476 21,579
Deferred income tax liabilities 81 249 370
----------------- ------ ------ ------
Total liabilities 70,390 54,669 72,057
Stockholders' equity
Capital stock 234,204 218,842 208,360
(Accumulated deficit) / retained
earnings (41,282) (20,207) 28,950
Accumulated other comprehensive loss - - (52)
-------------------------- ------- ------- -------
Total stockholders' equity 192,922 198,635 237,258
----------------------------------- ------- ------- -------
Total liabilities and stockholders'
equity $263,312 $253,304 $309,315
=================================== ======== ======== ========
Trident Microsystems, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended Year Ended
(In thousands, ------------------ ----------
except per June 30, March 31, June 30, June 30, June 30,
share data) 2009 2009 2008 2009 2008
-------------- ---- ---- ---- ---- ----
Net revenues $14,912 $6,852 $39,496 $75,761 $257,938
Cost of
revenues 10,290 6,391 22,736 $52,433 137,912
--------- ------ ----- ------ ------- -------
Gross profit 4,622 461 16,760 23,328 120,026
Gross margin 31.0% 6.7% 42.4% 30.8% 46.5%
Research and
development
expenses 15,802 11,434 13,223 53,016 52,608
% of net
revenues 106.0% 166.9% 33.5% 70.0% 20.4%
Selling,
general and
administrative
expenses 7,421 3,626 10,207 29,617 48,598
% of net
revenues 49.8% 52.9% 25.8% 39.1% 18.8%
Impairment of
goodwill - 1,432 - 1,432 -
% of net
revenues - 20.9% - 1.9% -
In-process
research and
development 697 - - 697 -
% of net
revenues 4.7% - - 0.9% -
Restructuring
charges 8 41 - 810 -
% of net
revenues 0.1% 0.6% - 1.1% -
--------- --- --- --- --- ---
Income (loss)
from
operations (19,306) (16,072) (6,670) (62,244) 18,820
% of net
revenues (129.5)% (234.6)% (16.9)% (82.2)% 7.3%
Net (loss) on
investment in /
dividend
income from
UMC stock - - (6,480) (8,187) (6,480)
Interest and
other income
(expense), net (806) 1,287 1,328 5,712 6,611
--------------- ---- ----- ----- ----- -----
Income (loss)
before income
taxes (20,112) (14,785) (11,822) (64,719) 18,951
% of net
revenues (134.9)% (215.8)% (29.9)% (85.4)% 7.3%
Provision for
(benefit from)
income taxes (1) 963 1,819 (4,892) 5,513 8,799
% of net
revenues 6.5% 26.5% (12.4)% 7.3% 3.4%
--------- --- ---- ----- --- ---
Net income
(loss) (21,075) (16,604) (6,930) (70,232) $10,152
% of net
revenues (141.3)% (242.3)% (17.5)% (92.7)% 3.9%
--------- ------ ------ ----- ----- ---
Basic net
income (loss)
per share $(0.32) $(0.27) $(0.11) $(1.12) $0.17
-------------- ------ ------ ------ ------ -----
Common shares
used in
computing
basic
per share
amounts 65,565 61,829 60,390 62,535 59,367
--------- ------ ------ ------ ------ ------
Diluted net
income (loss)
per share $(0.32) $(0.27) $(0.11) $(1.12) $0.16
-------------- ------ ------ ------ ------ -----
Common and common
equivalent shares
used in computing
diluted per
share amounts 65,565 61,829 60,390 62,535 62,751
-------------- ------ ------ ------ ------ ------
(1) Amounts for each quarter ended include the amortization of foreign
taxes associated with intercompany profit on assets remaining within
Trident's group.
Trident Microsystems, Inc.
Non-GAAP Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended Year Ended
(In thousands, ------------------ ----------
except per June 30, March 31, June 30, June 30, June 30,
share data) 2009 2009 2008 2009 2008
-------------- ---- ---- ---- ---- ----
Net revenues $14,931 $6,852 $39,496 $75,780 $257,938
Cost of
revenues 9,368 5,321 21,446 47,168 132,011
--------- ----- ----- ------ ------ -------
Gross profit 5,563 1,531 18,050 28,612 125,927
Gross margin 37.3% 22.3% 45.7% 37.8% 48.8%
Research and
development
expenses 12,886 10,382 10,717 45,158 38,803
% of net
revenues 86.3% 151.5% 27.1% 59.6% 15.0%
Selling,
general and
administrative
expenses 5,865 5,004 6,584 23,039 26,555
% of net
revenues 39.3% 73.0% 16.7% 30.4% 10.3%
In-process
research and
development 697 - - 697 -
% of net
revenues 34.7% - - 34.7% -
--------- ---- --- --- ---- ---
Income (loss)
from
operations (13,885) (13,855) 749 (40,282) 60,569
% of net
revenues (93.0)% (202.2)% 1.9% (53.2)% 23.5%
Interest and
other income
(expense),
net(1) (806) 1,280 1,322 5,820 3,859
------------ ---- ----- ----- ----- -----
Income (loss)
before income
taxes (14,691) (12,575) 2,071 (34,462) 64,428
% of net
revenues (98.4)% (183.5)% 5.2% (45.5)% 25.0%
Provision for
(benefit from)
income taxes
(2) 963 1,819 (4,892) 5,513 8,799
% of net
revenues 6.4% 26.5% (12.4)% 7.3% 3.4%
--------- --- ---- ----- --- ---
Net income
(loss) (15,654) (14,394) 6,963 (39,975) 55,629
% of net
revenues (104.8)% (210.1)% 17.6% (52.8)% 21.6%
--------- ------ ------ ---- ----- ----
--------------- ------ ------ ----- ------ -----
Basic net
income (loss)
per share $(0.24) $(0.23) $0.12 $(0.64) $0.94
Common shares
used in
computing
basic
per share
amounts 65,565 61,829 60,390 62,535 59,367
--------- ------ ------ ------ ------ ------
--------------- ------ ------ ----- ------ -----
Diluted net
income (loss)
per share $(0.24) $(0.23) $0.11 $(0.64) $0.87
Common and common
equivalent shares
used in computing
diluted per
share amounts
under non-GAAP
basis (3) 65,565 61,829 63,541 62,535 63,840
---------- ------ ------ ------ ------ ------
(1) Amounts in the three months and the year ended June 30, 2009 included
a $1.0 million foreign currency remeasurement loss and $2.6 million
foreign currency remeasurement gain, respectively, related to income
taxes payable in foreign jurisdictions, which resulted from the relative
strengthening of the U.S. dollar.
(2) Amounts for each quarter ended include the amortization of foreign
taxes associated with intercompany profit on assets remaining within
Trident's group.
(3) Common and common equivalent shares used to calculate non-GAAP
diluted net income per share excluded all the unamortized stock
compensation of stock options and restricted shares when determining
whether the awards are anti-dilutive. We also excluded unamortized
stock compensation from the assumed proceeds under the treasury stock
method.
Trident Microsystems, Inc.
A reconciliation between net income on a GAAP basis and a non-GAAP
basis is as follows:
Three Months Ended Year Ended
(In thousands, except ------------------ ----------
per share data, June 30, March 31, June 30, June 30, June 30,
unaudited) 2009 2009 2008 2009 2008
---- ---- ---- ---- ----
GAAP net income (loss) ($21,075) ($16,604) ($6,930) ($70,232) $10,152
Impairment of goodwill
and intangible
assets (1)
Cost of
revenues - 294 1,127 677 5,138
Selling, general and
administrative
expenses - 1,735 146 1,739 588
Research and
development 1,706 - - 1,706 -
----- --- --- ----- ---
Total impairment of
goodwill and
intangible assets 1,706 2,029 1,273 4,122 5,726
Backlog amortization 19 - - 19 -
Amortization of
acquisition-related
intangible assets (2)
Cost of
revenues 768 628 - 3,567 -
Selling, general and
administrative
expenses 51 76 - 398 -
--- --- --- --- ---
Total amortization of
acquisition-related
intangible assets 819 704 - 3,965 -
Stock-based compensation
expense (3)
Cost of
revenues 149 145 163 587 763
Research and
development 1,710 1,340 2,596 7,539 12,418
Selling, general and
administrative
expenses 1,401 1,318 1,608 4,547 15,424
----- ----- ----- ----- ------
Total stock-based
compensation expense 3,260 2,803 4,367 12,673 28,605
Restructuring Charges
Cost of
revenues 5 3 - 15 -
Research and
development 0 28 - 470 -
Selling, general and
administrative
expenses 8 13 - 340 -
--- --- --- --- ---
Total restructuring
charges 13 44 - 825 -
Stock options related
professional fees -
(SG&A) (4) 104 (3,075) 1,869 1,326 6,031
Software license fees -
(R&D) (5) (500) (288) (90) (1,387) 1,387
Prepaid royalties
adjustment (6)
Cost of
revenues - - - 419 -
Loss/Impairment/Dividend on
UMC stock (7)
Loss of sale of UMC
stock - - - 8,959 -
Impairment loss of UMC
stock - - 6,480 429 6,480
UMC stock dividend
income - - - (1,201) -
--- --- --- ------ ---
Total impact on UMC
stock - - 6,480 8,187 6,480
Impairment of other
investment - - - 127 -
Capital gain on
investments, net (8) - (7) (6) (19) (2,752)
----------------------- -------- -------- ------ -------- -------
Non-GAAP net income
(loss) ($15,654) ($14,394) $6,963 ($39,975) $55,629
======== ======== ====== ======== =======
----------------------- ------ ------ ----- ------ -----
Basic net income
(loss) per share $(0.24) $(0.23) $0.12 $(0.64) $0.94
----------------- ------ ------ ----- ------ -----
Common shares used
in computing basic
per share amounts 65,565 61,829 60,390 62,535 59,367
-------------------- ------ ------ ------ ------ ------
----------------------- ------ ------ ----- ------ -----
Diluted net income
(loss) per share $(0.24) $(0.23) $0.11 $(0.64) $0.87
------------------ ------ ------ ----- ------ -----
Common and common
equivalent shares
used in computing
diluted per share
amounts under
non-GAAP basis 65,565 61,829 63,541 62,535 63,840
--------- ------ ------ ------ ------ ------
(1) Charges for impairment of goodwill and intangible assets incurred as a
result of their carrying value exceeding the fair value. The impaired
goodwill and intangible assets related to acquired TMBJ and certain
third-party purchased IP. Management believes that these charges are not
directly associated with the Company's core operating performance.
(2) Amortization of acquisition-related intangible assets represents the
amortization of identifiable intangible assets from the acquisition of
TMBJ and the purchase of the minority interests of the Company's TTI
subsidiary. Management deemed that these acquisition-related charges are
not related to Trident's core operating performance and it is appropriate
to exclude those charges from Trident's non-GAAP financial measures, as
it enhances the ability of investors to compare Trident's
period-over-period operating results.
(3) Stock-based compensation expense relates primarily to the equity
awards such as stock options and restricted stock. This is non-cash
expense that varies in amount from period to period and is dependent on
market forces that are often beyond Trident's control. Hence, management
excludes this item from the non-GAAP financial measures.
(4) Stock options related professional fees are excluded from the
non-GAAP net income (loss) calculation. Management believes that these
professional fees are not related to the Company's ongoing business and
operating performance of Trident. Amounts in the three months and year ended June 30, 2009 include insurance reimbursements received for the
Directors' and Officers' insurance partially offset by the stock options
related professional fees incurred.
(5) Software license fees represent an adjustment for prior years'
software usage.
(6) Adjustment incurred to write down existing royalties that the Company
prepaid to certain vendors. Management believes that the adjustment is not
directly associated with Trident's core operating performance.
(7) Management believes that the capital loss on the sale of UMC stock and
the dividend income received from UMC are not directly related to the
ongoing business and operating performance of Trident. In addition, at
September 30, 2008, based on the guidance prescribed in FSPs No. FAS
115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments, the Company determined that the
decline in value of its remaining investment in UMC was other than
temporary. As a result, the Company recorded an impairment loss in the
first quarter of fiscal year 2009 for this decline in value. The capital
loss, dividend income and impairment loss from the investment in UMC have
all been excluded from the non-GAAP net loss calculation.
(8) The capital gain related to cash distribution from one of the
Company's investments. Management believes that such capital gain on the
investment is not related to the ongoing business and operating
performance of Trident. As such, management believes that it is
appropriate to exclude investment related gain from Trident's non-GAAP
financial measures.
SOURCE Trident Microsystems, Inc.
http://www.tridentmicro.com
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