FREMONT, Calif., Sept. 07, 2017 (GLOBE NEWSWIRE) -- Sigma Designs, Inc.® (NASDAQ:SIGM), a leading provider of intelligent system-on-chip (SoC) solutions for Connected Smart TV Platforms and Internet of Things (IoT) Devices, today reported financial results for its second quarter of fiscal year 2018, which ended July 29, 2017.
Second Quarter Fiscal 2018 Financial Results
Net revenue for the second quarter of fiscal 2018 was $39.5 million. This compares with net revenue of $39.6 million reported in the previous quarter, and net revenue of $61.3 million in the same period in fiscal 2017.
GAAP gross margin in the second quarter of fiscal 2018 was 47.6%. This compares with GAAP gross margin of 47.1% in the previous quarter, and GAAP gross margin of 48.2% for the same period in fiscal 2017.
Non-GAAP gross margin in the second quarter of fiscal 2018 was 48.1%. This compares with non-GAAP gross margin of 47.6% in the previous quarter, and non-GAAP gross margin of 49.9% for the same period in fiscal 2017.
GAAP operating expenses in the second quarter of fiscal 2018 were $29.8 million. This compares with GAAP operating expenses of $32.0 million in the previous quarter, and GAAP operating expenses of $29.9 million for the same period in fiscal 2017.
Non-GAAP operating expenses in the second quarter of fiscal 2018 were $26.1 million. This compares with non-GAAP operating expenses of $26.7 million in the previous quarter, and non-GAAP operating expenses of $27.2 million for the same period in fiscal 2017.
GAAP operating loss in the second quarter of fiscal 2018 was ($11.0) million. This compares with a GAAP operating loss of ($13.4) million in the previous quarter, and a GAAP operating loss of ($0.3) million for the same period in fiscal 2017.
Non-GAAP operating loss in the second quarter of fiscal 2018 was ($7.1) million. This compares with a non-GAAP operating loss of ($7.9) million in the previous quarter, and non-GAAP operating income of $3.4 million for the same period in fiscal 2017.
GAAP net loss in the second quarter of fiscal 2018 was ($12.7) million, or ($0.33) per share. This compares with a GAAP net loss of ($14.9) million, or ($0.39) per share in the previous quarter, and a GAAP net loss of ($1.7) million, or ($0.05) per share, for the same period in fiscal 2017.
Non-GAAP net loss in the second quarter of fiscal 2018 was ($8.8) million, or ($0.23) per share. This compares with a non-GAAP net loss of ($9.4) million, or ($0.25) per share, in the previous quarter, and non-GAAP net income of $2.5 million, or $0.07 per diluted share, for the same period in fiscal 2017.
The reconciliation between the GAAP and non-GAAP financial results for all referenced periods is provided in a table immediately following the GAAP financial tables below.
Strategic Alternatives Review
On July 26, Sigma Designs announced it had engaged Deutsche Bank to help explore alternatives for enhancing stockholder value. The Company is continuing to work with Deutsche Bank and will provide an update on this process when it determines that further disclosures are appropriate. During this review period, the Company continues to implement its previously announced restructuring plans with a goal of exiting fiscal 2018 at an operating expense rate 10% lower than the prior fiscal year.
Management Comment
“Our second quarter results were in-line with our guidance. One positive trend coming out of the quarter was our IoT Devices segment, which generated another quarter of revenue growth. Led by our industry leading Z-Wave product line, IoT Devices revenue grew 15% sequentially from last quarter and 41% from the year ago quarter. While we are disappointed with the overall results, we are actively taking actions to streamline operations, lower costs and build long-term momentum for our core businesses,” said Thinh Tran, President and CEO of Sigma Designs, Inc.
Investor Conference Call
The conference call relating to Sigma’s second quarter fiscal year 2018 financial results will take place following this announcement at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time, today, September 7, 2017. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com/IR. To listen to the live call, please go to the website at least 10 minutes prior to the commencement of the call 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 via the Internet through www.sigmadesigns.com/IR. An audio replay will also be accessible for one week after the call by dialing 1-844-512-2921 and entering the replay pin number 3004524.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”), Sigma reports non-GAAP financial measures, as Sigma believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Therefore, non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAPP financials measures. The Company presents non-GAAP financial measures to provide investors with an additional tool to evaluate its operating results in a manner that focuses on what management believes to be its core, ongoing business operations. Furthermore, non-GAAP financial measures used by the Company may not be the same non-GAAP financial measures as those utilized by other companies; specifically, non-GAAP financial measures used by the Company may be calculated differently than other companies. Investors should, therefore, exercise caution when comparing non-GAAP financial measures used by Sigma to similarly titled non-GAAP financial measures of other companies. Sigma intends to calculate the various non-GAAP financial measures in future periods consistent with how they were calculated for the periods presented within this press release.
Sigma’s non-GAAP financial measures exclude amortization of acquired intangibles, stock-based compensation, one-time legal and other professional fee expenses, net gain on the sale of and impairment of privately-held investments, impairment of purchased IP, mask sets and design tools used in production, the reversal of previously accrued rebates and one-time restructuring charges. The tax amounts included in Sigma’s non-GAAP results approximate its operating cash tax expense, similar to the liability reported on Sigma’s tax returns. In the GAAP to non-GAAP reconciliation at the end of this press release, we have disclosed the impact of these income tax adjustments in our calculation of our non-GAAP financial results.
Sigma believes that its non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate Sigma’s operating results in the same manner as the research analysts that follow Sigma’s progress, all of whom present non-GAAP projections in their published reports.
Sigma uses non-GAAP measures to evaluate and assess its performance and operating results on a consistent basis, and to measure and compare its performance with the financial projections published by analysts as well as its direct competitors in the industry, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial results. For example, Sigma’s management has no control over certain variables that have a major influence in the determination of stock-based compensation. These variables include the volatility of its stock price and changing interest rates. Sigma believes that all of these excluded expenses in its non-GAAP financial measures may not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma’s GAAP financial results in the foreseeable future. Sigma believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides a better understanding of the overall performance of the business and its ability to perform in subsequent periods.
Forward-Looking Statements
