Safe Harbor Statement
This release contains forward-looking statements, including, without limitation, the statements in Bruce Walicek's quote with respect to the Company’s growth opportunities and product momentum in 2014, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements for purposes of this release, including any projections of revenue or other financial items or any statements regarding the plans and objectives of management for future operations. Such statements are based on management's current expectations, estimates and projections about the Company's business. These statements are not guarantees of future performance and involve numerous risks, uncertainties and assumptions that are difficult to predict. Actual results could vary materially from those contained in forward looking statements due to many factors, including, without limitation: our ability to deliver new products in a timely fashion; our new product yield rates; changes in estimated product costs; product mix; supply of products from third-party foundries; failure or difficulty in achieving design wins; timely customer transition to new product designs; competitive factors, such as rival chip architectures, introduction or traction by competing designs, or pricing pressures; risks related to licensing our intellectual property; the success of our products in expanded markets; current global economic challenges; levels of inventory at distributors and customers; changes in the digital display and projection markets; changes in customer ordering patterns or lead times; seasonality in the consumer electronics market; our efforts to achieve profitability from operations; insufficient, excess or obsolete inventory and variations in inventory valuation; the outcome of any litigation related to our intellectual property rights; our limited financial resources and our ability to attract and retain key personnel. More information regarding potential factors that could affect the Company's financial results and could cause actual results to differ materially is included from time to time in the Company's Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2012, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and subsequent SEC filings.
The forward-looking statements contained in this release speak as of the date of this release, and we do not undertake any obligation to update any such statements, whether as a result of new information, future events or otherwise.
| PIXELWORKS, INC. | |||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| Revenue, net | $ | 14,984 | $ | 15,309 | $ | 13,571 | $ | 48,118 | $ | 59,710 | |||||||||||||||
| Cost of revenue (1) | 6,495 | 5,987 | 6,979 | 21,708 | 29,862 | ||||||||||||||||||||
| Gross profit | 8,489 | 9,322 | 6,592 | 26,410 | 29,848 | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||
| Research and development (2) | 4,536 | 4,234 | 6,247 | 20,664 | 20,757 | ||||||||||||||||||||
| Selling, general and administrative (3) | 3,715 | 3,296 | 3,576 | 13,883 | 14,944 | ||||||||||||||||||||
| Total operating expenses | 8,251 | 7,530 | 9,823 | 34,547 | 35,701 | ||||||||||||||||||||
| Income (loss) from operations | 238 | 1,792 | (3,231 | ) | (8,137 | ) | (5,853 | ) | |||||||||||||||||
| Interest expense and other, net | (109 | ) | (101 | ) | (108 | ) | (405 | ) | (412 | ) | |||||||||||||||
| Income (loss) before income taxes | 129 | 1,691 | (3,339 | ) | (8,542 | ) | (6,265 | ) | |||||||||||||||||
| Provision (benefit) for income taxes | 179 | 182 | 218 | 328 | (571 | ) | |||||||||||||||||||
| Net income (loss) | $ | (50 | ) | $ | 1,509 | $ | (3,557 | ) | $ | (8,870 | ) | $ | (5,694 | ) | |||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||||
| Basic | $ | (0.00 | ) | $ | 0.07 | $ | (0.19 | ) | $ | (0.45 | ) | $ | (0.31 | ) | |||||||||||
| Diluted | $ | (0.00 | ) | $ | 0.07 | $ | (0.19 | ) | $ | (0.45 | ) | $ | (0.31 | ) | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||
| Basic | 21,985 | 20,128 | 18,401 | 19,816 | 18,252 | ||||||||||||||||||||
| Diluted | 21,985 | 21,290 | 18,401 | 19,816 | 18,252 | ||||||||||||||||||||
|
—————— |
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| (1) Includes: | |||||||||||||||||||||||||
| Additional amortization of non-cancelable prepaid royalty | $ | 103 | $ | 77 | $ | 135 | $ | 369 | $ | 565 | |||||||||||||||
| Stock-based compensation | 64 | 29 | 44 | 164 | 162 | ||||||||||||||||||||
| (2) Includes stock-based compensation | 522 | 209 | 274 | 1,204 | 893 | ||||||||||||||||||||
| (3) Includes stock-based compensation | 599 | 301 | 316 | 1,640 | 1,109 | ||||||||||||||||||||
| PIXELWORKS, INC. | |||||||||||||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * | |||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||||
| 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| Reconciliation of GAAP and non-GAAP gross profit | |||||||||||||||||||||||||
| GAAP gross profit | $ | 8,489 | $ | 9,322 | $ | 6,592 | $ | 26,410 | $ | 29,848 | |||||||||||||||
| Additional amortization of non-cancelable prepaid royalty | 103 | 77 | 135 | 369 | 565 | ||||||||||||||||||||
| Stock-based compensation | 64 | 29 | 44 | 164 | 162 | ||||||||||||||||||||
| Total reconciling items included in cost of revenue | 167 | 106 | 179 | 533 | 727 | ||||||||||||||||||||
| Non-GAAP gross profit | $ | 8,656 | $ | 9,428 | $ | 6,771 | $ | 26,943 | $ | 30,575 | |||||||||||||||
| Non-GAAP gross profit margin | 57.8 | % | 61.6 | % | 49.9 | % | 56.0 | % | 51.2 | % | |||||||||||||||
| Reconciliation of GAAP and non-GAAP operating expenses | |||||||||||||||||||||||||
| GAAP operating expenses | $ | 8,251 | $ | 7,530 | $ | 9,823 | $ | 34,547 | $ | 35,701 | |||||||||||||||
| Reconciling item included in research and development: | |||||||||||||||||||||||||
| Stock-based compensation | 522 | 209 | 274 | 1,204 | 893 | ||||||||||||||||||||
| Reconciling item included in selling, general and administrative: | |||||||||||||||||||||||||
| Stock-based compensation | 599 | 301 | 316 | 1,640 | 1,109 | ||||||||||||||||||||
| Total reconciling items included in operating expenses | 1,121 | 510 | 590 | 2,844 | 2,002 | ||||||||||||||||||||
| Non-GAAP operating expenses | $ | 7,130 | $ | 7,020 | $ | 9,233 | $ | 31,703 | $ | 33,699 | |||||||||||||||
| Reconciliation of GAAP and non-GAAP net income (loss) | |||||||||||||||||||||||||
| GAAP net income (loss) | $ | (50 | ) | $ | 1,509 | $ | (3,557 | ) | $ | (8,870 | ) | $ | (5,694 | ) | |||||||||||
| Reconciling items included in cost of revenue | 167 | 106 | 179 | 533 | 727 | ||||||||||||||||||||
| Reconciling items included in operating expenses | 1,121 | 510 | 590 | 2,844 | 2,002 | ||||||||||||||||||||
| Tax effect of non-GAAP adjustments | 17 | 8 | (20 | ) | — | — | |||||||||||||||||||
| Non-GAAP net income (loss) | $ | 1,255 | $ | 2,133 | $ | (2,808 | ) | $ | (5,493 | ) | $ | (2,965 | ) | ||||||||||||
| Non-GAAP net income (loss) per share: | |||||||||||||||||||||||||
| Basic | $ | 0.06 | $ | 0.11 | $ | (0.15 | ) | $ | (0.28 | ) | $ | (0.16 | ) | ||||||||||||
| Diluted | $ | 0.05 | $ | 0.10 | $ | (0.15 | ) | $ | (0.28 | ) | $ | (0.16 | ) | ||||||||||||
| Non-GAAP weighted average shares outstanding: | |||||||||||||||||||||||||
| Basic | 21,985 | 20,128 | 18,401 | 19,816 | 18,252 | ||||||||||||||||||||
| Diluted | 23,468 | 21,290 | 18,401 | 19,816 | 18,252 | ||||||||||||||||||||
