Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of power
efficient visual processing solutions, today announced financial
results for the second quarter ended June 30, 2019.
Second Quarter and Recent
Highlights
- Mobile revenue increased 14% and Video Delivery revenue grew
73% year-over-year
- ASUS launched ROG Phone II in conjunction with Tencent Games,
as the first smartphone to incorporate Soft Iris solution running
on the Qualcomm® Snapdragon™ 855 Plus Mobile Platform
- TrueCut® Motion Grading Wins Hollywood Professional Association
Engineering Excellence Award
- Black Shark launched Shark 2 Pro, its fourth gaming smartphone
to incorporate Iris visual processor
President and CEO of Pixelworks, Todd DeBonis,
commented, “Second quarter revenue was in-line with the midpoint of
our guidance as all areas of the business performed as expected,
with continued year-over-year revenue growth in both Mobile and
Video Delivery. Gross margin expanded sequentially and
year-over-year, and when combined with well-managed operating
expenses, resulted in EPS for the quarter at the high-end of our
guidance.
“We also made significant progress on advancing
our sales pipeline and further cultivating the ecosystem to enable
high-quality HDR video content on visual displays. As evidence of
our continued progress, Black Shark recently launched the Shark 2
Pro smartphone, their fourth gaming device to incorporate our Iris
visual processor. Additionally, ASUS launched the ROG Phone II in
conjunction with Tencent Games and became the first smartphone to
incorporate Pixelworks’ Soft Iris solution with advanced display
calibration running on the Snapdragon™ 855 Plus mobile
platform.”
DeBonis concluded, “As a result of our expanded
portfolio of hardware and software-based solutions, we are
extremely well positioned to increase adoption of our
industry-leading visual display solutions across a growing number
of new and existing mobile OEMs and streaming service providers. We
anticipate further momentum in the coming quarters as new mobile
devices are launched incorporating Pixelworks’ Iris visual
processors, Soft Iris and support for our award winning TrueCut
format – collectively contributing to a meaningful acceleration in
Mobile growth as we approach the end of 2019 and well into
2020.”
Second Quarter 2019 Financial
Results
Revenue in the second quarter of 2019 was $18.0
million, compared to $16.6 million in the first quarter of 2019 and
$19.3 million in the second quarter of 2018. Year-over-year, second
quarter revenue reflects continued growth in the Company’s Mobile
and Video Delivery businesses, offset by below normal seasonal
demand in the Projector market.
On a GAAP basis, gross profit margin in the
second quarter of 2019 was 52.0%, compared to 50.9% in the first
quarter of 2019 and 49.5% in the second quarter of 2018. On a
non-GAAP basis, second quarter 2019 gross profit margin was 54.1%,
compared to 53.3% in the first quarter of 2019 and 52.7% in the
second quarter of 2018.
GAAP operating expenses in the second quarter of
2019 were $11.7 million, compared to $11.9 million in the first
quarter of 2019 and $12.0 million in the year-ago quarter. Non-GAAP
operating expenses in the second quarter of 2019 were $9.6 million,
compared to $10.3 million in the first quarter of 2019 and $10.0
million in the year-ago quarter.
For the second quarter of 2019, the Company
recorded a GAAP net loss of $2.4 million, or ($0.06) per share,
compared to a GAAP net income of $133,000, or $0.00 per diluted
share, in the first quarter of 2019, which included a net gain of
$3.9 million related to the sale of non-strategic patents. The
Company recorded a GAAP net loss of $2.4 million, or ($0.07) per
share, in the second quarter of 2018.
For the second quarter of 2019, the Company
recorded a non-GAAP net loss of $97,000, or ($0.00) per share,
compared to a non-GAAP net loss of $1.5 million, or ($0.04) per
share, in the first quarter of 2019 and non-GAAP net income of
$31,000, or $0.00 per diluted share, in the second quarter of
2018.
Adjusted EBITDA in the second quarter of 2019
was $1.0 million, compared to ($464,000) in the first quarter of
2019 and $1.1 million in the second quarter of 2018.
Business Outlook
For the third quarter of 2019, Pixelworks
expects revenue to be in a range of between $17.5 million and $18.5
million, reflecting sequential and year-over-year growth in Mobile
combined with lower than normal seasonal demand in the Video
Delivery and Digital Projection markets. Additional guidance will
be provided as part of the Company’s earnings conference call.
Conference Call Information
Pixelworks will host a conference call today,
August 1, 2019, at 2:00 p.m. Pacific Time, which can be accessed by
calling 1-877-359-9508 and using passcode 6687844. A Web broadcast
of the call can be accessed by visiting the Company's investor page
at www.pixelworks.com. For those unable to listen to the live Web
broadcast, it will be archived for at least 30 days. A replay of
the conference call will also be available through Thursday, August
8, 2019, and can be accessed by calling 1-855-859-2056 and using
passcode 6687844.
About Pixelworks, Inc.
Pixelworks provides industry-leading display
processing and video delivery solutions and technology that enable
highly authentic viewing experiences with superior visual quality.
The Company has a 20-year history of delivering image processing
innovation to providers of leading-edge consumer electronics,
professional displays and video streaming services. Pixelworks is
headquartered in San Jose, CA. For more information, please visit
the company’s web site at www.pixelworks.com
Note: Pixelworks, the Pixelworks logo and
TrueCut are registered trademarks of Pixelworks, Inc. All other
trademarks are the property of their respective owners.
Non-GAAP Financial Measures
This earnings release makes reference to
non-GAAP gross profit margins, non-GAAP operating expenses,
non-GAAP net income (loss) and non-GAAP net income (loss) per
share, which exclude gain on sale of patents, inventory step-up and
backlog amortization, amortization of acquired intangible assets,
stock-based compensation expense, restructuring expenses, gain on
extinguishment of convertible debt, and discount accretion on
convertible debt fair value which are all required under GAAP as
well as the tax effect of the non-GAAP adjustments. The press
release also makes reference to and reconciles GAAP net income
(loss) and adjusted EBITDA, which Pixelworks defines as GAAP net
income (loss) before interest income (expense) and other, net,
income tax provision, depreciation and amortization, as well as the
specific items listed above.
Pixelworks management uses these non-GAAP
financial measures internally to understand, manage and evaluate
the business and establish its operational goals, review its
operations on a period to period basis, for compensation
evaluations, to measure performance, and for budgeting and resource
allocation. Pixelworks management believes it is useful for the
Company and investors to review, as applicable, both GAAP
information and non-GAAP financial measures to help assess the
performance of Pixelworks’ continuing business and to evaluate
Pixelworks’ future prospects. These non-GAAP measures, when
reviewed together with the GAAP financial information, provide
additional transparency and information for comparison and analysis
of operating performance and trends. These non-GAAP measures
exclude certain items to facilitate management’s review of the
comparability of our core operating results on a period to period
basis.
In calculating the above non-GAAP results,
management specifically adjusted for certain items related to the
acquisition of ViXS Systems, Inc., including amortization of
acquired intangible assets, and impact of inventory step up, both
related to fair valuing the items, restructuring expenses related
to a reduction in workforce and facility closure and
consolidations, gain on debt extinguishment, and accretion on
convertible debt. Management considers these items as either
limited in term or having no impact on Pixelworks’ cash flows, and
therefore has excluded such items to facilitate a review of current
operating performance and comparisons to our past operating
performance.
Because the Company’s non-GAAP financial
measures are not calculated in accordance with GAAP, they may not
necessarily be comparable to similarly titled measures employed by
other companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures, and should be read only in conjunction with the Company’s
consolidated financial results as presented in accordance with
GAAP. A reconciliation between GAAP and non-GAAP financial measures
is included in this earnings release which is available in the
investor relations section of the Pixelworks' website.
Safe Harbor Statement
This release contains forward-looking statements
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. These statements may be identified by use of terms such as
“begin,” “continue,” “will,” “expect”, “believe,” “anticipate” and
similar terms or the negative of such terms, and include, without
limitation, statements about the Company’s digital projection,
mobile and video delivery businesses, including market movement and
demand, customer engagements, mobile wins and the timing thereof,
growth in the mobile and video delivery markets, strategy,
seasonality, and additional guidance, particularly as to revenue
for the third quarter of 2019. 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 execute on our strategy, competitive
factors, such as rival chip architectures, introduction or traction
by competing designs, or pricing pressures; the success of our
products in expanded markets; current global economic challenges;
changes in the digital display and projection markets; seasonality
in the consumer electronics market; our efforts to achieve
profitability from operations; 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 from those discussed in the forward-looking statements
is included from time to time in the Company's Securities and
Exchange Commission filings, including its Annual Report on Form
10-K for the year ended December 31, 2018 as well as subsequent SEC
filings.
The forward-looking statements contained in this
release are as of the date of this release, and the Company does
not undertake any obligation to update any such statements, whether
as a result of new information, future events or otherwise.
[Financial Tables Follow]
|
PIXELWORKS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per
share data) (Unaudited) |
| |
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Revenue, net |
|
$ |
18,027 |
|
|
$ |
16,648 |
|
|
$ |
19,251 |
|
|
$ |
34,675 |
|
|
$ |
34,543 |
|
| Cost of revenue (1) |
|
|
8,651 |
|
|
|
8,176 |
|
|
|
9,717 |
|
|
|
16,827 |
|
|
|
17,207 |
|
|
Gross profit |
|
|
9,376 |
|
|
|
8,472 |
|
|
|
9,534 |
|
|
|
17,848 |
|
|
|
17,336 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development (2) |
|
|
6,364 |
|
|
|
6,472 |
|
|
|
6,423 |
|
|
|
12,836 |
|
|
|
10,886 |
|
|
Selling, general and administrative (3) |
|
|
4,935 |
|
|
|
5,460 |
|
|
|
4,959 |
|
|
|
10,395 |
|
|
|
9,573 |
|
|
Restructuring |
|
|
398 |
|
|
|
— |
|
|
|
602 |
|
|
|
398 |
|
|
|
621 |
|
|
Total operating expenses |
|
|
11,697 |
|
|
|
11,932 |
|
|
|
11,984 |
|
|
|
23,629 |
|
|
|
21,080 |
|
|
Loss from operations |
|
|
(2,321 |
) |
|
|
(3,460 |
) |
|
|
(2,450 |
) |
|
|
(5,781 |
) |
|
|
(3,744 |
) |
| Interest income and other, net
(4) |
|
|
104 |
|
|
|
96 |
|
|
|
40 |
|
|
|
200 |
|
|
|
1,177 |
|
| Gain on sale of patents |
|
|
— |
|
|
|
3,905 |
|
|
|
— |
|
|
|
3,905 |
|
|
|
— |
|
|
Total other income, net |
|
|
104 |
|
|
|
4,001 |
|
|
|
40 |
|
|
|
4,105 |
|
|
|
1,177 |
|
|
Income (loss) before income taxes |
|
|
(2,217 |
) |
|
|
541 |
|
|
|
(2,410 |
) |
|
|
(1,676 |
) |
|
|
(2,567 |
) |
| Provision for income
taxes |
|
|
231 |
|
|
|
408 |
|
|
|
32 |
|
|
|
639 |
|
|
|
308 |
|
|
Net income (loss) |
|
$ |
(2,448 |
) |
|
$ |
133 |
|
|
$ |
(2,442 |
) |
|
$ |
(2,315 |
) |
|
$ |
(2,875 |
) |
| Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
$ |
(0.07 |
) |
|
|
(0.06 |
) |
|
|
(0.08 |
) |
|
Diluted |
|
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
$ |
(0.07 |
) |
|
|
(0.06 |
) |
|
|
(0.08 |
) |
| Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,688 |
|
|
|
37,247 |
|
|
|
35,704 |
|
|
|
37,469 |
|
|
|
35,445 |
|
|
Diluted |
|
|
37,688 |
|
|
|
38,692 |
|
|
|
35,704 |
|
|
|
37,469 |
|
|
|
35,445 |
|
| —————— |
|
|
|
|
|
|
|
|
|
|
| (1) Includes: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
|
596 |
|
|
|
596 |
|
|
Stock-based compensation |
|
|
83 |
|
|
|
95 |
|
|
|
78 |
|
|
|
178 |
|
|
|
144 |
|
|
Inventory step-up and backlog amortization |
|
|
— |
|
|
|
12 |
|
|
|
239 |
|
|
|
12 |
|
|
|
361 |
|
| (2) Includes stock-based
compensation |
|
|
703 |
|
|
|
661 |
|
|
|
627 |
|
|
|
1,364 |
|
|
|
1,222 |
|
| (3) Includes: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
879 |
|
|
|
933 |
|
|
|
682 |
|
|
|
1,812 |
|
|
|
1,221 |
|
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
84 |
|
|
|
101 |
|
|
|
160 |
|
|
|
202 |
|
| (4) Includes: |
|
|
Gain on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
|
Discount accretion on convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
69 |
|
| |
|
PIXELWORKS, INC. RECONCILIATION OF GAAP
AND NON-GAAP
FINANCIAL
INFORMATION * (In thousands, except per
share data) (Unaudited) |
| |
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Reconciliation of GAAP
and non-GAAP gross profit |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
9,376 |
|
|
$ |
8,472 |
|
|
$ |
9,534 |
|
|
$ |
17,848 |
|
|
$ |
17,336 |
|
| Amortization of acquired
intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
|
596 |
|
|
|
596 |
|
| Stock-based compensation |
|
|
83 |
|
|
|
95 |
|
|
|
78 |
|
|
|
178 |
|
|
|
144 |
|
| Inventory step-up and backlog
amortization |
|
|
— |
|
|
|
12 |
|
|
|
239 |
|
|
|
12 |
|
|
|
361 |
|
|
Total reconciling items included in gross profit |
|
|
381 |
|
|
|
405 |
|
|
|
615 |
|
|
|
786 |
|
|
|
1,101 |
|
| Non-GAAP gross profit |
|
$ |
9,757 |
|
|
$ |
8,877 |
|
|
$ |
10,149 |
|
|
$ |
18,634 |
|
|
$ |
18,437 |
|
| Non-GAAP gross profit margin |
|
|
54.1 |
% |
|
|
53.3 |
% |
|
|
52.7 |
% |
|
|
53.7 |
% |
|
|
53.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of GAAP
and non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
| GAAP operating expenses |
|
$ |
11,697 |
|
|
$ |
11,932 |
|
|
$ |
11,984 |
|
|
$ |
23,629 |
|
|
$ |
21,080 |
|
| Reconciling item included in
research and development: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
703 |
|
|
|
661 |
|
|
|
627 |
|
|
|
1,364 |
|
|
|
1,222 |
|
| Reconciling items included in
selling, general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
879 |
|
|
|
933 |
|
|
|
682 |
|
|
|
1,812 |
|
|
|
1,221 |
|
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
84 |
|
|
|
101 |
|
|
|
160 |
|
|
|
202 |
|
| Restructuring |
|
|
398 |
|
|
|
— |
|
|
|
602 |
|
|
|
398 |
|
|
|
621 |
|
|
Total reconciling items included in operating expenses |
|
|
2,056 |
|
|
|
1,678 |
|
|
|
2,012 |
|
|
|
3,734 |
|
|
|
3,266 |
|
| Non-GAAP operating
expenses |
|
$ |
9,641 |
|
|
$ |
10,254 |
|
|
$ |
9,972 |
|
|
$ |
19,895 |
|
|
$ |
17,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of GAAP
and non-GAAP net income (loss) |
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) |
|
$ |
(2,448 |
) |
|
$ |
133 |
|
|
$ |
(2,442 |
) |
|
$ |
(2,315 |
) |
|
$ |
(2,875 |
) |
| Reconciling items included in
gross profit |
|
|
381 |
|
|
|
405 |
|
|
|
615 |
|
|
|
786 |
|
|
|
1,101 |
|
| Reconciling items included in
operating expenses |
|
|
2,056 |
|
|
|
1,678 |
|
|
|
2,012 |
|
|
|
3,734 |
|
|
|
3,266 |
|
| Reconciling items included in
total other income, net |
|
|
— |
|
|
|
(3,905 |
) |
|
|
— |
|
|
|
(3,905 |
) |
|
|
(1,203 |
) |
| Tax effect of non-GAAP
adjustments |
|
|
(86 |
) |
|
|
219 |
|
|
|
(154 |
) |
|
|
133 |
|
|
|
(55 |
) |
| Non-GAAP net income (loss) |
|
$ |
(97 |
) |
|
$ |
(1,470 |
) |
|
$ |
31 |
|
|
$ |
(1,567 |
) |
|
$ |
234 |
|
| Non-GAAP net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.00 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.00 |
|
|
$ |
(0.04 |
) |
|
$ |
0.01 |
|
|
Diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.00 |
|
|
$ |
(0.04 |
) |
|
$ |
0.01 |
|
| Non-GAAP weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,688 |
|
|
|
37,247 |
|
|
|
35,704 |
|
|
|
37,469 |
|
|
|
35,445 |
|
|
Diluted |
|
|
37,688 |
|
|
|
37,247 |
|
|
|
37,369 |
|
|
|
37,469 |
|
|
|
37,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| *Set forth above
are reconciliations of the non-GAAP financial measure to the most
directly comparable GAAP financial measure. The non-GAAP financial
measure disclosed by the company has limitations and should not be
considered a substitute for, or superior to, the financial measure
prepared in accordance with GAAP, and the reconciliations from GAAP
to Non-GAAP actuals should be carefully evaluated. Please refer to
"Non-GAAP Financial Measures” in this document for an explanation
of the adjustments made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why
management believes the non-GAAP measures provide useful
information for investors. |
| |
|
PIXELWORKS, INC. RECONCILIATION OF GAAP
AND NON-GAAP EARNINGS PER
SHARE * (Figures may not sum due to
rounding) (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
Dollars per share |
|
Dollars per share |
|
Dollars per share |
|
Dollars per share |
|
Dollars per share |
|
|
|
Basic |
|
Diluted |
|
Basic |
|
Diluted |
|
Basic |
|
Diluted |
|
Basic |
|
Diluted |
|
Basic |
|
Diluted |
| Reconciliation of GAAP
and non-GAAP net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
| Reconciling items included in
gross profit |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.03 |
|
|
|
0.03 |
|
| Reconciling items included in
operating expenses |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
0.09 |
|
| Reconciling items included in
total other income, net |
|
|
— |
|
|
|
— |
|
|
|
(0.10 |
) |
|
|
(0.10 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.10 |
) |
|
|
(0.10 |
) |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
| Tax effect of non-GAAP
adjustments |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Non-GAAP net income
(loss) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| *Set forth above are
reconciliations of the non-GAAP financial measure to the most
directly comparable GAAP financial measure. The non-GAAP financial
measure disclosed by the company has limitations and should not be
considered a substitute for, or superior to, the financial measure
prepared in accordance with GAAP, and the reconciliations from GAAP
to Non-GAAP actuals should be carefully evaluated. Please refer to
"Non-GAAP Financial Measures” in this document for an explanation
of the adjustments made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why
management believes the non-GAAP measures provide useful
information for investors. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIXELWORKS, INC. RECONCILIATION OF GAAP
AND NON-GAAP GROSS PROFIT
MARGIN * (Figures may not sum due to
rounding) (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Reconciliation of GAAP
and non-GAAP gross profit margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit margin |
|
52.0 |
% |
|
50.9 |
% |
|
49.5 |
% |
|
51.5 |
% |
|
50.2 |
% |
| Amortization of acquired
intangible assets |
|
1.7 |
% |
|
1.8 |
% |
|
1.5 |
% |
|
1.7 |
% |
|
1.7 |
% |
| Stock-based compensation |
|
0.5 |
% |
|
0.6 |
% |
|
0.4 |
% |
|
0.5 |
% |
|
0.4 |
% |
| Inventory step-up and backlog
amortization |
|
— |
% |
|
0.1 |
% |
|
1.2 |
% |
|
0.0 |
% |
|
1.0 |
% |
|
Total reconciling items included in gross profit |
|
2.1 |
% |
|
2.4 |
% |
|
3.2 |
% |
|
2.3 |
% |
|
3.2 |
% |
| Non-GAAP gross profit
margin |
|
54.1 |
% |
|
53.3 |
% |
|
52.7 |
% |
|
53.7 |
% |
|
53.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| *Set forth above are
reconciliations of the non-GAAP financial measure to the most
directly comparable GAAP financial measure. The non-GAAP financial
measure disclosed by the company has limitations and should not be
considered a substitute for, or superior to, the financial measure
prepared in accordance with GAAP, and the reconciliations from GAAP
to Non-GAAP actuals should be carefully evaluated. Please refer to
"Non-GAAP Financial Measures” in this document for an explanation
of the adjustments made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why
management believes the non-GAAP measures provide useful
information for investors. |
| |
|
|
|
|
|
|
|
|
|
|
|
PIXELWORKS, INC. RECONCILIATION OF GAAP
AND NON-GAAP
FINANCIAL
INFORMATION * (In thousands)
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Reconciliation of GAAP
net income (loss) and adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(2,448 |
) |
|
$ |
133 |
|
|
$ |
(2,442 |
) |
|
$ |
(2,315 |
) |
|
$ |
(2,875 |
) |
| Stock-based compensation |
|
|
1,665 |
|
|
|
1,689 |
|
|
|
1,387 |
|
|
|
3,354 |
|
|
|
2,587 |
|
| Restructuring |
|
|
398 |
|
|
|
— |
|
|
|
602 |
|
|
|
398 |
|
|
|
621 |
|
| Amortization of acquired
intangible assets |
|
|
374 |
|
|
|
382 |
|
|
|
399 |
|
|
|
756 |
|
|
|
798 |
|
| Tax effect of non-GAAP
adjustments |
|
|
(86 |
) |
|
|
219 |
|
|
|
(154 |
) |
|
|
133 |
|
|
|
(55 |
) |
| Gain on sale of patents |
|
|
— |
|
|
|
(3,905 |
) |
|
|
— |
|
|
|
(3,905 |
) |
|
|
— |
|
| Inventory step-up and backlog
amortization |
|
|
— |
|
|
|
12 |
|
|
|
239 |
|
|
|
12 |
|
|
|
361 |
|
| Gain on debt
extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
| Discount accretion on
convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
69 |
|
| Non-GAAP net income
(loss) |
|
$ |
(97 |
) |
|
$ |
(1,470 |
) |
|
$ |
31 |
|
|
$ |
(1,567 |
) |
|
$ |
234 |
|
| EBITDA adjustments: |
|
|
|
|
|
|
|
|
|
|
| Depreciation and
amortization |
|
$ |
887 |
|
|
$ |
913 |
|
|
$ |
923 |
|
|
$ |
1,800 |
|
|
$ |
1,749 |
|
| Non-GAAP interest expense
(income) and other, net |
|
|
(104 |
) |
|
|
(96 |
) |
|
|
(40 |
) |
|
|
(200 |
) |
|
|
26 |
|
| Non-GAAP provision for income
taxes |
|
|
317 |
|
|
|
189 |
|
|
|
186 |
|
|
|
506 |
|
|
|
363 |
|
| Adjusted EBITDA |
|
$ |
1,003 |
|
|
$ |
(464 |
) |
|
$ |
1,100 |
|
|
$ |
539 |
|
|
$ |
2,372 |
|
| |
|
|
|
|
|
|
|
|
|
|
| *Set forth above are
reconciliations of the non-GAAP financial measure to the most
directly comparable GAAP financial measure. The non-GAAP financial
measure disclosed by the company has limitations and should not be
considered a substitute for, or superior to, the financial measure
prepared in accordance with GAAP, and the reconciliations from GAAP
to Non-GAAP actuals should be carefully evaluated. Please refer to
"Non-GAAP Financial Measures” in this document for an explanation
of the adjustments made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why
management believes the non-GAAP measures provide useful
information for investors. |
| |
|
PIXELWORKS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands)
(Unaudited) |
|
|
|
|
|
|
|
|
|
June 30, 2019 |
|
December 31, 2018 |
|
|
ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
16,746 |
|
$ |
17,944 |
|
|
Short-term marketable securities |
|
6,575 |
|
|
6,069 |
|
|
Accounts receivable, net |
|
7,353 |
|
|
6,982 |
|
|
Inventories |
|
2,842 |
|
|
2,954 |
|
|
Prepaid expenses and other current assets |
|
2,303 |
|
|
1,494 |
|
|
Total current assets |
|
35,819 |
|
|
35,443 |
|
| Property and equipment, net |
|
4,817 |
|
|
6,151 |
|
| Operating lease right of use
assets |
|
5,173 |
|
|
— |
|
| Other assets, net |
|
1,606 |
|
|
1,132 |
|
| Acquired intangible assets,
net |
|
3,452 |
|
|
4,208 |
|
| Goodwill |
|
18,407 |
|
|
18,407 |
|
|
Total assets |
$ |
69,274 |
|
$ |
65,341 |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
2,183 |
|
$ |
2,116 |
|
|
Accrued liabilities and current portion of long-term
liabilities |
|
9,158 |
|
|
10,256 |
|
|
Current portion of income taxes payable |
|
578 |
|
|
263 |
|
|
Total current liabilities |
|
11,919 |
|
|
12,635 |
|
| Long-term liabilities, net of
current portion |
|
674 |
|
|
1,017 |
|
| Operating lease liabilities, net
of current portion |
|
3,595 |
|
|
— |
|
| Income taxes payable, net of
current portion |
|
2,335 |
|
|
2,299 |
|
|
Total liabilities |
|
18,523 |
|
|
15,951 |
|
| Shareholders’ equity |
|
50,751 |
|
|
49,390 |
|
|
Total liabilities and shareholders’ equity |
$ |
69,274 |
|
$ |
65,341 |
|
| |
Contacts:
Investor ContactShelton Group Brett PerryP:
+1-214-272-0070 E: bperry@sheltongroup.com
Company ContactPixelworks, Inc.Steven MooreP:
+1-408-200-9221E: smoore@pixelworks.com
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