Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of power
efficient visual processing solutions, today announced financial
results for the third quarter ended September 30, 2019.
Third Quarter Highlights
- Mobile revenue increased 87% sequentially and 66%
year-over-year to a new record
- Iris visual processing solutions incorporated into five
smartphones launched across four customers, including HMD’s Nokia
7.2 and Nokia 6.2, and the TCL Plex
- Video Delivery revenue grew sequentially and year-over-year,
with increased contribution from Over-the-Air (OTA) solutions
- Available video content in TrueCut formats expanded to more
than 10,000 hours, with potential reach extended to over 100
million active daily users in China
- TrueCut® Motion Grading recognized with second prestigious
award, the Advanced Imaging Society’s (AIS) 2019 Entertainment
Technology Lumiere Award
President and CEO of Pixelworks, Todd DeBonis,
commented, “Our third quarter results played-out largely as
expected, as we continued to execute strongly in mobile and across
all other areas of the business. Revenue from mobile increased 66%
year-over-year to a new record, and we recorded the first
commercial revenue from both our Soft Iris solution and our 5th
generation Iris visual processor.
“As a result of expanding Pixelworks’ portfolio
of hardware and software-based visual display solutions, we have
continued to generate increasing momentum on our mobile growth
initiatives as well as key customer engagements. During the
quarter, we announced design wins on five newly launched
smartphones across four different OEMs, while also supporting
active programs with key customers on their planned next-generation
mobile devices.”
DeBonis concluded, “Looking forward, we are
focused on our growth initiatives in mobile visual processing and
our award winning TrueCut format, including a combination of
previous smartphone wins as well as new engagements across an
expanding set of mobile OEM customers and content platform
providers. Although macroeconomic headwinds are contributing to
prolonged inventory corrections within our digital projector and
video delivery businesses in the fourth quarter, we expect strong
sequential growth in mobile following its record revenue
contribution in the third quarter.”
Third Quarter 2019 Financial
Results
Revenue in the third quarter of 2019 was $18.1
million, compared to $18.0 million in the second quarter of 2019
and $21.5 million in the third quarter of 2018. Year-over-year,
third quarter revenue reflects continued growth in the Company’s
mobile and video delivery businesses, more than offset by below
normal seasonal demand in the digital projector market.
On a GAAP basis, gross profit margin in the
third quarter of 2019 was 51.8%, compared to 52.0% in the second
quarter of 2019 and 52.3% in the third quarter of 2018. On a
non-GAAP basis, third quarter 2019 gross profit margin was 53.9%,
compared to 54.1% in the second quarter of 2019 and 54.7% in the
third quarter of 2018.
GAAP operating expenses in the third quarter of
2019 were $11.8 million, compared to $11.7 million in the second
quarter of 2019 and $10.8 million in the year-ago quarter. Non-GAAP
operating expenses in the third quarter of 2019 were $10.3 million,
compared to $9.6 million in the second quarter of 2019 and $8.9
million in the year-ago quarter.
For the third quarter of 2019, the Company
recorded a GAAP net loss of $2.3 million, or ($0.06) per share,
compared to a GAAP net loss of $2.4 million, or ($0.06) per share,
in the second quarter of 2019, and GAAP net income of $0.4 million,
or $0.01 per diluted share, in the third quarter of 2018.
For the third quarter of 2019, the Company
recorded a non-GAAP net loss of $0.5 million, or ($0.01) per share,
compared to a non-GAAP net loss of $0.1 million, or ($0.00) per
share, in the second quarter of 2019 and non-GAAP net income of
$2.7 million, or $0.07 per diluted share, in the third quarter of
2018.
Adjusted EBITDA in the third quarter of 2019 was
$0.5 million, compared to $1.0 million in the second quarter of
2019 and $3.8 million in the third quarter of 2018.
Business Outlook
For the fourth quarter of 2019, Pixelworks
expects revenue to be in a range of between $15.0 million and $17.0
million. This range reflects weaker than previously expected demand
related to inventory corrections in both the digital projector and
video delivery markets due to the uncertain geopolitical macro
environment, partially offset by continued strong sequential
revenue growth in the mobile market. Additional guidance will be
provided as part of the Company’s scheduled earnings conference
call.
Conference Call Information
Pixelworks will host a conference call today,
October 31, 2019, at 2:00 p.m. Pacific Time, which can be accessed
by calling 1-877-359-9508 and using passcode 1262279. 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, November 7, 2019, and can be accessed by calling
1-855-859-2056 and using passcode 1262279.
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, deferred revenue fair
value adjustment, 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 and other, net, income tax
provision (benefit), 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 deferred revenue fair
value adjustment, 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, growth in the mobile market,
strategy, and additional guidance, particularly as to revenue for
the fourth 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 |
|
Nine Months Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue, net (1) |
|
$ |
18,057 |
|
|
$ |
18,027 |
|
|
$ |
21,472 |
|
$ |
52,732 |
|
|
$ |
56,015 |
|
Cost of
revenue (2) |
|
|
8,710 |
|
|
|
8,651 |
|
|
|
10,235 |
|
|
25,537 |
|
|
|
27,442 |
|
Gross profit |
|
|
9,347 |
|
|
|
9,376 |
|
|
|
11,237 |
|
|
27,195 |
|
|
|
28,573 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development (3) |
|
|
6,458 |
|
|
|
6,364 |
|
|
|
5,322 |
|
|
19,294 |
|
|
|
16,208 |
|
Selling, general and administrative (4) |
|
|
5,333 |
|
|
|
4,935 |
|
|
|
5,070 |
|
|
15,728 |
|
|
|
14,643 |
|
Restructuring |
|
|
— |
|
|
|
398 |
|
|
|
414 |
|
|
398 |
|
|
|
1,035 |
|
Total operating expenses |
|
|
11,791 |
|
|
|
11,697 |
|
|
|
10,806 |
|
|
35,420 |
|
|
|
31,886 |
|
Income (loss) from operations |
|
|
(2,444 |
) |
|
|
(2,321 |
) |
|
|
431 |
|
|
(8,225 |
) |
|
|
(3,313 |
) |
Interest
income and other, net (5) |
|
|
70 |
|
|
|
104 |
|
|
|
88 |
|
|
270 |
|
|
|
1,265 |
|
Gain on sale
of patents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
3,905 |
|
|
|
— |
|
Total other income, net |
|
|
70 |
|
|
|
104 |
|
|
|
88 |
|
|
4,175 |
|
|
|
1,265 |
|
Income (loss) before income taxes |
|
|
(2,374 |
) |
|
|
(2,217 |
) |
|
|
519 |
|
|
(4,050 |
) |
|
|
(2,048 |
) |
Provision
(benefit) for income taxes |
|
|
(68 |
) |
|
|
231 |
|
|
|
88 |
|
|
571 |
|
|
|
396 |
|
Net income (loss) |
|
$ |
(2,306 |
) |
|
$ |
(2,448 |
) |
|
$ |
431 |
|
$ |
(4,621 |
) |
|
$ |
(2,444 |
) |
Net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
(0.12 |
) |
|
|
(0.07 |
) |
Diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
(0.12 |
) |
|
|
(0.07 |
) |
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
38,086 |
|
|
|
37,688 |
|
|
|
36,195 |
|
|
37,677 |
|
|
|
35,697 |
|
Diluted |
|
|
38,086 |
|
|
|
37,688 |
|
|
|
37,993 |
|
|
37,677 |
|
|
|
35,697 |
|
—————— |
|
|
|
|
|
|
|
|
|
|
(1) Includes
deferred revenue fair value adjustment |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
52 |
|
$ |
— |
|
|
$ |
52 |
|
(2)
Includes: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
894 |
|
|
|
894 |
|
Stock-based compensation |
|
|
89 |
|
|
|
83 |
|
|
|
87 |
|
|
267 |
|
|
|
231 |
|
Inventory step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
97 |
|
|
12 |
|
|
|
458 |
|
(3) Includes
stock-based compensation |
|
|
570 |
|
|
|
703 |
|
|
|
609 |
|
|
1,934 |
|
|
|
1,831 |
|
(4)
Includes: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
839 |
|
|
|
879 |
|
|
|
762 |
|
|
2,651 |
|
|
|
1,983 |
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
76 |
|
|
|
101 |
|
|
236 |
|
|
|
303 |
|
(5)
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 |
|
Nine Months Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Reconciliation of GAAP and non-GAAP gross
profit |
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
9,347 |
|
|
$ |
9,376 |
|
|
$ |
11,237 |
|
|
$ |
27,195 |
|
|
$ |
28,573 |
|
Amortization
of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
|
894 |
|
|
|
894 |
|
Stock-based
compensation |
|
|
89 |
|
|
|
83 |
|
|
|
87 |
|
|
|
267 |
|
|
|
231 |
|
Inventory
step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
97 |
|
|
|
12 |
|
|
|
458 |
|
Deferred
revenue fair value adjustment |
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
|
— |
|
|
|
52 |
|
Total reconciling items included in gross profit |
|
|
387 |
|
|
|
381 |
|
|
|
534 |
|
|
|
1,173 |
|
|
|
1,635 |
|
Non-GAAP
gross profit |
|
$ |
9,734 |
|
|
$ |
9,757 |
|
|
$ |
11,771 |
|
|
$ |
28,368 |
|
|
$ |
30,208 |
|
Non-GAAP
gross profit margin |
|
|
53.9 |
% |
|
|
54.1 |
% |
|
|
54.7 |
% |
|
|
53.8 |
% |
|
|
53.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP operating
expenses |
|
|
|
|
|
|
|
|
|
|
GAAP
operating expenses |
|
$ |
11,791 |
|
|
$ |
11,697 |
|
|
$ |
10,806 |
|
|
$ |
35,420 |
|
|
$ |
31,886 |
|
Reconciling
item included in research and development: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
570 |
|
|
|
703 |
|
|
|
609 |
|
|
|
1,934 |
|
|
|
1,831 |
|
Reconciling
items included in selling, general and administrative: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
839 |
|
|
|
879 |
|
|
|
762 |
|
|
|
2,651 |
|
|
|
1,983 |
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
76 |
|
|
|
101 |
|
|
|
236 |
|
|
|
303 |
|
Restructuring |
|
|
— |
|
|
|
398 |
|
|
|
414 |
|
|
|
398 |
|
|
|
1,035 |
|
Total reconciling items included in operating expenses |
|
|
1,485 |
|
|
|
2,056 |
|
|
|
1,886 |
|
|
|
5,219 |
|
|
|
5,152 |
|
Non-GAAP
operating expenses |
|
$ |
10,306 |
|
|
$ |
9,641 |
|
|
$ |
8,920 |
|
|
$ |
30,201 |
|
|
$ |
26,734 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP net income
(loss) |
|
|
|
|
|
|
|
|
|
|
GAAP net
income (loss) |
|
$ |
(2,306 |
) |
|
$ |
(2,448 |
) |
|
$ |
431 |
|
|
$ |
(4,621 |
) |
|
$ |
(2,444 |
) |
Reconciling
items included in gross profit |
|
|
387 |
|
|
|
381 |
|
|
|
534 |
|
|
|
1,173 |
|
|
|
1,635 |
|
Reconciling
items included in operating expenses |
|
|
1,485 |
|
|
|
2,056 |
|
|
|
1,886 |
|
|
|
5,219 |
|
|
|
5,152 |
|
Reconciling
items included in total other income, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,905 |
) |
|
|
(1,203 |
) |
Tax effect
of non-GAAP adjustments |
|
|
(84 |
) |
|
|
(86 |
) |
|
|
(181 |
) |
|
|
49 |
|
|
|
(236 |
) |
Non-GAAP net
income (loss) |
|
$ |
(518 |
) |
|
$ |
(97 |
) |
|
$ |
2,670 |
|
|
$ |
(2,085 |
) |
|
$ |
2,904 |
|
Non-GAAP net
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.07 |
|
|
$ |
(0.06 |
) |
|
$ |
0.08 |
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.07 |
|
|
$ |
(0.06 |
) |
|
$ |
0.08 |
|
Non-GAAP
weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
38,086 |
|
|
|
37,688 |
|
|
|
36,195 |
|
|
|
37,677 |
|
|
|
35,697 |
|
Diluted |
|
|
38,086 |
|
|
|
37,688 |
|
|
|
37,993 |
|
|
|
37,677 |
|
|
|
37,634 |
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 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 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
Reconciling
items included in gross profit |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.05 |
|
|
|
0.04 |
|
Reconciling
items included in operating expenses |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.14 |
|
Reconciling
items included in total other income, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(0.10 |
) |
|
|
(0.10 |
) |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
Tax effect
of non-GAAP adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Non-GAAP net
income (loss) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Nine Months Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Reconciliation of GAAP and non-GAAP gross profit
margin |
|
|
|
|
|
|
|
|
|
|
GAAP gross profit margin |
|
51.8 |
% |
|
52.0 |
% |
|
52.3 |
% |
|
51.6 |
% |
|
51.0 |
% |
Amortization
of acquired intangible assets |
|
1.7 |
% |
|
1.7 |
% |
|
1.4 |
% |
|
1.7 |
% |
|
1.6 |
% |
Stock-based
compensation |
|
0.5 |
% |
|
0.5 |
% |
|
0.4 |
% |
|
0.5 |
% |
|
0.4 |
% |
Inventory
step-up and backlog amortization |
|
— |
% |
|
— |
% |
|
0.5 |
% |
|
— |
% |
|
0.8 |
% |
Deferred
revenue fair value adjustment |
|
— |
% |
|
— |
% |
|
0.2 |
% |
|
— |
% |
|
0.1 |
% |
Total reconciling items included in gross profit |
|
2.1 |
% |
|
2.1 |
% |
|
2.5 |
% |
|
2.2 |
% |
|
2.9 |
% |
Non-GAAP
gross profit margin |
|
53.9 |
% |
|
54.1 |
% |
|
54.7 |
% |
|
53.8 |
% |
|
53.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Nine Months Ended |
|
|
September
30, |
|
June
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Reconciliation of GAAP net income (loss) and adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(2,306 |
) |
|
$ |
(2,448 |
) |
|
$ |
431 |
|
|
$ |
(4,621 |
) |
|
$ |
(2,444 |
) |
Stock-based
compensation |
|
|
1,498 |
|
|
|
1,665 |
|
|
|
1,458 |
|
|
|
4,852 |
|
|
|
4,045 |
|
Amortization
of acquired intangible assets |
|
|
374 |
|
|
|
374 |
|
|
|
399 |
|
|
|
1,130 |
|
|
|
1,197 |
|
Tax effect
of non-GAAP adjustments |
|
|
(84 |
) |
|
|
(86 |
) |
|
|
(181 |
) |
|
|
49 |
|
|
|
(236 |
) |
Restructuring |
|
|
— |
|
|
|
398 |
|
|
|
414 |
|
|
|
398 |
|
|
|
1,035 |
|
Inventory
step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
97 |
|
|
|
12 |
|
|
|
458 |
|
Deferred
revenue fair value adjustment |
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
|
— |
|
|
|
52 |
|
Gain on sale
of patents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,905 |
) |
|
|
— |
|
Gain on debt
extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
Discount
accretion on convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
69 |
|
Non-GAAP net
income (loss) |
|
$ |
(518 |
) |
|
$ |
(97 |
) |
|
$ |
2,670 |
|
|
$ |
(2,085 |
) |
|
$ |
2,904 |
|
EBITDA
adjustments: |
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
$ |
1,024 |
|
|
$ |
887 |
|
|
$ |
933 |
|
|
$ |
2,824 |
|
|
$ |
2,682 |
|
Non-GAAP
interest income and other, net |
|
|
(70 |
) |
|
|
(104 |
) |
|
|
(88 |
) |
|
|
(270 |
) |
|
|
(62 |
) |
Non-GAAP
provision for income taxes |
|
|
16 |
|
|
|
317 |
|
|
|
269 |
|
|
|
522 |
|
|
|
632 |
|
Adjusted
EBITDA |
|
$ |
452 |
|
|
$ |
1,003 |
|
|
$ |
3,784 |
|
|
$ |
991 |
|
|
$ |
6,156 |
|
|
|
|
|
|
|
|
|
|
|
|
*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) |
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
15,596 |
|
$ |
17,944 |
Short-term marketable securities |
|
6,682 |
|
|
6,069 |
Accounts receivable, net |
|
8,857 |
|
|
6,982 |
Inventories |
|
3,133 |
|
|
2,954 |
Prepaid expenses and other current assets |
|
1,586 |
|
|
1,494 |
Total current assets |
|
35,854 |
|
|
35,443 |
Property and
equipment, net |
|
4,215 |
|
|
6,151 |
Operating
lease right of use assets |
|
4,608 |
|
|
— |
Other
assets, net |
|
1,504 |
|
|
1,132 |
Acquired
intangible assets, net |
|
3,078 |
|
|
4,208 |
Goodwill |
|
18,407 |
|
|
18,407 |
Total assets |
$ |
67,666 |
|
$ |
65,341 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
2,318 |
|
$ |
2,116 |
Accrued liabilities and current portion of long-term
liabilities |
|
8,778 |
|
|
10,256 |
Current portion of income taxes payable |
|
327 |
|
|
263 |
Total current liabilities |
|
11,423 |
|
|
12,635 |
Long-term
liabilities, net of current portion |
|
527 |
|
|
1,017 |
Operating
lease liabilities, net of current portion |
|
3,222 |
|
|
— |
Income taxes
payable, net of current portion |
|
2,297 |
|
|
2,299 |
Total liabilities |
|
17,469 |
|
|
15,951 |
Shareholders’ equity |
|
50,197 |
|
|
49,390 |
Total liabilities and shareholders’ equity |
$ |
67,666 |
|
$ |
65,341 |
|
|
|
|
Contacts:
Investor ContactShelton Group Brett PerryP:
+1-214-272-0070 E: bperry@sheltongroup.com
Company ContactPixelworks, Inc.Elias NaderP:
+1-408-200-9271E: enader@pixelworks.com
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