Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of innovative
video and display processing solutions, today announced financial
results for the fourth quarter and full year ended December 31,
2019.
Fourth Quarter and Recent
Highlights
- Mobile revenue increased 140%
sequentially and more than 400% year-over-year, driven by increased
customer engagements and initial ramp to support multiple
next-generation smartphones
- Signed multi-year collaboration
agreement with OPPO Group to develop advanced display systems for
smartphones, including the integration of Pixelworks’ visual
processor and software solutions
- Entered collaborative partnership
with Coolpad to incorporate visual processing technology in
next-generation devices
- Expanded footprint in China with
new Shenzhen engineering facility to support growing engagements
with smartphone OEM customers
- AirTV 2 Wi-Fi-enabled tuner for HD
over-the-air (OTA) TV launched with Pixelworks’ video processing
and transcoding technology
- Launched new EasyOTA solution, a
universal OTA integration platform for service providers
Full Year 2019 End Market
Highlights
- Mobile revenue increased over 170%,
with Iris visual processing solutions launched in six smartphones
across four OEMs, and qualification of TrueCut-enabled HDR expanded
to over 130 phone models
- Expanded mobile product portfolio
and market opportunity with the introductions of 5th generation
Iris visual processor, Soft Iris display calibration software and
TrueCut video content platform
- Entered collaboration agreements
with key mobile ecosystem partners, including Qualcomm, HMD Global
and YouKu
- Video content in TrueCut format
expanded to more than 20,000 hours, with potential reach increasing
to approximately 70% of YouKu’s 140 million daily active users
- Video Delivery revenue grew 23% in
support of demand for transcoding solutions from both leading
consumer electronics customers in Japan and OTA devices in the
U.S.
President and CEO of Pixelworks, Todd DeBonis,
commented, “The fourth quarter played out as expected, with results
that were in-line with our guidance. Although consolidated revenue
reflected the anticipated headwinds in both our projector and video
delivery end markets, we continued to gain further momentum in
mobile with triple-digit growth for the quarter and full year.
Further highlighting the recent traction of our Iris visual
processing solutions, revenue contribution from mobile reached a
record 24% of total revenue in the fourth quarter.
“Throughout 2019, Pixelworks technology was
incorporated into several innovative smartphones, including the
first implementation of Soft Iris in a flagship phone. We’ve
recently begun ramping shipments in support of multiple customers’
upcoming launches of new smartphones for the first half of 2020.
Many of these planned mobile devices will feature one or more of
the expanded mobile solutions we introduced in 2019, including
Pixelworks’ 5th generation Iris visual processor and our Soft Iris
solution. In support of growing engagements, we continue to
allocate additional resources toward our mobile growth initiatives
and pipeline expansion in key geographies for both our Iris
solutions and TrueCut video content platform.”
Fourth Quarter and Fiscal 2019 Financial
Results
Revenue in the fourth quarter of 2019 was $16.0
million, compared to $18.1 million in the third quarter of 2019 and
revenue of $20.5 million in the fourth quarter of 2018, which
included approximately $1.5 million of end-of-life (EOL) product
revenue. The sequential and year-over-year decline in fourth
quarter revenue reflects lower demand in the Company’s digital
projector and video delivery end markets, partially offset by
record revenue contribution from the mobile market. For the full
year 2019, revenue was $68.8 million, compared to full year revenue
of $76.6 million in 2018, which included approximately $2.0 million
of EOL product revenue.
On a GAAP basis, gross profit margin in the
fourth quarter of 2019 was 45.6%, compared to 51.8% in the third
quarter of 2019 and 53.1% in the fourth quarter of 2018. GAAP gross
profit margin for the full year 2019 was 50.2% compared to 51.6% in
the prior year. Fourth quarter 2019 GAAP operating expenses were
$12.2 million, compared to $11.8 million in the third quarter of
2019 and $12.4 million in the year-ago fourth quarter. For full
year 2019, GAAP operating expenses were $47.6 million, compared to
full year 2018 operating expenses of $44.3 million, which included
approximately $4.0 million of offsets to R&D expense related to
a since completed co-development project with a large digital
projector customer.
For the fourth quarter of 2019, the Company
recorded a GAAP net loss of $4.5 million, or ($0.12) per share,
compared to a GAAP net loss of $2.3 million, or ($0.06) per share,
in the third quarter of 2019 and a GAAP net loss of $1.5 million,
or ($0.04) per share, in the year-ago quarter. GAAP net loss for
the full year 2019 was $9.1 million, or ($0.24) per share, compared
to a GAAP net loss of $3.9 million, or ($0.11) per share, for the
full year 2018.
On a non-GAAP basis, fourth quarter 2019 gross
profit margin was 48.0%, compared to 53.9% in the third quarter of
2019 and 55.1% in the year-ago quarter. Fourth quarter 2019
non-GAAP operating expenses were $10.4 million, compared to $10.3
million in the third quarter of 2019 and $10.3 million in the
year-ago quarter. Non-GAAP gross profit margin for the full year
2019 was 52.5% compared to 54.2% in the prior year.
For the fourth quarter of 2019, the Company
recorded a non-GAAP net loss of $2.3 million, or ($0.06) per share,
compared to a non-GAAP net loss of $0.5 million, or ($0.01) per
share, in the third quarter of 2019 and non-GAAP net income of $1.3
million, or $0.03 per diluted share, in the year-ago quarter. For
the full year 2019, non-GAAP net loss was $4.4 million, or ($0.12)
per share, compared to non-GAAP net income of $4.2 million, or
$0.11 per diluted share, for the full year 2018.
Adjusted EBITDA in the fourth quarter of 2019
was a negative $1.7 million, compared to positive $0.5 million in
the third quarter of 2019 and positive $1.8 million in the year-ago
quarter. For the full year 2019, adjusted EBITDA was a negative
$0.7 million, compared to positive adjusted EBITDA of $8.0 million
for the full year 2018.
Business Outlook
For the first quarter of 2020, the Company
expects revenue to be in a range of between $13.0 million and $15.0
million, primarily reflecting a combination of seasonality and
continued inventory corrections in the digital projector and video
delivery markets, coupled with continued year-over-year 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,
February 6, 2020, at 2:00 p.m. Pacific Time, which can be accessed
by calling 1-877-359-9508 and using passcode 6816609. 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 approximately 30
days. A replay of the conference call will also be available
through Thursday, February 14, 2020, and can be accessed by calling
1-855-859-2056 and using passcode 6816609.
About Pixelworks, Inc.
Pixelworks provides industry-leading content
creation, video delivery and display processing solutions and
technology that enable highly authentic viewing experiences with
superior visual quality, across all screens – from cinema to
smartphone and beyond. The Company has a 20-year history of
delivering image processing innovation to leading providers of
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 and the Pixelworks logo are
registered trademarks of Pixelworks, Inc.
Non-GAAP Financial MeasuresThis
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 loss and
adjusted EBITDA, which Pixelworks defines as GAAP net 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 and backlog amortization, all related
to fair valuing the items, restructuring expenses related to a
reduction in workforce and facility closure and consolidations,
gain on debt extinguishment, and discount 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 StatementThis
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 first quarter of 2020. 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 |
|
Twelve Months Ended |
|
|
December
31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Revenue, net
(1) |
|
$ |
16,023 |
|
|
$ |
18,057 |
|
|
$ |
20,539 |
|
|
$ |
68,755 |
|
|
$ |
76,554 |
|
Cost of
revenue (2) |
|
|
8,723 |
|
|
|
8,710 |
|
|
|
9,634 |
|
|
|
34,260 |
|
|
|
37,076 |
|
Gross profit |
|
|
7,300 |
|
|
|
9,347 |
|
|
|
10,905 |
|
|
|
34,495 |
|
|
|
39,478 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development (3) |
|
|
6,724 |
|
|
|
6,458 |
|
|
|
6,673 |
|
|
|
26,018 |
|
|
|
22,881 |
|
Selling, general and administrative (4) |
|
|
5,474 |
|
|
|
5,333 |
|
|
|
5,310 |
|
|
|
21,202 |
|
|
|
19,953 |
|
Restructuring |
|
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
398 |
|
|
|
1,464 |
|
Total operating expenses |
|
|
12,198 |
|
|
|
11,791 |
|
|
|
12,412 |
|
|
|
47,618 |
|
|
|
44,298 |
|
Loss from operations |
|
|
(4,898 |
) |
|
|
(2,444 |
) |
|
|
(1,507 |
) |
|
|
(13,123 |
) |
|
|
(4,820 |
) |
Interest
income and other, net (5) |
|
|
324 |
|
|
|
70 |
|
|
|
90 |
|
|
|
594 |
|
|
|
1,355 |
|
Gain on sale
of patents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,905 |
|
|
|
— |
|
Total other income, net |
|
|
324 |
|
|
|
70 |
|
|
|
90 |
|
|
|
4,499 |
|
|
|
1,355 |
|
Loss before income taxes |
|
|
(4,574 |
) |
|
|
(2,374 |
) |
|
|
(1,417 |
) |
|
|
(8,624 |
) |
|
|
(3,465 |
) |
Provision
(benefit) for income taxes |
|
|
(118 |
) |
|
|
(68 |
) |
|
|
52 |
|
|
|
453 |
|
|
|
448 |
|
Net loss |
|
$ |
(4,456 |
) |
|
$ |
(2,306 |
) |
|
$ |
(1,469 |
) |
|
$ |
(9,077 |
) |
|
$ |
(3,913 |
) |
Net loss per
share - basic and diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.04 |
) |
|
|
(0.24 |
) |
|
|
(0.11 |
) |
Weighted
average shares outstanding - basic and diluted |
|
|
38,370 |
|
|
|
38,086 |
|
|
|
36,736 |
|
|
|
37,851 |
|
|
|
35,959 |
|
—————— |
|
|
|
|
|
|
|
|
|
|
(1) Includes
deferred revenue fair value adjustment |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
52 |
|
(2)
Includes: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
|
1,192 |
|
|
|
1,192 |
|
Stock-based compensation |
|
|
100 |
|
|
|
89 |
|
|
|
93 |
|
|
|
367 |
|
|
|
324 |
|
Inventory step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
12 |
|
|
|
475 |
|
(3) Includes
stock-based compensation |
|
|
611 |
|
|
|
570 |
|
|
|
635 |
|
|
|
2,545 |
|
|
|
2,466 |
|
(4)
Includes: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
1,086 |
|
|
|
839 |
|
|
|
910 |
|
|
|
3,737 |
|
|
|
2,893 |
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
76 |
|
|
|
101 |
|
|
|
312 |
|
|
|
404 |
|
(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 |
|
Twelve Months Ended |
|
|
|
December
31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
Reconciliation of GAAP and non-GAAP gross
profit |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit |
|
$ |
7,300 |
|
|
$ |
9,347 |
|
|
$ |
10,905 |
|
|
$ |
34,495 |
|
|
$ |
39,478 |
|
|
Amortization
of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
298 |
|
|
|
1,192 |
|
|
|
1,192 |
|
|
Stock-based
compensation |
|
|
100 |
|
|
|
89 |
|
|
|
93 |
|
|
|
367 |
|
|
|
324 |
|
|
Inventory
step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
12 |
|
|
|
475 |
|
|
Deferred
revenue fair value adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
Total reconciling items included in gross profit |
|
|
398 |
|
|
|
387 |
|
|
|
408 |
|
|
|
1,571 |
|
|
|
2,043 |
|
|
Non-GAAP
gross profit |
|
$ |
7,698 |
|
|
$ |
9,734 |
|
|
$ |
11,313 |
|
|
$ |
36,066 |
|
|
$ |
41,521 |
|
|
Non-GAAP
gross profit margin |
|
|
48.0 |
% |
|
|
53.9 |
% |
|
|
55.1 |
% |
|
|
52.5 |
% |
|
|
54.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating expenses |
|
$ |
12,198 |
|
|
$ |
11,791 |
|
|
$ |
12,412 |
|
|
$ |
47,618 |
|
|
$ |
44,298 |
|
|
Reconciling
item included in research and development: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
611 |
|
|
|
570 |
|
|
|
635 |
|
|
|
2,545 |
|
|
|
2,466 |
|
|
Reconciling
items included in selling, general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
1,086 |
|
|
|
839 |
|
|
|
910 |
|
|
|
3,737 |
|
|
|
2,893 |
|
|
Amortization of acquired intangible assets |
|
|
76 |
|
|
|
76 |
|
|
|
101 |
|
|
|
312 |
|
|
|
404 |
|
|
Restructuring |
|
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
398 |
|
|
|
1,464 |
|
|
Total reconciling items included in operating expenses |
|
|
1,773 |
|
|
|
1,485 |
|
|
|
2,075 |
|
|
|
6,992 |
|
|
|
7,227 |
|
|
Non-GAAP
operating expenses |
|
$ |
10,425 |
|
|
$ |
10,306 |
|
|
$ |
10,337 |
|
|
$ |
40,626 |
|
|
$ |
37,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP net income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(4,456 |
) |
|
$ |
(2,306 |
) |
|
$ |
(1,469 |
) |
|
$ |
(9,077 |
) |
|
$ |
(3,913 |
) |
|
Reconciling
items included in gross profit |
|
|
398 |
|
|
|
387 |
|
|
|
408 |
|
|
|
1,571 |
|
|
|
2,043 |
|
|
Reconciling
items included in operating expenses |
|
|
1,773 |
|
|
|
1,485 |
|
|
|
2,075 |
|
|
|
6,992 |
|
|
|
7,227 |
|
|
Reconciling
items included in total other income, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,905 |
) |
|
|
(1,203 |
) |
|
Tax effect
of non-GAAP adjustments |
|
|
(49 |
) |
|
|
(84 |
) |
|
|
237 |
|
|
|
— |
|
|
|
— |
|
|
Non-GAAP net
income (loss) |
|
$ |
(2,334 |
) |
|
$ |
(518 |
) |
|
$ |
1,251 |
|
|
$ |
(4,419 |
) |
|
$ |
4,154 |
|
|
Non-GAAP net
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
0.12 |
|
|
Diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
0.11 |
|
|
Non-GAAP
weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
38,370 |
|
|
|
38,086 |
|
|
|
36,736 |
|
|
|
37,851 |
|
|
|
35,959 |
|
|
Diluted |
|
|
38,370 |
|
|
|
38,086 |
|
|
|
38,320 |
|
|
|
37,851 |
|
|
|
37,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Twelve Months Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
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 loss |
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
Reconciling
items included in gross profit |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
Reconciling
items included in operating expenses |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.18 |
|
|
|
0.18 |
|
|
|
0.20 |
|
|
|
0.19 |
|
|
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 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Non-GAAP net
income (loss) |
|
$ |
(0.06 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.12 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Twelve Months Ended |
|
|
|
December 31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
Reconciliation of GAAP and non-GAAP gross profit
margin |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit margin |
|
45.6 |
% |
|
51.8 |
% |
|
53.1 |
% |
|
50.2 |
% |
|
51.6 |
% |
|
Amortization
of acquired intangible assets |
|
1.9 |
% |
|
1.7 |
% |
|
1.5 |
% |
|
1.7 |
% |
|
1.6 |
% |
|
Stock-based
compensation |
|
0.6 |
% |
|
0.5 |
% |
|
0.5 |
% |
|
0.5 |
% |
|
0.4 |
% |
|
Inventory
step-up and backlog amortization |
|
— |
% |
|
— |
% |
|
0.1 |
% |
|
— |
% |
|
0.6 |
% |
|
Deferred
revenue fair value adjustment |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
0.1 |
% |
|
Total reconciling items included in gross profit |
|
2.5 |
% |
|
2.1 |
% |
|
2.0 |
% |
|
2.3 |
% |
|
2.7 |
% |
|
Non-GAAP
gross profit margin |
|
48.0 |
% |
|
53.9 |
% |
|
55.1 |
% |
|
52.5 |
% |
|
54.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
Twelve Months Ended |
|
|
December
31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Reconciliation of GAAP net loss and adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(4,456 |
) |
|
$ |
(2,306 |
) |
|
$ |
(1,469 |
) |
|
$ |
(9,077 |
) |
|
$ |
(3,913 |
) |
Stock-based
compensation |
|
|
1,797 |
|
|
|
1,498 |
|
|
|
1,638 |
|
|
|
6,649 |
|
|
|
5,683 |
|
Amortization
of acquired intangible assets |
|
|
374 |
|
|
|
374 |
|
|
|
399 |
|
|
|
1,504 |
|
|
|
1,596 |
|
Tax effect
of non-GAAP adjustments |
|
|
(49 |
) |
|
|
(84 |
) |
|
|
237 |
|
|
|
— |
|
|
|
— |
|
Restructuring |
|
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
398 |
|
|
|
1,464 |
|
Inventory
step-up and backlog amortization |
|
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
12 |
|
|
|
475 |
|
Gain on sale
of patents |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,905 |
) |
|
|
— |
|
Gain on debt
extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
Discount
accretion on convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
69 |
|
Deferred
revenue fair value adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52 |
|
Non-GAAP net
income (loss) |
|
$ |
(2,334 |
) |
|
$ |
(518 |
) |
|
$ |
1,251 |
|
|
$ |
(4,419 |
) |
|
$ |
4,154 |
|
EBITDA
adjustments: |
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
$ |
1,013 |
|
|
$ |
1,024 |
|
|
$ |
873 |
|
|
$ |
3,837 |
|
|
$ |
3,555 |
|
Non-GAAP
interest income and other, net |
|
|
(324 |
) |
|
|
(70 |
) |
|
|
(90 |
) |
|
|
(594 |
) |
|
|
(152 |
) |
Non-GAAP
provision (benefit) for income taxes |
|
|
(69 |
) |
|
|
16 |
|
|
|
(185 |
) |
|
|
453 |
|
|
|
448 |
|
Adjusted
EBITDA |
|
$ |
(1,714 |
) |
|
$ |
452 |
|
|
$ |
1,849 |
|
|
$ |
(723 |
) |
|
$ |
8,005 |
|
|
|
|
|
|
|
|
|
|
|
|
*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) |
|
|
December 31, 2019 |
|
December 31, 2018 |
|
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ |
7,257 |
|
$ |
17,944 |
|
Short-term marketable securities |
|
6,975 |
|
|
6,069 |
|
Accounts receivable, net |
|
10,915 |
|
|
6,982 |
|
Inventories |
|
5,401 |
|
|
2,954 |
|
Prepaid expenses and other current assets |
|
1,689 |
|
|
1,494 |
|
Total current assets |
|
32,237 |
|
|
35,443 |
|
Property and
equipment, net |
|
4,608 |
|
|
6,151 |
|
Operating
lease right of use assets |
|
5,434 |
|
|
— |
|
Other
assets, net |
|
1,267 |
|
|
1,132 |
|
Acquired
intangible assets, net |
|
2,704 |
|
|
4,208 |
|
Goodwill |
|
18,407 |
|
|
18,407 |
|
Total assets |
$ |
64,657 |
|
$ |
65,341 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
$ |
818 |
|
$ |
2,116 |
|
Accrued liabilities and current portion of long-term
liabilities |
|
8,692 |
|
|
10,256 |
|
Current portion of income taxes payable |
|
164 |
|
|
263 |
|
Total current liabilities |
|
9,674 |
|
|
12,635 |
|
Long-term
liabilities, net of current portion |
|
982 |
|
|
1,017 |
|
Operating
lease liabilities, net of current portion |
|
4,212 |
|
|
— |
|
Income taxes
payable, net of current portion |
|
2,260 |
|
|
2,299 |
|
Total liabilities |
|
17,128 |
|
|
15,951 |
|
Shareholders’ equity |
|
47,529 |
|
|
49,390 |
|
Total liabilities and shareholders’ equity |
$ |
64,657 |
|
$ |
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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