Revenue increased 14% year-over-year with
sequential growth in Projector, Video Delivery and Mobile; Video
Delivery business accretive to earnings
Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of power
efficient visual processing solutions, today announced financial
results for the third quarter ended September 30, 2018.
Third Quarter and Recent
Highlights
- Mobile revenue grew 33% sequentially, driven by volume
production orders of Iris mobile processors
- Announced wins on newly launched smartphones, the ZTE Axon 9
Pro, Nokia 7.1 and Black Shark Helo
- Video Delivery revenue grew 70% sequentially and was accretive
to quarterly earnings
- Ramped shipments of XCode transcoding chips to leading consumer
electronics OEMs in Japan
- Recorded GAAP profitability and generated $3.6 million in cash
flow from operations
President and CEO of Pixelworks, Todd DeBonis,
commented, “Consolidated revenue in the third quarter grew 14%
year-over-year to $21.5 million, reflecting sequential growth
across all end markets. Gross margin and earnings per share were
both at the high-end of our guidance range, generating GAAP
profitability and solid cash flow from operations. Also notable,
our video delivery business was accretive to earnings in the third
quarter.
“We continue to gain momentum in Mobile, as
evidenced by achieving the fourth consecutive quarter of sequential
revenue growth. Our advanced video processing technology is
providing important differentiation to a growing number of handset
OEMs that are incorporating Pixelworks’ Iris processor to enable
high-quality, HDR display processing on their next-generation
smartphones. Additionally, our Video Delivery business benefited
from strong demand for our XCode transcoding chips in support of
the upcoming broadcast transition in Japan.
“Collectively, our recently secured wins and
customers’ product launches are driving increased awareness of
Pixelworks’ market-leading image and video processing technology,
as we continue to enhance the quality of engagements with both
prospective customers and partners. We are well positioned to
further capitalize on this momentum and deliver continued
year-over-year growth in Mobile and Video Delivery in the fourth
quarter.”
Third Quarter 2018 Financial
Results
Revenue in the third quarter of 2018 was $21.5
million, compared to $19.3 million in the second quarter of 2018
and $18.8 million in the third quarter of 2017. The sequential and
year-over-year increase in third quarter revenue was driven by
growth across all of the Company’s target end markets.
On a GAAP basis, gross profit margin in the
third quarter of 2018 was 52.3%, compared to 49.5% in the second
quarter of 2018 and 48.0% in the third quarter of 2017. Third
quarter 2018 GAAP operating expenses were $10.8 million, compared
to $12.0 million in the second quarter of 2018 and $13.4 million in
the year-ago quarter.
For the third quarter of 2018, the Company
recorded GAAP net income of $231,000, or $0.01 per diluted share,
compared to a GAAP net loss of $2.6 million, or $(0.07) per share,
in the second quarter of 2018 and a GAAP net loss of $4.7 million,
or $(0.14) per share, in the year-ago quarter.
On a non-GAAP basis, third quarter 2018 gross
profit margin was 54.7%, compared to 52.7% in the second quarter of
2018 and 54.9% in the year-ago quarter. Third quarter 2018 non-GAAP
operating expenses were $8.9 million, compared to $10.0 million in
the second quarter of 2018 and $8.9 million in the year-ago
quarter. Operating expenses in the third quarter of 2018 included
the recognition of approximately $1.8 million of anticipated
offsets to R&D related to the Company’s co-development project
with a large digital projector customer.
For the third quarter of 2018, the Company
recorded non-GAAP net income of $2.5 million, or $0.07 per diluted
share, compared to a non-GAAP net loss of $140,000, or $(0.00) per
share, in the second quarter of 2018 and non-GAAP net income of
$976,000, or $0.03 per diluted share, in the year-ago quarter.
Adjusted EBITDA in the third quarter of 2018 was $3.8 million,
compared to $1.1 million in the second quarter of 2018 and $2.3
million in the year-ago quarter.
Business Outlook
For the fourth quarter of 2018, Pixelworks
expects revenue to be in a range of between $20 million and $21
million, reflecting typical seasonality in the digital projection
market partially offset by continued year-over-year growth in the
Company’s Mobile and Video Delivery businesses. Additional guidance
will be provided as part of the Company’s earnings conference
call.
Conference Call Information
Pixelworks will host a conference call today,
November 1, 2018, at 2:00 p.m. Pacific Time, which can be accessed
by calling 1-877-359-9508 and using passcode 3757089. 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, November 8, 2018, and can be accessed by calling
1-855-859-2056 and using passcode 3757089.
About Pixelworks, Inc.
Pixelworks creates, develops and markets high
efficiency visual display processing and advanced video delivery
solutions for the highest quality display and streaming
applications. The Company has a 20-year history of delivering image
processing innovation to providers of leading-edge consumer
electronics and professional displays. Pixelworks is headquartered
in San Jose, Calif. 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 deferred
revenue fair value adjustment, inventory step-up and backlog
amortization, amortization of acquired intangible assets,
stock-based compensation expense, restructuring expenses,
acquisition and integration expenses, gain on extinguishment of
convertible debt, fair value adjustment on convertible debt
conversion option 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 businesses 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,
impact of inventory step up, all related to fair valuing the
items, acquisition and integration costs, restructuring expenses
related to a reduction in workforce and facility closure and
consolidations, gain on debt extinguishment, fair value adjustment
on convertible debt conversion option, 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 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, mobile wins and the timing thereof,
growth in the mobile and video delivery markets, synergies and
additional guidance. 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: whether the
Company will be able to implement the restructuring programs as
planned, whether the expected amount of the costs associated with
the restructuring programs will differ from or exceed the Company's
estimates and whether the Company will be able to realize the full
amount of estimated savings from the restructuring programs or
within the timeframe expected; our ability to execute on our
strategy, including the integration of ViXS; 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 our Annual Report on Form
10-K for the year ended December 31, 2017 as well as subsequent SEC
filings.
The forward-looking statements contained in this
release speak 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, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue, net (1) |
|
$ |
21,472 |
|
|
$ |
19,251 |
|
|
$ |
18,758 |
|
|
$ |
56,015 |
|
|
$ |
62,189 |
|
Cost of revenue
(2) |
|
|
10,235 |
|
|
|
9,717 |
|
|
|
9,747 |
|
|
|
27,442 |
|
|
|
29,585 |
|
Gross
profit |
|
|
11,237 |
|
|
|
9,534 |
|
|
|
9,011 |
|
|
|
28,573 |
|
|
|
32,604 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development (3) |
|
|
5,322 |
|
|
|
6,423 |
|
|
|
5,325 |
|
|
|
16,208 |
|
|
|
14,732 |
|
Selling,
general and administrative (4) |
|
|
5,070 |
|
|
|
4,959 |
|
|
|
6,583 |
|
|
|
14,643 |
|
|
|
15,382 |
|
Restructuring |
|
|
414 |
|
|
|
602 |
|
|
|
1,481 |
|
|
|
1,035 |
|
|
|
1,481 |
|
Total
operating expenses |
|
|
10,806 |
|
|
|
11,984 |
|
|
|
13,389 |
|
|
|
31,886 |
|
|
|
31,595 |
|
Income
(loss) from operations |
|
|
431 |
|
|
|
(2,450 |
) |
|
|
(4,378 |
) |
|
|
(3,313 |
) |
|
|
1,009 |
|
Interest income
(expense) and other, net (5) |
|
|
(112 |
) |
|
|
(131 |
) |
|
|
(528 |
) |
|
|
729 |
|
|
|
(728 |
) |
Income
(loss) before income taxes |
|
|
319 |
|
|
|
(2,581 |
) |
|
|
(4,906 |
) |
|
|
(2,584 |
) |
|
|
281 |
|
Provision (benefit) for
income taxes |
|
|
88 |
|
|
|
32 |
|
|
|
(200 |
) |
|
|
396 |
|
|
|
902 |
|
Net
income (loss) |
|
$ |
231 |
|
|
$ |
(2,613 |
) |
|
$ |
(4,706 |
) |
|
$ |
(2,980 |
) |
|
$ |
(621 |
) |
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.01 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.14 |
) |
|
|
(0.08 |
) |
|
|
(0.02 |
) |
Diluted |
|
$ |
0.01 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.14 |
) |
|
|
(0.08 |
) |
|
|
(0.02 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
36,195 |
|
|
|
35,704 |
|
|
|
32,552 |
|
|
|
35,697 |
|
|
|
30,545 |
|
Diluted |
|
|
37,993 |
|
|
|
35,704 |
|
|
|
32,552 |
|
|
|
35,697 |
|
|
|
30,545 |
|
—————— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes deferred
revenue fair value adjustment |
|
$ |
52 |
|
|
$ |
— |
|
|
$ |
25 |
|
|
$ |
52 |
|
|
$ |
25 |
|
(2) Includes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
199 |
|
|
|
894 |
|
|
|
199 |
|
Inventory
step-up and backlog amortization |
|
|
97 |
|
|
|
239 |
|
|
|
1,016 |
|
|
|
458 |
|
|
|
1,016 |
|
Stock-based compensation |
|
|
87 |
|
|
|
78 |
|
|
|
57 |
|
|
|
231 |
|
|
|
179 |
|
(3) Includes
stock-based compensation |
|
|
609 |
|
|
|
627 |
|
|
|
445 |
|
|
|
1,831 |
|
|
|
1,121 |
|
(4) Includes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
762 |
|
|
|
682 |
|
|
|
855 |
|
|
|
1,983 |
|
|
|
1,796 |
|
Amortization of acquired intangible assets |
|
|
101 |
|
|
|
101 |
|
|
|
67 |
|
|
|
303 |
|
|
|
67 |
|
Acquisition and integration |
|
|
— |
|
|
|
— |
|
|
|
1,611 |
|
|
|
— |
|
|
|
2,505 |
|
(5) Includes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
|
|
— |
|
Fair
value adjustment on convertible debt conversion option |
|
|
— |
|
|
|
— |
|
|
|
122 |
|
|
|
— |
|
|
|
122 |
|
Discount
accretion on convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
72 |
|
|
|
69 |
|
|
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of GAAP and non-GAAP gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
11,237 |
|
|
$ |
9,534 |
|
|
$ |
9,011 |
|
|
$ |
28,573 |
|
|
$ |
32,604 |
|
Amortization of
acquired intangible assets |
|
|
298 |
|
|
|
298 |
|
|
|
199 |
|
|
|
894 |
|
|
|
199 |
|
Inventory step-up and
backlog amortization |
|
|
97 |
|
|
|
239 |
|
|
|
1,016 |
|
|
|
458 |
|
|
|
1,016 |
|
Stock-based
compensation |
|
|
87 |
|
|
|
78 |
|
|
|
57 |
|
|
|
231 |
|
|
|
179 |
|
Deferred revenue fair
value adjustment |
|
|
52 |
|
|
|
— |
|
|
|
25 |
|
|
|
52 |
|
|
|
25 |
|
Total
reconciling items included in gross profit |
|
|
534 |
|
|
|
615 |
|
|
|
1,297 |
|
|
|
1,635 |
|
|
|
1,419 |
|
Non-GAAP gross
profit |
|
$ |
11,771 |
|
|
$ |
10,149 |
|
|
$ |
10,308 |
|
|
$ |
30,208 |
|
|
$ |
34,023 |
|
Non-GAAP gross profit
margin |
|
|
54.7 |
% |
|
|
52.7 |
% |
|
|
54.9 |
% |
|
|
53.9 |
% |
|
|
54.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of GAAP and non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses |
|
$ |
10,806 |
|
|
$ |
11,984 |
|
|
$ |
13,389 |
|
|
$ |
31,886 |
|
|
$ |
31,595 |
|
Reconciling item
included in research and development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
609 |
|
|
|
627 |
|
|
|
445 |
|
|
|
1,831 |
|
|
|
1,121 |
|
Reconciling items
included in selling, general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
762 |
|
|
|
682 |
|
|
|
855 |
|
|
|
1,983 |
|
|
|
1,796 |
|
Amortization of acquired intangible assets |
|
|
101 |
|
|
|
101 |
|
|
|
67 |
|
|
|
303 |
|
|
|
67 |
|
Acquisition and integration |
|
|
— |
|
|
|
— |
|
|
|
1,611 |
|
|
|
— |
|
|
|
2,505 |
|
Restructuring |
|
|
414 |
|
|
|
602 |
|
|
|
1,481 |
|
|
|
1,035 |
|
|
|
1,481 |
|
Total
reconciling items included in operating expenses |
|
|
1,886 |
|
|
|
2,012 |
|
|
|
4,459 |
|
|
|
5,152 |
|
|
|
6,970 |
|
Non-GAAP operating
expenses |
|
$ |
8,920 |
|
|
$ |
9,972 |
|
|
$ |
8,930 |
|
|
$ |
26,734 |
|
|
$ |
24,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of GAAP and non-GAAP net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) |
|
$ |
231 |
|
|
$ |
(2,613 |
) |
|
$ |
(4,706 |
) |
|
$ |
(2,980 |
) |
|
$ |
(621 |
) |
Reconciling items
included in gross profit |
|
|
534 |
|
|
|
615 |
|
|
|
1,297 |
|
|
|
1,635 |
|
|
|
1,419 |
|
Reconciling items
included in operating expenses |
|
|
1,886 |
|
|
|
2,012 |
|
|
|
4,459 |
|
|
|
5,152 |
|
|
|
6,970 |
|
Reconciling items
included in interest expense and other, net |
|
|
— |
|
|
|
— |
|
|
|
194 |
|
|
|
(1,203 |
) |
|
|
194 |
|
Tax effect of non-GAAP
adjustments |
|
|
(181 |
) |
|
|
(154 |
) |
|
|
(268 |
) |
|
|
(236 |
) |
|
|
157 |
|
Non-GAAP net income
(loss) |
|
$ |
2,470 |
|
|
$ |
(140 |
) |
|
$ |
976 |
|
|
$ |
2,368 |
|
|
$ |
8,119 |
|
Non-GAAP net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
(0.00 |
) |
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
(0.00 |
) |
|
$ |
0.03 |
|
|
$ |
0.06 |
|
|
$ |
0.25 |
|
Non-GAAP weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
36,195 |
|
|
|
35,704 |
|
|
|
32,552 |
|
|
|
35,697 |
|
|
|
30,545 |
|
Diluted |
|
|
37,993 |
|
|
|
35,704 |
|
|
|
34,656 |
|
|
|
37,634 |
|
|
|
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
*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 measures 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, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
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) |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Reconciling items
included in gross profit |
|
|
0.01 |
|
|
|
0.01 |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.04 |
|
Reconciling items
included in operating expenses |
|
|
0.05 |
|
|
|
0.05 |
|
|
0.06 |
|
|
|
0.06 |
|
|
|
0.14 |
|
|
|
0.13 |
|
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.23 |
|
|
|
0.21 |
|
Reconciling items
included in interest expense and other, net |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
0.01 |
|
|
|
0.01 |
|
Tax effect of non-GAAP
adjustments |
|
|
(0.01 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
— |
|
Non-GAAP net income
(loss) |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.27 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 measures 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, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of GAAP and non-GAAP gross profit margin |
|
|
|
|
|
|
|
|
|
|
GAAP gross profit margin |
|
52.3 |
% |
|
49.5 |
% |
|
48.0 |
% |
|
51.0 |
% |
|
52.4 |
% |
Amortization of
acquired intangible assets |
|
1.4 |
% |
|
1.5 |
% |
|
1.1 |
% |
|
1.6 |
% |
|
0.3 |
% |
Inventory step-up and
backlog amortization |
|
0.5 |
% |
|
1.2 |
% |
|
5.4 |
% |
|
0.8 |
% |
|
1.6 |
% |
Stock-based
compensation |
|
0.4 |
% |
|
0.4 |
% |
|
0.3 |
% |
|
0.4 |
% |
|
0.3 |
% |
Deferred revenue fair
value adjustment |
|
0.2 |
% |
|
— |
% |
|
0.1 |
% |
|
0.1 |
% |
|
— |
% |
Total
reconciling items included in gross profit |
|
2.5 |
% |
|
3.2 |
% |
|
6.9 |
% |
|
2.9 |
% |
|
2.3 |
% |
Non-GAAP gross profit
margin |
|
54.7 |
% |
|
52.7 |
% |
|
54.9 |
% |
|
53.9 |
% |
|
54.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
*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 measures 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, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of GAAP net income (loss) and adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) |
|
$ |
231 |
|
|
$ |
(2,613 |
) |
|
$ |
(4,706 |
) |
|
$ |
(2,980 |
) |
|
$ |
(621 |
) |
Stock-based
compensation |
|
|
1,458 |
|
|
|
1,387 |
|
|
|
1,357 |
|
|
|
4,045 |
|
|
|
3,096 |
|
Restructuring |
|
|
414 |
|
|
|
602 |
|
|
|
1,481 |
|
|
|
1,035 |
|
|
|
1,481 |
|
Amortization of
acquired intangible assets |
|
|
399 |
|
|
|
399 |
|
|
|
266 |
|
|
|
1,197 |
|
|
|
266 |
|
Inventory step-up and
backlog amortization |
|
|
97 |
|
|
|
239 |
|
|
|
1,016 |
|
|
|
458 |
|
|
|
1,016 |
|
Deferred revenue fair
value adjustment |
|
|
52 |
|
|
|
— |
|
|
|
25 |
|
|
|
52 |
|
|
|
25 |
|
Tax effect of non-GAAP
adjustments |
|
|
(181 |
) |
|
|
(154 |
) |
|
|
(268 |
) |
|
|
(236 |
) |
|
|
157 |
|
Gain on debt
extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,272 |
) |
|
|
— |
|
Discount accretion on
convertible debt fair value |
|
|
— |
|
|
|
— |
|
|
|
72 |
|
|
|
69 |
|
|
|
72 |
|
Acquisition and
integration |
|
|
— |
|
|
|
— |
|
|
|
1,611 |
|
|
|
— |
|
|
|
2,505 |
|
Fair value adjustment
on convertible debt conversion option |
|
|
— |
|
|
|
— |
|
|
|
122 |
|
|
|
— |
|
|
|
122 |
|
Non-GAAP net income
(loss) |
|
$ |
2,470 |
|
|
$ |
(140 |
) |
|
$ |
976 |
|
|
$ |
2,368 |
|
|
$ |
8,119 |
|
EBITDA
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
$ |
933 |
|
|
$ |
923 |
|
|
$ |
900 |
|
|
$ |
2,682 |
|
|
$ |
2,714 |
|
Interest expense and
other, net |
|
|
112 |
|
|
|
131 |
|
|
|
334 |
|
|
|
474 |
|
|
|
534 |
|
Non-GAAP provision for
income taxes |
|
|
269 |
|
|
|
186 |
|
|
|
68 |
|
|
|
632 |
|
|
|
745 |
|
Adjusted EBITDA |
|
$ |
3,784 |
|
|
$ |
1,100 |
|
|
$ |
2,278 |
|
|
$ |
6,156 |
|
|
$ |
12,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 measures 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,
2018 |
|
December 31,
2017 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
18,057 |
|
$ |
27,523 |
Short-term marketable securities |
|
6,069 |
|
|
— |
Accounts
receivable, net |
|
5,771 |
|
|
4,640 |
Inventories |
|
3,041 |
|
|
2,846 |
Prepaid
expenses and other current assets |
|
1,762 |
|
|
1,328 |
Total
current assets |
|
34,700 |
|
|
36,337 |
Property and equipment,
net |
|
5,062 |
|
|
5,605 |
Other assets, net |
|
1,312 |
|
|
1,338 |
Acquired intangible
assets, net |
|
4,607 |
|
|
5,856 |
Goodwill |
|
18,407 |
|
|
18,407 |
Total
assets |
$ |
64,088 |
|
$ |
67,543 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
$ |
2,187 |
|
$ |
1,436 |
Accrued
liabilities and current portion of long-term liabilities |
|
13,814 |
|
|
16,387 |
Current
portion of income taxes payable |
|
251 |
|
|
445 |
Total
current liabilities |
|
16,252 |
|
|
18,268 |
Long-term liabilities,
net of current portion |
|
883 |
|
|
1,487 |
Income taxes payable,
net of current portion |
|
2,300 |
|
|
2,282 |
Convertible debt |
|
— |
|
|
6,069 |
Total
liabilities |
|
19,435 |
|
|
28,106 |
Shareholders’
equity |
|
44,653 |
|
|
39,437 |
Total
liabilities and shareholders’ equity |
$ |
64,088 |
|
$ |
67,543 |
|
|
|
|
|
|
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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