SAN JOSE, Calif., May 4, 2021 /PRNewswire/ -- Pixelworks, Inc.
(NASDAQ: PXLW), a leading provider of innovative video and display
processing solutions, today announced financial results for the
first quarter ended March 31,
2021.
First Quarter and Recent Highlights
- Mobile revenue increased sequentially for the third consecutive
quarter, driven by growing adoption of Pixelworks' visual
processing solutions in newly launched smartphones
- OnePlus 9 Pro smartphone launched with X5 Pro visual processor,
leveraging Pixelworks dual MotionEngine®, color calibration, flesh
tone management and adaptive display technologies
- vivo launched its iQOO Neo5 smartphone, incorporating the X5
Pro visual processor to enable ultra-premium display performance
and advanced 5G gaming experience
- OPPO Find X3, Find X3 Pro and Reno 5 Pro+ smartphones
incorporated with Pixelworks' patented, high-efficiency calibration
technology and color management solution
- TCL 20 Pro 5G power by AI-based i6 visual processor launched
and received an overall display score of 89 by DXOMARK, placing it
among the industry's top performing displays on a smartphone
- ASUS ROG Phone 5 launched as the industry's first smartphones
to incorporate Pixelworks' sixth-generation mobile visual processor
(i6) with dedicated Artificial Intelligence (AI) engine
- Lenovo Legion™ Phone Duel 2 launched with i6 visual processor,
featuring real-time SDR-to-HDR conversion and industry-leading
multi-refresh-rate color calibration for immersive HDR gaming and
video experiences
- Year-to-date, Pixelworks technologies incorporated into 11 new
models across 6 mobile OEMs
"We continued to execute and make steady progress on our mobile
growth initiative in the first quarter, with record Mobile revenue
expanding to 44% of total revenue," stated Todd DeBonis, President and CEO of Pixelworks.
"As advanced AMOLED displays, higher refresh rates and 5G-enable
mobile gaming become increasingly mainstream, mobile OEMs are
turning to Pixelworks' visual processing solutions and display
expertise to differentiate their next-generation devices with
industry-leading display performance. Our growing momentum is
demonstrated by the expanding number of new smartphone models
launched across a series of new and existing customers, including
our second tier-one mobile OEM. The models launched year-to-date
span numerous product tiers and price points, from feature-packed
flagships and ultra-high performance gaming phones to more
affordable smartphones with premium displays. We continue to have a
robust pipeline of design-ins on upcoming smartphones in support of
our goal for 2021 to double the number of devices that were
launched by customers in 2020.
"Also, during the quarter we saw improving demand in the
Projector market. While we anticipate the broadly reported supply
constraints across the semiconductor industry to moderate the pace
of recovery throughout the year, we expect a meaningful uptick in
revenue from Projector in the second quarter. Together with
continued sequential growth in Mobile, we expect to deliver strong
top-line growth, gross margin expansion and improvement in our
operating results in the coming quarters."
First Quarter Fiscal 2021 Financial Results
Revenue in the first quarter of 2021 was $9.3 million, compared to $9.6 million in the fourth quarter of 2020 and
$13.8 million in the first quarter of
2020. The sequential and year-over-year decline in first quarter
revenue reflected weaker end market demand in the projector and
video delivery markets, partially offset by continued strong growth
and record revenue in the mobile market.
On a GAAP basis, gross profit margin in the first quarter of
2021 was 40.2%, compared to 45.5% in the fourth quarter of 2020 and
49.2% in the first quarter of 2020. First quarter 2021 GAAP
operating expenses were $11.6
million, compared to $11.3
million in the fourth quarter of 2020 and $12.1 million in the year-ago quarter.
For the first quarter of 2021, the Company recorded a GAAP net
loss of $8.1 million, or ($0.16) per share, compared to a GAAP net loss of
$6.4 million, or ($0.15) per share, in the fourth quarter of 2020
and a GAAP net loss of $5.4 million,
or ($0.14) per share, in the year-ago
quarter.
On a non-GAAP basis, first quarter 2021 gross profit margin was
43.7%, compared to 49.6% in the fourth quarter of 2020 and 52.1% in
the year-ago quarter. First quarter 2021 non-GAAP operating
expenses were $10.2 million, compared
to $9.5 million in the fourth quarter
of 2020 and $9.7 million in the
year-ago quarter.
For the first quarter of 2021, the Company recorded a non-GAAP
net loss of $6.4 million, or
($0.12) per share, compared to a
non-GAAP net loss of $4.9 million, or
($0.11) per share, in the fourth
quarter of 2020, and a non-GAAP net loss of $2.6 million, or ($0.07) per share, in the first quarter of
2020.
Adjusted EBITDA in the first quarter of 2021 was a negative
$5.2 million, compared to a negative
$3.8 million in the fourth quarter of
2020 and a negative $1.5 million in
the year-ago quarter.
Cash, cash equivalents and short-term investments at the end of
the first quarter of 2021 were $25.4
million, compared to $31.5
million at the end of the fourth quarter of 2020.
Business Outlook
The Company's current business outlook, including guidance for
the second quarter of 2021, will be provided as part of the
scheduled conference call.
Conference Call Information
Pixelworks will host a conference call today, May 4, 2021, at 2:00 p.m.
Pacific Time, which can be accessed by calling
1-877-359-9508 and using passcode 5768008. A live audio webcast of
the call can also be accessed by visiting the Company's investor
page at www.pixelworks.com. For those unable to listen to the live
webcast, it will be archived for approximately 90 days. A replay of
the conference call will also be available through Tuesday, May 11, 2021, and can be accessed by
calling 1-855-859-2056 and using passcode 5768008.
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, the Pixelworks logo and MotionEngine are
registered trademarks of Pixelworks, Inc.
Non-GAAP Financial Measures
This earnings release makes reference to non-GAAP gross
profit margins, non-GAAP operating expenses, non-GAAP net loss and
non-GAAP net loss per share, which exclude amortization of acquired
intangible assets, stock-based compensation expense, and
restructuring expenses, 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, 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.
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, recovery of the projector
market, strategy, and additional guidance, particularly as to the
business outlook and current market environment and the impact of
the COVID-19 pandemic on the same. 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 expanding 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; our
ability to attract and retain key personnel; and the impact of the
COVID-19 pandemic on our business and on our suppliers and
customers. 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, 2020 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
|
|
March
31,
|
December
31,
|
March
31,
|
|
2021
|
2020
|
2020
|
Revenue,
net
|
$
9,270
|
$
9,638
|
$
13,774
|
Cost of revenue
(1)
|
5,545
|
5,253
|
6,999
|
Gross
profit
|
3,725
|
4,385
|
6,775
|
Operating
expenses:
|
|
|
|
Research and
development (2)
|
6,785
|
6,397
|
6,267
|
Selling, general and
administrative (3)
|
4,854
|
4,870
|
5,193
|
Restructuring
|
-
|
19
|
592
|
Total operating
expenses
|
11,639
|
11,286
|
12,052
|
Loss from
operations
|
(7,914)
|
(6,901)
|
(5,277)
|
Interest income and
other, net
|
56
|
7
|
54
|
Gain on loan
extinguisment
|
-
|
796
|
-
|
Total other income,
net
|
56
|
803
|
54
|
Loss before income
taxes
|
(7,858)
|
(6,098)
|
(5,223)
|
Provision for income
taxes
|
217
|
341
|
176
|
Net loss
|
$
(8,075)
|
$
(6,439)
|
$
(5,399)
|
Net loss per share -
basic and diluted
|
$
(0.16)
|
$
(0.15)
|
$
(0.14)
|
Weighted average
shares outstanding - basic and diluted
|
51,673
|
43,735
|
38,868
|
——————
|
|
|
|
(1)
Includes:
|
|
|
|
Amortization of
acquired intangible assets
|
245
|
298
|
298
|
Stock-based
compensation
|
79
|
87
|
101
|
Restructuring
|
-
|
7
|
-
|
(2) Includes
stock-based compensation
|
581
|
669
|
648
|
(3)
Includes:
|
|
|
|
Stock-based
compensation
|
772
|
1,000
|
1,073
|
Amortization of
acquired intangible assets
|
60
|
76
|
76
|
PIXELWORKS,
INC.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL
INFORMATION *
(In thousands, except per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
December
31,
|
March
31,
|
|
2021
|
2020
|
2020
|
Reconciliation of
GAAP and non-GAAP gross profit
|
|
|
|
GAAP gross
profit
|
$
3,725
|
$
4,385
|
$
6,775
|
Amortization of
acquired intangible assets
|
245
|
298
|
298
|
Stock-based
compensation
|
79
|
87
|
101
|
Restructuring
|
-
|
7
|
-
|
Total reconciling
items included in gross profit
|
324
|
392
|
399
|
Non-GAAP gross
profit
|
$
4,049
|
$
4,777
|
$
7,174
|
Non-GAAP gross profit
margin
|
43.7 %
|
49.6 %
|
52.1 %
|
|
|
|
|
Reconciliation of
GAAP and non-GAAP operating expenses
|
|
|
|
GAAP operating
expenses
|
$
11,639
|
$
11,286
|
$
12,052
|
Reconciling item
included in research and development:
|
|
|
|
Stock-based
compensation
|
581
|
669
|
648
|
Reconciling items
included in selling, general and administrative:
|
|
|
|
Stock-based
compensation
|
772
|
1,000
|
1,073
|
Amortization of
acquired intangible assets
|
60
|
76
|
76
|
Restructuring
|
-
|
19
|
592
|
Total reconciling
items included in operating expenses
|
1,413
|
1,764
|
2,389
|
Non-GAAP operating
expenses
|
$
10,226
|
$
9,522
|
$
9,663
|
|
|
|
|
Reconciliation of
GAAP and non-GAAP net loss
|
|
|
|
GAAP net
loss
|
$
(8,075)
|
$
(6,439)
|
$
(5,399)
|
Reconciling items
included in gross profit
|
324
|
392
|
399
|
Reconciling items
included in operating expenses
|
1,413
|
1,764
|
2,389
|
Reconciling items
included in total other income, net
|
-
|
(796)
|
-
|
Tax effect of
non-GAAP adjustments
|
(20)
|
144
|
(25)
|
Non-GAAP net
loss
|
$
(6,358)
|
$
(4,935)
|
$
(2,636)
|
|
|
|
|
Non-GAAP net loss per
share - basic and diluted
|
$
(0.12)
|
$
(0.11)
|
$
(0.07)
|
|
|
|
|
Non-GAAP weighted
average shares outstanding - basic and diluted
|
51,673
|
43,735
|
38,868
|
|
|
|
|
*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
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2021
|
|
2020
|
|
2020
|
|
|
Dollars per
share
|
|
Dollars per
share
|
|
Dollars per
share
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Reconciliation of
GAAP and non-GAAP net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
(0.16)
|
|
$
(0.16)
|
|
$
(0.15)
|
|
$
(0.15)
|
|
$
(0.14)
|
|
$
(0.14)
|
Reconciling items
included in gross profit
|
|
0.01
|
|
0.01
|
|
0.01
|
|
0.01
|
|
0.01
|
|
0.01
|
Reconciling items
included in operating expenses
|
|
0.03
|
|
0.03
|
|
0.04
|
|
0.04
|
|
0.06
|
|
0.06
|
Reconciling items
included in total other income, net
|
|
-
|
|
-
|
|
(0.02)
|
|
(0.02)
|
|
-
|
|
-
|
Tax effect of
non-GAAP adjustments
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP net
loss
|
|
$
(0.12)
|
|
$
(0.12)
|
|
$
(0.11)
|
|
$
(0.11)
|
|
$
(0.07)
|
|
$
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2021
|
|
2020
|
|
2020
|
Reconciliation of
GAAP and non-GAAP gross profit margin
|
|
|
|
|
|
|
GAAP gross profit
margin
|
|
40.2 %
|
|
45.5 %
|
|
49.2 %
|
Amortization of
acquired intangible assets
|
|
2.6 %
|
|
3.1 %
|
|
2.2 %
|
Stock-based
compensation
|
|
0.9 %
|
|
0.9 %
|
|
0.7 %
|
Restructuring
|
|
- %
|
|
0.1 %
|
|
- %
|
Total reconciling
items included in gross profit
|
|
3.5 %
|
|
4.1 %
|
|
2.9 %
|
Non-GAAP gross profit
margin
|
|
43.7 %
|
|
49.6 %
|
|
52.1 %
|
|
|
|
|
|
|
|
*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
|
|
March
31,
|
December
31,
|
March
31,
|
|
2021
|
2020
|
2020
|
Reconciliation of
GAAP net loss and adjusted EBITDA
|
|
|
|
GAAP net
loss
|
$
(8,075)
|
$
(6,439)
|
$
(5,399)
|
Stock-based
compensation
|
1,432
|
1,756
|
1,822
|
Amortization of
acquired intangible assets
|
305
|
374
|
374
|
Tax effect of
non-GAAP adjustments
|
(20)
|
144
|
(25)
|
Gain on loan
extinguishment
|
-
|
(796)
|
-
|
Restructuring
|
-
|
26
|
592
|
Non-GAAP net
loss
|
$
(6,358)
|
$
(4,935)
|
$
(2,636)
|
EBITDA
adjustments:
|
|
|
|
Depreciation and
amortization
|
$
1,016
|
$
983
|
$
1,022
|
Non-GAAP interest
income and other, net
|
(56)
|
(7)
|
(54)
|
Non-GAAP provision
for income taxes
|
237
|
197
|
201
|
Adjusted
EBITDA
|
$
(5,161)
|
$
(3,762)
|
$
(1,467)
|
|
|
|
|
*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)
|
|
March 31,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
25,437
|
|
$
31,257
|
Short-term marketable
securities
|
-
|
|
250
|
Accounts receivable,
net
|
5,522
|
|
4,672
|
Inventories
|
1,670
|
|
2,445
|
Prepaid expenses and
other current assets
|
1,923
|
|
1,010
|
Total current
assets
|
34,552
|
|
39,634
|
Property and
equipment, net
|
4,384
|
|
5,103
|
Operating lease right
of use assets
|
6,625
|
|
6,606
|
Other assets,
net
|
1,005
|
|
1,081
|
Acquired intangible
assets, net
|
902
|
|
1,207
|
Goodwill
|
18,407
|
|
18,407
|
Total
assets
|
$
65,875
|
|
$
72,038
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,726
|
|
$
995
|
Accrued liabilities
and current portion of long-term liabilities
|
8,523
|
|
9,452
|
Current portion of
income taxes payable
|
155
|
|
147
|
Total current
liabilities
|
10,404
|
|
10,594
|
Long-term
liabilities, net of current portion
|
790
|
|
1,007
|
Operating lease
liabilities, net of current portion
|
4,791
|
|
5,088
|
Income taxes payable,
net of current portion
|
2,600
|
|
2,479
|
Total
liabilities
|
18,585
|
|
19,168
|
Shareholders'
equity
|
47,290
|
|
52,870
|
Total liabilities and
shareholders' equity
|
$
65,875
|
|
$
72,038
|
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SOURCE Pixelworks, Inc.