Entropic Reaffirms and Narrows Guidance Range for Q2 2013; Restructures to Improve Operational Efficiencies
July 02 2013 - 4:05PM
Entropic (Nasdaq:ENTR), a world leader in semiconductor solutions
for the connected home, today narrowed its previously announced
financial guidance for the second quarter of 2013 to the low end of
the revenue range. Entropic now expects revenue of approximately
$70 million and is reaffirming prior guidance for non-GAAP earnings
per share of $0.00 for the second quarter.
Entropic also announced it is implementing a restructuring plan
designed to refine business operations with the goal of driving
long-term profitable growth. In connection with the corporate
restructuring plan, Entropic is making strategic organizational
changes across its marketing and business operations to focus on
key vertical markets, streamline global manufacturing resources,
and consolidate several engineering activities to drive
efficiencies.
Entropic anticipates the restructuring plan will be
substantially completed within the next month. The
restructuring plan is expected to result in a reduction in force of
approximately 70 employees, constituting approximately 10 percent
of Entropic's global workforce. Once fully implemented,
Entropic estimates that the full annualized costs associated with
the 70 employees will be approximately $9 million. Entropic
has plans to reinvest these savings in the development of new
products and programs.
"The restructuring activities are designed to maximize
engineering efficiencies, optimize business operations and align
our investments with key vertical market requirements," said
Patrick Henry, president and chief executive officer, Entropic. "It
also gives us an opportunity to increase investment in strategic
areas with more long-term growth potential, including analog
mixed-signal and software."
Entropic estimates it will incur pre-tax GAAP charges of
approximately $1.7 million in connection with this restructuring
plan, the majority of which will be recorded during the second
quarter of 2013.
Entropic will release financial results for the second quarter
2013, and host a conference call for analysts and investors on July
31, 2013. At that time, Entropic will review its second quarter
results and provide an outlook for the third quarter of 2013.
Details on the conference call will be announced, prior to that
date.
About Entropic
Entropic™ (Nasdaq:ENTR) is a world leader in semiconductor
solutions for the connected home. Entropic transforms how
traditional HDTV broadcast and IP-based streaming video content is
seamlessly, reliably, and securely delivered, processed, and
distributed into and throughout the home. Entropic's
next-generation Set-top Box (STB) System-on-a-Chip (SoC) and
Connectivity solutions enable Pay-TV operators to offer consumers
more captivating whole-home entertainment experiences by
transforming the way digital entertainment is delivered, connected
and consumed – in the home and on the go. For more information,
visit Entropic at: www.entropic.com.
The Entropic logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4255
Non-GAAP Financial Measures
This press release contains non-GAAP earnings per
share. Non-GAAP earnings per share can be reconciled to GAAP
earnings per share by excluding the effects of all forms of
stock-based compensation, transaction and integration costs related
to Entropic's Trident Microsystems and PLX
Technology transactions, amortization of intangible assets,
the loss related to equity method investment, the impact of fair
value adjustments related to contingent consideration payable in
Entropic's acquisition of PLX Technology assets, the cash
tax difference and restructuring charges. Management uses
non-GAAP financial measures to manage Entropic's business,
including setting operating budgets and executive compensation
plans. Non-GAAP measures are also used to (i) supplement the
financial results and forecasts reported to Entropic's board of
directors, (ii) evaluate Entropic's operating performance, (iii)
compare Entropic's performance to internal forecasts, and (iv)
manage Entropic's business and benchmarking performance internally.
Non-GAAP measures have been made available to stockholders
consistently in the past to provide transparency on how management
manages Entropic's operating performance. Management believes that
non-GAAP operating measures are useful to investors, when used as a
supplement to GAAP measures, in evaluating Entropic's ongoing
operational performance. Non-GAAP financial measures disclosed
by Entropic should not be considered in isolation or a substitute
for, or superior to, the financial information prepared and
presented in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The non-GAAP
financial measures used by Entropic may be calculated differently
from, and therefore may not be comparable to, similarly titled
measures used by other companies.
Forward-Looking Statements
Statements in this press release that are not strictly
historical in nature constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to,
statements regarding the expected costs of the restructuring plan,
the goals and expected benefits of the restructuring plan,
including the operating expense reductions and engineering
efficiencies, Entropic's ability to make strategic investments and
continue product development, Entropic's growth opportunities and
expectations for future revenue and earnings per share. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause Entropic's actual
results to be materially different from historical results or from
any results expressed or implied by such forward-looking
statements. These factors include, but are not limited to, risks
and uncertainties associated with estimating revenues and earnings
per share prior to Entropic closing its books and verifying such
information; Entropic's ability to successfully implement its
restructuring plan to leverage synergies and optimize its
resources; the impact of the restructuring plan on Entropic's
business, including a potential adverse effect on revenues and
Entropic's other financial results; unanticipated charges not
currently contemplated that may occur as a result of the
restructuring plan, Entropic's dependence on a limited number of
supply chain partners for the manufacture of its products and other
factors that could affect its ability to meet customer demand;
Entropic's dependence on a limited number of customers for a
substantial portion of its revenues; risks associated with adverse
U.S. and international economic conditions; the ability of
Entropic's customers or the service providers who purchase their
products to successfully compete and continue to grow in their
markets; the continued development of the market for High
Definition (HD) video and other multi-media content delivery and
networking solutions; risks associated with competing against
larger and more established companies and Entropic's ability to
compete successfully in the connected home entertainment market;
risks associated with timely development and introduction of new or
enhanced products including those associated with IP Video
delivery; risks related to international operations; risks related
to intellectual property, including third party licensing or patent
infringement claims; risks associated with acquisitions including
their integration into Entropic's existing operations; and other
factors discussed in the "Risk Factors" section of Entropic's
Quarterly Report on Form 10-Q for the quarter ended March 31,
2013. All forward-looking statements are qualified in their
entirety by this cautionary statement. Entropic is providing this
information as of the date of this press release and does not
undertake any obligation to update any forward-looking statements
contained in this press release as a result of new information,
future events or otherwise.
Copyright© 2013 Entropic. All rights reserved. All other product
or company names mentioned are used for identification purposes
only and may be trademarks of their respective owners.
CONTACT: Investor Contact:
Debra Hart
+1 858.768.3852
debra.hart@entropic.com
Media/Industry Analyst Contact:
Chris Fallon
+ 1 858.768.3827
chris.fallon@entropic.com
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