Entropic Reports Third Quarter 2013 Results
October 29 2013 - 4:05PM
Entropic (Nasdaq:ENTR), a world leader in semiconductor solutions
for the connected home, today reported its third quarter results
for the period ended September 30, 2013. Entropic reported third
quarter net revenues of $56.4 million. This compares to net
revenues of $70.6 million in the second quarter of 2013, and $89.8
million in the third quarter of 2012.
In accordance with U.S. generally accepted accounting principles
(GAAP), the Company's third quarter net loss was $11.9 million, or
$(0.13) per share (basic and diluted). This compares with GAAP net
loss of $39.9 million, or $(0.44) per share (basic and diluted) in
the second quarter of 2013, and net income of $0.4 million, or
$0.00 per share (diluted) in the third quarter of 2012. Included in
the GAAP operating results for the second quarter of 2013 is a
charge of $26.7 million, or $0.30 per share (diluted), associated
with the establishment of a valuation allowance related to federal
deferred tax assets.
Non-GAAP net loss in the third quarter was $5.6 million, or
$(0.06) per share (diluted), compared to non-GAAP net income of
$0.6 million, or $0.01 per share (diluted) in the second quarter of
2013, and non-GAAP net income of $7.7 million, or $0.09 per share
(diluted), in the third quarter of 2012.
"Entropic delivered revenue near the higher end of the guided
range for the third quarter," said Patrick Henry, Entropic's
president and chief executive officer. "We continue to drive
innovation across our businesses and have made significant progress
toward our long-term goals by developing new products and winning
key tier-one designs. We are focused on optimizing the connected
home entertainment experience and we are confident that Entropic
has the right strategy in place to address core operator needs,
produce high-volume design-wins and create significant value for
shareholders."
|
|
|
Three Months
Ended |
(In millions, except per share
data) |
September 30,
2013 |
June 30,
2013 |
September 30,
2012 |
Net revenues |
$ 56.4 |
$ 70.6 |
$ 89.8 |
GAAP net (loss) income |
$ (11.9) |
$ (39.9) |
$ 0.4 |
GAAP net (loss) income per share
(basic and diluted) |
$ (0.13) |
$ (0.44) |
$ 0.00 |
Non-GAAP net (loss)
income1 |
$ (5.6) |
$ 0.6 |
$ 7.7 |
Non-GAAP net (loss) income per share1
(diluted) |
$ (0.06) |
$ 0.01 |
$ 0.09 |
1. Please refer to "Non-GAAP
Financial Measures" below and the financial statements portion of
this press release for an explanation of the non-GAAP financial
measures contained in the table above and a reconciliation of such
measures to the comparable GAAP financial measures. |
|
RECENT HIGHLIGHTS
Corporate Activities
- Stock Repurchase Program: Entropic announced a $30 million
stock repurchase program, which reflected the Board's ongoing
commitment to maximizing shareholder value and continued confidence
in Entropic's long-term strategic direction.
- Executive Hires: Entropic appointed Matthew Rhodes as senior
vice president, Global Marketing to oversee the development,
execution and communication of the Company's overall product
vision, strategy and roadmap across all market segments,
worldwide.
New Design Wins
Entropic announced new design wins across the following product
lines:
- Set-Top Box (STB) System-on-a-Chip (SoC) Product Line:
- Jupiter Telecommunications Co., Ltd. (J:COM), the largest
multiple system operator in Japan, unveiled its first IP-based
Video-on-Demand (VOD) STB using an Entropic-powered PIXELA
solution.
- Telefonica Czech Republic deployed a new interactive Eagle
Kingdom Technologies (EKT) IP-STB featuring Entropic's STB
SoC.
- LG CNS, the leading IT services company in South Korea,
selected Entropic's Verimatrix-certified, high-performance hybrid
STB SoC to deliver a secure and powerful TV viewing
experience.
- Discrete Multimedia over Coax Alliance (MoCA®) Product
Line:
- Entropic announced its EN2510 is powering the Actiontec
WCB3000, the latest MoCA-to-Wi-Fi® network adapter in Actiontec's
Whole Home Wireless portfolio.
- Direct Broadcast Satellite Outdoor Unit (DBS ODU) Product
Line:
- Entropic and Wistron NeWeb Corporation (WNC) delivered DBS ODU
systems for use at Sky Italia and Canal Digital.
- Entropic and Prime extended their reach in the Brazilian DBS
ODU market by deploying a new Low Noise Block (LNB) solution at a
leading Brazilian satellite operator.
- Jiuzhou integrated Entropic's c.LINK® 1.1 Ethernet-over-Coax
(EoC) solution into its High Definition (HD) STBs.
Partnerships
- Alticast: Entropic and Alticast demonstrated Reference Design
Kit (RDK) STB solutions at multiple trade events in Q3 2013, which
highlighted Alticast's proven RDK integration expertise on
Entropic's powerful SoC platform.
- Irdeto: Entropic announced its EN75xx family of
highly-integrated HD STB SoC solutions support Irdeto Media
Protection.
- OmniPhy: OmniPhy announced its Video Display IP Group shipped a
new Silicon Intellectual Property platform to Entropic to
support HDMI 2.0 TX and RX standards for the
Ultra-High-Definition (UHD) market.
For More Information
Entropic management will be holding a conference call today,
October 29, 2013 at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time
to discuss the Company's results for the third quarter of fiscal
2013, and to provide guidance for the fourth quarter. You may
access the conference call via any of the following:
Teleconference: |
888-713-4199 |
|
|
Access Code: |
66149967 |
|
|
Web Broadcast: |
http://events.entropic.com/ |
|
|
Replay: |
888-286-8010 |
|
|
Replay Passcode: |
54001616 |
About Entropic
Entropic™ (Nasdaq:ENTR) is a world leader in semiconductor
solutions for the connected home. The Company 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 and the accompanying tables contain the
following non-GAAP financial measures: net income and net income
per share. These non-GAAP financial measures exclude the effects on
the Statement of Operations of all forms of stock-based
compensation, transaction and integration costs related to the
Trident Microsystems, PLX Technology and Mobius
Semiconductor transactions, amortization of intangible assets,
the loss related to equity method investment, the impairment of
investment, the impact of fair value adjustments related to
contingent consideration payable in the acquisition of PLX
Technology assets, deferred tax asset valuation allowance, the cash
tax difference and the restructuring charge.
Management uses these non-GAAP financial measures to manage the
Company's business, including setting operating budgets and
executive compensation plans. These non-GAAP measures are also used
to (i) supplement the financial results and forecasts reported to
the Company's board of directors, (ii) evaluate the Company's
operating performance, (iii) compare the Company's performance to
internal forecasts, and (iv) manage the Company's business and
benchmarking performance internally. The non-GAAP measures have
been made available to stockholders consistently in the past to
provide transparency on how management manages the Company's
operating performance. Management believes that these non-GAAP
operating measures are useful to investors, when used as a
supplement to GAAP measures, in evaluating the Company's ongoing
operational performance.
The non-GAAP financial measures disclosed by the Company 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 the
Company 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 our progress toward our long-term goals and
our implementation of the right strategy and the objectives and
outcome of that strategy. 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, our dependence on a limited number of
supply chain partners for the manufacture of our products and other
factors that could affect our ability to meet customer demand; our
dependence on a limited number of customers and, ultimately,
service providers for a substantial portion of our revenues; risks
associated with adverse U.S. and international economic conditions;
the ability of our 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 our 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 the Trident
Microsystems, PLX Technology and Mobius Semiconductor 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 June
30, 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 release and does not
undertake any obligation to update any forward-looking statements
contained in this 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.
|
|
|
ENTROPIC
COMMUNICATIONS, INC. |
GAAP Condensed
Consolidated Statements of Operations |
(In thousands, except
for per share information) |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30,
2013 |
June 30, 2013 |
September 30,
2012 |
September 30,
2013 |
September 30,
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
Net revenues |
$ 56,376 |
$ 70,612 |
$ 89,825 |
$ 201,445 |
$ 231,980 |
Cost of net revenues |
28,863 |
36,356 |
45,778 |
104,837 |
111,886 |
Gross profit |
27,513 |
34,256 |
44,047 |
96,608 |
120,094 |
Operating expenses: |
|
|
|
|
|
Research and development |
28,510 |
28,334 |
28,072 |
84,914 |
69,214 |
Sales and marketing |
6,137 |
6,017 |
6,966 |
18,609 |
18,986 |
General and administrative |
5,751 |
5,456 |
5,718 |
17,290 |
19,592 |
Amortization of intangibles |
443 |
495 |
930 |
1,868 |
1,645 |
Restructuring charges |
(69) |
1,763 |
-- |
1,694 |
-- |
Total operating expenses |
40,772 |
42,065 |
41,686 |
124,375 |
109,437 |
(Loss) income from operations |
(13,259) |
(7,809) |
2,361 |
(27,767) |
10,657 |
Loss related to equity method
investment |
-- |
(335) |
(799) |
(1,115) |
(2,536) |
Impairment of investment |
-- |
(4,780) |
-- |
(4,780) |
-- |
Other income, net |
464 |
255 |
31 |
1,147 |
567 |
(Loss) income before income taxes |
(12,795) |
(12,669) |
1,593 |
(32,515) |
8,688 |
Income tax (benefit) provision |
(860) |
27,244 |
1,185 |
21,737 |
4,214 |
Net (loss) income |
$ (11,935) |
$ (39,913) |
$ 408 |
$ (54,252) |
$ 4,474 |
|
|
|
|
|
|
Net (loss) income per share - basic and
diluted |
$ (0.13) |
$ (0.44) |
$ 0.00 |
$ (0.60) |
$ 0.05 |
Weighted average number of shares used to
compute net income per share - basic |
91,069 |
90,281 |
88,399 |
90,225 |
87,913 |
Weighted average number of shares used to
compute net income per share - diluted |
91,069 |
90,281 |
90,885 |
90,225 |
89,918 |
|
|
|
ENTROPIC
COMMUNICATIONS, INC. |
GAAP Condensed
Consolidated Balance Sheets |
(In
thousands) |
|
|
|
|
|
September 30 |
June 30, |
December 31, |
|
2013 |
2013 |
2012 |
|
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 27,901 |
$ 14,349 |
$ 17,206 |
Marketable securities |
59,549 |
91,334 |
79,981 |
Accounts receivable |
40,797 |
45,452 |
41,847 |
Inventory |
15,116 |
15,323 |
26,395 |
Deferred tax assets, current |
13 |
-- |
7,157 |
Prepaid expenses and other current
assets |
17,405 |
15,323 |
11,988 |
Total current assets |
160,781 |
181,781 |
184,574 |
Property and equipment, net |
17,928 |
18,992 |
17,629 |
Long-term marketable securities |
73,894 |
60,118 |
71,748 |
Intangible assets, net |
50,487 |
53,355 |
46,997 |
Deferred tax assets, long-term |
-- |
661 |
19,255 |
Goodwill |
4,688 |
4,688 |
4,664 |
Other long-term assets |
6,356 |
3,483 |
8,683 |
Total assets |
$ 314,134 |
$ 323,078 |
$ 353,550 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ 14,956 |
$ 14,910 |
$ 11,380 |
Accrued expenses and other current
liabilities |
7,158 |
8,273 |
8,067 |
Accrued payroll and benefits |
8,156 |
9,223 |
9,474 |
Total current liabilities |
30,270 |
32,406 |
28,921 |
Deferred rent |
2,178 |
2,244 |
683 |
Other long-term liabilities |
1,586 |
1,511 |
1,281 |
Stockholders' equity |
280,100 |
286,917 |
322,665 |
Total liabilities and stockholders'
equity |
$ 314,134 |
$ 323,078 |
$ 353,550 |
|
|
|
ENTROPIC
COMMUNICATIONS, INC. |
Unaudited
Reconciliation of Non-GAAP Adjustments |
(In thousands, except
for per share information) |
|
|
|
|
|
|
This press release contains the
following non-GAAP financial measures: net income and net income
per share. The presentation of such measures is not intended
to be considered in isolation or as a substitute for, or superior
to, the financial information prepared and presented in accordance
with GAAP. Our non-GAAP net income and net income per share
exclude the items listed below. |
|
|
|
|
|
|
The following table sets forth
such non-GAAP measures for the applicable periods as well as the
reconciliation of such measures to the directly comparable GAAP
measures for the periods shown. |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30,
2013 |
June 30, 2013 |
September 30,
2012 |
September 30,
2013 |
September 30,
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
GAAP net (loss) income |
$ (11,935) |
$ (39,913) |
$ 408 |
$ (54,252) |
$ 4,474 |
Non-GAAP adjustments: |
|
|
|
|
|
Stock-based compensation: |
|
|
|
|
|
Cost of net revenues |
227 |
230 |
217 |
658 |
567 |
Research and development |
2,766 |
1,975 |
2,030 |
6,730 |
5,554 |
Sales and marketing |
510 |
516 |
675 |
1,324 |
1,679 |
General and administrative |
1,089 |
1,054 |
1,283 |
3,109 |
3,182 |
Total stock-based compensation |
4,592 |
3,775 |
4,205 |
11,821 |
10,982 |
Amortization of intangible assets: |
|
|
|
|
|
Cost of net revenues |
2,425 |
2,228 |
2,025 |
6,881 |
3,802 |
Operating expenses |
443 |
495 |
930 |
1,868 |
1,645 |
Transaction and integration costs |
-- |
244 |
183 |
244 |
4,484 |
Loss related to equity method
investment |
-- |
335 |
799 |
1,115 |
2,536 |
Impairment of investment |
-- |
4,780 |
-- |
4,780 |
-- |
Adjustments to the fair value of PLX
acquisition contingent consideration |
-- |
(143) |
230 |
(131) |
230 |
Income tax effects of pre-tax
adjustments |
-- |
2,591 |
(2,930) |
-- |
(8,288) |
Cash tax difference (1) |
(1,093) |
(2,274) |
1,899 |
(5,464) |
6,357 |
Deferred tax asset valuation
allowance |
-- |
26,695 |
-- |
26,695 |
-- |
Restructuring charges (2) |
(69) |
1,763 |
-- |
1,694 |
-- |
Total of non-GAAP adjustments |
6,298 |
40,489 |
7,341 |
49,503 |
21,748 |
Non-GAAP net (loss)
income |
$ (5,637) |
$ 576 |
$ 7,749 |
$ (4,749) |
$ 26,222 |
|
|
|
|
|
|
Weighted average shares (basic) |
91,069 |
90,281 |
88,399 |
90,225 |
87,913 |
Adjustment for dilutive shares |
-- |
2,152 |
2,486 |
-- |
2,005 |
Weighted average shares (diluted) |
91,069 |
92,433 |
90,885 |
90,225 |
89,918 |
|
|
|
|
|
|
GAAP net (loss) income per share (basic) |
$ (0.13) |
$ (0.44) |
$ 0.00 |
$ (0.60) |
$ 0.05 |
Non-GAAP adjustments detailed above |
0.07 |
0.45 |
0.09 |
0.55 |
0.24 |
Non-GAAP net (loss) income per share
(diluted) |
$ (0.06) |
$ 0.01 |
$ 0.09 |
$ (0.05) |
$ 0.29 |
|
|
|
|
|
|
(1) The Company's non-GAAP net
(loss) income per share is calculated using the cash tax rate of
(4)%, 29%, and 22% for the three month periods ended September 30,
2013, June 30, 2013, and September 30, 2012, respectively. The
Company's non-GAAP net (loss) income per share is calculated using
the cash tax rate of (12)% and 19% for the nine month periods ended
September 30, 2013 and 2012, respectively. The estimated cash
tax rate is the estimated tax payable on the Company's projected
tax returns as a percentage of estimated annual non-GAAP pre-tax
net income. The Company uses an estimated cash tax rate to
adjust for the historical variation in the effective book tax rate
associated with the reversal of valuation allowances, the
utilization of research and development tax credits, and the
utilization of loss carryforwards which currently have an overall
effect of reducing taxes payable. The Company believes that
the cash tax rate provides a more transparent view of its operating
results. The Company's effective tax rate used for the
purposes of calculating GAAP net (loss) income for the three month
periods ended September 30, 2013, June 30, 2013, and September 30,
2012 was approximately 7%, (215)%, and 74%, respectively. The
Company's effective tax rate used for the purposes of calculating
GAAP net (loss) income for the nine month periods ended September
30, 2013 and September 30, 2012 was approximately (67)% and 49%,
respectively. |
|
|
|
|
|
|
(2) In June, 2013, we incurred a
restructuring charge of $1.8 million pursuant to a plan to
rebalance our operations in an attempt to leverage synergies from
our acquisitions and refine our business operations. This plan
resulted in a reduction of our personnel by 66 employees, or
approximately 10% of our workforce. |
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
ERShares Entrepreneurs ETF (NASDAQ:ENTR)
Historical Stock Chart
From Jun 2024 to Jul 2024
ERShares Entrepreneurs ETF (NASDAQ:ENTR)
Historical Stock Chart
From Jul 2023 to Jul 2024