SigmaTel, Inc. (NASDAQ: SGTL) today announced results for the
quarter ended December 31, 2007. Fourth Quarter Financial Review
Revenues for the fourth quarter of 2007 were $33.2 million with a
GAAP net loss of $4.0 million or $0.11 per share. The non-GAAP
adjusted net loss for the fourth quarter of 2007 was $2.0 million
or a non-GAAP adjusted net loss of $0.06 per share. GAAP gross
margin for the quarter was 42.3 percent and non-GAAP gross margin
was 43.3 percent. See the reconciling charges set forth in the
reconciliation of GAAP to non-GAAP results provided below. As of
December 31, 2007 SigmaTel had cash, cash equivalents, restricted
cash and short-term investments of $71.4 million. Business Update
�In 2007, we continued our aggressive cost management and
restructured the company,� said Phil Pompa, CEO of SigmaTel. �We
have achieved new design wins across all the product lines and
begun to transition to our PMP solutions, the 3600 and 3700 product
families. SigmaTel shipped over 1 million 3700 SoCs to OEM/ODMs
worldwide, last year.� Executive Summary: 5.0 Software Development
Kit for the 3700 product family available for the mass market GPS
reference design units showcased at CES 2008 Kodak launched the
ESP3, based on SigmaTel technology, at CES SGTV5900 adopted by
Samsung and shipping in mass production �Development has begun on
solutions for different consumer markets,� said Phil Pompa, CEO of
SigmaTel. �New product announcements are expected later on in this
quarter with more details available at that time.� First Quarter
2008 Outlook For the first quarter of 2008, the company anticipates
revenue of $17 million to $22 million with non-GAAP gross margins
of approximately 44 percent, plus or minus a couple of points.
SigmaTel�s gross margin percentage varies primarily with product
mix, pricing, and unit costs. GAAP diluted loss per share is
expected to be $0.40 to $0.30 with non-GAAP adjusted net loss per
share expected to be $0.35 to $0.25, based on 36.1 million diluted
weighted average shares outstanding. Conference Call Today A
conference call will be held today, February 4th, 2007, at 3:30
p.m. Central Time (CST) and will be simulcast over the Internet at
www.streetevents.com and www.sigmatel.com. A replay will be
available from February 6, 2008 until February 29, 2008, at the
websites listed above and by phone at 888-203-1112 for domestic
calls or 719-457-0820 for international calls. Please use passcode
4057885 when accessing the replay by phone. For more information on
SigmaTel, please visit www.sigmatel.com. About SigmaTel: SigmaTel
is a fabless semiconductor company which designs, develops, and
markets mixed-signal ICs for the consumer electronics market. The
Company's target market segments include portable media players,
printers and digital televisions. SigmaTel provides complete,
system-level solutions that include highly-integrated ICs,
customizable firmware and software, software development tools and
reference designs. The Company's focus is on enabling customers to
rapidly introduce and offer electronic products that are small,
light-weight, power-efficient, reliable, and cost-effective.
SigmaTel is ISO 9001:2000 certified and is committed to providing
customers with high performance, quality products along with
superior, worldwide customer service. Cautionary Language: This
press release contains forward-looking statements based on current
SigmaTel expectations. The words "expect," "will," "should,"
"would," "anticipate," "project," "outlook," "believe," "intend,"
and similar phrases as they relate to SigmaTel or future events are
intended to identify such forward-looking statements. These
forward-looking statements reflect the current views and
assumptions of SigmaTel, but are subject to various risks and
uncertainties that could cause actual results to differ materially
from expectations. A number of important factors could cause actual
results to differ materially from those in the forward-looking
statements, and there will be events in the future that SigmaTel is
not able to accurately predict or control. These risks and
uncertainties include, but are not limited to: SigmaTel�s ability
to effectively implement changes which will increase operational
efficiencies, reduce costs as planned, and ultimately improve
SigmaTel�s financial results; SigmaTel�s ability to succeed in its
more narrowly-defined market emphasis and the ability of those
markets to support SigmaTel�s business objectives; SigmaTel�s
ability to gain continued market acceptance of its 3600 and 3700
families of products, and to achieve additional product wins with
those products; and SigmaTel�s ability to correctly identify and
pursue new market segments and to successfully develop new products
for those segments. For a more thorough discussion of the risks to
which the forward-looking statements are subject, please refer to
recent SigmaTel filings with the SEC, particularly the Form 10-Q
that was filed on August 9, 2007. Discussion of Non-GAAP Financial
Measures: SigmaTel provides a non-GAAP measure of gross profit, net
loss income and net loss income per share in its earnings release.
The presentation of gross profit is intended to be a supplemental
measure of performance and excludes a non-cash charge related to
amortization of intangible assets from acquisitions. The
presentation of net loss and net loss per share is intended to be a
supplemental measure of performance and excludes: : (i) a non-cash
charge related to impairment of goodwill and other long-lived
assets; (ii) a non-cash charge related to amortization of
intangible assets from acquisitions; (iii) a non-cash charge
related to stock-based compensation; (iv) a charge related to the
abandonment of leased facilities; (v) a charge related to accrual
for severance payable to our former CEO; (vi) a gain on the sale of
the PC Audio product line and a loss on the disposition of assets
in conjunction with the lease abandonment; (vii) a non-cash charge
related to a tax valuation allowance against our deferred tax
asset; (viii) a non-cash benefit related to a release of a tax
reserve; (ix) a non-cash benefit related to tax benefits of
unwinding our IP migration strategy. The presentation of this
additional information is not meant to be considered in isolation
or as a substitute for results prepared in accordance with GAAP.
The non-GAAP financial measures included in the press release have
been reconciled to the corresponding GAAP financial measures as
required under the rules of the Securities and Exchange Commission
regarding the use of non-GAAP financial measures. SigmaTel is a
registered trademark of SigmaTel, Inc. All other products and brand
names as they appear in this release are trademarks or registered
trademarks of their respective holders. All specifications may be
changed without notice. SIGMATEL, INC. RECONCILIATION of GAAP to
NON-GAAP RESULTS (in thousands, except per share data) (unaudited)
� Three Months Ended December 31, � Year Ended December 31, 2007 �
2006 2007 � 2006 Gross profit as reported $ 14,045 $ 13,822 $
51,081 $ 64,679 Adjustments: Amortization of intangible assets from
acquisitions 342 � 783 � 1,707 � 3,133 � Non-GAAP gross profit $
14,387 � $ 14,605 � $ 52,788 � $ 67,812 � Non-GAAP gross profit
percentage 43.3 % 38.9 % 41.5 % 42.6 % � Three Months Ended
December 31, � Year Ended December 31, 2007 � 2006 2007 � 2006 Net
loss as reported $ (3,994 ) $ (98,735 ) $ (37,777 ) $ (109,024 )
Adjustments (tax effected): Impairment of goodwill and other long
lived assets 398 72,811 398 72,811 Amortization of intangible
assets from acquisitions 392 831 1,907 3,344 Stock-based
compensation 1,213 1,445 6,492 7,205 Lease impairment charges � �
619 � CEO severance accrual � 1,546 � 1,546 Loss (gain) on asset
disposition � � 915 (24,312 ) Tax valuation allowance � 16,142 �
16,142 Release of tax reserve � (2,857 ) � (2,857 ) Net tax benefit
of unwinding IP migration strategy � � � � � � (9,271 ) Non-GAAP
net loss $ (1,991 ) $ (8,817 ) $ (27,446 ) $ (44,416 ) Diluted
weighted average shares outstanding 36,038 35,483 35,811 35,304
Diluted net loss per share, non-GAAP $ (0.06 ) $ (0.25 ) $ (0.77 )
$ (1.26 ) SIGMATEL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) (unaudited) � December 31, 2007 � 2006 ASSETS Current
Assets: Cash and cash equivalents $ 20,773 $ 30,686 Restricted cash
193 7,354 Short-term investments 50,438 62,800 Accounts receivable,
net 14,921 12,556 Inventories, net 12,295 20,794 Income tax
receivable 2,517 3,365 Prepaid expenses and other assets 2,729 �
5,591 � Total current assets 103,866 143,146 � Property, equipment
and software, net 8,793 13,301 Intangible assets, net 14,645 15,370
Non-current income tax receivable 6,559 � Other assets 1,389 �
1,574 � � Total assets $ 135,252 � $ 173,391 � � LIABILITIES AND
STOCKHOLDERS� EQUITY Current Liabilities: Accounts payable $ 14,234
$ 16,338 Accrued compensation 5,293 8,712 Other accrued expenses
3,539 5,327 Deferred revenue 2,771 1,242 Income taxes payable 125
2,729 Current portion of long-term obligations 163 � 229 � Total
current liabilities 26,125 34,577 � Non-current income taxes
payable 6,107 4,453 Other liabilities 2,182 � 809 � Total
liabilities 34,414 � 39,839 � � Commitments and contingencies (see
Note 12) Stockholders' Equity: Common stock, $0.0001 par value;
170,000 shares authorized; shares issued and outstanding: 36,160
and 36,070 at 2007 and 35,603 and 35,513 at 2006, respectively 4 4
Additional paid-in capital 204,873 197,711 Notes receivable from
stockholders � (5 ) Treasury stock, 90 common shares at cost (741 )
(741 ) Accumulated deficit (103,673 ) (63,687 ) Accumulated other
comprehensive income loss 375 � 270 � Total stockholders' equity
100,838 � 133,552 � Total liabilities and stockholders' equity $
135,252 � $ 173,391 � SIGMATEL, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share data)
(unaudited) � Three Months Ended December 31, � Year Ended December
31, 2007 � 2006 2007 � 2006 Revenues, net $ 33,195 $ 37,524 $
127,126 $ 159,365 Cost of goods sold 19,150 � 23,702 � 76,045 �
94,686 � Gross profit 14,045 13,822 51,081 64,679 � Operating
expenses: Research and development 12,811 21,971 64,777 90,640
Selling, general and administrative 5,553 12,320 30,179 50,245
Goodwill impairment � 63,334 � 63,334 Impairment of long-lived
assets 398 18,477 398 18,477 Loss (gain) on asset disposition 320 �
� � 915 � (45,673 ) � Total operating expenses 19,082 � 116,102 �
96,269 � 177,023 � Operating loss (5,037 ) (102,280 ) (45,188 )
(112,344 ) � � Interest income, net 969 966 4,053 3,084 Foreign
exchange loss (70 ) (50 ) (147 ) (221 ) Other income � � 50 � � �
50 � Total other income 899 � 966 � 3,906 � 2,913 � � Loss before
income taxes (4,138 ) (101,314 ) (41,282 ) (109,431 ) � Income tax
benefit (144 ) (2,579 ) (3,505 ) (407 ) � Net loss $ (3,994 ) $
(98,735 ) $ (37,777 ) $ (109,024 ) � BASIC NET LOSS PER SHARE � $
(0.11 ) $ (2.78 ) $ (1.05 ) $ (3.09 ) DILUTED NET LOSS PER SHARE $
(0.11 ) $ (2.78 ) $ (1.05 ) $ (3.09 ) � WEIGHTED AVERAGE SHARES
USED TO COMPUTE: Basic net loss per share � 36,038 35,483 35,811
35,304 Diluted net loss per share � 36,038 35,483 35,811 35,304
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