Silicon Image Reports Fourth Quarter 2003 Revenue Grew 25.4 Percent
Over Prior Quarter Selected Q4 Highlights: SUNNYVALE, Calif., Feb.
17 /PRNewswire-FirstCall/ -- Silicon Image, Inc. , a leader in
multi-gigabit semiconductor solutions for the securetransmission
and storage of rich digital media, today reported financial results
for its fourth quarter ended December 31, 2003. Revenue of $30.3
million was achieved for the fourth quarter. This was an increase
of 25.4 percent from revenue of $24.2 million achieved in the third
quarter of 2003, and was an increase of 27.5 percent from revenue
of $23.8 million in the fourth quarter of 2002. Year-to-date
revenue totaled $103.5 million, an increase of 27.0 percent from
revenue of $81.5 million for the year 2002. Net loss under
Generally Accepted Accounting Principles (GAAP), which includes
stock compensation expense, amortization and impairment of goodwill
and intangible assets, patent defense costs, acquisition
integration costs, restructuring costs, in-process research and
development expense, and a gain on escrow settlement, was $5.3
million, or $0.07 per basic and diluted share, for the quarter
ended December 31, 2003. This compares to a net loss of $2.1
million, or $0.03 per basic and diluted share, for the previous
quarter, and a net loss of $8.1 million, or $0.12 per basic and
diluted share, for the fourth quarter of 2002. On a year-to-date
basis, the GAAP net loss was $12.8 million, or $0.18 per basic and
diluted share, and comparesto a net loss of $40.1 million, or $0.62
per basic and diluted share, for the year 2002. Fourth quarter
pro-forma net income, calculated excluding a non-cash charge for
stock compensation ($7.0 million), a non-cash expense for the
amortization of intangible assets ($0.4 million) and cash legal
expenses associated with the patent litigation lawsuit against
Genesis Microchip ($0.2 million), was $2.3 million, or $0.03 per
diluted share. This compares to a pro-forma net loss of $0.5
million, or $0.01 per basic and diluted share, for the third
quarter of 2003, and a pro-forma net profit of $0.6 million, or
$0.01 per diluted share, for the fourth quarter of 2002. Commenting
on the results, David Lee, Silicon Image's chairman and chief
executive officer, said, "We achieved record financial results --
both on the top line as well as the pro-forma bottom line. We saw
revenues expand more than 25% sequentially and interest in our IP,
particularly in the HDMI arena, remains strong. In fact, the
successand momentum of our HDMI products was readily apparent at
the Consumer Electronics Show in January. Our business momentum
entering 2004 continues to be robust and we look forward to more
record quarters." "Our overall strategy aimed at the distribution,
storage and display of rich digital content in a secure environment
is clearly paying benefits for us as we enter 2004. Our improved
visibility and gross margins are clear evidence that we are focused
and executing to plan," added Silicon Image's president Steve
Tirado. The company will host a conference call at 2:00 p.m. PST
today to discuss its fourth quarter 2003 results and business
outlook. The call will be broadcast over the Internet and can be
accessed on the investor relations site located at
http://www.siliconimage.com/. A replay of the conference call will
be available on this site until 12:00 p.m. PST on March 1, 2004. *
Pro-forma net income or loss represents net income or net loss,
exclusive of stock compensation expense, amortization and
impairment of goodwill and intangible assets, patent defense costs,
acquisition integration costs, restructuring costs, in-process
research & development expense, and gains on escrow settlement.
About Silicon Image Headquartered in Sunnyvale, Calif., Silicon
Image, Inc. designs, develops and markets multi-gigabit
semiconductor and system solutions for a variety of communications
applications demanding high-bandwidth capability. With its
proprietary Multi-layer Serial Link (MSL(TM)) architecture, Silicon
Image is well positioned for leadership in multiple mass markets
including PCs, consumer electronics, and storage. Silicon Image is
a leader in the global PC/display arena with its innovative digital
interconnect technology and is now emerging as a leading player in
the fields of storage and consumer electronics by offering robust,
high-bandwidth semiconductors. For more information on Silicon
Image, visit http://www.siliconimage.com/ Safe Harbor Statement
This news release contains forward-looking information within the
meaning of federal securities regulations. These forward-looking
statements include statements related to future financial results,
product introductions and standards adoption rates. These
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
anticipated by these forward-looking statements. In particular,
future demand in PC, display, consumer electronics and storage
markets may differ from current expectations, adversely affecting
expected future results for the company, new product introductions
may not be timely or successful, and standards may not be adopted
at the rates anticipated. In addition, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations -
Factors Affecting Future Results" in the most recent Quarterly
Report on Form 10-Q and Annual Report on Form 10-K filed by Silicon
Image with the SEC. Silicon Image assumes no obligation to update
this forward-looking information. SILICON IMAGE, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS) Three Months
Ended Twelve Months Ended (unaudited) (unaudited) (In thousands,
except per share amounts) Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec.
31, 2003 2003 2002 2003 2002 Revenue: Product $27,421 $22,447
$20,202 $89,335 $74,884 Development, licensing and royalties 2,906
1,743 3,593 14,190 6,655 Total revenue 30,327 24,190 23,795 103,525
81,539 Cost and operating expenses: Cost of productrevenue 13,267
11,501 10,739 46,609 38,110 Research and development 9,264 9,054
8,646 36,523 32,809 Selling, general and administrative 5,607 4,131
3,962 18,401 17,454 Stock compensation expense 6,991 1,106 3,521
9,988 11,107 Amortization of goodwill and intangible assets 357 373
857 1,103 3,482 Patent defense and acquisition integration costs
196 160 2,870 2,152 7,034 Restructuring -- -- 1,500 986 7,193
In-process research and development -- -- -- 5,482 -- Impairment of
goodwill and intangible assets -- -- -- -- 5,200 Total cost and
operating expenses 35,682 26,325 32,095 121,244 122,389 Net loss
from operations (5,355) (2,135) (8,300) (17,719) (40,850) Gainon
escrow settlement -- -- -- 4,618 -- Interest income and other, net
75 40 161 291 758 Net loss $(5,280) $(2,095) $(8,139) $(12,810)
$(40,092) Net loss per share - basic $(0.07) $(0.03) $(0.12)
$(0.18) $(0.62) Net loss per share - diluted $(0.07) $(0.03)
$(0.12) $(0.18) $(0.62) Weighted average shares - basic 70,638
69,803 66,198 69,412 64,283 Weighted average shares - diluted
70,638 69,803 66,198 69,412 64,283 SILICON IMAGE, INC.
RECONCILIATION OF GAAP TO PRO-FORMA FINANCIAL INFORMATION Three
Months Ended Twelve Months Ended (unaudited) (unaudited) Dec. 31,
Sept. 30, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2003 2003 2002
2003 2002 GAAP net loss $(5,280) $(2,095) $(8,139) $(12,810)
$(40,092) Pro-forma adjustments: Stock compensation expense (A)
6,991 1,106 3,521 9,988 11,107 Amortization of goodwill and
intangible assets (B) 357 373 857 1,103 3,482 Patent defense and
acquisition integration costs (C) 196 160 2,870 2,152 7,034
Restructuring (D) -- -- 1,500 986 7,193 In-process research and
development (E) -- -- -- 5,482 -- Impairment of goodwill and
intangible assets (F) -- -- -- -- 5,200 Gain on escrow settlement
(G) -- -- -- (4,618) -- Pro-forma net income (loss) $2,264 $(456)
$609 $2,283 $(6,076) (A) Non-cash expenses associated with stock
option modifications (including repricings) and certain stock
options issued to employees in our Initial Public Offering, to
employees of acquired companies, and to non-employees in exchange
for services. (B) Non-cash expenses for the amortization of
goodwill and intangible assets recorded in connection with our
acquisitions. (C) Costs incurred to defend our intellectual
property and to integrate the operations of companies we have
acquired. These expenses have been excluded because they are
expected to be incurred over a limited period of time and are not
directly attributable to our ongoing operations. (D) Severance and
other costs resulting from our involuntary workforce reductions and
consolidation of facilities. These expenses have been excluded
since they are not directly attributable to our ongoing operations.
(E) A non-cash expense for the value assigned to an acquired
company's existing research and development projects that have not
reached technological feasibility and that have no alternative use
as of the acquisition date. (F) A non-cash expense to reduce the
carrying values of intangible assets to their estimated fair
values. (G) A non-cash gain from recovery of shares held in escrow
as indemnification for certain damages incurred as a result of a
prior acquisition. SILICON IMAGE, INC. PRO FORMA (NON-GAAP BASIS)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended
Twelve Months Ended (unaudited) (unaudited) (In thousands, except
per share amounts) Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2003 2003 2002 2003 2002 Revenue: Product $27,421 $22,447 $20,202
$89,335 $74,884 Development, licensing and royalties 2,906 1,743
3,593 14,190 6,655 Total revenue 30,327 24,190 23,795 103,525
81,539 Pro-forma cost and operating expenses: Cost of product
revenue 13,267 11,501 10,739 46,609 38,110 Research and development
9,264 9,054 8,646 36,523 32,809 Selling, general and administrative
5,607 4,131 3,962 18,401 17,454 Total pro-forma cost and operating
expenses 28,138 24,686 23,347 101,533 88,373 Pro-forma net income
(loss) from operations 2,189 (496) 448 1,992 (6,834) Interest
income and other, net 75 40 161 291 758 Pro-forma net income (loss)
$2,264 $(456) $609 $2,283 $(6,076) Pro-forma net income (loss) per
share $0.03 $(0.01) $0.01 $0.03 $(0.09) Weighted average shares *
78,564 69,803 73,195 76,555 64,283 The above pro-forma financial
information is presented for informational purposes only. Our
presentation of pro-forma financial information excludes non-cash
expenses resulting from acquisitions or the issuance of stock
options, as well as unusual or infrequent income and expenses that
are not directly attributable to our ongoing operations and are
expected to be non-recurring or to be incurred over a limited
period of time. Because of these exclusions, our presentation is
not in accordance with Generally Accepted Accounting Principles
(GAAP). Additionally, our presentation of pro-forma financial
information may not be consistent with that of other companies. We
do not evaluate items such as amortization of goodwill and
intangible assets, stock-based compensation, impairment charges, in
process research and development charges, and other non-cash or
infrequent or unusual items when assessing the performance of our
ongoing operations or when allocating resources. We believe that
the exclusion of intangible non-cash charges may help the investor
better understand our liquidity position and the use of tangible
resources in our operations and the exclusion of unusual or
infrequent items provides an alternative measure which may help the
investor evaluate our underlying operating performance. Pro-forma
information is not, and should not be considered, a substitute for
financial information prepared in accordance with GAAP. * For
periods in which there is pro-forma net income, weighted average
shares includes weighted average shares outstanding during the
period, as well as the dilutive effect of outstanding stock options
as if they had been converted to shares during the period. SILICON
IMAGE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (In
thousands) Dec. 31, Dec. 31, 2003 2002 Assets Current assets: Cash
and short-term investments $37,254 $35,833 Accounts receivable, net
12,754 11,589 Inventories, net 10,312 7,301 Prepaid expenses and
other current assets 2,703 2,510 Total current assets 63,023 57,233
Property and equipment, net 7,411 6,653 Goodwill and intangible
assets, net 16,049 13,021 Other assets 1,259 709 Total assets
$87,742 $77,616 Liabilities and Stockholders' Equity Current
liabilities: Accounts payable, debt and other current liabilities
$18,075 $25,313 Deferred margin on sales to distributors 7,274
4,133 Total current liabilities 25,349 29,446 Stockholders' equity
62,393 48,170 Total liabilities and stockholders' equity $87,742
$77,616 DATASOURCE: Silicon Image, Inc. CONTACT: Robert G. Gargus,
Chief Financial Officer, +1-408-616-4114, or Liz Casolari, Investor
Relations, +1-408-616-1543, both of Silicon Image, Inc., fax,
+1-408-830-9531 Web site: http://www.siliconimage.com/
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