March Quarter Revenue Grew 10% Sequentially
June Quarter Revenue Expected to Be Up 10-12% Sequentially
SUNNYVALE, Calif., April 26 /PRNewswire-FirstCall/ -- Trident
Microsystems, Inc. (Nasdaq: TRID) a leading provider of digital TV
semiconductor technology today announced for the third quarter of fiscal
2006, ended March 31, 2006, the company achieved net revenues of
$44,743,000, a sequential increase of 10% from the $40,614,000 reported in
the immediately preceding quarter, and a year over year increase of 177%
from $16,136,000 reported in the third fiscal quarter one year ago.
Net income of $6,982,000 was recorded in the third quarter ended March
31, 2006, on a generally accepted accounting principles (GAAP) basis, or
$0.11 per share on a diluted basis, which included $2,309,000 in amortized
stock compensation expense relating to option expense under FAS 123(R) and
$1,517,000 charged to cost of revenue and operating expenses relating to
amortization of intangibles. This compares to net income of $8,542,000
which was recorded in the second quarter ended December 31, 2005, on a
generally accepted accounting principles (GAAP) basis, or $0.14 per share
on a diluted basis, which included $2,209,000 in amortized stock
compensation expense relating to option expense under FAS 123(R),
$1,200,000 charged to cost of revenue and operating expenses relating to
amortization of intangibles, and a credit to income tax expense of
$414,000, as well as a credit of $1,951,000 relating to the booking of a
deferred tax asset for our TTI subsidiary. For the third quarter ended
March 31, 2005, the company has a net loss of $ 4,515,000 on a generally
accepted accounting principles (GAAP) basis, or $0.10 per share on a
diluted basis, which included $4,586,000 of in-process research and
development expenses relating to the acquisition of the minority interest
in the Company's TTI subsidiary, and $820,000 in deferred compensation
amortization relating to TTI options.
Pro forma net income in the quarter ended March 31, 2006, was
$11,050,000, or $0.18 per share on a diluted basis and excludes the items
noted above. This compares to pro forma net income of $10,167,000 or $0.17
per diluted share in the quarter ended December 31, 2005 and to pro forma
net income in the quarter ended March 31, 2005 of $891,000, or $0.02 per
diluted share. A reconciliation between net income on a GAAP basis and pro
forma net income/loss is provided in a table following the pro forma
consolidated statement of operations.
"We are very pleased with the continuing strong momentum and our good
sequential growth rate of 10% in what traditionally has been a seasonally
down quarter" said Mr. Frank Lin, Trident's CEO. In March quarter, there
were some conflicting market information and confusion about market trends.
We believe this has been the result of a slow down among suppliers to the
second and third tier TV manufacturers caused by a dynamic market demand
shift to favor first tier world class manufacturers. This trend bodes well
for Trident. In particular, we believe we are benefiting from a strong
replenishment rate at two of our largest tier one OEM customers who
respectively grew sequentially by 18% and 19% in the quarter as they both
appear to be gaining market share at present. In addition, we are also
experiencing strong product cycles and increased customer penetration which
have combined to lead to a broad based growth across the entire flat panel
customer base," continued Mr. Lin. Digital CRT which now represents 8% of
our revenues was more than seasonally off due to slower than expected sell
through during the Chinese New Year holiday season in late January and
February. In addition we believe a significant portion of the digital CRT
market is continuing to convert into LCD TV business."
"In this quarter, we witnessed top-tier OEM customers successfully
making the transition from their previous SVP EX based product lines into
the new 2006 SVP PX based models which they recently launched worldwide.
The SVP-PX represented more than 30% of our flat panel volumes shipped in
the quarter," said Mr. Lin.
The current product transition to our SVP-PX signifies the maturity of
our product for worldwide platforms and demonstrates the benefits to our
customers from our strong product continuity/compatibility between
generations from a hardware and software perspective. This product greatly
enhances the productivity and competitiveness of our customers in the
highly competitive TV market space.
On the HDTV front, in the March quarter, the company also saw its first
generation HiDTV based products starting to sell in the U.S. Market. We
expect more models by various OEM's to be launched in the June quarter. The
Company believes it is well on the way to achieving its goal to deliver
more than $10 million in revenue by the end of calendar 2006. Production
starts with our customers mark our entry into the HDTV market and also
signal a level of maturity for our HDTV technology. In addition this
quarter, the Company has successfully show-cased at CES and started to
sample its second HDTV Pro product which is the world's first SOC product
that has integrated both mature HDTV technology and field proven superior
display technology (SVP PX/LX) into a single chip. Furthermore, we have
continued to develop and introduce a next follow-on generation of HiDTV PRO
SOC which will integrate our seventh and latest generation image processing
technologies in the HiDTV family by early summer.
As the SVP-PX/LX continues to ramp into production and our customers
continue to do well in the market , we now expect to generate approximately
10-12% sequential revenue growth in the June quarter.
About Pro Forma adjustments
To supplement the consolidated financial results prepared under
generally accepted accounting principles ("GAAP"), Trident uses a non-GAAP
conforming, or pro forma, measure of net income that is GAAP net income
adjusted to exclude certain costs, expenses and gains. Pro forma net income
gives an indication of Trident's baseline performance before gains, losses
or other charges that are considered by management to be outside the
company's core operating results. In addition, pro forma net income is
among the primary indicators management uses for planning purposes.
Management also believes the exclusion of amortization of stock option
expense may be useful in comparing the Company's results with past results
and with companies who are not yet subject to FAS 123R. However, the
Company's pro forma measures are not in accordance with, or an alternative
for, GAAP and may be materially different from pro forma measures used by
other companies. Trident computes pro forma net income by adjusting GAAP
net income for the impact of certain investment gains (or losses) and
excluding various items related to the acquisition of the TTI minority
interest, including amortization of deferred stock compensation,
amortization of intangible assets and charges for in-process research and
development costs. A reconciliation between net income/loss on a GAAP basis
and pro forma net income is provided in a table following pro forma
consolidated financial statements.
Webcast, Teleconference and Taped Replay
The Company also announced that it will hold a conference call to
discuss the earnings, which will be held on Wednesday, April 26, 2006 at
2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Shareholders may
participate in the call by calling 617-614-3925 passcode 94021917. The
conference call will also be webcast by Thomson/CCBN and can be accessed at
Trident's web site at: http://www.tridentmicro.com. A replay of the
conference call will be available from 5:00 p.m. Pacific Time April 26,
2006 until midnight Pacific Time May 3, 2006, and can be accessed by
calling 617-801-6888 using passcode 19399331.
Forward-Looking Information
This press release contains forward-looking statements, including
statements which use the words "expect," "should," "hope," "anticipate,"
"believe," "potential" and similar words, including our statements
regarding financial expectations and our expectations regarding market
leadership, product introductions and design-wins. The forward-looking
statements above are subject to certain risks, and actual results could
vary materially depending on a number of factors. These risks include, in
particular, changes in trends in the DPTV industries, whether the Company
is able to achieve timely product introductions, the failure to obtain
design wins among major OEMs for the Company's products, and competitive
pressures, including pricing and competitors' new product introductions.
Additional factors that may affect the Company's business are described in
detail in the Company's filings with the Securities and Exchange
Commission.
Special Stockholder's Meeting
The Company also announced that it intends to hold a special
stockholder's meeting to consider the adoption of a 2006 Equity Incentive
Plan. The meeting is scheduled to occur on May 25, 2006. Proxy statements
regarding the proposal will be mailed on or around April 27, 2006.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Sunnyvale, California,
designs, develops and markets digital media for the masses in the form of
integrated circuits (ICs) for HDTV, LCD TV, PDP TV, DLP TV, and DCRT.
Trident's products are sold to a network of OEMs, original design
manufacturers and system integrators worldwide. For further information
about Trident and its products, please consult the company's web site:
http://www.tridentmicro.com.
NOTE: Trident is a registered trademark of Trident Microsystems, Inc.
All other company and product names are trademarks and/or registered
trademarks of their respective owners. Features, pricing, availability and
specifications are subject to change without notice.
Trident Microsystems, Inc.
Consolidated Statement of Operations
Three Months Ended
March 31, December 31, March 31,
(in thousands, except per 2006 2005 2005
share data, unaudited)
Net revenue $44,743 $40,614 $16,136
Cost of revenue 20,531 18,533 7,170
Cost of revenues -
amortization of intangibles 1,383 1,164 --
Gross profit 22,829 20,917 8,966
% of net revenue 51.0% 51.5% 55.6%
Research and development
expenses 8,644 8,166 5,481
% of net revenue 19.3% 20.1% 34.0%
Selling, general and
administrative expenses 5,612 5,098 2,940
% of net revenue 12.5% 12.6% 18.2%
In-process research and
development expenses -- -- 4,586
% of net revenue -- -- 28.4%
Income (loss) from operations 8,573 7,653 (4,041)
% of net revenue 19.2% 18.8% (25.0)%
(Loss) gain on investments,
net (242) (167) --
Interest and other income,
net 570 642 209
Minority interests in
subsidiaries -- -- (263)
Income (loss) before income
taxes 8,901 8,128 (4,095)
% of net revenue 19.9% 20.0% (25.4)%
Provision (benefit) for
income taxes 1,919 (414) 420
% of net revenue 4.3% (1.0)% 2.6%
Net income (loss) before
cumulative effect
of change in accounting
principle 6,982 8,542 (4,515)
% of net revenue 15.6% 21.0% (28.0)%
Cumulative effect of change
in accounting principle -- -- --
% of net revenue 0.0% 0.0% 0.0%
Net income (loss) $6,982 $8,542 $(4,515)
% of net revenue 15.6% 21.0% (28.0)%
Basic net income (loss) per
share
Prior to cumulative effect
of change in accounting
principle $0.12 $0.16 $(0.10)
Cumulative effect of change
in accounting principle -- -- --
Basic net income (loss) per
share $0.12 $0.16 $(0.10)
Common shares used in
computing basic
per share amounts 56,025 53,591 46,680
Diluted net income (loss) per
share
Prior to cumulative effect
of change in accounting
principle $0.11 $0.14 $(0.10)
Cumulative effect of change
in accounting principle -- -- --
Diluted net income (loss) per
share $0.11 $0.14 $(0.10)
Common and common equivalent
shares used
in computing diluted per
share amounts 62,729 60,842 46,680
Nine Months Ended
March 31, March 31,
(in thousands, except per share data, 2006 2005
unaudited)
Net revenue $118,561 $48,125
Cost of revenue 53,518 21,476
Cost of revenues - amortization of
intangibles 3,739 --
Gross profit 61,304 26,649
% of net revenue 51.7% 55.4%
Research and development expenses 24,167 15,778
% of net revenue 20.4% 32.8%
Selling, general and administrative
expenses 15,527 8,031
% of net revenue 13.1% 16.7%
In-process research and development
expenses -- 5,171
% of net revenue -- 10.7%
Income (loss) from operations 21,610 (2,331)
% of net revenue 18.2% (4.8)%
(Loss) gain on investments, net (510) 331
Interest and other income, net 1,724 436
Minority interests in subsidiaries -- (1,179)
Income (loss) before income taxes 22,824 (2,743)
% of net revenue 19.3% (5.7)%
Provision (benefit) for income taxes 2,706 936
% of net revenue 2.3% 1.9%
Net income (loss) before cumulative
effect of change in
accounting principle 20,118 (3,679)
% of net revenue 17.0% (7.6)%
Cumulative effect of change in
accounting principle 171 --
% of net revenue 0.1% 0.0%
Net income (loss) $20,289 $(3,679)
% of net revenue 17.1% (7.6)%
Basic net income (loss) per share
Prior to cumulative effect of change
in accounting principle $0.37 $(0.08)
Cumulative effect of change in
accounting principle -- --
Basic net income (loss) per share $0.37 $(0.08)
Common shares used in computing basic
per share amounts 54,042 46,190
Diluted net income (loss) per share
Prior to cumulative effect of change
in accounting principle $0.33 $(0.08)
Cumulative effect of change in
accounting principle -- --
Diluted net income (loss) per share $0.33 $(0.08)
Common and common equivalent shares
used in computing diluted
per share amounts 61,446 46,190
Trident Microsystems, Inc.
Pro Forma Consolidated Statement of Operations
Three Months Ended
March 31, December 31, March 31,
(in thousands, except per 2006 2005 2005
share data, unaudited)
Net revenue $44,743 $40,614 $16,136
Cost of revenue 20,531 18,533 7,170
Gross profit 24,212 22,081 8,966
% of net revenue 54.1% 54.4% 55.6%
Research and development
expenses 7,023 6,671 4,938
% of net revenue 15.7% 16.4% 30.6%
Selling, general and
administrative expenses 4,790 4,348 2,663
% of net revenue 10.7% 10.7% 16.5%
Income from operations 12,399 11,062 1,365
% of net revenue 27.7% 27.2% 8.5%
Interest and other income,
net 570 642 209
Minority interests in
subsidiaries -- -- (263)
Income before income taxes 12,969 11,704 1,311
% of net revenue 29.0% 28.8% 8.1%
Provision (benefit) for
income taxes 1,919 1,537 420
% of net revenue 4.3% 3.8% 2.6%
Net income 11,050 10,167 891
% of net revenue 24.7% 25.0% 5.5%
Basic net income per share $0.20 $0.19 $0.02
Common shares used in
computing basic
per share amounts 56,025 53,591 46,680
Diluted net income per share $0.18 $0.17 $0.02
Common and common equivalent
shares used
in computing diluted per
share amounts 62,729 60,842 51,286
Nine Months Ended
March 31, March 31,
(in thousands, except per share data, 2006 2005
unaudited)
Net revenue $118,561 $48,125
Cost of revenue 53,518 21,476
Gross profit 65,043 26,649
% of net revenue 54.9% 55.4%
Research and development expenses 20,050 14,665
% of net revenue 16.9% 30.5%
Selling, general and administrative
expenses 13,352 7,387
% of net revenue 11.3% 15.3%
Income from operations 31,641 4,597
% of net revenue 26.7% 9.6%
Interest and other income, net 1,724 436
Minority interests in subsidiaries -- (1,179)
Income before income taxes 33,365 3,854
% of net revenue 28.1% 8.0%
Provision (benefit) for income taxes 4,657 936
% of net revenue 3.9% 1.9%
Net income 28,708 2,918
% of net revenue 24.2% 6.1%
Basic net income per share $0.53 $0.06
Common shares used in computing
basic
per share amounts 54,042 46,190
Diluted net income per share $0.47 $0.06
Common and common equivalent shares
used in computing diluted per share
amounts 61,446 50,832
A reconciliation between net income (loss) on a GAAP basis
and pro forma net income is as follows:
Three Months Ended
March 31, December 31, March 31,
(in thousands, except per 2006 2005 2005
share data, unaudited)
GAAP net income (loss) $6,982 $8,542 $(4,515)
Amortization of intangibles 1,517 1,200 --
In-process research and
development expenses -- -- 4,586
Amortization of stock-based
compensation 2,309 2,209 820
Loss (gain) on investments,
net 242 167 --
Benefit for income taxes -- (1,951) --
Cumulative effect of change
in accounting principle (1) -- -- --
Pro forma net income $11,050 $10,167 $891
Basic net income per share $0.20 $0.19 $0.02
Common shares used in
computing basic
per share amounts 56,025 53,591 46,680
Diluted net income per share $0.18 $0.17 $0.02
Common and common equivalent
shares used in computing
diluted per share amounts 62,729 60,842 51,286
Nine Months Ended
March 31, March 31,
(in thousands, except per share data, 2006 2005
unaudited)
GAAP net income (loss) $20,289 $(3,679)
Amortization of intangibles 3,945 --
In-process research and development
expenses -- 5,171
Amortization of stock-based
compensation 6,086 1,757
Loss (gain) on investments, net 510 (331)
Benefit for income taxes (1,951) --
Cumulative effect of change in
accounting principle (1) (171) --
Pro forma net income $28,708 $2,918
Basic net income per share $0.53 $0.06
Common shares used in computing
basic per share amounts 54,042 46,190
Diluted net income per share $0.47 $0.06
Common and common equivalent shares
used in computing diluted
per share amounts 61,446 50,832
(1) The adoption of SFAS 123R resulted in a cumulative benefit from an
accounting change of $171,000 on unvested awards for which an expense had
already been recorded.
Trident Microsystems, Inc.
Consolidated Balance Sheet
March 31, December 31, March 31,
(in thousands, unaudited) 2006 2005 2005
ASSETS
Current assets
Cash and cash equivalents $83,388 $68,665 $32,971
Short-term investment - UMC 52,295 46,916 45,454
Accounts receivable, net 7,325 4,430 3,959
Inventories 6,635 4,369 2,838
Deferred income taxes 2,158 2,158 --
Prepaid expenses and
other current assets 3,550 2,892 2,401
Total current assets 155,351 129,430 87,623
Property and equipment, net 2,943 2,831 1,990
Intangible assets, net 20,714 22,231 26,029
Investments - other 3,830 4,072 3,200
Other assets 1,890 1,872 1,562
Total assets $184,728 $160,436 $120,404
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $13,252 $11,493 $5,583
Accrued liabilities 16,768 14,331 8,950
Deferred income taxes 2,485 334 --
Income taxes payable 10,007 8,517 5,187
Total current liabilities 42,512 34,675 19,720
Minority interests in
subsidiaries 2 2 58
Total liabilities 42,514 34,677 19,778
Stockholders' equity
Capital stock 103,782 97,536 123,444
Deferred stock-based
compensation -- -- (43,099)
Retained earnings 34,704 27,722 20,480
Accumulated other
comprehensive income (loss) 3,728 501 (199)
Total stockholders' equity 142,214 125,759 100,626
Total liabilities and
stockholders' equity $184,728 $160,436 $120,404
SOURCE Trident Microsystems, Inc.
 back to top
Related links:
http://www.tridentmicro.com/
CONTACT:
John Edmunds, Chief Financial Officer of
Trident Microsystems, Inc., +1-408-991-8800, or
Investor@tridentmicro.com
|
