NVIDIA Reports Record Results for Fourth Quarter and Fiscal Year 2006
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NVIDIA Reports Record Results for Fourth Quarter and Fiscal Year 2006

Company Achieves Record Annual Revenue; Annual Net Income Increases 202 Percent Year-Over-Year

Feb. 16 /PRNewswire/ -- SANTA CLARA, Calif., Feb. 16 /PRNewswire-FirstCall/ -- NVIDIA Corporation (NASDAQ: NVDA) today reported financial results for the fourth quarter of fiscal 2006 and the fiscal year ended January 29, 2006.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020613/NVDALOGO )

For the fourth quarter of fiscal 2006, revenue was $633.6 million, compared to $566.5 million for the fourth quarter of fiscal 2005, an increase of 12 percent. Operating income for the fourth quarter of fiscal 2006 experienced 97 percent growth to $112.3 million, compared to operating income of $57.2 million for the fourth quarter of fiscal 2005. Net income for the fourth quarter of fiscal 2006 was $98.1 million, or $0.53 per diluted share, compared to net income of $48.0 million, or $0.27 per diluted share, for the fourth quarter of fiscal 2005, a net income increase of 104 percent.

Revenue for the fiscal year ended January 29, 2006 was a record $2.38 billion, compared to revenue of $2.01 billion for the fiscal year ended January 30, 2005. Net income for the fiscal year ended January 29, 2006 was $302.6 million, or $1.65 per diluted share, compared to net income of $100.4 million, or $0.57 per diluted share, for the fiscal year ended January 30, 2005, a net income increase of 202 percent.

"Fiscal 2006 was a milestone year for NVIDIA," stated Jen-Hsun Huang, president and CEO at NVIDIA. "We led the GPU and core logic industry on every front -- technology leadership, product innovation, and operational excellence. As a result, we delivered record annual results for revenue, operating income, operating margin, and operating cash flow."

"Looking ahead into fiscal 2007, multiple important trends will create substantial growth opportunities in our target markets -- HD DVD and Blu-ray high definition video, Microsoft Windows Vista, the 3G ramp and increasing multimedia content for mobile devices, and next generation game consoles. We have aligned ourselves with these exciting new growth drivers and are well positioned to have another strong year."

    Fourth Quarter Fiscal 2006 and Recent Highlights:

    -- Gross margin improved to 40.2 percent, an increase of 110 basis points
       sequentially from the third quarter fiscal 2006, and 600 basis points
       year-over-year.
    -- NVIDIA increased its leadership share position in the desktop graphics
       processing unit (GPU) segment to 51 percent share, according to the
       Mercury Research Fourth Quarter 2005 PC Graphics Report.
    -- NVIDIA shipped the NVIDIA nForce(R) 4 SLI XE and NVIDIA nForce4 Ultra
       Intel media and communications processors (MCPs).  They represent the
       Company's first discrete chipsets targeted at mainstream Intel-based
       motherboards.  NVIDIA nForce MCP revenue for the fourth quarter of
       fiscal 2006 increased 83 percent year-over-year and has achieved record
       revenue for six consecutive quarters.
    -- NVIDIA and Dell showcased the first ever Quad SLI(TM) PC -- the
       Dimension XPS Renegade -- at the Consumer Electronics Show (CES) 2006,
       and earned the "Best of CES 2006" award for gaming.
    -- The NVIDIA Quadro(R) professional product line increased its revenue
       42 percent from the fourth quarter fiscal 2005 and again achieved
       record revenue.
    -- NVIDIA introduced three new notebook GPUs -- the GeForce(R) Go 7800,
       GeForce Go 7600 and GeForce Go 7400 -- with leading tier one and system
       builders worldwide.
    -- NVIDIA shipped two new GeForce 7 desktop GPUs -- the GeForce 7800 GTX
       512 and GeForce 7300 GS -- for the enthusiast and mainstream desktop PC
       segments.
    -- NVIDIA announced its intent to acquire ULi Electronics Inc., one of the
       PC industry's most highly-regarded core logic developers.
    -- NVIDIA announced that NVIDIA Quadro professional graphics will offer
       Adobe users direct GPU acceleration capabilities that increase
       application performance and video editing workflow for Adobe Product
       Studio.  As a member of the Adobe OpenHD Alliance, NVIDIA is working
       with the industry to develop tools and technologies that enhance the
       productivity of HD video creation.
    -- NVIDIA unveiled the NVIDIA GoForce(R) 5500 handheld GPU, the industry's
       first handheld GPU to enable true, DVD-quality video, full H.264
       processing for fluid digital TV, high-fidelity surround sound, rapid
       multi-shot photography, and console-class 3D graphics.  Phones based on
       the NVIDIA GoForce 5500 handheld GPU are expected to be available from
       key handset manufacturers before the 2006 holiday season.

NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter fiscal 2006 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial 706-679-0543. A live Web cast (listen-only mode) of the conference call will be held at the NVIDIA investor relations Web site http://nvidia.com/ir and at http://www.streetevents.com . The Web cast will be recorded and available for replay until the Company's conference call to discuss its financial results for its first quarter fiscal 2007.

About NVIDIA

NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. The Company creates innovative, industry-changing products for computing, consumer electronics, and mobile devices. NVIDIA is headquartered in Santa Clara, CA and has offices throughout Asia, Europe, and the Americas. For more information, visit www.nvidia.com.

Certain statements in this press release including, but not limited to, trends creating growth opportunities in our target markets, our alignment with growth drivers, our fiscal 2007 as a strong year, the benefits and outcome of our work with the Adobe OpenHD Alliance, dates and sources of availability of new products and our acquisition of ULi Electronics, Inc. are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Such risks and uncertainties include, but are not limited to, continued market acceptance of new products and technologies, prohibitive pricing of new products and technologies, manufacturing delays or defects, software bugs, delayed adoption of HD DVD and Blu Ray high definition video, Microsoft Vista, 3G, multimedia content for mobile devices and next generation game consoles, emergence of different trends in the graphics industry in fiscal 2007, continued demand for use of GPUs in devices other than the PC or notebook computer, continued demand for improved GPUs, difficulties in the development of new and enhanced products, the impact of technological development, our dependence on third- party manufacturers, general industry trends including cyclical trends in the semiconductor and PC industries, the impact of competition including competitive products and pricing alternatives, slower than expected or unanticipated changes in industry standards and interfaces, risks associated with acquisitions including the ability to successfully integrate the technologies, employees and operations of the companies and diversion of management's attention, not realizing the anticipated benefits of the acquisition, loss of ULi Electronics' customers post acquisition and other risks detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission including its Form 10-Q for its quarter ended October 30, 2005. These forward-looking statements speak only as of the date of this release. NVIDIA disclaims any obligation to update these forward-looking statements.


    All company and/or product names may be trade names, trademarks and/or
registered trademarks of the respective owners with which they are associated.
Features, pricing, availability, and specifications are subject to change
without notice.


                                NVIDIA CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)
                                   (Unaudited)

                               Three Months Ended       Twelve Months Ended
                             January 29, January 30,   January 29, January 30,
                                 2006       2005          2006        2005


    Revenue                    $633,614  $566,476      $2,375,687  $2,010,033

    Cost of revenue             378,674   372,661       1,464,892   1,360,547

    Gross profit                254,940   193,815         910,795     649,486

    Operating expenses:
      Research and development   92,435    84,054         352,099     335,104
      Sales, general and
       administrative            50,163    52,605         204,441     200,789
      Settlement costs               --        --          14,158          --

          Total operating
           expenses             142,598   136,659         570,698     535,893

    Operating income            112,342    57,156         340,097     113,593

    Interest and other
     income, net                  4,386     2,854          20,124      11,852

    Income before income
     tax expense                116,728    60,010         360,221     125,445

    Income tax expense (A)       18,676    12,001         57,635      25,089

    Net income                  $98,052   $48,009        $302,586    $100,356

    Basic net income per share    $0.57     $0.29           $1.78       $0.60

    Diluted net income per share  $0.53     $0.27           $1.65       $0.57

    Shares used in basic per
     share computation          171,042   166,659         169,690     166,062

    Shares used in diluted per
     share computation          186,122   177,257         182,951     176,558



    (A)  The effective income tax rate for the three and twelve months ended
    January 29, 2006 was 16%.  The effective income tax rate for the three and
    twelve months ended January 30, 2005 was 20%.


                               NVIDIA CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)

                                             January 29,       January 30,
                                                2006              2005
    ASSETS

    Current assets:
      Cash, cash equivalents and
       marketable securities                  $950,174          $670,045
      Accounts receivable, net                 318,186           296,279
      Inventories                              254,792           315,518
      Prepaid and other current assets          24,387            19,819
      Deferred income tax asset                  1,393             3,265

        Total current assets                 1,548,932         1,304,926

    Property and equipment, net                178,152           178,955
    Deposits and other assets                   27,477             9,034
    Goodwill                                   145,317           108,107
    Intangible assets, net                      15,421            27,514

        Total assets                        $1,915,299        $1,628,536

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                        $179,395          $238,223
      Accrued liabilities                      259,264           182,077
      Current portion of capital lease
       obligations                                  --               856

        Total current liabilities              438,659           421,156

    Deferred income tax liability                8,260            20,754
    Long-term liabilities                       10,624             8,358

    Stockholders' equity                     1,457,756         1,178,268

        Total liabilities and
         stockholders' equity               $1,915,299        $1,628,536

CONTACT: Michael Hara, Investor Relations, +1-408-486-2511, or
Email Contact, or Calisa Cole, Corporate Communications,
+1-408-486-6263, or Email Contact, both of NVIDIA Corporation

Web site: http://www.nvidia.com/