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PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP GROSS PROFIT MARGIN * (Figures may not sum due to rounding) (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | December 31, | March 31, | |||||||
| 2018 | 2017 | 2017 | |||||||
| Reconciliation of GAAP and non-GAAP gross profit margin | |||||||||
| GAAP gross profit margin | 51.0 | % | 49.7 | % | 54.6 | % | |||
| Amortization of acquired intangible assets | 1.9 | % | 1.6 | % | — | % | |||
| Inventory step-up and backlog amortization | 0.8 | % | 5.1 | % | — | % | |||
| Stock-based compensation | 0.4 | % | 0.3 | % | 0.2 | % | |||
| Amortization of deferred revenue fair value adjustment | 0.0 | % | 0.4 | % | — | % | |||
| Total reconciling items included in gross profit | 3.2 | % | 7.4 | % | 0.2 | % | |||
| Non-GAAP gross profit margin | 54.2 | % | 56.9 | % | 54.8 | % | |||
| *Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
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PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands) (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2018 | 2017 | 2017 | |||||||||
| Reconciliation of GAAP net income (loss) and adjusted EBITDA | |||||||||||
| GAAP net income (loss) | $ | (598 | ) | $ | (3,552 | ) | $ | 2,821 | |||
| Gain on debt extinguishment | (1,272 | ) | (29 | ) | — | ||||||
| Stock-based compensation | 1,200 | 1,147 | 789 | ||||||||
| Amortization of acquired intangible assets | 399 | 399 | — | ||||||||
| Tax effect of non-GAAP adjustments | 99 | (157 | ) | 155 | |||||||
| Inventory step-up and backlog amortization | 122 | 949 | — | ||||||||
| Discount accretion on convertible debt fair value | 69 | 124 | — | ||||||||
| Restructuring | 19 | 439 | — | ||||||||
| Fair value adjustment on convertible debt conversion option | — | 621 | — | ||||||||
| Benefit related to tax reform | — | (343 | ) | — | |||||||
| Amortization of deferred revenue fair value adjustment | — | 68 | — | ||||||||
| Acquisition and integration | — | (45 | ) | — | |||||||
| Non-GAAP net income (loss) | $ | 38 | $ | (379 | ) | $ | 3,765 | ||||
| EBITDA adjustments: | |||||||||||
| Depreciation and amortization | $ | 826 | $ | 863 | $ | 839 | |||||
| Interest expense and other, net | 231 | 203 | 93 | ||||||||
| Non-GAAP provision for income taxes | 177 | 91 | 278 | ||||||||
| Adjusted EBITDA | $ | 1,272 | $ | 778 | $ | 4,975 | |||||
| *Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
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