Pixelworks Reports Second Quarter 2018 Financial Results
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of terms such as “begin,” “continue,” “will,” “expect”, “believe,” “anticipate” and similar terms or the negative of such terms, and include, without limitation, statements about the Company’s digital projection, mobile and OTA businesses, including market movement and demand, customer engagements, mobile wins and the timing thereof, growth in the mobile and video delivery markets, synergies and additional guidance. All statements other than statements of historical fact are forward-looking statements for purposes of this release, including any projections of revenue or other financial items or any statements regarding the plans and objectives of management for future operations. Such statements are based on management's current expectations, estimates and projections about the Company's business. These statements are not guarantees of future performance and involve numerous risks, uncertainties and assumptions that are difficult to predict. Actual results could vary materially from those contained in forward looking statements due to many factors, including, without limitation: whether the Company will be able to implement the restructuring program as planned, whether the expected amount of the costs associated with the restructuring program will differ from or exceed the Company's estimates and whether the Company will be able to realize the full amount of estimated savings from the restructuring program or within the timeframe expected; our ability to execute on our strategy, including the integration of ViXS; competitive factors, such as rival chip architectures, introduction or traction by competing designs, or pricing pressures; the success of our products in expanded markets; current global economic challenges; changes in the digital display and projection markets; seasonality in the consumer electronics market; our efforts to achieve profitability from operations; our limited financial resources and our ability to attract and retain key personnel. More information regarding potential factors that could affect the Company's financial results and could cause actual results to differ materially from those discussed in the forward-looking statements is included from time to time in the Company's Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2017 as well as subsequent SEC filings. The forward-looking statements contained in this release speak as of the date of this release, and the Company does not undertake any obligation to update any such statements, whether as a result of new information, future events or otherwise.
PIXELWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited) | | |
Three Months Ended | |
Six Months Ended | | |
June 30, | |
March 31, | |
June 30, | |
June 30, | |
June 30, | | | |
2018 | | | |
2018 | | | |
2017 | | | |
2018 | | | |
2017 | | | Revenue, net | | $ | 19,251 | | | $ | 15,292 | | | $ | 20,721 | | | $ | 34,543 | | | $ | 43,431 | | | Cost of revenue (1) | | | 9,717 | | | | 7,490 | | | | 9,520 | | | | 17,207 | | | | 19,838 | | | Gross profit | | | 9,534 | | | | 7,802 | | | | 11,201 | | | | 17,336 | | | | 23,593 | | | Operating expenses: | | | | | | | | | | | | Research and development (2) | | | 6,423 | | | | 4,463 | | | | 4,501 | | | | 10,886 | | | | 9,407 | | | Selling, general and administrative (3) | | | 4,959 | | | | 4,614 | | | | 4,660 | | | | 9,573 | | | | 8,799 | | | Restructuring | | | 602 | | | | 19 | | | | — | | | | 621 | | | | — | | | Total operating expenses | | | 11,984 | | | | 9,096 | | | | 9,161 | | | | 21,080 | | | | 18,206 | | | Income (loss) from operations | | | (2,450 | ) | | | (1,294 | ) | | | 2,040 | | | | (3,744 | ) | | | 5,387 | | | Interest income (expense) and other, net (4) | | | (131 | ) | | | 972 | | | | (107 | ) | | | 841 | | | | (200 | ) | | Income (loss) before income taxes | | | (2,581 | ) | | | (322 | ) | | | 1,933 | | | | (2,903 | ) | | | 5,187 | | | Provision for income taxes | | | 32 | | | | 276 | | | | 669 | | | | 308 | | | | 1,102 | | | Net income (loss) | | $ | (2,613 | ) | | $ | (598 | ) | | $ | 1,264 | | | $ | (3,211 | ) | | $ | 4,085 | | | Net income (loss) per share: | | | | | | | | | | | | Basic | | $ | (0.07 | ) | | $ | (0.02 | ) | | $ | 0.04 | | | | (0.09 | ) | | | 0.14 | | | Diluted | | $ | (0.07 | ) | | $ | (0.02 | ) | | $ | 0.04 | | | | (0.09 | ) | | | 0.13 | | | Weighted average shares outstanding: | | | | | | | | | | | | Basic | | | 35,704 | | | | 35,183 | | | | 29,766 | | | | 35,445 | | | | 29,526 | | | Diluted | | | 35,704 | | | | 35,183 | | | | 31,974 | | | | 35,445 | | | | 31,601 | | | —————— | | | | | | | | | | | | (1) Includes: | | | | | | | | | | | | Amortization of acquired intangible assets | | | 298 | | | | 298 | | | | — | | | | 596 | | | | — | | | Inventory step-up and backlog amortization | | | 239 | | | | 122 | | | | — | | | | 361 | | | | — | | | Stock-based compensation | | | 78 | | | | 66 | | | | 69 | | | | 144 | | | | 122 | | | (2) Includes stock-based compensation | | | 627 | | | | 595 | | | | 362 | | | | 1,222 | | | | 676 | | | (3) Includes: | | | | | | | | | | | | Stock-based compensation | | | 682 | | | | 539 | | | | 519 | | | | 1,221 | | | | 941 | | | Amortization of acquired intangible assets | | | 101 | | | | 101 | | | | — | | | | 202 | | | | — | | | Acquisition and integration | | | — | | | | — | | | | 730 | | | | — | | | | 894 | | | (4) Includes: | | | Gain on debt extinguishment | | | — | | | | (1,272 | ) | | | — | | | | (1,272 | ) | | | — | | | Discount accretion on convertible debt fair value | | | — | | | | 69 | | | | — | | | | 69 | | | | — | | | |
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