Leadis reports financial information in accordance with generally accepted accounting principles (GAAP), but believes that non-GAAP financial measures are helpful in evaluating its ongoing operating results and comparing its performance to comparable companies. Leadis management uses financial statements that exclude share-based compensation expense and the impact of purchase accounting expenses, including in-process research and development expenses, amortization of purchased intangible assets, impairment charges for goodwill and other intangible assets, and retention expenses connected with acquisitions, to plan and evaluate its financial performance. Consequently, Leadis has excluded these expenses and charges in deriving calculations of net income (loss), net income (loss) per share, gross profit or margin and certain operating expenses (including cost of sales, research and development, selling, general and administrative, and provision for income taxes). Leadis believes the inclusion of these non-GAAP measures enhances the comparability of current results against the results of prior periods. These non-GAAP measures will enable investors to evaluate the company's operating results and business outlook in a manner similar to how the company internally analyzes its operating results and makes strategic decisions. Investors should note, however, that the non-GAAP financial measures used by the company may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. The company does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures alone or as a substitute for financial information prepared in accordance with GAAP. A reconciliation of GAAP financial measures to non-GAAP financial measures is included in the financial statements portion of this press release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measure. For additional information on the non-GAAP financial measures, please see the Form 8-K regarding this press release furnished today with the Securities and Exchange Commission.
Cautionary Language
This press release contains forward-looking statements regarding the company's business and financial outlook for the third quarter and remainder of the 2008 fiscal year based on the company's current expectations. The words "expect," "will," "should," "would," "anticipate," "project," "outlook," "believe," "intend," "confident," "optimistic," "targeted," and similar phrases as they relate to future events are intended to identify such forward-looking statements. These forward-looking statements reflect the company's current views and assumptions but are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that the company may not be able to maintain its current level of revenue or its gross margin levels; risks that one or more of the company's concentrated group of customers may reduce demand or price for the company's products or a particular product; risks that design wins will not result in meaningful revenue; the company's dependence on a limited number of products; risks that the company's new products may not be completed in a timely fashion or gain market acceptance; risks associated with the company's efforts to expand its business beyond display drivers, including efforts to develop and market LED drivers, power management ICs, audio CODECs and FM transmitters, and touch sensor technology products; risks related to the semiconductor and portable electronic industries; the company's ability to keep up with technological change; risks associated with any strategic transaction undertaken by the company; risks with managing international activities; and other factors. For a discussion of these and other factors that could impact the company's financial results and cause actual results to differ materially from those in the forward-looking statements, please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2007 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, in the sections titled Risk Factors and Forward-Looking Statements, which are available at www.leadis.com. The projections in this press release are based on information currently available to the company. Although such projections, as well as the factors influencing them, may change in the future, the company undertakes no responsibility to update the information contained in this press release.
LEADIS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, March 31, June 30,
2008 2008 2007
--------- --------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 37,710 $ 39,450 $ 44,020
Restricted cash 2,461 2,418 2,530
Short-term investments 11,851 15,442 40,287
Accounts receivable, net 3,772 5,340 8,127
Inventory 4,659 1,706 5,635
Prepaid expenses and other current
assets 2,483 5,070 3,874
--------- --------- ---------
Total current assets 62,936 69,426 104,473
Property and equipment, net 3,513 4,021 4,725
Goodwill and purchased intangible assets,
net 107 10,466 7,335
Long term investments, net 2,307 2,607 -
Other assets 1,630 1,513 833
--------- --------- ---------
Total assets $ 70,493 $ 88,033 $ 117,366
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,479 $ 5,331 $ 5,807
Taxes payable 80 1,109 254
Deferred margin 386 303 281
Other accrued liabilities 4,463 3,811 4,328
--------- --------- ---------
Total current liabilities 12,408 10,554 10,670
Long-term tax liabilities 2,684 2,957 2,689
Other noncurrent liabilities 901 937 1,159
--------- --------- ---------
Total liabilities 15,993 14,448 14,518
Stockholders' equity:
Common stock and additional paid-in
capital 109,815 109,354 109,134
Accumulated deficit (55,315) (35,769) (6,286)
--------- --------- ---------
Total stockholders' equity 54,500 73,585 102,848
--------- --------- ---------
Total liabilities and stockholders'
equity $ 70,493 $ 88,033 $ 117,366
========= ========= =========
LEADIS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
------------------------------- --------------------
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007
--------- --------- --------- --------- ---------
Product revenue $ 5,606 $ 5,551 $ 9,735 $ 11,157 $ 23,405
NRE revenue 307 56 - 363 -
--------- --------- --------- --------- ---------
Total revenue 5,913 5,607 9,735 11,520 23,405
Product cost of
sales 5,483 5,577 8,678 11,060 20,976
NRE cost of sales 453 32 - 485 -
--------- --------- --------- --------- ---------
Total cost of sales 5,936 5,609 8,678 11,545 20,976
Gross profit (23) (2) 1,057 (25) 2,429
Research and
development
expenses 5,485 5,333 4,479 10,818 7,840
Selling, general and
administrative
expenses 4,306 4,699 3,608 9,005 6,832
Amortization of
purchased
intangible assets 848 848 627 1,696 836
Impairment of
goodwill and other
intangible assets 9,445 - - 9,445 -
In process research
and development - - - - 1,320
--------- --------- --------- --------- ---------
Total operating
expenses 20,084 10,880 8,714 30,964 16,828
--------- --------- --------- --------- ---------
Operating loss (20,107) (10,882) (7,657) (30,989) (14,399)
Interest and other
income, net 340 797 1,085 1,137 2,323
--------- --------- --------- --------- ---------
Loss before benefit
from income taxes (19,767) (10,085) (6,572) (29,852) (12,076)
Benefit from income
taxes (221) (10) (506) (231) (552)
--------- --------- --------- --------- ---------
Net loss $ (19,546) $ (10,075) $ (6,066) $ (29,621) $ (11,524)
========= ========= ========= ========= =========
Basic and diluted
net loss per share $ (0.67) $ (0.35) $ (0.21) $ (1.02) $ (0.39)
========= ========= ========= ========= =========
Shares used in
computing basic and
diluted per share
amounts 29,221 29,015 29,376 29,118 29,354
========= ========= ========= ========= =========
LEADIS TECHNOLOGY, INC.
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
------------------------------- --------------------
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007
--------- --------- --------- --------- ---------
A. GAAP net loss $ (19,546) $ (10,075) $ (6,066) $ (29,621) $ (11,524)
Adjustment for
stock-based
compensation
within:
Cost of sales 53 19 44 72 62
Research and
development
expenses 329 133 255 462 451
Selling,
general and
administrative
expenses 229 572 480 801 917
Provision for
income taxes - (218) (83) (218) (226)
Adjustment for
acquisition of
business
within:
Research and
development
expenses 164 198 394 362 530
Selling,
general and
administrative
expenses 242 254 231 496 303
Amortization
of purchased
intangible
assets 848 848 627 1,696 836
In-process
research and
development - - - - 1,320
Provision for
income taxes - - (20) - (36)
Adjustment for
impairment of
goodwill and
other intangible
assets 9,445 - - 9,445 -
--------- --------- --------- --------- ---------
Non-GAAP net loss $ (8,236) $ (8,269) $ (4,138) $ (16,505) $ (7,367)
B. GAAP basic and
diluted net loss
per share $ (0.67) $ (0.35) $ (0.21) $ (1.02) $ (0.39)
Adjustment for
stock-based
compensation 0.02 0.02 0.02 0.04 0.04
Adjustment for
acquisition of
business 0.04 0.05 0.05 0.09 0.10
Adjustment for
impairment of
goodwill and
other intangible
assets 0.33 - - 0.32 -
--------- --------- --------- --------- ---------
Non-GAAP basic and
diluted net loss
per share $ (0.28) $ (0.28) $ (0.14) $ (0.57) $ (0.25)
C. GAAP gross margin -0.4% 0.0% 10.9% -0.2% 10.4%
Adjustment for
stock-based
compensation 0.9% 0.3% 0.4% 0.6% 0.2%
--------- --------- --------- --------- ---------
Non-GAAP gross
margin 0.5% 0.3% 11.3% 0.4% 10.6%
D. GAAP operating
expenses $ 20,084 $ 10,880 $ 8,714 $ 30,964 $ 16,828
Adjustment for
stock-based
compensation
within:
Research and
development
expenses (329) (133) (255) (462) (451)
Selling,
general and
administrative
expenses (229) (572) (480) (801) (917)
Adjustment for
acquisition of
business
within:
Research and
development
expenses (164) (198) (394) (362) (530)
Selling,
general and
administrative
expenses (242) (254) (231) (496) (303)
Amortization
of purchased
intangible
assets (848) (848) (627) (1,696) (836)
In-process
research and
development - - - - (1,320)
Adjustment for
impairment of
goodwill and
other
intangible
assets (9,445) - - (9,445) -
--------- --------- --------- --------- ---------
Non-GAAP operating
expenses $ 8,827 $ 8,875 $ 6,727 $ 17,702 $ 12,471
IR Contacts John Allen Chief Financial Officer Eric Itakura Director Business Development & Investor Relations (408) 331-8616
