Sigma Designs, Inc. Reports Fiscal Third Quarter ResultsWednesday, November 28th, 2007
MILPITAS, Calif. — Sigma Designs®, Inc. (NASDAQ:SIGM), a leading provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home, today reported financial results for its third fiscal quarter ended November 3, 2007.
Net revenues for the third quarter were $66.2 million, up 56% from $42.5 million for the previous quarter and up 164% from $25.1 million reported for the same period last year. The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes and Blu-ray players. Net revenues for the first three quarters of fiscal year 2008 were $144.8 million, up 141% from $60.0 million for the same period in the prior fiscal year.
GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago. GAAP net income for the first three quarters of fiscal year 2008 was $34.9 million, or $1.27 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.
Non-GAAP net income for the quarter was $23.0 million or $0.79 per diluted share. This compares to non-GAAP net income of $13.0 million, or $0.48 per diluted share for the previous quarter and a non-GAAP net income of $4.8 million or $0.19 per diluted share during the same period one year ago. Non-GAAP adjustments for the third quarter of fiscal year 2008 consisted of the exclusion of $306,000 in amortization expense of acquired intangibles related to the Blue7 acquisition and $1.7 million in non-cash stock-option compensation expenses. The reconciliation between GAAP and non-GAAP results for all referenced periods is provided in a table immediately following the GAAP financial tables below.
Income tax expense for the quarter was $2.9 million which brings our year to date tax rate to approximately 10%, the rate expected for the balance of this fiscal year.
“We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players. We have established a leadership position in the IPTV market and are benefiting from the widespread ramp in demand from our worldwide base of set-top box and telco customers. We have also established a leadership position in Blu-ray players and are enjoying an early ramp in demand from their increased popularity with consumers. Finally, we are encouraged by increasing customer interest in our products for Ultra-wideband (UWB) connectivity solutions. Looking forward, we maintain our expectation of further top-line growth and profitability for the fourth quarter,” stated Thinh Tran, chairman and chief executive officer, Sigma Designs.
Recent business developments include:
- Announced that Samsung’s new third generation Blu-ray player incorporates Sigma’s industry leading media processors. Using Sigma’s SMP8634, the BD-P1400 player from Samsung is designed to offer one of the best video and audio performances available, including a number of industry first features.
- Announced that Microsoft and Sigma Designs are working together to offer Extender for Windows Media Center middleware ported to the Sigma Designs 8622 Secure Media Processor, enabling a new category of digital media extender products with high quality, low cost solutions to deliver digital content to every room in the home.
- Announced that HP, D-Link and Linksys (Cisco), are each launching extenders for Windows Media Center products powered by Sigma media processors. Sigma’s media processors are powering the latest media extender products, which include the recently launched HP MediaSmart LCD HDTV, which is the first high-definition TV to have media extenders built-in and available from the TV itself to offer consumers a high-quality, low-cost solution for delivering digital content to every room in a home.
The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company’s gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.