Sigma Designs Fiscal Year 2007 Financial Results Update

MILPITAS, Calif. — Sigma Designs®, Inc. (Nasdaq: SIGM), a leader in digital media processors for consumer appliances, today provided further detail on its record fourth quarter and fiscal year 2007 financial results, including its statement of operations and reconciliation of U.S. Generally Accepted Accounting Principles (“GAAP”) net income (loss) to non-GAAP net income detail for each of the quarters of fiscal 2007. Non-GAAP net income excludes amortization of acquired intangibles, stock-based compensation calculated per Accounting Principles Board Opinion (“APB”) No. 25 and Statement of Financial Accounting Standards (“SFAS”)No. 123(R), and stock option special investigation professional service fees. The Company filed its Form 10-K for the fiscal year ended February 3, 2007 on Friday of last week. Highlights of Sigma’s net income results are:

• Fourth Quarter Fiscal 2007 GAAP net income of $4.6 million, or $0.17 per diluted share along with non-GAAP net income of $6.3 million, or $0.26 per diluted share
• Fiscal Year 2007 GAAP net income of $6.2 million, or $0.24 per diluted share along with non-GAAP net income of $14.2 million, or $0.55 per diluted share

For the fourth quarter of fiscal 2007, Sigma’s net revenues grew to $31.2 million, up $6.2 million or 25% from $25.1 million for the third quarter of fiscal 2007. GAAP net income for the fourth quarter grew to $4.6 million or $0.17 per diluted share, up $1.9 million or 69% from $2.7 million or $0.11 per diluted share for the third quarter of fiscal 2007. Non-GAAP net income for the fourth quarter of fiscal 2007 grew to $6.8 million or $0.26 per diluted share, up $1.9 million or 39% from $4.9 million or $0.19 per diluted share for the third quarter of fiscal 2007.

Sigma’s fiscal 2007 net revenues grew to $91.2 million, up $57.9 million or 174% from $33.3 million for fiscal 2006. Net income for fiscal 2007 of $6.2 million or $0.24 per diluted share grew $7.8 million from fiscal 2006’s net loss of $(1.6) million or $(0.07) per diluted share. The Company’s fiscal 2007 non-GAAP net income of $14.2 million or $0.55 per diluted share grew $14.2 million from non-GAAP net income of $0.0 million or $0.00 per diluted share for fiscal 2006.

Additionally, Sigma released the following financial information:

• Net revenues for the first, second, third and fourth quarters of fiscal 2007 were $14.8 million, $20.1 million, $25.1 million and $31.2 million, respectively.
• GAAP net income (loss) for the first, second, third and fourth quarters of fiscal 2007 was $(1.4) million, $0.2 million, $2.7 million, and $4.6 million, respectively.
• Non-GAAP net income for the first, second, third and fourth quarters of fiscal 2007 was $0.2 million, $2.3 million, $4.9 million and $6.8 million, respectively.
• Gross margin was 50%, 45%, 48% and 51% for the first, second, third and fourth quarters of fiscal 2007, respectively.
• Income (loss) from operations was $(1.5) million, $0.1 million, $2.7 million and $4.6 million for the first, second, third and fourth quarters of fiscal 2007, respectively.
• Professional service fees incurred in connection with the stock option special investigation included in GAAP net income (loss) as a component of general and administrative expenses for the first, second, third and fourth quarters was nil, $0.6 million, $0.5 million, and $0.6 million, respectively.
• Fiscal 2007 sales by geographic region were 53% Asia, 36% Europe, 11% North America, and nil other regions.
• Combined cash balances (comprised of cash, cash equivalents, and short-term investments) grew to $33.2 million at the end of fiscal 2007, up $6.9 million or 26% from $26.4 million at the end of fiscal 2006.
• Days sales outstanding at the end of fiscal 2007 was 32 days compared with 42 days at the end of fiscal 2006.

On Friday of last week, Sigma also filed its Quarterly Reports on Form 10-Q for the quarters ended July 29, 2006 and October 28, 2006. Sigma additionally amended its results for the quarter ended April 29, 2006 in last week Friday’s Annual Report on Form 10-K filing. With these filings, Sigma believes that it will now regain compliance with the requirements for continued listing on the NASDAQ Global Select Market; however, the Company awaits confirmation of compliance from NASDAQ.