Zoran DTV Revenues Increase 39 Percent Sequentially

SUNNYVALE, Calif. — Zoran Corporation (Nasdaq: ZRAN), a leading provider of digital solutions for applications in the digital entertainment and digital imaging markets, today reported results for its first quarter ended March 31, 2009.

Revenues for the first quarter were $68.5 million, compared to $74.7 million last quarter and $109.0 million for the first quarter of 2008. The Company reported a first quarter GAAP net loss of $21.1 million, or $0.41 per share, which includes $2.9 million for stock-based compensation expense, $109 thousand for amortization of acquired intangible assets, restructuring expense of $859 thousand attributable to the closing of our facility in Netanya, Israel, and an adjustment of the tax provision to a non-GAAP rate of $460 thousand. This compares with a net loss of $20.2 million, or $0.40 per share, for the previous quarter and a net loss of $4.7 million, or $0.09 per diluted share, for the first quarter last year.

Non-GAAP net loss for the first quarter was $17.6 million, or $0.34 per share, which excludes charges related to the amortization of acquired intangible assets, stock-based compensation expenses, restructuring expense and the adjustment of the tax provision to a non-GAAP rate. This compares with a non-GAAP net loss of $10.5 million, or $0.21 per diluted share, for the previous quarter, and non-GAAP net income of $3.5 million, or $0.07 per diluted share, for the same period last year.

“In light of the worldwide recession and subsequent decline in consumer spending, we are pleased that the results we are reporting today are better than initial expectations,” said Dr. Levy Gerzberg, Zoran’s president and chief executive officer. “We achieved 39 percent sequential revenue growth in DTV, driven by increasing demand for low- to mid- range LCD TVs, where we have a leading position. Several of our largest customers have successfully expanded their presence in major US retail channels, a trend we expect to continue to benefit from in the future. In digital cameras, we saw a strong increase in demand towards the end of the quarter, indicating that channel inventory has been substantially reduced. While consumer spending is far from previous levels and visibility into the second half remains limited, we are encouraged by these positive trends and are currently expecting a stronger second quarter.”

Revenues by product line for the first quarter of 2009 were 35 percent DTV, 25 percent Digital Camera, 21 percent Printer Imaging, 11 percent DVD, 7 percent mobile phone processors and 1 percent other.

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