Sigmatel (NASDAQ:SGTL)
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SigmaTel, Inc. (NASDAQ: SGTL) today announced results for the quarter
ended December 31, 2007.
Fourth Quarter Financial Review
Revenues for the fourth quarter of 2007 were $33.2 million with a GAAP
net loss of $4.0 million or $0.11 per share. The non-GAAP adjusted net
loss for the fourth quarter of 2007 was $2.0 million or a non-GAAP
adjusted net loss of $0.06 per share. GAAP gross margin for the quarter
was 42.3 percent and non-GAAP gross margin was 43.3 percent. See the
reconciling charges set forth in the reconciliation of GAAP to non-GAAP
results provided below.
As of December 31, 2007 SigmaTel had cash, cash equivalents, restricted
cash and short-term investments of $71.4 million.
Business Update
“In 2007, we continued our aggressive cost
management and restructured the company,” said
Phil Pompa, CEO of SigmaTel. “We have achieved
new design wins across all the product lines and begun to transition to
our PMP solutions, the 3600 and 3700 product families. SigmaTel shipped
over 1 million 3700 SoCs to OEM/ODMs worldwide, last year.”
Executive Summary:
5.0 Software Development Kit for the 3700 product family available for
the mass market
GPS reference design units showcased at CES 2008
Kodak launched the ESP3, based on SigmaTel technology, at CES
SGTV5900 adopted by Samsung and shipping in mass production
“Development has begun on solutions for
different consumer markets,” said Phil Pompa,
CEO of SigmaTel. “New product announcements
are expected later on in this quarter with more details available at
that time.”
First Quarter 2008 Outlook
For the first quarter of 2008, the company anticipates revenue of $17
million to $22 million with non-GAAP gross margins of approximately 44
percent, plus or minus a couple of points. SigmaTel’s
gross margin percentage varies primarily with product mix, pricing, and
unit costs.
GAAP diluted loss per share is expected to be $0.40 to $0.30 with
non-GAAP adjusted net loss per share expected to be $0.35 to $0.25,
based on 36.1 million diluted weighted average shares outstanding.
Conference Call Today
A conference call will be held today, February 4th, 2007, at 3:30 p.m.
Central Time (CST) and will be simulcast over the Internet at www.streetevents.com
and www.sigmatel.com. A replay
will be available from February 6, 2008 until February 29, 2008, at the
websites listed above and by phone at 888-203-1112 for domestic calls or
719-457-0820 for international calls. Please use passcode 4057885 when
accessing the replay by phone.
For more information on SigmaTel, please visit www.sigmatel.com.
About SigmaTel: SigmaTel is a fabless semiconductor company which
designs, develops, and markets mixed-signal ICs for the consumer
electronics market. The Company's target market segments include
portable media players, printers and digital televisions. SigmaTel
provides complete, system-level solutions that include highly-integrated
ICs, customizable firmware and software, software development tools and
reference designs. The Company's focus is on enabling customers to
rapidly introduce and offer electronic products that are small,
light-weight, power-efficient, reliable, and cost-effective. SigmaTel is
ISO 9001:2000 certified and is committed to providing customers with
high performance, quality products along with superior, worldwide
customer service.
Cautionary Language: This press release contains forward-looking
statements based on current SigmaTel expectations. The words "expect,"
"will," "should," "would," "anticipate," "project," "outlook,"
"believe," "intend," and similar phrases as they relate to SigmaTel or
future events are intended to identify such forward-looking statements.
These forward-looking statements reflect the current views and
assumptions of SigmaTel, but are subject to various risks and
uncertainties that could cause actual results to differ materially from
expectations. A number of important factors could cause actual results
to differ materially from those in the forward-looking statements, and
there will be events in the future that SigmaTel is not able to
accurately predict or control. These risks and uncertainties include,
but are not limited to: SigmaTel’s ability to
effectively implement changes which will increase operational
efficiencies, reduce costs as planned, and ultimately improve SigmaTel’s
financial results; SigmaTel’s ability to
succeed in its more narrowly-defined market emphasis and the ability of
those markets to support SigmaTel’s business
objectives; SigmaTel’s ability to gain
continued market acceptance of its 3600 and 3700 families of products,
and to achieve additional product wins with those products; and SigmaTel’s
ability to correctly identify and pursue new market segments and to
successfully develop new products for those segments. For a more
thorough discussion of the risks to which the forward-looking statements
are subject, please refer to recent SigmaTel filings with the SEC,
particularly the Form 10-Q that was filed on August 9, 2007.
Discussion of Non-GAAP Financial Measures: SigmaTel provides a
non-GAAP measure of gross profit, net loss income and net loss income
per share in its earnings release. The presentation of gross profit is
intended to be a supplemental measure of performance and excludes a
non-cash charge related to amortization of intangible assets from
acquisitions. The presentation of net loss and net loss per share is
intended to be a supplemental measure of performance and excludes: : (i)
a non-cash charge related to impairment of goodwill and other long-lived
assets; (ii) a non-cash charge related to amortization of intangible
assets from acquisitions; (iii) a non-cash charge related to stock-based
compensation; (iv) a charge related to the abandonment of leased
facilities; (v) a charge related to accrual for severance payable to our
former CEO; (vi) a gain on the sale of the PC Audio product line and a
loss on the disposition of assets in conjunction with the lease
abandonment; (vii) a non-cash charge related to a tax valuation
allowance against our deferred tax asset; (viii) a non-cash benefit
related to a release of a tax reserve; (ix) a non-cash benefit related
to tax benefits of unwinding our IP migration strategy. The presentation
of this additional information is not meant to be considered in
isolation or as a substitute for results prepared in accordance with
GAAP. The non-GAAP financial measures included in the press release have
been reconciled to the corresponding GAAP financial measures as required
under the rules of the Securities and Exchange Commission regarding the
use of non-GAAP financial measures.
SigmaTel is a registered trademark of SigmaTel, Inc. All other products
and brand names as they appear in this release are trademarks or
registered trademarks of their respective holders. All specifications
may be changed without notice.
SIGMATEL, INC.
RECONCILIATION of GAAP to NON-GAAP RESULTS
(in thousands, except per share data)
(unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2007
2006
2007
2006
Gross profit as reported
$ 14,045
$ 13,822
$ 51,081
$ 64,679
Adjustments:
Amortization of intangible assets from acquisitions
342
783
1,707
3,133
Non-GAAP gross profit
$ 14,387
$ 14,605
$ 52,788
$ 67,812
Non-GAAP gross profit percentage
43.3
%
38.9
%
41.5
%
42.6
%
Three Months Ended December 31,
Year Ended
December 31,
2007
2006
2007
2006
Net loss as reported
$ (3,994
)
$ (98,735
)
$ (37,777
)
$ (109,024
)
Adjustments (tax effected):
Impairment of goodwill and other long lived assets
398
72,811
398
72,811
Amortization of intangible assets from acquisitions
392
831
1,907
3,344
Stock-based compensation
1,213
1,445
6,492
7,205
Lease impairment charges
–
–
619
–
CEO severance accrual
–
1,546
–
1,546
Loss (gain) on asset disposition
–
–
915
(24,312
)
Tax valuation allowance
–
16,142
–
16,142
Release of tax reserve
–
(2,857
)
–
(2,857
)
Net tax benefit of unwinding IP migration strategy
–
–
–
(9,271
)
Non-GAAP net loss
$ (1,991
)
$ (8,817
)
$ (27,446
)
$ (44,416
)
Diluted weighted average shares outstanding
36,038
35,483
35,811
35,304
Diluted net loss per share, non-GAAP
$ (0.06
)
$ (0.25
)
$ (0.77
)
$ (1.26
)
SIGMATEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31,
2007
2006
ASSETS
Current Assets:
Cash and cash equivalents
$ 20,773
$ 30,686
Restricted cash
193
7,354
Short-term investments
50,438
62,800
Accounts receivable, net
14,921
12,556
Inventories, net
12,295
20,794
Income tax receivable
2,517
3,365
Prepaid expenses and other assets
2,729
5,591
Total current assets
103,866
143,146
Property, equipment and software, net
8,793
13,301
Intangible assets, net
14,645
15,370
Non-current income tax receivable
6,559
–
Other assets
1,389
1,574
Total assets
$ 135,252
$ 173,391
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$ 14,234
$ 16,338
Accrued compensation
5,293
8,712
Other accrued expenses
3,539
5,327
Deferred revenue
2,771
1,242
Income taxes payable
125
2,729
Current portion of long-term obligations
163
229
Total current liabilities
26,125
34,577
Non-current income taxes payable
6,107
4,453
Other liabilities
2,182
809
Total liabilities
34,414
39,839
Commitments and contingencies (see Note 12)
Stockholders' Equity:
Common stock, $0.0001 par value; 170,000 shares authorized; shares
issued and outstanding: 36,160 and 36,070 at 2007 and 35,603 and
35,513 at 2006, respectively
4
4
Additional paid-in capital
204,873
197,711
Notes receivable from stockholders
–
(5
)
Treasury stock, 90 common shares at cost
(741
)
(741
)
Accumulated deficit
(103,673
)
(63,687
)
Accumulated other comprehensive income loss
375
270
Total stockholders' equity
100,838
133,552
Total liabilities and stockholders' equity
$ 135,252
$ 173,391
SIGMATEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended December 31,
Year Ended
December 31,
2007
2006
2007
2006
Revenues, net
$ 33,195
$ 37,524
$ 127,126
$ 159,365
Cost of goods sold
19,150
23,702
76,045
94,686
Gross profit
14,045
13,822
51,081
64,679
Operating expenses:
Research and development
12,811
21,971
64,777
90,640
Selling, general and administrative
5,553
12,320
30,179
50,245
Goodwill impairment
–
63,334
–
63,334
Impairment of long-lived assets
398
18,477
398
18,477
Loss (gain) on asset disposition
320
–
915
(45,673
)
Total operating expenses
19,082
116,102
96,269
177,023
Operating loss
(5,037
)
(102,280
)
(45,188
)
(112,344
)
Interest income, net
969
966
4,053
3,084
Foreign exchange loss
(70
)
(50
)
(147
)
(221
)
Other income
–
50
–
50
Total other income
899
966
3,906
2,913
Loss before income taxes
(4,138
)
(101,314
)
(41,282
)
(109,431
)
Income tax benefit
(144
)
(2,579
)
(3,505
)
(407
)
Net loss
$ (3,994
)
$ (98,735
)
$ (37,777
)
$ (109,024
)
BASIC NET LOSS PER SHARE
$ (0.11
)
$ (2.78
)
$ (1.05
)
$ (3.09
)
DILUTED NET LOSS PER SHARE
$ (0.11
)
$ (2.78
)
$ (1.05
)
$ (3.09
)
WEIGHTED AVERAGE SHARES USED TO COMPUTE:
Basic net loss per share
36,038
35,483
35,811
35,304
Diluted net loss per share
36,038
35,483
35,811
35,304