SIRF Sirf Technology (MM)

SiRF reports revenue of $34 million SAN JOSE, Calif., May 5 /PRNewswire-FirstCall/ -- SiRF Technology Holdings, Inc. (NASDAQ:SIRF), a leading provider of GPS-enabled silicon and premium software location platforms, today reported unaudited financial results for its first quarter ended March 28, 2009. Net revenue in the first quarter of 2009 was $34.2 million, a decrease of 44.8 percent from $62.0 million reported in the first quarter of 2008. Gross profit in the first quarter of 2009 was $13.8 million or 40.2 % of net revenue, as compared to $26.4 million or 42.6% of net revenue in the first quarter of 2008. Net loss for the first quarter of 2009 was $16.9 million, or ($0.27) per diluted share, based on 62.8 million diluted weighted average shares outstanding. This compares with net loss of $28.1 million, or ($0.47) per diluted share, based on 60.3 million diluted weighted average shares outstanding in the first quarter of 2008. SiRF reports net income (loss), gross profit, and basic and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP gross profit excludes the effect of stock-based compensation expense and amortization of acquisition-related intangible assets. Non-GAAP gross profit for the first quarter of 2009 was $16.2 million, or 47.4% of net revenue as compared to non-GAAP gross profit of $30.3 million or 48.9% of net revenue, for the first quarter of 2008. Non-GAAP net income (loss), where applicable, excludes the effect of stock-based compensation expense, amortization of acquisition-related intangible assets, expenses related to acquisition-related contingent payments, restructuring and asset impairment charges, gain on note receivable previously impaired and adjustments to normalize the income tax provision. Non-GAAP net loss for the first quarter of 2009 was $13.8 million, or ($0.22) per diluted share, as compared to non-GAAP net loss of $8.4 million, or ($0.14) per diluted share for the first quarter of 2008. Non-GAAP net loss for the first quarter of 2009 excludes $6.8 million in stock-based compensation expense, $3.0 million in amortization of acquisition-related intangible assets, $0.7 million of restructuring and asset impairment charges and $7.3 million in gain associated with a note receivable previously impaired. Non-GAAP net loss for the first quarter of 2008 excludes $8.9 million in stock-based compensation expense, $6.2 million in amortization of acquisition-related intangible assets, $0.3 million of expenses related to acquisition-related contingent payments, $0.5 million of restructuring and asset impairment charges and $3.8 million of provision for income taxes. Weighted average shares outstanding used in computing diluted non-GAAP net loss per share for the first quarter of 2009 were approximately 62.8 million, compared to 60.3 million for the first quarter of 2008. Refer to the itemized reconciliation between net loss on both a GAAP and non-GAAP bases for the first quarter of 2009 and 2008. Total cash, cash equivalents and short-term investments were $109.5 million at March 28, 2009, compared with $115.8 million at December 27, 2008. The Company had no long term investments at March 28, 2009 and December 27, 2008. Quarterly conference call details: SiRF will host a conference call on May 5, 2009, at approximately 4:30 PM EDT/1:30 PM PDT to discuss its first quarter ended March 28, 2009 financial results. This event is available through the SiRF Technology web site at http://www.sirf.com/ by clicking on the "Investors" link. Listeners should go to the website at least ten minutes before the event to download and install any necessary audio software. For those unable to attend the live broadcast, an archived version of the webcast will be available for twelve months. The call can also be heard by dialing (800) 894-5910 (domestic) or (785) 424-1052 (international) and entering the conference id: SIRF. A telephonic replay will also be available approximately 2 hours following the earnings call and will be available for two weeks. The telephone playback of the conference call can be accessed by dialing (800) 283-9429. About SiRF Technology Holdings, Inc.: SiRF Technology Holdings, Inc. develops and markets semiconductor and software products that are designed to enable location-awareness utilizing GPS and other location technologies. SiRF's technology has been integrated into mobile consumer devices, such as automobile navigation systems, mobile phones, PDAs, GPS-based peripherals and handheld GPS navigation devices, and into commercial applications, such as location servers, asset tracking devices and fleet management systems. SiRF markets and sells its products in three target platforms: wireless handheld devices, such as mobile phones; automotive electronics systems, including navigation and telematics systems; and consumer and compute devices, including personal digital assistants, notebook computers, recreational GPS handhelds, mobile gaming machines, digital cameras and watches. Founded in 1995, SiRF is headquartered in San Jose, California, and has sales offices, design centers and research facilities around the world. SiRF's common stock trades on the Nasdaq Global Select Market under the symbol SIRF. Additional information about SiRF and its Location Technology solutions can be found at http://www.sirf.com/. FORWARD-LOOKING STATEMENTS: Except for the purely historical information contained herein, the matters set forth in this press release, including, but not limited to, any statements related to our business plans or business outlook and any related forecasts or projections relating to any aspect of our business, anticipated financial or operating results, the purposes and benefits to our management and investors of using non-GAAP measures, the recurrence of certain expenses in the future, and/or the contribution of stock-based compensation to our revenue generation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "to," "being," "possible," "may," "should," "address," "designed to," "provide," "anticipate," "believe," "expect," "estimate," "plan," "will," and similar expressions are intended to identify forward-looking statements. Any forward-looking statements contained herein are based on the current beliefs and expectations of our management and are not guarantees of future performance. Moreover, our reported results should not be considered as an indication of our future performance. SiRF's actual results could differ materially from those discussed in its forward-looking statements as a result of risks and uncertainties, including, among others, changes to the market for GPS-based location awareness capabilities, our ability to keep pace with and anticipate rapid technological change, the success of our product offerings and the market's acceptance of those products, factors affecting our quarterly results, sales cycles, price reductions, dependence on and qualification of foundries to manufacture our products, production capacity, limitations on our ability to adequately forecast demand, changes to our customer relationships, our ability to compete successfully, our product warranties, the impact of our intellectual property indemnification practices, the outcome of our litigation, U.S. Customs' review of our products, trends and uncertainties with respect to consumer demand for our products and our customers' products, the extent to which current weak current economic conditions will continue into the future, the difficulty in predicting sales even in the short term in light of current economic conditions, developments in the macroeconomic environment and the semiconductor industry, general volatility in global economic markets, the strength of our international operations and our ability to compete in foreign markets, our ability to successfully integrate acquired businesses and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and the Company's Annual Report on Form 10-K, as amended, for the fiscal year 2008. All forward-looking statements in this communication are qualified by these risk factors. Each statement speaks only as of the date of this communication (or any earlier date indicated in this communication) and SiRF undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Investors, potential investors and others should give careful consideration to these risks and uncertainties. SiRF TECHNOLOGY HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands) March 28, December 27, 2009 2008 (Unaudited) (1) ------------ ------------ ASSETS Current assets: Cash and cash equivalents $75,578 $85,840 Marketable securities 33,967 29,950 Accounts receivable, net 21,671 16,329 Inventories 12,680 16,372 Prepaid expenses and other current assets 2,832 4,175 ----- ----- Total current assets 146,728 152,666 Property and equipment, net 12,752 13,637 Identified intangible assets, net 18,194 21,602 Long-term deferred tax assets 2,886 2,837 Other long-term assets 713 688 Notes receivable 2,219 3,919 ----- ----- Total assets $183,492 $195,349 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $12,317 $15,038 Accrued payroll and related benefits 7,960 8,535 Other accrued liabilities 8,956 7,743 Deferred margin on shipments to distributors 1,931 1,714 Deferred revenue 1,074 1,368 Advance contract billings 249 23 Rebates payable to customers 837 1,026 --- ----- Total current liabilities 33,324 35,447 Long-term deferred tax liabilities 164 165 Long-term income taxes payable 3,035 3,022 Long-term obligations 1,935 1,695 ----- ----- Total liabilities 38,458 40,329 Commitments and contingencies - - Stockholders' equity: Common stock 6 6 Additional paid-in capital 600,311 593,350 Accumulated other comprehensive loss 12 21 Accumulated deficit (455,295) (438,357) -------- -------- Total stockholders' equity 145,034 155,020 ------- ------- Total liabilities and stockholders' equity $183,492 $195,349 ======== ======== (1) The condensed consolidated balance sheet information was derived from SiRF Technology Holdings, Inc. audited consolidated financial statements for the year ended December 27, 2008 as presented in the Company's Form 10-K for the fiscal year ended December 27, 2008. SiRF TECHNOLOGY HOLDINGS, INC. CONDENSED CONSOLIDATED GAAP STATEMENT OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended March 28, March 31, --------- --------- 2009 2008 ---- ---- Revenue: Product revenue $32,321 $59,928 License royalty and service revenue 1,927 2,048 ----- ----- Net revenue 34,248 61,976 Cost of revenue: Cost of product revenue (includes stock-based compensation expense of $332 and $217 for the three months ended March 28, 2009 and March 31, 2008, respectively) 18,346 31,898 Amortization of acquisition- related intangible assets 2,150 3,707 ----- ----- Gross profit 13,752 26,371 Gross margin 40.2% 42.6% Operating expenses: Research and development (includes stock-based compensation expense of $4,340 and $4,808 for the three months ended March 28, 2009 and March 31, 2008, respectively) 20,984 26,881 Sales and marketing (includes stock-based compensation expense of $1,221 and $1,371 for the three months ended March 28, 2009 and March 31, 2008, respectively) 4,812 7,425 General and administrative (includes stock-based compensation expense of $885 and $2,480 for the three months ended March 28, 2009 and March 31, 2008, respectively) 10,543 15,090 Amortization of acquisition-related intangible assets 861 2,489 Restructuring and asset impairment charges 688 473 --- --- Total operating expenses 37,888 52,358 Operating loss (24,136) (25,987) Other income, net 180 1,012 Gain on note receivable previously impaired 7,300 - ----- --- Net loss before provision for income taxes (16,656) (24,975) Provision for income taxes 282 3,110 --- ----- Net loss $(16,938) $(28,085) ======== ======== Net loss per share: Basic $(0.27) $(0.47) ====== ====== Diluted $(0.27) $(0.47) ====== ====== Weighted average number of shares used in per share calculations: Basic 62,754 60,334 ====== ====== Diluted 62,754 60,334 ====== ====== SiRF TECHNOLOGY HOLDINGS, INC. RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts) (Presentation is not based on a comprehensive set of accounting rules or principles) (Unaudited) Three Months Ended March 28, March 31, --------- --------- 2009 2008 ---- ---- Net revenue: $34,248 $61,976 Gross profit: GAAP gross profit $13,752 $26,371 Stock-based compensation expense (A) 332 217 Amortization of acquisition-related intangible assets (B) 2,150 3,707 Non-GAAP gross profit $16,234 $30,295 ======= ======= Non-GAAP gross margin 47.4% 48.9% Operating expenses: GAAP operating expenses $37,888 $52,358 Stock-based compensation expense (A) (6,446) (8,659) Amortization of acquisition-related intangible assets (B) (861) (2,489) Acquisition-related contingent payments (C) - (313) Restructuring and asset impairment charges (D) (688) (473) Non-GAAP operating expenses $29,893 $40,424 ======= ======= Operating loss: GAAP operating loss $(24,136) $(25,987) Stock-based compensation expense (A) 6,778 8,876 Amortization of acquisition-related intangible assets (B) 3,011 6,196 Acquisition-related contingent payments (C) - 313 Restructuring and asset impairment charges (D) 688 473 Non-GAAP operating loss $(13,659) $(10,129) ======== ======== Net loss: GAAP net loss $(16,938) $(28,085) Stock-based compensation expense (A) 6,778 8,876 Amortization of acquisition-related Intangible assets (B) 3,011 6,196 Acquisition-related contingent payments (C) - 313 Restructuring and asset impairment charges (D) 688 473 Gain on note receivable previously impaired (E) (7,300) - Provision for income taxes (F) - 3,824 --- ----- Non-GAAP net loss $(13,761) $(8,403) ======== ======= Diluted net loss per share: GAAP diluted net loss per share $(0.27) $(0.47) ====== ====== Non-GAAP diluted net loss per share $(0.22) $(0.14) ====== ====== Shares used to compute diluted net loss per share: GAAP 62,754 60,334 ====== ====== Non-GAAP 62,754 60,334 ====== ====== USE OF NON-GAAP FINANCIAL INFORMATION: To supplement the company's condensed consolidated financial statements presented on a GAAP basis, SiRF uses additional non-GAAP measures of gross profit, operating expenses, operating income(loss), net income(loss) and net income(loss) per share, adjusted to exclude certain expenses it believes appropriate to enhance an overall understanding of SiRF's past financial performance as well as its prospects for the future. We present such non-GAAP financial measures in reporting our financial results to provide investors with an additional tool to evaluate our operating results. Because these non-GAAP measures are not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. SiRF management uses each of the non-GAAP financial measures internally to understand, manage and evaluate our business. SiRF believes it is useful for itself and investors to review, as applicable, both GAAP information, which includes stock-based compensation expense, amortization of acquisition-related intangibles assets, expenses related to acquisition-related contingent payments, restructuring and asset impairment charges, gain on note receivable previously impaired and adjustments to normalize the income tax provision, and the non-GAAP measures, which exclude these amounts, in order to assess the performance of our continuing operations and for planning and forecasting in future periods. Each of these non-GAAP measures is intended to provide investors with an understanding of our operational results and trends that enables them to analyze our base financial and operating performance and facilitate period-to-period comparisons and analysis of operational trends. SiRF believes each of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Our non-GAAP financial measures reflect adjustments based on the following items: (A) Stock-based compensation expense: SiRF's operating expenses include stock-based compensation expense recorded pursuant to SFAS No. 123R, which requires us to recognize a non-cash expense related to the fair value of all our employee stock-based compensation awards. SiRF believes it is useful to highlight the effect of this stock compensation expense in our condensed statement of operations. However, stock-based compensation is a key incentive offered to our employees, and SiRF believes it has contributed to the revenue earned during the period and will contribute to its future revenue generation. Stock compensation expenses will recur in future periods. (B) Amortization of acquisition-related intangible assets: SiRF has excluded the effects of amortization of acquisition-related intangible assets from our non-GAAP net loss because these costs are associated with the acquisition of companies that would not have otherwise been incurred. This non-GAAP adjustment is intended to reflect acquisition-related expense incurred that is not directly associated with our continuing operations. (C) Acquisition-related contingent payments: SiRF has excluded the effects of compensation expense recorded in relation to acquisition-related contingent payments from our non-GAAP net loss because these costs are associated with the acquisition of companies that would not have otherwise been incurred. This non-GAAP adjustment is intended to reflect additional acquisition-related payments that are not directly associated with our continuing operations. (D) Restructuring charges: SiRF has incurred charges associated with the various restructuring plans that were adopted in 2008 that otherwise would not have been incurred and therefore we have excluded the effects of these charges from our non-GAAP net loss. This non-GAAP adjustment is intended to reflect restructuring costs that are not directly associated with our continuing operations. Other restructuring charges may recur in future periods. (E) Gain on note receivable previously impaired: SiRF has excluded the gain associated with a note receivable it has impaired in the prior year that otherwise would not have occurred and therefore we have excluded the effects of these charges from our non-GAAP net loss. This non-GAAP adjustment is intended to reflect gain that is not directly associated with our continuing operations. (F) Provision for income taxes: SiRF has excluded certain tax benefits from our GAAP operating loss and recorded tax benefits and expenses by applying an estimated tax rate to our non-GAAP loss or income. This non-GAAP adjustment is intended to normalize the tax effects for the reporting periods. DATASOURCE: SiRF Technology, Inc. CONTACT: Dennis Bencala of SiRF Technology Holdings, Inc., +1-408-392-8314, Web Site: http://www.sirf.com/

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