OREGON | 000-30269 | 91-1761992 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release issued by Pixelworks, Inc. dated February 2, 2017. | |
99.2 | Pixelworks, Inc. Fourth Quarter Results Conference Call Script dated February 2, 2017. |
PIXELWORKS, INC. | ||
(Registrant) | ||
Dated: | February 2, 2017 | /s/ Steven L. Moore |
Steven L. Moore Vice President, Chief Financial Officer, Secretary and Treasurer |
Exhibit No. | Description | |
99.1 | Press Release issued by Pixelworks, Inc. dated February 2, 2017. | |
99.2 | Pixelworks, Inc. Fourth Quarter Results Conference Call Script dated February 2, 2017. |
• | Increased revenue 19% year over year and 17% sequentially to $16.0 million |
• | Achieved GAAP net income of $0.01 and non-GAAP net income of $0.04, per diluted share |
• | Generated positive cash flow from operations, with net cash balance of $19.6 million at quarter-end |
• | Revenue to be between $22 million and $23 million, including approximately $9.0 million of revenue related to End of Life (EOL) products with the run-rate projector business reflecting typical seasonality; |
• | Gross profit margin of approximately 53% to 55% on both a GAAP basis and non-GAAP basis; and |
• | Operating expenses of $9 million to $10 million on a GAAP basis and $8 million to $9 million on a non-GAAP basis. |
PIXELWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Revenue, net | $ | 15,987 | $ | 13,656 | $ | 13,477 | $ | 53,390 | $ | 59,517 | ||||||||||
Cost of revenue (1) | 7,483 | 7,099 | 6,663 | 28,322 | 30,224 | |||||||||||||||
Gross profit | 8,504 | 6,557 | 6,814 | 25,068 | 29,293 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development (2) | 4,415 | 4,442 | 6,076 | 19,036 | 24,644 | |||||||||||||||
Selling, general and administrative (3) | 3,653 | 3,072 | 3,648 | 13,770 | 14,453 | |||||||||||||||
Restructuring | — | 3 | — | 2,608 | — | |||||||||||||||
Total operating expenses | 8,068 | 7,517 | 9,724 | 35,414 | 39,097 | |||||||||||||||
Income (loss) from operations | 436 | (960 | ) | (2,910 | ) | (10,346 | ) | (9,804 | ) | |||||||||||
Interest expense and other, net | (101 | ) | (99 | ) | (129 | ) | (406 | ) | (446 | ) | ||||||||||
Income (loss) before income taxes | 335 | (1,059 | ) | (3,039 | ) | (10,752 | ) | (10,250 | ) | |||||||||||
Provision (benefit) for income taxes | (2 | ) | 183 | 128 | 355 | 320 | ||||||||||||||
Net income (loss) | $ | 337 | $ | (1,242 | ) | $ | (3,167 | ) | $ | (11,107 | ) | $ | (10,570 | ) | ||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.01 | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.39 | ) | $ | (0.42 | ) | ||||||
Diluted | $ | 0.01 | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.39 | ) | $ | (0.42 | ) | ||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 28,684 | 28,313 | 27,697 | 28,276 | 25,088 | |||||||||||||||
Diluted | 30,244 | 28,313 | 27,697 | 28,276 | 25,088 | |||||||||||||||
—————— | ||||||||||||||||||||
(1) Includes: | ||||||||||||||||||||
Stock-based compensation | $ | 51 | $ | 49 | $ | 49 | $ | 190 | $ | 196 | ||||||||||
Restructuring | 7 | 27 | — | 1,784 | — | |||||||||||||||
Additional amortization of non-cancelable prepaid royalty | — | — | — | — | (14 | ) | ||||||||||||||
(2) Includes stock-based compensation | 378 | 401 | 485 | 1,600 | 1,927 | |||||||||||||||
(3) Includes stock-based compensation | 377 | 334 | 397 | 872 | 1,798 |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands, except per share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Reconciliation of GAAP and non-GAAP gross profit | ||||||||||||||||||||
GAAP gross profit | $ | 8,504 | $ | 6,557 | $ | 6,814 | $ | 25,068 | $ | 29,293 | ||||||||||
Stock-based compensation | 51 | 49 | 49 | 190 | 196 | |||||||||||||||
Restructuring | 7 | 27 | — | 1,784 | — | |||||||||||||||
Additional amortization of non-cancelable prepaid royalty | — | — | — | — | (14 | ) | ||||||||||||||
Total reconciling items included in cost of revenue | 58 | 76 | 49 | 1,974 | 182 | |||||||||||||||
Non-GAAP gross profit | $ | 8,562 | $ | 6,633 | $ | 6,863 | $ | 27,042 | $ | 29,475 | ||||||||||
Non-GAAP gross profit margin | 53.6 | % | 48.6 | % | 50.9 | % | 50.6 | % | 49.5 | % | ||||||||||
Reconciliation of GAAP and non-GAAP operating expenses | ||||||||||||||||||||
GAAP operating expenses | $ | 8,068 | $ | 7,517 | $ | 9,724 | $ | 35,414 | $ | 39,097 | ||||||||||
Reconciling item included in research and development: | ||||||||||||||||||||
Stock-based compensation | 378 | 401 | 485 | 1,600 | 1,927 | |||||||||||||||
Reconciling item included in selling, general and administrative: | ||||||||||||||||||||
Stock-based compensation | 377 | 334 | 397 | 872 | 1,798 | |||||||||||||||
Restructuring | — | 3 | — | 2,608 | — | |||||||||||||||
Total reconciling items included in operating expenses | 755 | 738 | 882 | 5,080 | 3,725 | |||||||||||||||
Non-GAAP operating expenses | $ | 7,313 | $ | 6,779 | $ | 8,842 | $ | 30,334 | $ | 35,372 | ||||||||||
Reconciliation of GAAP and non-GAAP net income (loss) | ||||||||||||||||||||
GAAP net income (loss) | $ | 337 | $ | (1,242 | ) | $ | (3,167 | ) | $ | (11,107 | ) | $ | (10,570 | ) | ||||||
Reconciling items included in cost of revenue | 58 | 76 | 49 | 1,974 | 182 | |||||||||||||||
Reconciling items included in operating expenses | 755 | 738 | 882 | 5,080 | 3,725 | |||||||||||||||
Tax effect of non-GAAP adjustments | 8 | (10 | ) | — | — | — | ||||||||||||||
Non-GAAP net income (loss) | $ | 1,158 | $ | (438 | ) | $ | (2,236 | ) | $ | (4,053 | ) | $ | (6,663 | ) | ||||||
Non-GAAP net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.04 | $ | (0.02 | ) | $ | (0.08 | ) | $ | (0.14 | ) | $ | (0.27 | ) | ||||||
Diluted | $ | 0.04 | $ | (0.02 | ) | $ | (0.08 | ) | $ | (0.14 | ) | $ | (0.27 | ) | ||||||
Non-GAAP weighted average shares outstanding: | ||||||||||||||||||||
Basic | 28,684 | 28,313 | 27,697 | 28,276 | 25,088 | |||||||||||||||
Diluted | 30,244 | 28,313 | 27,697 | 28,276 | 25,088 | |||||||||||||||
* Our non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP net income (loss) per share differs from GAAP gross profit, GAAP operating expenses, GAAP net income (loss) and GAAP net income (loss) per share due to the exclusion of restructuring expenses, stock-based compensation expense and additional amortization of a non-cancelable prepaid royalty. Pixelworks' management believes the presentation of non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP net income (loss) per share provides useful information to investors regarding Pixelworks' results of operations which allows investors an alternative evaluation of underlying cash flow dynamics. Pixelworks' management also uses each of these non-GAAP measures internally as an alternative evaluation of underlying cash flow dynamics. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, our GAAP financial measures. |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Reconciliation of GAAP net income (loss) and adjusted EBITDA | ||||||||||||||||||||
GAAP net income (loss) | $ | 337 | $ | (1,242 | ) | $ | (3,167 | ) | $ | (11,107 | ) | $ | (10,570 | ) | ||||||
Stock-based compensation | 806 | 784 | 931 | 2,662 | 3,921 | |||||||||||||||
Restructuring | 7 | 30 | — | 4,392 | — | |||||||||||||||
Additional amortization of non-cancelable prepaid royalty | — | — | — | — | (14 | ) | ||||||||||||||
Tax effect of non-GAAP adjustments | 8 | (10 | ) | — | — | — | ||||||||||||||
Non-GAAP net income (loss) | $ | 1,158 | $ | (438 | ) | $ | (2,236 | ) | $ | (4,053 | ) | $ | (6,663 | ) | ||||||
EBITDA adjustments: | ||||||||||||||||||||
Depreciation and amortization | $ | 828 | $ | 816 | $ | 1,038 | $ | 3,466 | $ | 4,263 | ||||||||||
Interest expense and other, net | 101 | 99 | 129 | 406 | 446 | |||||||||||||||
Non-GAAP provision (benefit) for income taxes | (10 | ) | 193 | 128 | 355 | 320 | ||||||||||||||
Adjusted EBITDA | $ | 2,077 | $ | 670 | $ | (941 | ) | $ | 174 | $ | (1,634 | ) | ||||||||
* Adjusted EBITDA differs from GAAP net income (loss) due to the exclusion of restructuring expenses, stock-based compensation expense, additional amortization of a non-cancelable prepaid royalty, interest expense and other, net, income tax provision (benefit) and depreciation and amortization. Pixelworks' management believes the presentation of adjusted EBITDA provides useful information to investors regarding Pixelworks' results of operations which allows investors an alternative evaluation of underlying cash flow dynamics and core operating results and are used by Pixelworks' management for these purposes. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, our GAAP financial measures. |
PIXELWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||||||
December 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,622 | $ | 26,591 | |||
Accounts receivable, net | 3,118 | 5,988 | |||||
Inventories | 2,803 | 3,266 | |||||
Prepaid expenses and other current assets | 736 | 644 | |||||
Total current assets | 26,279 | 36,489 | |||||
Property and equipment, net | 3,793 | 6,543 | |||||
Other assets, net | 785 | 810 | |||||
Total assets | $ | 30,857 | $ | 43,842 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,734 | $ | 2,944 | |||
Accrued liabilities and current portion of long-term liabilities | 7,860 | 8,528 | |||||
Current portion of income taxes payable | 140 | 221 | |||||
Short-term line of credit | — | 3,000 | |||||
Total current liabilities | 9,734 | 14,693 | |||||
Long-term liabilities, net of current portion | 194 | 831 | |||||
Income taxes payable, net of current portion | 1,880 | 1,942 | |||||
Total liabilities | 11,808 | 17,466 | |||||
Shareholders’ equity | 19,049 | 26,376 | |||||
Total liabilities and shareholders’ equity | $ | 30,857 | $ | 43,842 |