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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | PXLW | The Nasdaq Global Market |
(d) | Exhibits. |
PIXELWORKS, INC. | ||
(Registrant) | ||
Dated: | May 2, 2019 | /s/ Steven L. Moore |
Steven L. Moore Vice President, Chief Financial Officer, Secretary and Treasurer |
• | Video Delivery revenue grew 64% year-over-year, and Mobile revenue increased over 250%, including mobile-related licensing revenue |
• | Recognized net gain of $3.9 million on the sale of non-strategic patents |
• | Unveiled 5th generation Iris visual processor and began pre-production sampling to multiple mobile OEMs |
• | Announced cooperative agreement with Qualcomm to provide a subset of Pixelworks Iris features as a software-only solution optimized for Snapdragon™ 855 mobile platforms |
• | Black Shark incorporated Iris visual processor into its newest gaming smartphone, the Black Shark 2 |
• | Launched TrueCut®, an end-to-end video optimization platform, extending cinematic motion and HDR across mobile, home-entertainment and cinema applications |
• | YouKu selected TrueCut as part of a multi-year marketing and license agreement to jointly advance the ecosystem for HDR quality video on mobile devices in China |
PIXELWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2019 | 2018 | 2018 | ||||||||||
Revenue, net | $ | 16,648 | $ | 20,539 | $ | 15,292 | ||||||
Cost of revenue (1) | 8,176 | 9,634 | 7,490 | |||||||||
Gross profit | 8,472 | 10,905 | 7,802 | |||||||||
Operating expenses: | ||||||||||||
Research and development (2) | 6,472 | 6,673 | 4,463 | |||||||||
Selling, general and administrative (3) | 5,460 | 5,310 | 4,614 | |||||||||
Restructuring | — | 429 | 19 | |||||||||
Total operating expenses | 11,932 | 12,412 | 9,096 | |||||||||
Loss from operations | (3,460 | ) | (1,507 | ) | (1,294 | ) | ||||||
Gain on sale of patents | 3,905 | — | — | |||||||||
Interest income (expense) and other, net (4) | (66 | ) | (82 | ) | 972 | |||||||
Total other income (expense), net | 3,839 | (82 | ) | 972 | ||||||||
Income (loss) before income taxes | 379 | (1,589 | ) | (322 | ) | |||||||
Provision for income taxes | 408 | 52 | 276 | |||||||||
Net loss | $ | (29 | ) | $ | (1,641 | ) | $ | (598 | ) | |||
Net loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.02 | ) | |||
Weighted average shares outstanding - basic and diluted | 37,247 | 36,736 | 35,183 | |||||||||
—————— | ||||||||||||
(1) Includes: | ||||||||||||
Amortization of acquired intangible assets | 298 | 298 | 298 | |||||||||
Stock-based compensation | 95 | 93 | 66 | |||||||||
Inventory step-up and backlog amortization | 12 | 17 | 122 | |||||||||
(2) Includes stock-based compensation | 661 | 635 | 595 | |||||||||
(3) Includes: | ||||||||||||
Stock-based compensation | 933 | 910 | 539 | |||||||||
Amortization of acquired intangible assets | 84 | 101 | 101 | |||||||||
(4) Includes: | ||||||||||||
Gain on debt extinguishment | — | — | (1,272 | ) | ||||||||
Discount accretion on convertible debt fair value | — | — | 69 |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands, except per share data) (Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2019 | 2018 | 2018 | ||||||||||
Reconciliation of GAAP and non-GAAP gross profit | ||||||||||||
GAAP gross profit | $ | 8,472 | $ | 10,905 | $ | 7,802 | ||||||
Amortization of acquired intangible assets | 298 | 298 | 298 | |||||||||
Stock-based compensation | 95 | 93 | 66 | |||||||||
Inventory step-up and backlog amortization | 12 | 17 | 122 | |||||||||
Total reconciling items included in gross profit | 405 | 408 | 486 | |||||||||
Non-GAAP gross profit | $ | 8,877 | $ | 11,313 | $ | 8,288 | ||||||
Non-GAAP gross profit margin | 53.3 | % | 55.1 | % | 54.2 | % | ||||||
Reconciliation of GAAP and non-GAAP operating expenses | ||||||||||||
GAAP operating expenses | $ | 11,932 | $ | 12,412 | $ | 9,096 | ||||||
Reconciling item included in research and development: | ||||||||||||
Stock-based compensation | 661 | 635 | 595 | |||||||||
Reconciling items included in selling, general and administrative: | ||||||||||||
Stock-based compensation | 933 | 910 | 539 | |||||||||
Amortization of acquired intangible assets | 84 | 101 | 101 | |||||||||
Restructuring | — | 429 | 19 | |||||||||
Total reconciling items included in operating expenses | 1,678 | 2,075 | 1,254 | |||||||||
Non-GAAP operating expenses | $ | 10,254 | $ | 10,337 | $ | 7,842 | ||||||
Reconciliation of GAAP and non-GAAP net income (loss) | ||||||||||||
GAAP net loss | $ | (29 | ) | $ | (1,641 | ) | $ | (598 | ) | |||
Reconciling items included in gross profit | 405 | 408 | 486 | |||||||||
Reconciling items included in operating expenses | 1,678 | 2,075 | 1,254 | |||||||||
Reconciling items included in total other income (expense), net | (3,905 | ) | — | (1,203 | ) | |||||||
Tax effect of non-GAAP adjustments | 219 | 237 | 99 | |||||||||
Non-GAAP net income (loss) | $ | (1,632 | ) | $ | 1,079 | $ | 38 | |||||
Non-GAAP net income (loss) per share: | ||||||||||||
Basic | $ | (0.04 | ) | $ | 0.03 | $ | 0.00 | |||||
Diluted | $ | (0.04 | ) | $ | 0.03 | $ | 0.00 | |||||
Non-GAAP weighted average shares outstanding: | ||||||||||||
Basic | 37,247 | 36,736 | 35,183 | |||||||||
Diluted | 37,247 | 38,320 | 37,306 | |||||||||
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors. |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP EARNINGS PER SHARE (Figures may not sum due to rounding) (Unaudited) | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
March 31, | December 31, | March 31, | |||||||||||||||||||||||
2019 | 2018 | 2018 | |||||||||||||||||||||||
Dollars per share | Dollars per share | Dollars per share | |||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||||
Reconciliation of GAAP and non-GAAP net income (loss) | |||||||||||||||||||||||||
GAAP net loss | $ | 0.00 | $ | 0.00 | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||||||||
Reconciling items included in gross profit | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||||||
Reconciling items included in operating expenses | 0.05 | 0.05 | 0.06 | 0.05 | 0.04 | 0.03 | |||||||||||||||||||
Reconciling items included in total other income (expense), net | (0.10 | ) | (0.10 | ) | — | — | (0.03 | ) | (0.03 | ) | |||||||||||||||
Tax effect of non-GAAP adjustments | 0.01 | 0.01 | 0.01 | 0.01 | — | — | |||||||||||||||||||
Non-GAAP net income (loss) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.03 | $ | 0.03 | $ | 0.00 | $ | 0.00 | |||||||||||
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors. |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP GROSS PROFIT MARGIN * (Figures may not sum due to rounding) (Unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, | December 31, | March 31, | ||||||||
2019 | 2018 | 2018 | ||||||||
Reconciliation of GAAP and non-GAAP gross profit margin | ||||||||||
GAAP gross profit margin | 50.9 | % | 53.1 | % | 51.0 | % | ||||
Amortization of acquired intangible assets | 1.8 | 1.5 | 1.9 | |||||||
Stock-based compensation | 0.6 | 0.5 | 0.4 | |||||||
Inventory step-up and backlog amortization | 0.1 | 0.1 | 0.8 | |||||||
Total reconciling items included in gross profit | 2.4 | 2.0 | 3.2 | |||||||
Non-GAAP gross profit margin | 53.3 | % | 55.1 | % | 54.2 | % | ||||
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors. |
PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands) (Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2019 | 2018 | 2018 | ||||||||||
Reconciliation of GAAP net loss and adjusted EBITDA | ||||||||||||
GAAP net loss | $ | (29 | ) | $ | (1,641 | ) | $ | (598 | ) | |||
Gain on sale of patents | (3,905 | ) | — | — | ||||||||
Stock-based compensation | 1,689 | 1,638 | 1,200 | |||||||||
Amortization of acquired intangible assets | 382 | 399 | 399 | |||||||||
Tax effect of non-GAAP adjustments | 219 | 237 | 99 | |||||||||
Inventory step-up and backlog amortization | 12 | 17 | 122 | |||||||||
Restructuring | — | 429 | 19 | |||||||||
Gain on debt extinguishment | — | — | (1,272 | ) | ||||||||
Discount accretion on convertible debt fair value | — | — | 69 | |||||||||
Non-GAAP net income (loss) | $ | (1,632 | ) | $ | 1,079 | $ | 38 | |||||
EBITDA adjustments: | ||||||||||||
Depreciation and amortization | $ | 913 | $ | 873 | $ | 826 | ||||||
Non-GAAP Interest expense and other, net | 66 | 82 | 231 | |||||||||
Non-GAAP provision (benefit) for income taxes | 189 | (185 | ) | 177 | ||||||||
Adjusted EBITDA | $ | (464 | ) | $ | 1,849 | $ | 1,272 | |||||
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors. |
PIXELWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||||||
March 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 17,346 | $ | 17,944 | |||
Short-term marketable securities | 6,566 | 6,069 | |||||
Accounts receivable, net | 5,853 | 6,982 | |||||
Inventories | 3,018 | 2,954 | |||||
Prepaid expenses and other current assets | 2,828 | 1,494 | |||||
Total current assets | 35,611 | 35,443 | |||||
Property and equipment, net | 5,409 | 6,151 | |||||
Operating lease right of use assets | 5,658 | — | |||||
Other assets, net | 1,700 | 1,132 | |||||
Acquired intangible assets, net | 3,826 | 4,208 | |||||
Goodwill | 18,407 | 18,407 | |||||
Total assets | $ | 70,611 | $ | 65,341 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,647 | $ | 2,116 | |||
Accrued liabilities and current portion of long-term liabilities | 13,780 | 14,823 | |||||
Current portion of income taxes payable | 440 | 263 | |||||
Total current liabilities | 16,867 | 17,202 | |||||
Long-term liabilities, net of current portion | 700 | 1,017 | |||||
Operating lease liabilities, net of current portion | 3,900 | — | |||||
Income taxes payable, net of current portion | 2,342 | 2,299 | |||||
Total liabilities | 23,809 | 20,518 | |||||
Shareholders’ equity | 46,802 | 44,823 | |||||
Total liabilities and shareholders’ equity | $ | 70,611 | $ | 65,341 |