EX-99.1 3 f98227exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 TRIDENT MICROSYSTEMS REPORTS FINANCIAL RESULTS FOR THIRD QUARTER OF FISCAL YEAR 2004 Sunnyvale, Calif., --- April 22, 2004: Trident Microsystems, Inc. (NASDAQ: TRID) reported today its financial results for the third quarter of fiscal year 2004 ended March 31, 2004. The Company announced that its net sales for the third quarter were $13,846,000, a decrease of 15% from $16,227,000 for the prior quarter and an increase of 19% from $11,614,000 for the same quarter of the prior fiscal year. The year ago period included sales of graphics products, which were discontinued during the quarter ended September 30, 2003. $12,720,000 of net sales for the quarter ended March 31, 2004 were from sales of digital media products by TTI, an 83%-owned subsidiary. This compares to digital media sales for the prior quarter of $15,889,000, a decrease of 20%, and digital media sales for the same quarter of the prior fiscal year of $7,574,000, an increase of 68%. Net income in the third quarter of fiscal year 2004, on a generally accepted accounting principles (GAAP) basis after taking into account minority ownership of TTI was $2,489,000, or $0.10 per share on a diluted basis, which included a gain on the sale of UMC stock of $1,941,000. This compares to net income on a GAAP basis of $1,431,000 or $0.06 per share on a diluted basis in the prior quarter and a net loss $7,543,000 or $0.37 for the same quarter of the prior fiscal year. Pro forma net income in the quarter ended March 31, 2004, which excluded a gain on the sale of UMC stock of $1,941,000 and deferred compensation expense of $147,000, was $695,000, or $0.03 per share on a diluted basis. This compares to pro forma net income of $1,762,000 or $0.07 per share on a diluted basis in the prior quarter, which excluded deferred compensation expense of $246,000, and pro forma net loss of $4,722,000 or $0.23 per share for the same quarter of the prior fiscal year. A reconciliation between net income on a GAAP basis and pro forma net income is provided in a table following the pro forma consolidated statement of operations. "Our March quarter results turned out to be what we had expected. For the June quarter, which is typically a slow quarter for the consumer electronics market, we expect digital media revenue to be relatively flat or slightly up as compared with the March quarter. Moving forward into the second half, we are quite encouraged by our strong market position," said Frank Lin, Trident's President and CEO. "Considering the following key indicators of Trident business potential, we anticipate a strong revenue growth trend starting from the second half of this year: First, in the digital CRT TV arena, we still hold a very solid number one position in the China market and we expect winning other first-tier OEMs in territories outside China at the second half of this year. Second, not only have we continued our design win momentum in top-tier OEMs in LCD TV, PDP TV, DLP TV and particularly in the AV PC arena, we have also received very favorable responses for our new and exciting product offering. Third, we are still the first company offering a single chip solution for the potentially huge HDTV market." "Third quarter revenue for TTI was $12.7 million, in line with our expectation. This represents a decrease of 20% over the prior quarter due to seasonal effect, and an increase of 68% over the same quarter in the prior year. Gross margin was 57.5%. During the third quarter, the Progressive-scan CRT TV revenue accounted for 57% of the total revenue as compared with 61% in the first quarter, and the LCDTV and PDP revenue accounted for 42% of the total revenue as compared with 37% in the second quarter. During the March quarter, we showcased our new HiDTV chip during the CES for the emerging HDTV market. This is the industry's first SoC chip to fully integrate HDTV audio/video decoding, analog video processing and TV features/ requirements all into a single chip. Our HiDTV chip is very well received by major TV OEMs. In this quarter, we have also announced the cooperation with Silicon Image in bringing the HDMI interface into the main stream HDTV market. We believe the HDMI interface will be integrated into our future products ahead of any other competitor. On the front of new OEM design-wins, we are very pleased to have made significant inroads into several first-tier OEM accounts with our DPTV-SVP chip. A couple of mainstream models are already in mass production in a first-tier Japan OEM which we hope to announce soon. During this quarter, we have also started sampling our next generation DPTV chip, called SVP-EX, which has further integrated a high-performance 10-bit ADC for HD/PC and a high-quality scaler using 0.18um mixed-signal technology. We believe this chip can help us to continue expanding our market share in a fast pace in the second half of this year." The Company also announced that it will hold a conference call to discuss the earnings, which will occur on Thursday, April 22, 2004 at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). Shareholders may participate in the call by calling 800-901-5231 (U.S.), or 617-786-2961 (International) passcode 94390327. The conference call will also be webcast by CCBN and can be accessed at Trident's web site at: http://www.tridentmicro.com. A replay of the conference call will be available from 7:30 p.m. April 22, 2004 until midnight April 29, 2004, and can be accessed by calling 888-286-8010 (U.S.), or 617-801-6888 (International) using passcode 56145105. Forward-Looking Information This press release contains forward-looking statements, including statements which use the words "expect," "hope," "anticipate," "believe," "potential" and similar words, including our statements regarding financial expectations and our expectations regarding product developments and design-wins. The forward-looking statements above are subject to certain risks, and actual results could vary materially depending on a number of factors. These risks include, in particular, changes in trends in the DPTV industries, changes in targeted consumer electronics markets such as Digital Television, whether the Company is able to achieve timely product introductions, the failure to obtain design wins among major OEMs for the Company products, and competitive pressures, including pricing and competitors' new product introductions. Additional factors that may affect the Company's business are described in detail in the Company's filings with the Securities and Exchange Commission. Use of Pro forma Information To supplement our consolidated financial statements presented in accordance with GAAP, Trident uses non-GAAP measures of pro forma results of operations. These non-GAAP results are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. We believe the non-GAAP results provide useful information to both management and investors by excluding certain gains and expenses. The non-GAAP measures are included to provide investors and management with an alternative method for assessing Trident's operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. ABOUT TRIDENT MICROSYSTEMS, INC. Trident Microsystems, Inc., with headquarters in Sunnyvale, California, designs, develops and markets digital media for the masses in the form of integrated circuits (ICs) for CRT TV, LCD TV, PDP TV, HDTV, and digital set-top box. Trident's products are sold to a network of OEMs, original design manufacturers and system integrators worldwide. For further information about Trident and its products, please consult the company's web site: http://www.tridentmicro.com. Trident is a registered trademark of Trident Microsystems, Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice. FOR PRESS RELEASES: Trident Microsystems, Inc. Investor Relations Tel: (408) 991-8090 Email: Investor@tridentmicro.com Web site: http://www.tridentmicro.com Trident Microsystems, Inc. Consolidated Statement of Operations
Three Months Ended Nine Months Ended --------------------------------------------------------------------- March 31, December 31, March 31, March 31, March 31, (in thousands, except per share data, unaudited) 2004 2003 2003 2004 2003 -------------------------------------------------------------------------------------------------------------------------- Net sales $ 13,846 $ 16,227 $ 11,614 $ 39,905 $ 38,132 Cost of sales 6,014 7,303 7,431 18,176 25,990 -------------------------------------------------------------------------------------------------------------------------- Gross profit 7,832 8,924 4,183 21,729 12,142 % to net sales 56.6% 55.0% 36.0% 54.5% 31.8% Research and development expenses 3,129 2,666 5,461 7,876 17,034 % to net sales 22.6% 16.4% 47.0% 19.7% 44.7% Selling, general and administrative expenses 3,522 3,683 2,986 10,229 9,100 % to net sales 25.4% 22.7% 25.7% 25.6% 23.9% -------------------------------------------------------------------------------------------------------------------------- Income (loss) from operations 1,181 2,575 (4,264) 3,624 (13,992) % to net sales 8.5% 15.9% (36.7)% 9.1% (36.7)% Gain(loss) on investments, net 1,941 (85) (2,821) 9,061 (4,787) Interest and other income(expense), net 137 (265) (458) (255) (350) Minority interests in subsidiaries (539) (689) -- (1,324) -- -------------------------------------------------------------------------------------------------------------------------- Income(loss) before income taxes 2,720 1,536 (7,543) 11,106 (19,129) % to net sales 19.6% 9.5% (64.9)% 27.8% (50.2)% Provision for income taxes 231 105 -- 2,506 1,046 % to net sales 1.7% 0.6% 6.3% 2.7% -------------------------------------------------------------------------------------------------------------------------- Net income(loss) $ 2,489 $ 1,431 $ (7,543) $ 8,600 $(20,175) % to net sales 18.0% 8.8% (64.9)% 21.6% (52.9)% -------------------------------------------------------------------------------------------------------------------------- Basic net income (loss) per share $ 0.11 $ 0.06 $ (0.37) $ 0.39 $ (0.99) -------------------------------------------------------------------------------------------------------------------------- Common shares used in computing basic per share amounts 22,715 22,374 20,544 22,183 20,477 -------------------------------------------------------------------------------------------------------------------------- Diluted net income (loss) per share $ 0.10 $ 0.06 $ (0.37) $ 0.35 $ (0.99) -------------------------------------------------------------------------------------------------------------------------- Common and common equivalent shares used in computing diluted per share amounts 25,275 25,098 20,544 24,923 20,477 --------------------------------------------------------------------------------------------------------------------------
Trident Microsystems, Inc. Pro Forma Consolidated Statement of Operations
Three Months Ended Nine Months Ended --------------------------------------------------------------------- March 31, December 31, March 31, March 31, March 31, (in thousands, except per share data, unaudited) 2004 2003 2003 2004 2003 -------------------------------------------------------------------------------------------------------------------------- Net sales $ 13,846 $ 16,227 $ 11,614 $ 39,905 $ 38,132 Cost of sales 6,014 7,303 7,431 18,176 25,990 -------------------------------------------------------------------------------------------------------------------------- Gross profit 7,832 8,924 4,183 21,729 12,142 % to net sales 56.6% 55.0% 36.0% 54.5% 31.8% Research and development expenses 3,106 2,628 5,461 7,815 17,034 % to net sales 22.4% 16.2% 47.0% 19.6% 44.7% Selling, general and administrative expenses 3,398 3,475 2,986 9,897 9,100 % to net sales 24.5% 21.4% 25.7% 24.8% 23.9% -------------------------------------------------------------------------------------------------------------------------- Income (loss) from operations 1,328 2,821 (4,264) 4,017 (13,992) % to net sales 9.6% 17.4% (36.7)% 10.1% (36.7)% Interest and other income(expense), net 137 (265) (458) (255) (350) Minority interests in subsidiaries (539) (689) -- (1,324) -- -------------------------------------------------------------------------------------------------------------------------- Income(loss) before income taxes 926 1,867 (4,722) 2,438 (14,342) % to net sales 6.7% 11.5% (40.7)% 6.1% (37.6)% Provision for income taxes 231 105 -- 336 -- % to net sales 1.7% 0.6% -- 0.8% -- -------------------------------------------------------------------------------------------------------------------------- Net income(loss) $ 695 $ 1,762 $ (4,722) $ 2,102 $(14,342) % to net sales 5.0% 10.9% (40.7)% 5.3% (37.6)% -------------------------------------------------------------------------------------------------------------------------- Basic net income (loss) per share $ 0.03 $ 0.08 $ (0.23) $ 0.09 $ (0.70) -------------------------------------------------------------------------------------------------------------------------- Common shares used in computing basic per share amounts 22,715 22,374 20,544 22,183 20,477 -------------------------------------------------------------------------------------------------------------------------- Diluted net income (loss) per share $ 0.03 $ 0.07 $ (0.23) $ 0.08 $ (0.70) -------------------------------------------------------------------------------------------------------------------------- Common and common equivalent shares used in computing diluted per share amounts 25,275 25,098 20,544 24,923 20,477 --------------------------------------------------------------------------------------------------------------------------
A reconciliation between net income (loss) on a GAAP basis and pro forma net income (loss) is as follows:
Three Months Ended Nine Months Ended --------------------------------------------------------------------- March 31, December 31, March 31, March 31, March 31, (in thousands, unaudited) 2004 2003 2003 2004 2003 -------------------------------------------------------------------------------------------------------------------------- GAAP net income (loss) $ 2,489 $ 1,431 $ (7,543) $ 8,600 $(20,175) Amortization of stock-based compensation 147 246 -- 393 -- (Gain) loss on investments, net (1,941) 85 2,821 (9,061) 4,787 Income taxes on investments -- -- -- 2,170 1,046 --------------------------------------------------------------------- Pro forma net income (loss) $ 695 $ 1,762 $ (4,722) $ 2,102 $(14,342) =====================================================================
Trident Microsystems, Inc. Consolidated Balance Sheet
March 31, December 31, March 31, (in thousands, unaudited) 2004 2003 2003 ------------------------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $ 29,179 $ 26,225 $ 8,801 Short-term investment - UMC 64,338 62,981 37,423 Short-term investments - other 26 23 931 Accounts receivable, net 3,121 1,177 1,817 Inventories 3,391 3,126 4,753 Prepaid expenses and other current assets 1,240 1,431 1,619 ------------------------------------------------------------------------------------------- Total current assets 101,295 94,963 55,344 Property and equipment, net 2,282 2,411 3,015 Long-term investment - UMC -- 2,103 4,375 Long-term investments - other 2,950 2,950 3,944 Other assets 408 341 344 ------------------------------------------------------------------------------------------- Total assets $ 106,935 $ 102,768 $ 67,022 =========================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 4,458 $ 6,914 $ 6,366 Accrued liabilities 8,592 8,616 9,944 Deferred tax liabilities 7,175 6,095 -- Income taxes payable 4,062 3,856 1,385 ------------------------------------------------------------------------------------------- Total current liabilities 24,287 25,481 17,695 Minority interests in subsidiaries 3,515 2,976 -- ------------------------------------------------------------------------------------------- Total liabilities 27,802 28,457 17,695 Stockholders' equity Capital stock 47,895 47,329 38,639 Deferred stock based compensation (2,541) (2,688) -- Retained earnings 23,171 20,682 19,170 Accumulated other comprehensive income (loss) 10,608 8,988 (8,482) ------------------------------------------------------------------------------------------- Total stockholders' equity 79,133 74,311 49,327 ------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 106,935 $ 102,768 $ 67,022 ===========================================================================================