Exhibit 99.1
Investor Relations Contact:
Ken Lowe
Sigma Designs, Inc.
Tel: 408/957-9850
Fax: 408/957-9741
IR@sdesigns.com
For Immediate Release
SIGMA DESIGNS, INC. REPORTS THIRD QUARTER RESULTS
MILPITAS, Calif.- November 22, 2005-Sigma Designs®, Inc. (Nasdaq: SIGM), a leader in digital media processors for consumer appliances, announced results for its third fiscal quarter ended October 31, 2005.
Net revenues for the third quarter were $8,497,000 up 7% from $7,961,000 for the previous quarter and up 11% from $7,677,000 reported for the same period last year. Sigma reported a net profit of $ 1,948,000 or $0.09 per basic and $0.08 per diluted share in the third quarter. This compares to a net profit of $163,000, or $0.00 per basic and diluted share, for the previous quarter, and net profit of $525,000 or $0.03 per basic share and $0.02 per diluted share during the same period one year ago. The increase in revenue is primarily attributable to increased sales of EM8620 chipsets and the third quarter net profit includes a one-time investment gain of $1.5 million.
"We are pleased to report another sequential increase in quarterly revenue, with many accounts showing steady or increasing demand for our chipsets. Our design activity is at an all-time high with the majority of our efforts placed on top-tier accounts across multiple segments. We remain heavily focused on IPTV set-top box and Blu-ray/HD-DVD player opportunities, where we enjoy a technology leadership position. Looking forward, we maintain our expectation of meaningful top-line growth for our fourth fiscal quarter as well as our next fiscal year," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.
Recent business developments include:
- Jointly announced with Microsoft a collaboration to enable the production of low-cost, high-definition-capable devices optimized for the Microsoft® TV Internet Protocol Television (IPTV) Edition software platform. The new SMP8634 media processor from Sigma Designs will enable set-top box and consumer electronics manufacturers to create a range of products for broadband service providers to deliver IPTV services to the home. Microsoft and Sigma Designs have worked closely together to extend the processing functionality of Sigma Design's open standards-based SMP8634 media processor, to achieve a feature set that delivers the full power of the Microsoft TV platform.
- Announced that Sharp Corporation has selected Sigma Designs' media processors to power its newest network LCD monitor, the IT-32X2. Sigma's EM8620L media processor streamlines the networkability for Sharp's new LCD monitor. Sharp's new large screen network LCD monitor provides a high- resolution, 32-inch liquid crystal display (LCD) that consumers can use as a TV, PC monitor and display for digital photographs.
- Announced that Scientific-Atlanta's advanced IPTV set- tops were demonstrated at the IBC conference using the company's SMP8634 media processors. The demonstration of this new class of system-on-chip (SOC) based set-top box platforms was shown at the Scientific-Atlanta stand to address telco opportunities on a worldwide basis.
The conference call relating to third quarter results will take place following this announcement at 5:00 PM EDT today, November 22. The dial-in number is 888-362-4820 (international callers dial 617-597-5345) and the passcode is 14686979. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com/investors/overview or over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call by dialing into 1- 888-286-8010 (international callers dial 617-801-6888) and use passcode 99167440. The audio replay will be available for one week after the call. For further information, please see the link on our website atwww.sigmadesigns.com/.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expected operating performance and business prospects as we move into next year. Actual results may vary materially due to a number of factors including, but not limited to, general economic conditions, including continuance of the current economic conditions specific to the semiconductor industry, the rate of growth of the set-top box market in general, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our REALmagic MPEG silicon to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes. Other risk factors are detailed from time to time in our SEC reports, including the report on Form 10-K for the year ended January 31, 2005 and the report on Form 10-Q for the quarter ended July 31, 2005. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
About Sigma Designs, Inc.
Sigma Designs (Nasdaq: SIGM) specializes in silicon-based media processors for IPTV set-top boxes, digital media receivers, high definition DVD players, HDTV, and portable media players. The company's award-winning REALmagic® Video Streaming Technology is used in a variety of consumer applications providing highly integrated solutions for high-quality decoding of H.264, WMV9, MPEG-4, MPEG-2 and MPEG-1. Headquartered in Milpitas, Calif., the company also has sales offices in China, Europe, Hong Kong, Japan, Korea and Taiwan. For more information, please visit the company's web site atwww.sigmadesigns.com/.
REALmagic and Sigma Designs are registered trademarks of Sigma Designs. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.
###
| | Following are comparative, unaudited highlights of the third quarter and nine-months results of fiscal 2006 and 2005: | | | | | |
| | | | | | | |
| | | | | | | |
| | Quarter ended October 31, | | 2005 | | 2004 | |
| | | | | | | |
| | Net revenues | | $ 8,497,000 | | $ 7,677,000 | |
| | Net income | | $ 1,948,000 | | $ 525,000 | |
| | Basic net income per share | | $ 0.09 | | $ 0.03 | |
| | Basic weighted average shares | | 21,447,000 | | 20,838,000 | |
| | Diluted net income per share | | $ 0.08 | | $ 0.02 | |
| | Diluted weighted average shares | | 24,401,000 | | 23,629,000 | |
| | | | | | | |
| | | | | | | |
| | Nine months ended October 31, | | 2005 | | 2004 | |
| | | | | | | |
| | Net revenues | | $ 22,833,000 | | $ 23,549,000 | |
| | Net income (loss) | | $ 1,394,000 | | $ 1,857,000 | |
| | Basic net income (loss) per share | | $ 0.07 | | $ 0.09 | |
| | Basic weighted average shares | | 21,307,000 | | 20,754,000 | |
| | Diluted net income (loss) per share | | $ 0.06 | | $ 0.08 | |
| | Diluted weighted average shares | | 23,179,000 | | 23,363,000 | |
| | | | | | | |
| | SIGMA DESIGNS, INC. | |
| | CONDENSED CONSOLIDATED BALANCE SHEETS | |
| | (In thousands) | | | |
| | (Unaudited) | |
| | | | | | | | |
| | | October 31, | | January 31, | |
| | | 2005
| | 2005(1)
| |
| | Assets | | | | |
| | | | | | |
| | Current assets: | | | | |
| | Cash and cash equivalents | $ 15,074 | | $ 10,250 | |
| | Short-term investments | 9,395 | | 8,529 | | | |
| | Accounts receivable - net | 4,512 | | 6,417 | |
| | Notes receivable - related party | 500 | | - | |
| | Inventories | 2,990 | | 3,675 | |
| | Prepaid expenses and other | 648
| | 764
| |
| | | | | | |
| | Total current assets | 33,119 | | 29,635 | |
| | | | | | | |
| | Equipment and leasehold improvements, net | 1,762 | | 1,756 | |
| | Long-term investments | 1,282 | | 3,313 | | | |
| | Other assets | 166
| | 233
| |
| | | | | | | |
| | Total | $ 36,329
| | $ 34,937
| |
| | | | | | |
| | | | | | |
| | Liabilities and shareholders' equity | | | | |
| | | | | | |
| | Current liabilities: | | | | |
| | Accounts payable | 1,769 | | 3,540 | |
| | Accrued liabilities and other | 2,037 | | 2,097 | |
| | Current portion of bank lines of credit | 205
| | -
| |
| | | | | | | | |
| | Total current liabilities | 4,011 | | 5,637 | |
| | | | | | | | |
| | Bank line of credit | 288 | | - | |
| | Other - long term liabilities | 127 | | 188 | |
| | | | | | |
| | Shareholders' equity: | | | | |
| | Common stock | 89,618 | | 88,207 | |
| | Accumulated other comprehensive income | 14 | | 28 | |
| | Accumulated deficit | (57,729)
| | (59,123)
| |
| | | | | | | | |
| | Total shareholders' equity | 31,903
| | 29,112
| |
| | | | | | |
| | Total | $ 36,329
| | $ 34,937
| |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | (1)Derived from audited balance sheet included in the Company's annual report on Form 10-K for the year | | | | | | |
| | ended January 31, 2005. | | | | | | |
| | | | | | | | |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands, except per share data) |
| (Unaudited) |
| |
| | | | | | | | |
| | Three months ended | | Nine months ended |
| | October 31,
| | October 31,
|
| | 2005 | | 2004 | | 2005 | | 2004 |
| | | | | | | | |
| Net revenues | $ 8,497 | | $ 7,677 | | $ 22,833 | | $ 23,549 |
| | | | | | | | |
| Costs and expenses: | | | | | | | |
| Costs of revenues | 2,666 | | 2,155 | | 7,349 | | 7,090 |
| Research and development | 3,613 | | 2,762 | | 10,650 | | 8,714 |
| Sales and marketing | 1,259 | | 1,137 | | 3,713 | | 3,563 |
| General and administrative | 880
| | 1,165
| | 2,903
| | 2,814
|
| | | | | | | | |
| | | | | | | | |
| Total costs and expenses | 8,418 | | 7,219 | | 24,615 | | 22,181 |
| | | | | | | | |
| Income from operations | 79 | | 458 | | (1,782) | | 1,368 |
| Gain on sales of long-term investment | 1,466 | | - | | 2,549 | | - |
| Interest and other income (expense), net | 401
| | 63
| | 629
| | 516
|
| | | | | | | | |
| | | | | | | | |
| Income (loss) before income taxes | 1,946 | | 521 | | 1,396 | | 1,884 |
| Provision for income taxes | (2)
| | (4)
| | 2
| | 27
|
| | | | | | | | |
| | | | | | | | |
| Net income (loss) | $ 1,948
| | $ 525
| | $ 1,394
| | $ 1,857
|
| | | | | | | | |
| | | | | | | | |
| Basic net income (loss) per share | $ 0.09 | | $ 0.03 | | $ 0.07 | | $ 0.09 |
| Shares used in computing per share amount | 21,447 | | 20,838 | | 21,307 | | 20,754 |
| | | | | | | | |
| Diluted net income (loss) per share | $ 0.08 | | $ 0.02 | | $ 0.06 | | $ 0.08 |
| Shares used in computing per share amount | 24,401 | | 23,629 | | 23,179 | | 23,363 |
| | | | | | | | |
