EXHIBIT 99.1
TRIDENT MICROSYSTEMS REPORTS FINANCIAL RESULTS FOR
FIRST QUARTER OF FISCAL YEAR 2004
Sunnyvale, Calif. --- October 22, 2003: Trident Microsystems, Inc. (NASDAQ:
TRID) reported today its financial results for the first quarter of fiscal year
2004 ended September 30, 2003. The Company announced that its net sales for the
first quarter were $9,832,000, a decrease of 33% from $14,620,000 for the prior
quarter and a decrease of 27% from $13,235,000 for the same quarter of the prior
fiscal year. Net sales for the first quarter ended September 30, 2003 were
$9,832,000 which were primarily from digital media sales, this compares to
digital media sales for the prior quarter of $5,645,000, an increase of 74% and
digital media sales for the same quarter of the prior fiscal year of $5,348,000,
an increase of 84%. Net income in the first quarter of fiscal year 2004 was
$4,679,000, or $0.33 per share, which includes a pre-tax gain of $7.6 million
related to the restructuring of the Graphics Division and to the sales of 6.8%
of the equity of our subsidiary, TTI, and of one-third of our interest of XGI
stock. The operating loss, excluding investment gains and losses, was $132,000.
In the prior quarter the Company incurred a net loss $4,589,000, or $0.33 per
share and in the same quarter of the prior fiscal year the Company incurred a
net loss of $5,830,000, or $0.43 per share. Specifically, TTI on a standalone
basis completed its first quarter of operations as the Trident's digital media
operations with net income of $931,000.
"We successfully completed our two restructuring transactions in this quarter,"
said Frank Lin, President and CEO. "We are pleased to report that, operating as
a digital media company starting from this quarter, we have achieved our
operational objective of substantially increasing digital media revenue and
profit at the TTI level. As of now, Trident's digital media revenue comes mainly
from TTI, the Company's 83% owned subsidiary, and we believe this will be the
case for at least the next few quarters. We believe we are well on track to
achieve profitability in the December quarter."
"We are glad to report that we have achieved $9.2M revenue for TTI in the
September quarter, a strong growth of 63% over the June quarter revenue of the
digital media sales," said JH Chang, President of TTI, Trident's subsidiary.
"The China market has recovered from the impact of SARS in the June quarter, and
accounted for 73.5% of the total digital media revenue this quarter. During the
quarter, we announced Samsung's LCD TV design-win for their 15" main-stream,
high-volume model, and we have also successfully showcased our next generation
DPTV((TM)) Video Processor for LCD TV, PDP TV, and Flat Screen CRT TV
applications at Berlin's IFA show. This product has been very well received by
many first-tier OEM customers worldwide. We are confident that this product will
further extend our lead both in the integration level and video quality over
other competitors. We expect to formally announce this product and some early
design-wins in the near future. Overall, we believe our product design-in
momentum is very strong at this moment, both in the backlog and design-win
activities. Looking forward, we are projecting between 25% and 35% revenue
growth in the December quarter over
the September quarter. We anticipate that growth in the December quarter will
mainly come from LCD TV and PDP activities as more customers' TV models start to
ramp into production. We expect that the LCD TV and PDP related revenue will be
more than double in the December quarter from the September quarter."
Trident also announced that it had completed stock sales of a portion of its
positions in XGI, the entity to which its video graphics assets were sold, and
TTI, its digital media subsidiary. The sales were both to venture capital
entities, and both improved the Company's cash position. During the quarter, the
Company completed the transfer of the Graphics Business Unit to XGI in exchange
for an equity interest in XGI, and then sold one-third of the equity interest to
a third party. These transactions resulted in a gain of $6.6 million reported in
the line item for gain (loss) on investments. The Company sold approximately
6.8% of its holding in TTI to a venture fund and its affiliates for $2.7 million
representing a gain of $1 million. The venture fund is an affiliate of UMC, a
key business partner of the Company, and was the largest independent shareholder
of TTI (about 15%) prior to the restructuring. After the restructuring, Trident
increased its interest in TTI from 68% to 90%, and other TTI shareholders,
including the UMC affiliate, were diluted. The UMC affiliate requested and
negotiated with the Company the right to acquire additional shares of TTI, with
a premium over the valuation of TTI implied in June at the time of the
restructuring transaction, to maintain a long-term and meaningful relationship
in TTI. "We believe our strategic relationship with UMC can greatly enhance our
overall competitiveness in this market and benefit the shareholders for the long
term," said Mr. Lin.
The Company also announced that it will hold a conference call to discuss the
earnings, which will occur on Wednesday, October 22, 2003 at 2:30 p.m. Pacific
Time (5:30 p.m. Eastern Time). Shareholders may participate in the call by
calling 800-923-4207 (U.S.), or 904-779-4713 (International) conference ID
number 19780185 and Chairperson Frank Lin. A replay of the conference call will
be available approximately two hours following the conference call until
midnight PT, on October 29, 2003, and can be accessed by calling 800-252-6030
using access code 19780185.
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 new products, revenue
expectations and our expectations regarding 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 Trident is able to
achieve timely product introductions, the failure to obtain design wins among
major OEMs for Trident products, competitive pressures, including pricing and
competitors' new product introductions, and the outcome of pending litigation.
Additional factors that may affect the Company's business are described in
detail in the Company's filings with the Securities and Exchange Commission.
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
-----------------------------------------------
September 30, June 30, September 30,
(in thousands, except per share data, unaudited) 2003 2003 2002
------------- -------- -------------
Net sales $ 9,832 $ 14,620 $ 13,235
Cost of sales 4,859 11,730 9,357
-------- -------- --------
Gross profit 4,973 2,890 3,878
% to net sales 50.6% 19.8% 29.3%
Research and development expenses 2,081 4,566 5,773
% to net sales 21.2% 31.2% 43.6%
Selling, general and administrative expenses 3,024 2,786 2,915
% to net sales 30.8% 19.1% 22.0%
-------- -------- --------
Loss from operations (132) (4,462) (4,810)
% to net sales (1.3)% (30.5)% (36.3)%
Gain(loss) on investments, net 7,205 (208) --
Interest and other income, net (128) 81 26
Minority interests in subsidiaries (96) -- --
-------- -------- --------
Income(loss) before income taxes 6,849 (4,589) (4,784)
% to net sales 69.7% (31.4)% (36.1)%
Provision for income taxes 2,170 -- 1,046
% to net sales 0 0.0% 7.9%
-------- -------- --------
Net income(loss) $ 4,679 $ (4,589) $ (5,830)
% to net sales 47.6% (31.4)% (44.0)%
-------- -------- --------
Basic net income (loss) per share $ 0.33 $ (0.33) $ (0.43)
-------- -------- --------
Common shares used in computing basic
per share amounts 14,312 13,783 13,601
-------- -------- --------
Diluted net income (loss) per share $ 0.29 $ (0.33) $ (0.43)
-------- -------- --------
Common and common equivalent shares used
in computing diluted per share amounts 16,049 13,783 13,601
-------- -------- --------
Trident Microsystems, Inc.
Consolidated Balance Sheet
September 30, June 30, September 30,
(in thousands, unaudited) 2003 2003 2002
------------- -------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 22,230 $ 5,085 $ 18,666
Short-term investment - UMC 61,140 43,541 43,669
Short-term investments - other 926 1,241 825
Accounts receivable, net 754 4,338 1,417
Inventories 1,857 2,318 4,401
Prepaid expenses and other current assets 1,307 734 1,116
Assets held for sale -- 1,800 --
-------- -------- --------
Total current assets 88,214 59,057 70,094
Property and equipment, net 2,647 2,789 4,507
Long-term investment - UMC 2,103 4,375 6,563
Long-term investments - other 3,039 3,569 8,642
Other assets 342 333 400
-------- -------- --------
Total assets $ 96,345 $ 70,123 $ 90,206
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,372 $ 7,974 $ 5,806
Accrued liabilities 7,798 8,332 10,756
Deferred tax liabilities 5,133 -- --
Income taxes payable 3,750 1,580 1,385
-------- -------- --------
Total current liabilities 25,053 17,886 17,947
Minority interests in subsidiaries 2,287 77 509
-------- -------- --------
Total liabilities 27,340 17,963 18,456
Stockholders' equity
Capital stock 59,811 57,752 56,341
Treasury stock, at cost (17,952) (17,952) (17,952)
Retained earnings 19,260 14,581 33,515
Accumulated other comprehensive income (loss) 7,886 (2,221) (154)
-------- -------- --------
Total stockholders' equity 69,005 52,160 71,750
-------- -------- --------
Total liabilities and stockholders' equity $ 96,345 $ 70,123 $ 90,206
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