EXHIBIT 99.1
TRIDENT MICROSYSTEMS REPORTS FINANCIAL RESULTS FOR
FIRST QUARTER OF FISCAL YEAR 2005
31% SEQUENTIAL GROWTH IN SEPTEMBER QUARTER, THOUGH
DECEMBER MAY BE SLIGHTLY DOWN, SVP-EX RAMP GIVES
STRONG CONFIDENCE THAT GROWTH WILL RESUME IN EARLY
CALENDAR 2005
Sunnyvale, Calif., --- October 27, 2004: Trident Microsystems, Inc. (NASDAQ:
TRID) a leading provider of digital TV technology for the consumer digital video
marketplace today announced for the first fiscal quarter of 2005, ending
September 30, 2004, the company achieved net revenues of $16,602,000, a
sequential increase of 31% from the $12,646,000 reported in the quarter ended
June 30, 2004, and a year over year increase of 69% from $9,832,000 reported in
the first fiscal quarter one year ago. Included in these consolidated results,
were sales of $16,022,000 in the quarter ended September 30, 2004 in digital
media products by TTI, an 80%-owned subsidiary which represented a sequential
increase in digital media sales of 30% over the $12,301,000 reported in the June
30, 2004 quarter and a year over year increase of 74% over the $9,209,000
reported in the first fiscal quarter one year ago.
Net income in the first quarter ended September 30, 2004, on a generally
accepted accounting principles (GAAP) basis, after taking into account minority
ownership of TTI was $1,382,000, or $0.04 per share on a diluted basis, which
included a net gain on the sale of investments of $401,000. This compares to net
income on a GAAP basis of $989,000 or $0.04 per share on a diluted basis in the
June 30, 2004 quarter, which included net gain on the sale of investments of
$733,000. This also compares on a year over year basis to net income of
$4,679,000 or $0.19 per fully diluted share for the quarter ended September 30,
2003 which included $7,205,000 net gain on sale of investments predominately
from the sale of our graphics subsidiary.
Pro forma net income in the quarter ended September 30, 2004, which excludes
gain on the sale of investments of $401,000 and deferred compensation expense of
$216,000, was $1,197,000, or $0.04 per share on a diluted basis. This compares
to pro forma net income of $470,000 or $0.02 per share on a diluted basis in the
prior quarter, which excludes deferred compensation expense of $214,000, gain on
investments of $733,000, and a pro forma net loss of $356,000 or $0.02 per share
for the same quarter of the prior fiscal year which also excluded a gain on
investments of $7,205,000 and income taxes on investments of $2,170,000. 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.
"For the December quarter, we expect growth to slow temporarily and revenue
could be down by as much as 5%-9% from the September quarter due to a continued
soft LCDTV end market and product generation transition from our fourth
generation - the SVP to our fifth generation - the SVP-EX at certain OEM
customers," said Frank Lin, Trident's President and CEO. "However, we see this
unexpected slowdown in our revenue growth
due to short term market softness and customer driven product transition
schedules regarding the SVP-EX. In fact, we remain quite upbeat about resuming
our growth momentum for the March quarter and all of calendar 2005 based on a
very strong design win momentum of our SVP-EX product including wins from among
the top six first-tier LCDTV manufacturers."
"In the September quarter we continued to demonstrate our strength and
leadership as an innovative semiconductor design company for the digital
television market. While many other consumer electronics semiconductor companies
have failed to meet their revenue targets this quarter, our LCDTV revenue in the
September quarter grew by 36% driven primarily by the production ramp of two
first tier Japanese OEM's. We officially announced our fifth generation DPTV
chip, the SVP-EX which is first in the industry to incorporate a
high-performance 10-bit triple ADC, a color decoder with 2D/3D comb filter, and
a high quality scaler and de-interlacer. We are excited to report that we have
received a significant number of design wins from customers in Japan, Korea,
China, Europe, Taiwan and Singapore including quite a few from the top six LCDTV
manufacturers. With this chip, we have extended our lead over competitors in
winning market share especially from world class TV manufacturers. We expect
some of these OEMs will start ramping into production with the SVP-EX chip in
late December quarter. More significant ramp-up is forecasted for the March
quarter and throughout calendar 2005. Also, our HiDTV chip design win momentum
is picking up. In addition to launching a HDTV project collaboration with
China's No. 1 TV maker, we have now secured several HiDTV design-wins with other
leading DTV makers in Asia. Recognizing the potential growth and eventual size
of the HDTV market, Trident has been committing significant resources in
developing a comprehensive total HDTV solution including a series of highly
integrated SoC chips and a complete suite of customizable TV turnkey software
with utilities and tools that can be used to accelerate TV application designs.
We believe we are far ahead of competitors in offering a highly integrated total
solution for HDTV. Worldwide HDTV momentum will accelerate in 2005 and beyond,
and we anticipate Trident will receive benefit significantly."
About Pro Forma adjustments
To supplement the consolidated financial results prepared under generally
accepted accounting principles ("GAAP"), Trident uses a non-GAAP conforming, or
pro forma measure of net income that is GAAP net income adjusted to exclude
certain costs, expenses and gains. Pro forma net income gives an indication of
Trident's baseline performance before gains, losses or other charges that are
considered by management to be outside the company's core operating results. In
addition, pro forma net income is among the primary indicators management uses
as a basis for planning and forecasting future periods. These measures are not
in accordance with, or an alternative for, GAAP and may be materially different
from pro forma measures used by other companies. Trident computes pro forma net
income by adjusting GAAP net income for the impact of certain investment gains
and excluding amortization of deferred stock compensation. A reconciliation
between net income on a GAAP basis and pro forma net income is provided in a
table following pro forma consolidated financial statements.
Webcast, Teleconference and Taped Replay
The Company also announced that it will hold a conference call to discuss the
earnings, which will occur on Wednesday, October 27, 2004 at 2:30 p.m. Pacific
Time (5:30 p.m. Eastern Time). Shareholders may participate in the call by
calling 800-435-1261 (U.S.), or 617-614-4076 (International) passcode 57164809.
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 4:30 p.m. Pacific Time October 27, 2004 until
midnight Pacific Time November 3, 2004, and can be accessed by calling
888-286-8010 (U.S.), or 617-801-6888 (International) using passcode 72512259.
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.
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) 991-8800
Email: Investor@tridentmicro.com
Web site: http://www.tridentmicro.com
TRIDENT MICROSYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
-------------------------------------------
(in thousands, except per share data, September 30, June 30, September 30,
unaudited) 2004 2004 2003
------------- -------- -------------
Net revenues $ 16,602 $ 12,646 $ 9,832
Cost of revenue 7,418 5,498 4,859
-------- -------- --------
Gross profit 9,184 7,148 4,973
% of net revenues 55.3% 56.5% 50.6%
Research and development expenses 4,738 3,599 2,081
% of net revenues 28.5% 28.5% 21.2%
Selling, general and administrative expenses 2,358 2,739 3,024
% of net revenues 14.2% 21.7% 30.8%
-------- -------- --------
Income (loss) from operations 2,088 810 (132)
% of net revenues 12.6% 6.4% (1.3)%
Gain on investments, net 401 733 7,205
Interest and other income(expense), net 99 152 (128)
Minority interests in subsidiaries (589) (508) (96)
-------- -------- --------
Income before income taxes 1,999 1,187 6,849
% of net revenues 12.0% 9.4% 69.7%
Provision for income taxes 617 198 2,170
% of net revenues 3.7% 1.6% 22.1%
-------- -------- --------
Net income $ 1,382 $ 989 $ 4,679
% of net revenues 8.3% 7.8% 47.6%
-------- -------- --------
Basic net income per share $ 0.06 $ 0.04 $ 0.22
-------- -------- --------
Common shares used in computing basic
per share amounts 22,914 22,850 21,468
-------- -------- --------
Diluted net income per share $ 0.04 $ 0.04 $ 0.19
-------- -------- --------
Common and common equivalent shares used
in computing diluted per share amounts 25,192 25,265 24,074
-------- -------- --------
TRIDENT MICROSYSTEMS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
--------------------------------------------
September 30, June 30, September 30,
(in thousands, unaudited) 2004 2004 2003
------- ------- ------
Net revenues $ 16,602 $ 12,646 $ 9,832
Cost of revenue 7,418 5,498 4,859
-------- -------- --------
Gross profit 9,184 7,148 4,973
% of net revenues 55.3% 56.5% 50.6%
Research and development expenses 4,654 3,536 2,081
% of net revenues 28.0% 28.0% 21.2%
Selling, general and administrative expenses 2,226 2,588 3,024
% of net revenues 13.4% 20.5% 30.8%
-------- -------- --------
Income (loss) from operations 2,304 1,024 (132)
% of net revenues 13.9% 8.1% (1.3)%
Interest and other income(expense), net 99 152 (128)
Minority interests in subsidiaries (589) (508) (96)
-------- -------- --------
Income(loss) before income taxes 1,814 668 (356)
% of net revenues 10.9% 5.3% (3.6)%
Provision for income taxes 617 198 --
% of revenues 3.7% 1.6% 0.0%
-------- -------- --------
Net income(loss) $ 1,197 $ 470 $ (356)
% of net revenues 7.2% 3.7% (3.6)%
-------- -------- --------
Basic net income (loss) per share $ 0.05 $ 0.02 $ (0.02)
-------- -------- --------
Common shares used in computing basic
per share amounts 22,914 22,850 21,468
-------- -------- --------
Diluted net income (loss) per share $ 0.04 $ 0.02 $ (0.02)
-------- -------- --------
Common and common equivalent shares used
in computing diluted per share amounts 25,192 25,265 21,468
-------- -------- --------
A RECONCILIATION BETWEEN NET INCOME ON A GAAP BASIS AND PRO FORMA NET INCOME
(LOSS) IS AS FOLLOWS:
Three Months Ended
---------------------------------------
(in thousands, except per share data, September 30, June 30, September 30,
unaudited) 2004 2004 2003
------- ------- -------
GAAP net income $ 1,382 $ 989 $ 4,679
Amortization of stock based compensation 216 214 -
Gain on investments, net (401) (733) (7,205)
Income taxes on investments - - 2,170
------- ------- -------
Pro forma net income (loss) $ 1,197 $ 470 $ (356)
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TRIDENT MICROSYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
September 30, June 30, September 30,
(in thousands, unaudited) 2004 2004 2003
-------- -------- --------
ASSETS
Current assets
Cash and cash equivalents $ 35,405 $ 32,488 $ 22,230
Short-term investment - UMC 45,331 51,843 61,140
Short-term investments - other -- -- 926
Accounts receivable, net 2,508 2,436 754
Inventories 2,317 2,737 1,857
Prepaid expenses and other current assets 1,946 1,087 1,307
-------- -------- --------
Total current assets 87,507 90,591 88,214
Property and equipment, net 2,349 2,372 2,647
Long-term investment - UMC -- -- 2,103
Long-term investments - other 2,405 2,720 3,039
Other assets 1,555 573 342
-------- -------- --------
Total assets $ 93,816 $ 96,256 $ 96,345
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,045 $ 3,180 $ 8,372
Accrued liabilities 7,477 8,287 7,798
Deferred income taxes 89 2,694 5,133
Income taxes payable 4,868 4,260 3,750
-------- -------- --------
Total current liabilities 16,479 18,421 25,053
Minority interests in subsidiaries 5,589 4,023 2,287
-------- -------- --------
Total liabilities 22,068 22,444 27,340
Stockholders' equity
Capital stock 46,227 45,766 41,859
Retained earnings 25,541 24,159 19,260
Accumulated other comprehensive income (loss) (20) 3,887 7,886
-------- -------- --------
Total stockholders' equity 71,748 73,812 69,005
-------- -------- --------
Total liabilities and stockholders' equity $ 93,816 $ 96,256 $ 96,345
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