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Entropic Communications Reports Fourth Quarter and Fiscal Year 2009 Results

Conference Call to be Webcast Today at 2:30 p.m. Pacific Time

SAN DIEGO, Feb 3, 2010 (GlobeNewswire via COMTEX News Network) -- Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of silicon and software solutions to enable connected home entertainment, today reported its fourth quarter and fiscal year results for the period ended December 31, 2009. Entropic reported fourth quarter net revenues of $35.1 million, an increase of 13 percent compared with $31.0 million in the third quarter of 2009 and an increase of 19 percent compared to $29.5 million reported in the fourth quarter of 2008.

In accordance with U.S. generally accepted accounting principles (GAAP), the company's fourth quarter net income was $1.0 million, or $0.01 per share (basic and diluted). This compares with GAAP net loss of $1.2 million, or ($0.02) per share (basic and diluted) in the third quarter of 2009. Non-GAAP net income in the fourth quarter was $3.6 million, or $0.05 per share (basic and diluted), compared to non-GAAP net income of $1.4 million, or $0.02 per share (basic and diluted) in the third quarter of 2009.

Net revenues for the year ended December 31, 2009 were $116.3 million, a decrease of 20 percent from the $146.0 million reported for the year ended December 31, 2008. Net loss computed in accordance with GAAP for the year ended December 31, 2009 was $13.2 million, or ($0.19) per share (basic and diluted), compared with GAAP net loss of $136.4 million, or ($2.01) per share (basic and diluted), for the year ended December 31, 2008. Non-GAAP net income for the year ended December 31, 2009 was $0.1 million, or breakeven on a per share basis (basic and diluted), compared to non-GAAP net income of $2.8 million, or $0.04 per share (basic and diluted) for the year ended December 31, 2008.

"We were pleased to once again see a strong increase in quarter-over-quarter revenue and further diversification of our business," said Patrick Henry, president and CEO of Entropic Communications. "Our continued focus on cost containment along with solid revenue growth allowed us to achieve a record level of net income this quarter. Historically, Entropic's revenue was primarily derived from Verizon's FiOS deployment, however we are now moving into our second wave of growth based on new Pay-TV service provider deployments of MoCA with DIRECTV and cable MSOs, expansion of our DBS-ODU footprint at DIRECTV and internationally, and increased traction in our tuner product line."

                                                                          Years ended Dec.
                                                 Three Months ended             31,
                                              -------------------------  -----------------
                                               Dec.    Sept.
                                               31,      30,    Dec. 31,
  (In millions, except per share data)         2009    2009      2008     2009      2008
  ------------------------------------------  ------  -------  --------  -------  --------
  Net revenues1                                $35.1    $31.0     $29.5   $116.3    $146.0
  GAAP net income (loss)                        $1.0   ($1.2)  ($118.9)  ($13.2)  ($136.4)
  GAAP net income (loss) per share (basic
   and diluted)                                $0.01  ($0.02)   ($1.74)  ($0.19)   ($2.01)
  Non-GAAP net income (loss)1                   $3.6     $1.4    ($0.4)     $0.1      $2.8
  Non-GAAP net income (loss) per share1        $0.05    $0.02   ($0.01)     $0.0     $0.04

1. Please refer to "Non-GAAP Financial Measures" below and the financial statements portion of this press release for an explanation of the non-GAAP financial measures contained in the table above and a reconciliation of such measures to the comparable GAAP financial measures.

Recent Highlights

Deployments

  --  Announced Entropic silicon has been selected by DIRECTV, the world's
      largest DBS service provider, for integration into set-top boxes (STBs)
      that deliver a new-generation of coax-based networking capabilities such
      as multi-room viewing. By adopting Entropic's field-proven technology
      based on the Multimedia over Coax Alliance (MoCA) standard, DIRECTV will
      soon enable its subscriber base of 18 million to easily share
      high-quality, high-definition digital entertainment and data throughout
      the home over the existing coax cable infrastructure. Deployments are
      expected to begin in the first quarter of 2010. DIRECTV is the first
      satellite operator to deploy MoCA enabled technology and its selection
      is indicative of the growing adoption of MoCA over competing
      technologies for the cable, telco and satellite markets.
  --  Announced Entropic silicon has been selected by Pace Americas for its
      Network Attached Storage (NAS) device, a key piece in Pace's new Home
      Content Sharing solution, which is in field trials with cable operators
      including Buckeye Cablevision. Pace's Home Content Sharing solution
      represents a new paradigm in multi-room DVR (MR-DVR) by providing
      centralized storage that enables multiple non-DVR STBs in the home to
      access and share recorded content. The initial group of cable operators
      and industry cooperatives working with Pace opens up a target market of
      up to 26 million subscribers for this new technology.

Technology/Partner/Customer News

  --  Announced Skyworth, a leading Chinese set-top box and TV manufacturer,
      has selected Entropic's Broadband Access solution to develop an Ethernet
      over Coax (EoC) solution that will deliver high performance, scalable
      "last kilometer" connectivity to multiple dwelling unit (MDU) apartments
      in mainland China. Skyworth showcased the EoC solution during the
      International CATV Technology Conference (ICTC) held October 26 through
      October 28, 2009 in Hangzhou, China.
  --  Announced Advanced Digital Broadcast (ADB), a leading supplier of
      technology to the global digital television industry, introduced the
      industry's first MoCA(R) 1.1 certified cable set-top box. Powered by
      Entropic's EN2210/EN1010, MoCA compliant chipset, the ADB-6882CDMX is
      designed specifically for Multiple System Operators (MSOs) to offer new
      home networking options to their subscribers.
  --  Partnered with Wistron NeWeb (WNC), an industry leader in the design and
      manufacturing of advanced wireless communications, to showcase the WNC
      4-Port Ethernet-to-Coax Bridge (ECB) using MoCA home networking
      technology at the Consumer Electronics Show in Las Vegas, Nevada,
      January 7-10, 2010. The WNC 4-Port MoCA Bridge makes it possible for
      consumers to connect an entire home theater to the Internet using the
      existing coax cable within the home. The ECBs are currently in
      production and are expected to be available to consumers via retail
      outlets in the second half of 2010.
  --  Partnered with Atheros to demonstrate the ease with which two
      technologies can coexist to distribute multimedia to any room of the
      home. This marks a joint collaboration between two leading home
      networking companies to show that Entropic's MoCA offerings and Atheros'
      HomePlug solutions are already able to adequately serve the needs of
      operators and consumers for delivering multimedia content.
      Standardization of next-generation technologies is underway and there is
      no need to produce a completely new standard that does not provide
      backward interoperability with these existing market leading solutions.
  --  Entropic had the distinct honor of being the only exhibitor on the show
      floor of CES 2010 to host a public demonstration of the RVU Remote User
      Interface (RUI) technology using equipment provided by DIRECTV. RVU is
      an industry alliance developing a standard for enabling set-top
      receivers to access, view and control content in other set-top receivers
      and provides a robust platform for a uniform and consistent user
      experience.

Recognition

  --  Patrick Henry was named Most Admired CEO by the San Diego Business
      Journal. The publication's judging committee credited Henry's steadfast
      leadership skills, enthusiasm and determination as he shepherded the
      company from an early stage startup to a thriving, publicly traded
      company that continues to build on its mission as the leader in enabling
      connected home entertainment solutions.
  --  Entropic's third-generation, MoCA 1.1 compliant, single-chip solution,
      the EN2510, has received a 2009 TMCnet.com Cable Product of the Year
      Award from Technology Marketing Corporation (TMC). "Entropic has proven
      they are committed to quality and excellence while addressing real needs
      in the marketplace," said Rich Tehrani, CEO, TMC. "We're proud to honor
      their accomplishments in the advancement of the cable technology
      industry."

For More Information

Entropic management will be holding a conference call today, February 3, 2010, at 2:30 p.m. Pacific Time/5:30 p.m. Eastern Time to discuss the company's results for the fourth quarter of fiscal 2009 and to provide guidance for the first quarter of fiscal 2010. You may access the conference call via any of the following:

Teleconference: 719-325-4784

Conference ID: 2228144

Web Broadcast: http://ir.entropic.com/events.cfm

Replay: 719-457-0820

About Entropic Communications

Entropic Communications, Inc. (Nasdaq:ENTR) is a leading fabless semiconductor company that is engineering the future of connected home networking and entertainment by providing next-generation silicon and software technologies to the world's leading cable, telecommunications and satellite service providers, OEMs and consumer electronic manufacturers. As a co-founder of MoCA (Multimedia over Coax Alliance), Entropic pioneered and continues to evolve the way high-definition television-quality video and other multimedia and digital content such as movies, music, games and photos are brought into and delivered throughout the home. For more information, visit Entropic at www.entropic.com.

The Entropic Communications logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4255

Non-GAAP Financial Measures

This press release and the accompanying tables contain the following non-GAAP financial measures: net income (loss) and net income (loss) per share. These non-GAAP financial measures exclude the effects on the Statement of Operations of, among others, all forms of stock-based compensation, non-cash acquired intangibles amortization and impairment charges, and restructuring charges (benefits), and their related affects on the number of diluted shares used in calculating non-GAAP earnings (loss) per share.

Management uses these non-GAAP financial measures to manage the company's business, including setting operating budgets and executive compensation plans. These non-GAAP measures are also used to (i) supplement the financial results and forecasts reported to the company's board of directors, (ii) evaluate the company's operating performance, (iii) compare the company's performance to internal forecasts, and (iv) manage the company's business and benchmarking performance internally. The non-GAAP measures have been made available to stockholders consistently in the past to provide transparency on how management manages the company's operating performance. Management believes that these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP measures, in evaluating the company's ongoing operational performance.

The non-GAAP financial measures disclosed by the company should not be considered in isolation or a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Forward-Looking Statements

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements regarding our expectations for future revenue and earnings growth, as well as additional product deployments and customer traction and diversification, our belief that our product portfolio and roadmap substantiates a compelling long-term growth strategy, and the anticipated benefits from various businesses, collaborations and partnerships. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Entropic's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, our dependence on a limited number of customers and service providers for a substantial portion of our revenues; risks that the market for HD video and other multi-media content delivery and networking solutions will not develop as we expect; risks associated with competing against larger and more established companies and our ability to compete successfully in the market for MoCA-compliant chipsets; risks associated with timely development and introduction of new or enhanced products; risks that our collaborations and partnerships will not yield their anticipated benefits; risks associated with adverse U.S. and international economic conditions; and other factors discussed in the "Risk Factors" section of Entropic's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009. All forward-looking statements are qualified in their entirety by this cautionary statement. Entropic is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.

Entropic Communications® and the stylized Entropic "curve" logo are either trademarks or registered trademarks of Entropic Communications, Inc. in the United States and/or other countries.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Entropic Communications

CONTACT: Entropic Communications, Inc.
Investor Contact:
Debra Hart, Director, Investor Relations
858.768.3852
debra.hart@entropic.com
The Ardell Group
Media Contact:
Angela Edgerton
858.792.2941
angela@ardellgroup.com

 

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