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|Entropic Communications Reports First Quarter Results|
SAN DIEGO, Apr 24, 2012 (GlobeNewswire via COMTEX) -- Entropic Communications, Inc. (Nasdaq:ENTR), a world leader in semiconductor solutions for the connected home, today reported its first quarter results for the period ended March 31, 2012. Entropic reported first quarter net revenues of $59.1 million, an increase of five percent compared with $56.2 million in the fourth quarter of 2011.
In accordance with U.S. generally accepted accounting principles (GAAP), the Company's first quarter net income was $3.9 million, or $0.04 per share (diluted). This compares with GAAP net income of $2.3 million, or $0.03 per share (diluted) in the fourth quarter of 2011.
Non-GAAP net income in the first quarter was $10.6 million, or $0.12 per share (diluted), compared to non-GAAP net income of $10.2 million, or $0.12 per share (diluted) in the fourth quarter of 2011.
"Entropic recorded solid revenue growth and strong profitability for the quarter. This is indicative of the health of our core business, the value of our solutions to customers, and the strength of our operating model," said Patrick Henry, president and CEO, Entropic Communications. "With the strength of our core business coupled with the addition of our recently closed acquisition of the Trident set-top box system-on-a-chip business, Entropic is poised to benefit from the roll out of advanced service offerings by Pay-TV service providers worldwide. As the only pure-play platform connected home entertainment company in the industry, we will continue to shape the market and provide solutions that enrich the home entertainment experience."
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.
-- Trident Microsystems' Set-top Box (STB) System-on-a-Chip (SoC) Business: Entropic announced on April 12, 2012, it completed the acquisition of Trident Microsystems' STB SoC business creating the only pure-play company focused on connected home solutions for the world's premier cable, telco and satellite service providers.
New Global Deployments
-- Brazil Market: Entropic and Prime Electronics & Satellitics Inc., a leading manufacturer of advanced digital satellite communication and wireless consumer electronic products, announced one of the largest telecommunications carriers in Brazil will deliver Direct-Broadcast Satellite (DBS) entertainment services to single family homes (SFH) via Entropic's Channel Stacking Switch (CSS) single cable wire infrastructure. -- China Market: Entropic announced its c.LINK(R) Broadband Access silicon has been deployed by Chengdu Multiple System Operator (MSO). The deployment, made possible through GD.LINK, an Ethernet-over-Coax (EoC) platform produced by Guangda, delivers video and broadband services which co-exist on a single coax infrastructure for Multiple Dwelling Units (MDUs) throughout the Chengdu, Sichuan region of China.
New International Partnerships
-- P&F USA: Entropic and P&F USA, the exclusive licensee for Philips Hospitality in North America announced a partnership to simplify the hospitality television experience. Philips hospitality televisions will be combined with Entropic's Broadband Access silicon solution to enable both TV and broadband services to hotel rooms over existing coaxial cable; allowing guests to take advantage of new infotainment and over-the-top (OTT) video services via the hotel room TV. -- CHANGHONG: Entropic announced a collaboration with CHANGHONG, a top regional supplier to Chinese MSOs, to bring next generation broadband access video and broadband services to the Chinese MDU market. CHANGHONG will provide EoC access equipment -- powered by Entropic's c.LINK Broadband Access silicon -- to offer television, broadband and new IP-based video services to MDUs on the existing coaxial cable. -- Sichuan Jiuzhou Electronic Technology Co., Ltd.: Entropic announced its c.LINK Broadband Access silicon will be integrated by Sichuan Jiuzhou Electronic Technology Co., Ltd. into its Passive Optical Network (PON) systems and STB solutions for the China EoC market.
For More Information
Entropic management will be holding a conference call today, April 24, 2012, at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time to discuss the Company's results for the first quarter of fiscal 2012 and to provide guidance for the second quarter. You may access the conference call via any of the following:
About Entropic Communications
Entropic Communications, Inc. (Nasdaq:ENTR) is a leading global provider of silicon and software solutions to enable connected home entertainment. The Company transforms how traditional HDTV broadcast and streaming video content is seamlessly, reliably, and securely delivered, processed, and distributed into and throughout the home. Entropic's next-generation home connectivity and set-top box system-on-a-chip (SoC) solutions enable Pay-TV service providers to offer consumers a more captivating whole-home entertainment experience by delivering new, high-performing ways to connect, engage, and enjoy multimedia content. For more information, visit Entropic at: www.entropic.com.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: net income and net income per share. These non-GAAP financial measures exclude the effects on the Statement of Operations of all forms of stock-based compensation, due diligence and other costs related to the Trident Microsystems transaction, the loss related to equity method investment, and the cash tax difference.
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.
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding our expectations for Entropic's market penetration and overall market expansion, continued and/or future revenue, earnings and product sales growth and the factors that may contribute to such growth. 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, risks associated with the Trident Microsystems acquisition including its integration into Entropic's existing operations; our dependence on a limited number of customers and service providers for a substantial portion of our revenues; risks that the market for HD and SD video and other multi-media content delivery and networking solutions in the United States, China and elsewhere 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; the risk that management's financial estimates, including estimates used in the calculation of the effective cash tax rate upon which we base our non-GAAP earnings, will be different than expected; 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 Annual Report on Form 10-K for the year ended December 31, 2011. 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(R) and the stylized Entropic "curve" logo are either trademarks or registered trademarks of Entropic Communications, Inc. in the United States and/or other countries.
(1) The Company's non-GAAP net income per share is calculated using the cash tax rate of 14%, (8%) and 7% for the three month periods ended March 31, 2012, December 31, 2011 and March 31, 2011, respectively. The estimated cash tax rate is the estimated tax payable on the Company's projected tax returns as a percentage of estimated annual non-GAAP pre-tax net income. The Company uses an estimated cash tax rate to adjust for the historical variation in the effective book tax rate associated with the reversal of valuation allowances, the utilization of research and development tax credits, and the utilization of loss carryforwards which currently have an overall effect of reducing taxes payable. The Company believes that the cash tax rate provides a more transparent view of the Company's operating results. The Company's effective tax rate used for the purposes of calculating GAAP net income for the three month periods ended March 31, 2012, December 31, 2011 and March 31, 2011 was approximately 43%, 42% and 35%, respectively.
SOURCE: Entropic Communications