SiRF Technology Holdings, Inc. , a leading provider of GPS-enabled silicon and premium software location platforms, today reported financial results for its fourth quarter ended December 31, 2004.
Net revenue in the fourth quarter of fiscal 2004 was $27.5 million, an increase of 5 percent from $26.3 million reported in the fourth quarter of 2003. Net revenue in fiscal 2004 was $117.4 million, an increase of 60 percent from $73.1 million in the prior year period. Gross margin in the fourth quarter and fiscal year ended December 31, 2004 was 56.6 percent and 56.4 percent, respectively, as compared to 56.3 percent and 54.7 percent in the corresponding prior year periods.
Net income for the fourth quarter of fiscal 2004 was $17.1 million or $0.33 per diluted share based on 51.6 million weighted average shares outstanding. This compares with net income of $2.8 million or $0.07 per diluted share based on 39.9 million weighted average shares outstanding in the fourth quarter of fiscal 2003. Net income in fiscal 2004 was $30.7 million or $0.64 per diluted share based on 48.3 million weighted average shares outstanding. This compares with net income of $3.1 million or $0.08 per diluted share based on 37.8 million weighted average shares outstanding in fiscal 2003. Net income and diluted net income per share in both the fourth quarter and year ended December 31, 2004 were favorably impacted by a $14.2 million benefit from income taxes related to the reversal of SiRF's deferred tax asset valuation allowance.
SiRF reports net income and basic and diluted net income per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of amortization of stock compensation expense, amortization of acquisition-related intangibles and the income tax benefit from the reversal of SiRF's deferred tax asset valuation allowance. Non-GAAP net income for the fourth quarter of fiscal 2004 was $5.1 million or $0.10 per diluted share, as compared to non-GAAP net income of $6.0 million, or $0.15 per diluted share for the fourth quarter of fiscal 2003. Non-GAAP net income for the fourth quarter of fiscal 2004 excludes $1.1 million in stock compensation expense, $1.2 million in amortization of acquisition-related intangibles and $14.2 million in tax benefit due to the reversal of deferred tax asset valuation allowance. Non-GAAP net income for the fourth quarter of fiscal 2003 excludes $2.1 million in stock compensation expense and $1.2 million in amortization of acquisition-related intangibles. Weighted average shares outstanding used in computing diluted non-GAAP net income per share for the fourth quarter of fiscal 2004 were 51.6 million, compared with 39.9 million for the fourth quarter of fiscal 2003.
Non-GAAP net income in fiscal 2004 was $27.1 million, or $0.56 per diluted share, as compared to non-GAAP net income of $10.1 million, or $0.27 per diluted share, in fiscal 2003. Non-GAAP net income in fiscal 2004 excludes $5.9 million in stock compensation expense, $4.6 million in amortization of acquisition-related intangibles and $14.2 million in tax benefit due to the reversal of deferred tax asset valuation allowance. Non-GAAP net income in fiscal 2003 excludes $3.0 million in stock compensation expense and $4.1 million in amortization of acquisition-related intangibles. Weighted average shares outstanding used in computing diluted non-GAAP net income per share in fiscal 2004 were 48.3 million, compared with 37.8 million weighted average shares outstanding used in computing diluted non-GAAP net income per share in fiscal 2003.
Total cash, cash equivalents and short-term investments were $101.3 million at December 31, 2004, compared with $17.5 million at December 31, 2003. Long-term investments were $43.8 million at December 31, 2004, compared with $3.2 million at December 31, 2003. The increase includes $94.1 million in net proceeds to the company from its initial public offering of 8.65 million shares of common stock in April 2004.
"2004 was an excellent year for SiRF and we made very good progress in Q4 in each of our focus markets. Our SiRFStar III platform is now the technology of choice in the wireless market, which reinforces our technology leadership in each of the markets we serve", said Dr. Michael Canning, president and CEO. "Revenue performance in Q4 was affected by delays in the production release of SiRFStar III software and by a shortfall in IP revenue. Now that SiRFStar III software has been fully released to customers, our design win momentum and other key metrics continue very strong and augur well for the future."
Quarterly conference call details
SiRF will host a conference call on Thursday, January 27, 2005, at approximately 4:30 PM EST/1:30 PM PST to discuss fourth quarter fiscal 2004 results. The conference call will be webcast live via the Internet in the investor relations section of the SiRF website at http://www.sirf.com/ . Interested parties should access the site, downloading any necessary audio software, at least ten minutes prior to the call. An archived webcast replay of the call will be available at the web site for twelve months.
To listen to the call, please dial 877-707-9632 (domestic) or 785-832-0301 (international) approximately 10 minutes prior to the start time. The pass code is: SIRF. A telephonic replay will be available approximately two hours following the earnings call and will remain available for one week. To access the replay, dial 800-839-4197.
About SiRF Technology Holdings, Inc.
SiRF Technology Holdings, Inc. develops and markets semiconductor and premium software products that are designed to enable location-awareness utilizing GPS and other location technologies in high-volume mobile consumer devices and commercial applications. SiRF's technology has been integrated into mobile consumer devices, such as automobile navigation systems, mobile phones, PDAs, GPS-based peripherals and handheld GPS navigation devices, and into commercial applications, such as asset tracking devices and fleet management systems. SiRF markets and sells its products in four target platforms: automotive, consumer electronics, mobile computing, and wireless devices. Founded in 1995, SiRF is headquartered in San Jose, Calif., and has sales offices, design centers and research facilities around the world. The company trades on the Nasdaq Stock Exchange under the symbol SIRF. Additional information about SiRF and its Location Technology solutions can be found at http://www.sirf.com/.
USE OF NON-GAAP FINANCIAL INFORMATION
To supplement the company's condensed consolidated financial statements presented on a GAAP basis, SiRF uses non-GAAP additional measures of operating results, net income and net income per share adjusted to exclude certain expenses it believes appropriate to enhance an overall understanding of SiRF's past financial performance and also its prospects for the future. These adjustments to SiRF's GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and the company's marketplace performance. The non-GAAP results are an indication of SiRF's baseline performance before stock compensation expense and amortization of acquisition-related intangibles that are considered by management to be outside of the company's business operational results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.
FORWARD-LOOKING STATEMENTS:
Except for the historical information contained herein, the matters set forth in this press release, including but not limited to, statements regarding our design win momentum and other key metrics performance, our technological leadership in the markets we serve and our future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "augur," "believes," "encouraging prospects," "expects," "expected," "plans," "will," and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and reported results should not be considered as an indication of future performance. SiRF's actual results could differ materially from those discussed in these forward-looking statements as a result of risks and uncertainties, including, among others, the market for GPS-based location awareness capabilities, our ability to keep pace with rapid technological change, the semiconductor industry, international operations and our ability to compete, and other risks and uncertainties discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and from time to time in SiRF's SEC reports. These forward-looking statements speak only as of the date hereof. We do not undertake any obligation to update forward-looking statements.
SiRF TECHNOLOGY HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three months ended Twelve months ended December 31, December 31, 2004 2003 2004 2003 Revenue: Product revenue $26,032 $23,910 $105,579 $69,896 License royalty revenue 1,504 2,360 11,789 3,251 Net revenue 27,536 26,270 117,368 73,147 Cost of revenue: Cost of product revenue (a) 11,956 11,489 51,131 33,100 Gross profit 15,580 14,781 66,237 40,047 Operating expenses: Research and development 6,210 4,866 22,275 15,457 Sales and marketing 2,674 2,807 10,481 9,394 General and administrative 2,399 1,156 7,705 4,352 Amortization of acquisition-related intangibles 1,158 1,159 4,632 4,088 Stock compensation expense (b) 961 1,882 5,329 3,042 Total operating expenses 13,402 11,870 50,422 36,333 Operating income 2,178 2,911 15,815 3,714 Other income, net 699 34 1,418 95 Net income before income tax provision 2,877 2,945 17,233 3,809 (Benefit from) provision for income taxes (14,219) 191 (13,490) 244 Net income 17,096 2,754 30,723 3,565 Deemed dividend to preferred stockholders -- -- -- 468 Net income applicable to common stockholders $17,096 $2,754 $30,723 $3,097 Net income applicable to common stockholders per share: Basic $0.37 $0.39 $0.90 $0.45 Diluted $0.33 $0.07 $0.64 $0.08 Weighted average number of shares used in per share calculations Basic 46,429 7,047 34,126 6,838 Diluted 51,583 39,904 48,332 37,820 (a) Cost of product revenue includes: Stock compensation expense $109 $174 $691 $(91) (b) Stock compensation expense (net of amounts included in cost of product revenue): Research and development 416 436 2,341 716 Sales and marketing 300 247 1,579 562 General and administrative 245 1,199 1,409 1,764 $961 $1,882 $5,329 $3,042 An itemized reconciliation between net income on a GAAP basis and non-GAAP basis is as follows: Three months ended Twelve months ended December 31, December 31, 2004 2003 2004 2003 GAAP net income applicable to common stockholders $17,096 $2,754 $30,723 $3,097 Amortization of acquisition-related intangibles 1,158 1,159 4,632 4,088 Stock compensation expense, net of tax 1,070 2,056 5,940 2,951 Reversal of deferred tax asset valuation allowance (14,205) -- (14,205) -- Non-GAAP net income applicable to common stockholders $5,119 $5,969 $27,090 $10,136 Weighted average number of shares used in non-GAAP diluted per share calculations 51,583 39,904 48,332 37,820 Non-GAAP diluted net income applicable to common stockholders per share $0.10 $0.15 $0.56 $ 0.27 SiRF TECHNOLOGY HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands) December 31, December 31, 2004 2003 (Unaudited) (1),(2) ASSETS Current assets: Cash and cash equivalents $86,462 $16,715 Marketable securities 14,842 827 Accounts receivable, net 9,768 8,467 Inventories 7,982 7,968 Current deferred tax assets 14,986 -- Prepaid expenses and other current assets 1,719 1,168 Total current assets 135,759 35,145 Long-term investments 43,760 3,248 Property and equipment, net 5,484 2,879 Goodwill 28,052 28,052 Identified intangible assets, net 15,182 19,123 Other long-term assets 246 181 Total assets $ 228,483 $88,628 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $7,418 $6,384 Accrued payroll and related benefits 3,444 1,410 Income taxes payable 26 244 Other accrued liabilities 1,554 1,850 Deferred margin on shipments to distributors 419 517 Advance contract billings 590 567 Current portion of long-term obligations 673 556 Total current liabilities 14,124 11,528 Long-term deferred tax liability 781 -- Long-term obligations 1,771 2,910 Total liabilities 16,676 14,438 Commitments and contingencies Convertible preferred stock -- 138,213 Stockholders' equity (deficit): Common stock 5 1 Additional paid-in-capital 275,309 36,013 Deferred stock-based compensation (2,734) (8,686) Accumulated other comprehensive income (123) 22 Accumulated deficit (60,650) (91,373) Total stockholders' equity (deficit) 211,807 (64,023) Total liabilities and stockholders' equity (deficit) $228,483 $88,628 (1) The condensed consolidated balance sheet information was derived from SiRF Technology Holdings, Inc. audited consolidated financial statements for the year ended December 31, 2003. (2) Certain reclassifications have been made to prior year amounts in order to conform to the current year presentation.
CONTACT: Investors and Shareholders, Walt Amaral of SiRF Technology Holdings, Inc., +1-408-392-8437, or wamaral@sirf.com
Web site: http://www.sirf.com/
