NVIDIA Reports Financial Results for Third Quarter of Fiscal 2009

SANTA CLARA, Calif., Nov. 6 /PRNewswire-FirstCall/ -- NVIDIA Corporation (NASDAQ: NVDA) today reported financial results for the third quarter of fiscal 2009 ended October 26, 2008.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020613/NVDALOGO)

For the third quarter of fiscal 2009, revenue was $897.7 million compared to $1.12 billion for the third quarter of fiscal 2008, a decrease of 20 percent. For the nine months ended October 26, 2008, revenue increased to $2.94 billion compared to $2.90 billion for the nine months ended October 28, 2007, an increase of 2 percent.

During the third quarter of fiscal 2009, NVIDIA recorded an $8.3 million charge against operating expenses related to restructuring costs in connection with its workforce reduction. These pre-tax charges are comprised of severance and related expenses.

NVIDIA's results for the third quarter of fiscal 2009, computed in accordance with U.S. generally accepted accounting principles (GAAP), included net income of $61.7 million, or $0.11 per diluted share. Non-GAAP net income for the third quarter of fiscal 2009, which excludes stock-based compensation charges, a non-recurring charge against cost of revenue related to a royalty dispute, a restructuring charge against operating expenses, and the associated tax impact, was $111.4 million, or $0.20 per diluted share.

GAAP net income for the nine months ended October 26, 2008 was $117.6 million, or $0.20 per diluted share, compared to $540.7 million, or $0.89 per diluted share, for the nine months ended October 28, 2007. Non-GAAP net income for the nine months ended October 26, 2008, which excludes stock-based compensation charges, a non-recurring charge against cost of revenue related to a royalty dispute, a non-recurring warranty charge against cost of revenue, a restructuring charge against operating expenses, and the associated tax impact was $397.7 million, or $0.68 per diluted share, compared to $626.7 million, or $1.06 per diluted share, for the nine months ended October 28, 2007.

"We made good progress on multiple fronts during the quarter," said Jen-Hsun Huang, president and CEO of NVIDIA. "Improving gross margin while managing operating expenses enabled us to significantly improve our operating fundamentals. We transitioned our performance segment GPUs to 55 nanometers and are now poised to recapture lost share. We entered the fastest growing segment of the PC market with our first notebook chipset for Intel processors, and delivered on several exciting new growth initiatives -- 3-way SLI for the Intel Core i7 processor platform, Quadro CX for Adobe CS4 creative professionals and the Tesla supercomputing processor."

Third Quarter Fiscal 2009 and Recent Highlights:

-- NVIDIA introduced the GeForce 9400 and 9300 motherboard GPUs for Intel desktop PCs. The new motherboard GPUs set a new price/performance standard for integrated graphics by combining the power of three different chips into one highly compact and efficient GPU.

-- Together with Apple, NVIDIA launched the new GeForce 9400M motherboard GPU for their new lineup of Mac notebooks. The GeForce 9400M is the industry's first processor to integrate three complex chips -- the northbridge, the IO/network processor, and GeForce GPU into a single chip, and as a result, delivers up to a 5X performance increase over Intel integrated graphics in one-half the size. The MacBook and MacBook Air come standard with the 9400M. The MacBook Pro comes standard with the hybrid combination of two GeForce GPUs -- the 9400M is used for maximum battery life and a GeForce 9600M GT for high performance mode.

-- NVIDIA announced the NVIDIA Quadro CX, the industry's first accelerator for Adobe's Creative Suite 4 content creation software. Adobe CS4 software has now added optimization to take advantage of GPU technology. NVIDIA specifically designed and optimized the Quadro CX to enhance the performance of the CS4 product line and to give creative professionals the ultimate performance and productivity.

-- For design and creative professionals, NVIDIA introduced five new Quadro FX notebook GPUs that span from ultra-high performance to ultra mobility. NVIDIA also delivered the first desk side visual supercomputer with the Quadro Plex D Series. At this year's SIGGRAPH 2008, NVIDIA set a new milestone in computer graphics by demonstrating the world's first real-time fully-interactive ray tracer on the new Quadro Plex D2 system.

Conference Call and Web Cast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its third quarter fiscal 2009 financial results and current financial prospects today at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time). To listen to the call, please dial (212) 231-2901. A live Web cast (listen-only mode) of the conference call will be held at the NVIDIA investor relations Web site http://www.nvidia.com/ir and at http;// www.streetevents.com. The Web cast will be recorded and available for replay until the Company's conference call to discuss its financial results for its fourth quarter fiscal 2009.

Non-GAAP Measures

To supplement the Company's Condensed Consolidated Statements of Income presented in accordance with GAAP, we use non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP net income, and non-GAAP diluted net income per share. In order for our investors to be better able to compare our current results with those of previous periods, we have shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation, a non-recurring charge against cost of revenue related to a royalty dispute, a non-recurring warranty charge against cost of revenue, a restructuring charge against operating expenses, and the associated tax impact, where applicable. We believe the presentation of our non-GAAP financial measures enhances the user's overall understanding of our historical financial performance. The presentation of our non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA

NVIDIA is the world leader in visual computing technologies and the inventor of the GPU, a high-performance processor which generates breathtaking, interactive graphics on workstations, personal computers, game consoles, and mobile devices. NVIDIA serves the entertainment and consumer market with its GeForce(R) products, the professional design and visualization market with its Quadro(R) products, and the high-performance computing market with its Tesla(TM) products. NVIDIA is headquartered in Santa Clara, California and has offices throughout Asia, Europe, and the Americas. For more information, visit http://www.nvidia.com.

Certain statements in this press release including, but not limited to, statements as to: our growth opportunities; our positioning to recapture lost share; the performance of the NVIDIA GeForce 9300, 9400 and 9400M motherboard GPUs; and the impact of Quadro CX on Adobe's Creative Suite 4 software are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: development of faster or more efficient technology; the impact of technological development and competition; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including our Form 10-Q for the fiscal period ended July 27, 2008. Copies of reports filed with the SEC are posted on our website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.


    Copyright (C) 2008 NVIDIA Corporation. All rights reserved. NVIDIA,
GeForce, Quadro, and Tesla are registered trademarks and/or trademarks of
NVIDIA Corporation in the United States and other countries. All other company
and/or product names may be trade names, trademarks, and/or registered
trademarks of the respective owners with which they are associated. Features,
pricing, availability, and specifications are subject to change without
notice.



                                                         NVIDIA  CORPORATION
                                        CONDENSED  CONSOLIDATED  STATEMENTS  OF  INCOME
                                            (In  thousands,  except  per  share  data)
                                                                      (Unaudited)

                                                                    Three  Months  Ended          Nine  Months  Ended
                                                              October  26,  October  28,  October  26,  October  28,
                                                                      2008              2007                2008                2007

        Revenue                                            $897,655    $1,115,597    $2,943,719    $2,895,130

        Cost  of  revenue                              529,812          600,044      1,911,116      1,575,447

        Gross  profit                                    367,843          515,553      1,032,603      1,319,683

        Operating  expenses:
            Research  and  development        212,360          179,529          644,100          495,802
            Sales,  general  and
              administrative                            90,349            88,183          275,782          250,034
            Restructuring  charges                  8,338                      -              8,338                      -

                Total  operating  expenses    311,047          267,712          928,220          745,836

        Operating  income                              56,796          247,841          104,383          573,847

        Interest  and  other  income,
          net                                                        4,207            18,958            23,038            47,592

        Income  before  income  tax
          expense                                              61,003          266,799          127,421          621,439

        Income  tax  expense  (benefit)
          (A)                                                          (745)          31,138              9,797            80,787

        Net  income                                        $61,748        $235,661        $117,624        $540,652

        Basic  net  income  per  share            $0.11              $0.42              $0.21              $0.99

        Diluted  net  income  per  share        $0.11              $0.38              $0.20              $0.89

        Shares  used  in  basic  per
          share  computation                        543,807          554,966          551,623          547,796

        Shares  used  in  diluted  per
          share  computation                        564,536          612,985          590,490          605,733

        (A)  The  income  tax  expense  (benefit)  rate  for  the  three  and  nine  months
                ended  October  26,  2008  was  (1.2)%  and  7.7%,  respectively.    The  income
                tax  expense  rate  for  the  three  and  nine  months  ended  October  28,  2007
                was  11.7%  and  13.0%,  respectively.



                                                                NVIDIA  CORPORATION
                            RECONCILIATION  OF  GAAP  TO  NON-GAAP  FINANCIAL  MEASURES
                                            (In  thousands,  except  per  share  data)
                                                                      (Unaudited)

                                                                    Three  Months  Ended          Nine  Months  Ended
                                                              October  26,  October  28,  October  26,  October  28,
                                                                      2008                2007              2008                2007

        GAAP  gross  profit                        $367,843        $515,553    $1,032,603    $1,319,683
            Stock-based  compensation
              expense  included  in  cost
              of  revenue  (A)                              3,558              2,566            10,027              8,077
            Non-recurring  charge
              related  to  a  royalty
              dispute                                            4,500                      -              4,500                      -
            Warranty  charge  against
              cost  of  revenue  arising
              from  a  weak  die/packaging
              material  set                                          -                      -          195,954                      -
        Non-GAAP  gross  profit                $375,901        $518,119    $1,243,084    $1,327,760

        GAAP  net  income                              $61,748        $235,661        $117,624        $540,652
            Stock-based  compensation
              expense  (A)                                  38,384            32,003          120,873            98,868
            Restructuring  charges                  8,338                      -              8,338                      -
            Non-recurring  charge
              related  to  a  royalty
              dispute                                            4,500                      -              4,500                      -
            Warranty  charge  against
              cost  of  revenue  arising
              from  a  weak  die/packaging
              material  set                                          -                      -          195,954                      -
            Income  tax  impact  of  non-
              GAAP  adjustments                        (1,540)          (3,491)        (49,624)        (12,853)
        Non-GAAP  net  income                    $111,430        $264,173        $397,665        $626,667

        Diluted  net  income  per  share

            GAAP                                                    $0.11              $0.38              $0.20              $0.89
            Non-GAAP                                            $0.20              $0.44              $0.68              $1.06

        Shares  used  in  GAAP  diluted
          net  income  per  share
          computation                                    564,536          612,985          590,490          605,733
            Cumulative  impact  of  non-
              GAAP  adjustments  (B)                (3,374)        (17,927)          (9,058)        (16,716)
        Shares  used  in  non-GAAP
          diluted  net  income  per
          share  computation                        561,162          595,058          581,432          589,017

        (A)  Results  include  stock-
          based  compensation  expense
          as  follows  (in  thousands):

                                                                  Three  Months  Ended              Nine  Months  Ended
                                                              October  26,  October  28,  October  26,  October  28,
                                                                      2008                  2007              2008                2007

            Cost  of  revenue                            $3,558            $2,566          $10,027            $8,077
            Research  and  development        $22,740          $18,650          $71,500          $57,471
            Sales,  general  and
              administrative                          $12,086          $10,787          $39,346          $33,320

        (B)  Reflects  an  adjustment  to  the  diluted  outstanding  shares  calculated
                under  SFAS  123R  to  conform  to  diluted  outstanding  shares  calculated
                under  prior  accounting  standards  (APB  25).



                                                              NVIDIA  CORPORATION
                                            CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                                  (In  thousands)
                                                                      (Unaudited)

                                                                                            October  26,                  January  27,
                                                                                                    2008                              2008
        ASSETS

        Current  assets:
            Cash,  cash  equivalents  and
              marketable  securities                                        $1,304,888                $1,809,478
            Accounts  receivable,  net                                          607,834                      666,494
            Inventories                                                                    523,988                      358,521
            Prepaid  expenses  and  other  current  assets          43,389                        54,336

                Total  current  assets                                          2,480,099                  2,888,829

        Property  and  equipment,  net                                        609,674                      359,808
        Goodwill                                                                              366,286                      354,057
        Intangible  assets,  net                                                  155,646                      106,926
        Deposits  and  other  assets                                              37,193                        38,051

                Total  assets                                                        $3,648,898                $3,747,671

        LIABILITIES  AND  STOCKHOLDERS'  EQUITY

        Current  liabilities:
            Accounts  payable                                                        $387,252                    $492,099
            Accrued  liabilities                                                    617,213                      475,062

                Total  current  liabilities                                1,004,465                      967,161

        Other  long-term  liabilities                                        157,358                      162,598

        Stockholders'  equity                                                  2,487,075                  2,617,912

                Total  liabilities  and
                  stockholders'  equity                                      $3,648,898                $3,747,671
 

Web site: http://www.nvidia.com/




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