SAN JOSE, Calif. — (BUSINESS WIRE) — April 25, 2013 — Pixelworks, Inc. (NASDAQ: PXLW), a pioneer in innovative video and display processing technology, today announced financial results for the first quarter ended March 31, 2013.
First quarter 2013 revenue was $8.3 million, compared to $13.6 million reported in the prior quarter and $14.3 million in the first quarter of 2012. The decline in first quarter revenue reflects greater than normal seasonality coupled with a push-out of certain licensing revenue.
On a GAAP basis, gross profit margin in the first quarter of 2013 was 48.1%, compared to 48.6% in the prior quarter and 54.5% in the first quarter of 2012. The sequential decline in gross profit margin was driven by reduced fixed cost absorption during the first quarter of 2013 offset by a favorable product mix. First quarter 2013 GAAP operating expenses were $9.5 million, compared to $9.8 million in the previous quarter and $9.1 million in the first quarter of 2012. For the first quarter of 2013, the Company recorded a GAAP net loss of $5.4 million, or $0.29 per share, compared to a GAAP net loss of $3.6 million, or $0.19 per share, in the fourth quarter of 2012 and a GAAP net loss of $0.6 million, or $0.04 per share, in the first quarter of 2012.
On a non-GAAP basis, gross profit margin in the first quarter of 2013 was 49.7%, compared to 49.9% in the prior quarter and 55.7% in the first quarter of 2012. First quarter 2013 operating expenses on a non-GAAP basis were $8.9 million, compared to $9.2 million in the prior quarter and $8.6 million in the first quarter of 2012. The sequential decline in operating expenses was primarily due to modest decreases in certain development costs. First quarter 2013 research and development expense did not include any reimbursement credit related to a co-development partnership with a major customer; however, future reimbursement credits to research and development expense are anticipated in 2013 as additional milestones associated with the co-development partnership are achieved. The Company expects the product being developed under this co-development project to begin contributing significantly to revenue in 2014. For the first quarter of 2013, the Company recorded a non-GAAP net loss of $4.7 million, or $0.25 per share, compared with a net loss of $2.8 million, or $0.15 per share, in the prior quarter and a net loss of $0.1 million, or $0.01 per share, in the first quarter of 2012.
“The first quarter was a difficult quarter due to an ongoing inventory correction that led to a weaker demand environment for our products as well as the push-out of an IP licensing deal into Q2,” said Bruce Walicek, President and CEO of Pixelworks. “Despite these first quarter challenges, we expect our robust IP licensing pipeline, strong design win activity, and ramping of new products to contribute to topline growth in the second quarter and for the balance of 2013. As the industry begins a major shift to higher resolutions across all screens, we remain focused on capitalizing on this trend and applying our industry-leading video display processing technology to deliver the highest quality video experience to displays of all sizes.”
The Company will discuss the details of its business outlook for the second quarter of 2013 during its conference call scheduled for today, April 25, 2013, at 2:00 p.m. Pacific Time.
Conference Call Information
Pixelworks will host a conference call today at 2:00 p.m. Pacific Time, which can be accessed by calling 866-318-8614 and using passcode 28846278. A Web broadcast of the call can be accessed by visiting the Company's investor page at www.pixelworks.com. For those unable to listen to the live Web broadcast, it will be archived for approximately 30 days. A replay of the conference call will also be available through Thursday, May 2, 2013, and can be accessed by calling 888-286-8010 and using passcode 11476943.
About Pixelworks, Inc.
Pixelworks creates, develops and markets video display processing technology for digital video applications that demand the very highest quality images. At design centers around the world, Pixelworks engineers constantly push video performance to keep manufacturers of consumer electronics and professional displays worldwide on the leading edge. The company is headquartered in San Jose, CA.
For more information, please visit the Company's Web site at www.pixelworks.com.
Note: Pixelworks and the Pixelworks logo are registered trademarks of Pixelworks, Inc.
Non-GAAP Financial Measures
This earnings release makes reference to non-GAAP gross profit
margins, non-GAAP operating expenses, non-GAAP net income (loss) and
non-GAAP net income (loss) per share which excludes stock-based
compensation expense and additional amortization of a non-cancelable
prepaid royalty, which are required under GAAP. The press release also
reconciles GAAP net loss and adjusted EBITDA which Pixelworks defines as
GAAP net income (loss) before interest expense and other, net, income
tax provision, depreciation and amortization, as well as the specific
items listed above. The Company believes these non-GAAP measures provide
a meaningful perspective on the Company's core operating results and
underlying cash flow dynamics, but cautions investors to consider these
measures in addition to, not as a substitute for, its consolidated
financial results as presented in accordance with GAAP. A reconciliation
between GAAP and non-GAAP financial measures is included in this
earnings release which is available in the investor relations section of
the Company's website.