From Briefing.com: ESST ESS Tech beats by 10 cents (17.95 +0.28) Reports Q1 EPS of $0.37, ten cents better than the Multex consensus of $0.27; revenues were $79.1 mln vs the $75.2 mln consensus. Guides Q2 revenues to $76-79 mln from prior guidance of $66-70 mln (Multex: $76.2 mln); EPS guided to $0.24-0.28 vs consensus of $0.24.
The press release
ESS Technology Reports First Quarter Results
Revenue of $79.1 Million and EPS of $0.34
56% Year-Over-Year Revenue Growth
biz.yahoo.com
FREMONT, Calif., April 24 /PRNewswire-FirstCall/ -- ESS Technology (Nasdaq: ESST - news) today reported net revenues for the first quarter of 2002 of $79.1 million, up $28.3 million or 56% from the same period last year, and down $4.2 million or 5% from net revenues of $83.3 million in the fourth quarter of 2001.
Net income for the first quarter of 2002 was $16.4 million, or $0.34 per diluted share, compared to a net loss of $20.7 million, or ($0.49) per diluted share, in the first quarter of 2001. For the fourth quarter of 2001, net income was $16.3 million, or $0.35 per diluted share.
Pro forma net income for the first quarter of 2002 was $17.9 million, as compared to pro forma net loss of $1.7 million for the first quarter of 2001 and pro forma net income of $17.0 million for the fourth quarter of 2001. Pro forma earnings per diluted share was $0.37, up from a pro forma loss per diluted share of $0.04 in the same period last year and unchanged from the pro forma $0.37 earned in the fourth quarter of 2001. Pro forma net income and loss exclude acquisition charges and net gains and losses on investments.
Gross margin for the first quarter of 2002 was 43%, up from the 22% gross margin for the first quarter of 2001 and up from the 41% gross margin in the fourth quarter of 2001. Cash, cash equivalents and short-term investments at the end of the first quarter of 2002 were $207.0 million, an increase of $78.0 million, or 60%, from $129.0 million at the end of the fourth quarter of 2001. The increase included $45.2 million in net proceeds from the company's secondary offering completed in February 2002.
Robert Blair, president and chief executive officer commented, ``We are excited about the results of the first quarter for many reasons. We had very good financial results as our revenues and earnings exceeded expectations. The DVD market grew faster than expected, and most importantly, ESS continued to gain design wins from key customers and again increased market share.''
Mr. Blair continued, ``We were surprised by the strength of the DVD market in the traditionally slow first quarter. ESS has now shipped a record number of units for three quarters in a row. We believe we once again expanded our No. 1 market share position during the quarter, to over 40% of the worldwide DVD market. Our DVD revenue grew to over $45 million during the first quarter, with a 780% year-over-year increase in unit shipments and a 6% sequential quarterly increase in units.
``We intend to continue to grow market share and strengthen our leadership role through the introduction of five new major product families over the next 12 months. With these new product family introductions, we believe we can continue to lead the high growth market for digital home entertainment products.'' Mr. Blair concluded.
New Product Families:
Vibratto II family: integrates the front-end controller functionality with our progressive scan decoder, with ESS's superior audio features, and integrated TV encoder functionality.
MPEG encoder product family: enables digital recording to a hard drive or DVD recordable disk. We plan to begin production shipments in the next six to nine months.
Digital Home System family: a system on a chip (SOC) product complete with MIPS 4KC CPU, progressive scan decoder, TV encoder, PCI and USB buses, and DDR SDRAM memory controller. Capable of running third party operating systems such as Windows CE, Linux or VxWorks.
Home networking product family: products designed for easily sharing entertainment content within the home. These new products allow video and audio content to be sent throughout homes without the inconvenience of adding any new wires.
Set-Top-Box product family: This new product family has been developed in partnership with NEC. ESS's advanced system controller chips with integrated communications capabilities will match with NEC's industry leading MIPS processors and will form the heart of advanced Set-Top-Box products.
Second Quarter 2002 Guidance
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
We expect to grow our DVD revenue by 10% - 20% in the second quarter of 2002 compared to the first quarter, and expect overall revenues for the seasonally slower second quarter to be $76 - $79 million, up from our previous guidance of $66 - $70 million. We expect earnings per diluted share to be in the range of $0.24 to $0.28 (GAAP basis).
ESS will provide more guidance on its first quarter and 2002 outlook during the earnings conference call.
Earnings Conference Call
ESS technology, Inc. has scheduled a conference call for 5:00 p.m. ET today to discuss its first quarter results. The call can be accessed through ESS' web site www.esstech.com.
About ESS Technology
ESS Technology, Inc., is a leading supplier of high-performance feature-rich chips, applications and solutions for the rapidly expanding DVD and digital entertainment markets. ESS provides advanced products that enable the emergence of digital home systems that deliver and manage entertainment and information in the home.
ESS, headquartered in Fremont, California, has R&D, sales, and technical support offices worldwide. ESS Technology's common stock is traded on the Nasdaq under the symbol ESST. ESS Technology's web site address is: esstech.com .
The matters discussed in this news release include certain forward-looking statements that involve risks and uncertainties, including, but not limited to, the possible reduction of consumer spending occasioned by general economic conditions, the timely availability and acceptance of the Company's new products, the impact of competitive products and pricing, the dependence on continued growth in demand for consumer multimedia products, and the other risks detailed from time to time in the SEC reports of ESS, including the reports on Form 10-K and Form 10-Q. Actual results could differ materially from those projected in the forward-looking statements.
ESS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited) (audited)
March 31, December 31,
2002 2001
ASSETS
Current Assets:
Cash and cash equivalents $154,307 $96,995
Short-term investments 52,657 32,039
Accounts receivable, net 40,149 42,642
Inventories, net 37,501 37,452
Prepaid expenses and other assets 2,538 1,894
Total current assets 287,152 211,022
Property, plant and equipment, net 20,845 22,438
Other assets, net 7,731 4,505
Total Assets $315,728 $237,965
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $54,265 $49,173
Income taxes payable and deferred
income taxes 8,850 4,883
Total current liabilities 63,115 54,056
Non-current deferred tax liability 6,932 6,931
Shareholders' equity:
Common stock 204,970 153,678
Accumulated other comprehensive loss (200) (1,374)
Retained earnings 40,911 24,674
Total shareholders' equity 245,681 176,978
Total Liabilities and Shareholders'
Equity $315,728 $237,965
ESS TECHNOLOGY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended (A)
March 31, March 31,
2002 2001
Net revenues $79,115 $50,808
Cost of revenues 44,839 39,606
Gross profit 34,276 11,202
43% 22%
Operating expenses:
Research and development 6,352 4,831
Selling, general and administrative 10,356 8,666
Operating income 17,568 (2,295)
Nonoperating income, net 1,278 325
Income (loss) before provision for
income taxes 18,846 (1,970)
Benefit from income taxes 906 (303)
Net income (loss) $17,940 $(1,667)
Net income per share
Basic $0.41 $(0.04)
Diluted $0.37 $(0.04)
Weighted average common shares:
Basic 44,209 42,370
Diluted 48,331 42,370
(A) Pro forma adjustments are detailed within the schedule entitled
"Reconciliation of GAAP Basis Net Income to Pro Forma Net Income."
ESS TECHNOLOGY, INC.
RECONCILIATION OF GAAP BASIS NET INCOME TO PRO FORMA NET INCOME
(unaudited)
(in thousands)
Three months ended
March 31, March 31,
2002 2001
Net income (loss) - GAAP basis $16,386 $(20,685)
Pro Forma Adjustments:
Acquisition amortization (A) 29 1,580
Write down of Cisco shares (B) 2,545 --
Tax effect of items (A) and (B) (1,020) (79)
Discontinued operation, net of
tax (C) -- 17,517
Net income (loss) - Pro forma $17,940 $(1,667)
(A) Pro forma amounts for all periods presented exclude the effects of
acquisition amortization, amounting to $29 and $1,580 for the three
months ended March 31, 2002 and March 31, 2001, respectively.
(B) Pro forma amounts for all periods presented exclude the effects of a
write down of Cisco shares for other than temporary decline in value,
amounting to ($2,545) and $0 for the three months ended March 31, 2002
and March 31, 2001, respectively.
(C) Pro forma amounts for all periods presented exclude the effects of the
discontinued operation, amounting to $0 and ($17,517) for the three
months ended March 31, 2002 and March 31, 2001, respectively.
ESS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP BASIS
(unaudited)
(in thousands, except per share data)
Three months ended (A)
March 31, March 31,
2002 2001
Net revenues $79,115 $50,808
Cost of revenues 44,839 39,606
Gross profit 34,276 11,202
43% 22%
Operating expenses:
Research and development 6,381 6,411
Selling, general and administrative 10,356 8,666
Operating income (loss) 17,539 (3,875)
Nonoperating income (loss), net (1,267) 325
Income (loss) before provision for
income taxes 16,272 (3,550)
Provision for benefit from income
taxes (114) (382)
Net income (loss) from continuing
operations 16,386 (3,168)
Net loss from discontinued operation -- (4,205)
Loss from disposal of discontinued
operation -- (13,312)
Net income (loss) $16,386 $(20,685)
Net income (loss) per share:
Basic
Continuing operations $0.37 $(0.07)
Discontinued operation $-- $(0.42)
$0.37 $(0.49)
Diluted
Continuing operations $0.34 $(0.07)
Discontinued operation $-- $(0.42)
$0.34 $(0.49)
Weighted average common shares:
Basic 44,209 42,370
Diluted 48,331 42,370
(A) Amounts for the three months ended March 31, 2001 have been
reclassified to take into account the effects of discontinued
operation.
SOURCE: ESS Technology, Inc. |
