UGLY news:
SiRF Hemorrhages Money in Q2, Plans Layoffs
Jul 25, 2008 - GPS World
SiRF Technology has said it plans a second round of layoffs, further reducing its workforce by 7 per cent to 9 percent by the end of September, in the wake of a considerable loss in the second quarter (Q2), inflated by a number of special charges.
A small part of those special charges relate to a round of layoffs that occurred in April of this year at the time the company announced that Michael L. Canning, its CEO and president, had resigned and that Diosdado P. Banatao, its board's founder, would take over as chief executive. As for Q2, SiRF reported that its net revenue in the quarter was $63.1 million, down 10.6 percent from $70.6 million year over year, spawning a net loss of $332.6 million, $5.41 per diluted share.
That loss includes $215.7 million of goodwill impairment, $42.9 million in acquisition-related intangibles impairment and $34.2 million of provision for income taxes (including valuation allowance on deferred tax assets of $38 million), $11.8 million of impairment on a note receivable, $10.3 million in stock-based compensation expense, $6.2 million in amortization of acquisition-related intangible assets, and $100,00 in restructuring charges. This compares with net income of $2.1 million, or 4 cents per diluted share in Q2 2007.
Gross margin in the second quarter of 2008 was 21 percent, as compared to 53.9 percent in Q2 2007. Even on a non-GAAP basis, removing the consideration of special charges, SiRF still suffered a loss of $11.4 million, or 19 cents per diluted share, as compared to non- GAAP net income of $12.7 million, or 23 cents per diluted share, in Q2 2007. It was the third straight quarter of losses for the GPS chip maker.
Net revenue in the first six months of 2008 was $125.1 million, down 9.3 percent from $137.9 million in the first six months of 2007. Gross margin in the first six months of 2008 was 31.7 percent, as compared to 53.9 percent in the first six months of 2007.
Net loss for the first six months of 2008 was $360.6 million, or $5.92 per diluted share. This includes $215.7 million of goodwill impairment, $42.9 million in acquisition-related intangibles impairment and $38 million of provision for income taxes (including valuation allowance on deferred tax assets of $38 million), $11.8 million of impairment on a note receivable, $19.2 million in stock-based compensation expense, $12.4 million in amortization of acquisition-related intangible assets, $600,000 in restructuring charges, and $300,000 in acquisition-related contingent payments. This compares with net income of $4.9 million, or $9 cents per diluted share, in the first six months of 2007.
SiRF's total cash, cash equivalents and short-term investments were $105.9 million on June 30, compared with $139.4 million on December 31, 2007.
The company cited weakness in demand from both its OEM and ODM customers, particularly in the portable navigation device (PND) market, as well as competitive pressure as the reasons for its continuing losses. SiRF did say that it was seeing design win traction for both the SiRFprima platform in the PND market, and its host-based single die SiRFstarIII product, GSD3tw, at key handset and PND customers. The company further said it plans to start pre-production shipments of GSD3tw to its lead customer in the current quarter. SiRF said that it couldn't offer specific guidance, however, given market conditions. |
