Genesis Microchip Reports Fourth Quarter and Fiscal 2002 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--April 29, 2002--Genesis Microchip Inc. (Nasdaq:GNSS - news), a world leader in the development of display technologies, today announced financial results for the fourth quarter of its 2002 fiscal year, which ended March 31, 2002.
Fiscal 2002 Financial Highlights
Record fiscal 2002 revenues of $163.4 million increased 157 percent over fiscal 2001
Record pro forma net income(1) of $27.2 million was more than 10 times net income of $2.7 million in fiscal 2001
Record pro forma EPS(1) of $1.13, up from $0.13 in fiscal 2001
Net income in accordance with generally accepted accounting principles was $18.0 million, or $0.74 per diluted share in fiscal 2002, compared to net income of $2.7 million, or $0.13 per diluted share, in fiscal 2001
Fourth Quarter Fiscal 2002 Financial Highlights
Revenue of $56.1 million tripled year-over-year and was up 13 percent sequentially
Pro forma net income(1) of $8.9 million, or $0.32 per diluted share
Loss in accordance with generally accepted accounting principles was ($336,000), or ($0.01) per share compared to a loss of ($2.8) million, or ($0.15) per share, in the March 2001 quarter
Charges recorded in fiscal 2002 in accordance with generally accepted accounting principles included $1.0 million for amortization of core technology, $4.7 million for in-process R&D expense, $850,000 for amortization of deferred stock compensation and $1.9 million for restructuring costs, all of which related to the acquisitions of Sage, Inc. and the technology assets of VM Labs, Inc. in the March 2002 quarter. Including these charges, net income for the year ended March 31, 2002 was $18.0 million, or $0.74 per diluted share, and the loss for the quarter ended March 31, 2002 was ($336,000) or ($0.01) per share.
"Our financial performance in the fourth quarter and 2002 fiscal year reflects our success as a leader in the high-growth flat panel display market," said Amnon Fisher, CEO of Genesis Microchip. "As we enter our 2003 fiscal year, the company is well-positioned to extend its leadership position in the display sector to the LCD television market and other emerging high-growth display markets."
Business Outlook
The following statements are based on current expectations. Please see the cautionary language below under "Safe Harbor Statement."
The company estimates first quarter fiscal 2003 revenue will exceed $60 million. The company expects the highest sequential quarterly rates of growth to occur in the last half of the fiscal year. While estimating revenue is very difficult given the uncertain economic environment, the company is estimating revenue will be in the range of $250 million to $270 million for the entire 2003 fiscal year. Revenue is dependent on factors including, but not limited to, the growth rate of the flat panel monitor and flat panel television markets, the supply of products from the company's third party foundries, the company's ability to maintain design wins with customers, timely new product introductions, and general economic conditions.
The company expects gross profit margins in the first quarter of fiscal 2003 to be about 40 percent. The company expects gross profit margins in fiscal 2003 as a whole to exceed 42 percent during the remaining quarters of the year and to average about 42 percent for the year as whole. Gross profit margins may be higher or lower than expected due to many factors including, but not limited to, manufacturing yields, competitive pricing actions, changes in estimated product costs, revenue levels, and changes in estimated product mix.
The company expects combined operating expenses for R&D and SG&A of approximately $14.0 to $14.5 million in the first quarter of fiscal 2003, and to average 20 to 22 percent of revenues for the entire fiscal year.
The company expects accounting charges related to the amortization of core technology and amortization of deferred stock compensation to aggregate approximately $4 million in the first quarter of fiscal 2003 and approximately $16 million for the entire 2003 fiscal year.
The company expects the tax rate for fiscal 2003 to be approximately 25 percent of pro forma pretax income(1).
About Genesis Microchip
Genesis Microchip is a leading supplier of cost-effective integrated circuits and software solutions, which are at the core of all display systems. Flat-panel displays, digital televisions, and consumer video products all benefit from Genesis technology, which connects and formats any kind of source content to be displayed with the highest image quality on any type of display. All leading brand-name monitor vendors use "Genesis Display Perfection" components. Founded in 1987, Genesis has offices in: Silicon Valley, California; Toronto, Canada; Bangalore, India; Taipei, Taiwan; Seoul, Korea; Shenzen, China and Tokyo, Japan. Further information is available at www.genesis-microchip.com.
Safe Harbor Statement
This press release contains forward-looking statements, including, without limitation, forward-looking statements regarding the company's future revenues, gross profit margins, operating expenses, accounting charges and tax rates. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
The risks and uncertainties include those mentioned in this press release as well as the continued acceptance of the company's products in the flat-panel monitor market, the company's ability to successfully complete the restructuring of certain of its operations, and the company's ability to manage inventory. Other risk factors are listed in the company's SEC reports, including but not limited to Genesis's report on Form 10-K for the fiscal year ended March 31, 2001 and its most recent Registration Statement on Form S-4.
The forward-looking statements in this press release are the company's targets, not predictions of actual performance. The company's performance has deviated, often materially, from its targets as of the beginning of a quarter. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
The inclusion of any statement in this release does not constitute a suggestion by the company or any other person that the events or circumstances described in such statements are material. The company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in this release will not be realized. Any statements by persons outside the company speculating on the progress of the quarter will not be based on internal company information and should be assessed accordingly by investors.
(1) Pro-forma net income represents net income or loss excluding expenses for the amortization of core technology, in-process research and development expense, amortization of deferred stock compensation, restructuring expenses and pro forma income tax adjustments. Net income excluding these items differs from net income or loss according to generally accepted accounting principles.
-0-
GENESIS MICROCHIP INC.
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands of dollars, except per share amounts)
(unaudited)
Three months ended Twelve months ended
Mar 31, Mar 31, Mar 31, Mar 31,
2002 2001 2002 2001
Revenues $ 56,104 $ 18,471 $163,370 $ 63,627
Cost of revenues 31,268 14,762 89,287 32,416
--------------------- ----------------------
Gross profit 24,836 3,709 74,083 31,211
--------------------- ----------------------
44.3% 20.1% 45.4% 49.1%
--------------------- ----------------------
Operating expenses:
Research and
development 6,575 4,156 21,252 17,413
Selling, general and
administrative 6,995 5,372 21,129 15,947
Amortization of core
technology 1,032 -- 1,032 --
In-process research
and development
expense 4,700 -- 4,700 --
Amortization of
deferred stock
compensation 850 -- 850 --
Restructuring
expenses 1,858 -- 1,858 --
--------------------- ----------------------
Total operating
expenses 22,010 9,528 50,821 33,360
--------------------- ----------------------
Income (loss) from
operations 2,826 (5,819) 23,262 (2,149)
Interest and other
income (net) 332 433 1,463 2,328
--------------------- ----------------------
Income (loss) before
income taxes 3,158 (5,386) 24,725 179
Provision for
(recovery of) income
taxes 3,494 (2,540) 6,729 (2,483)
--------------------- ----------------------
Net income (loss) $ (336) $ (2,846) $ 17,996 $ 2,662
===================== ======================
Earnings (loss)
per share:
Basic (0.01) (0.15) 0.82 0.14
Diluted (0.01) (0.15) 0.74 0.13
Weighted average number
of common shares
outstanding
(in thousands):
Basic 26,124 19,524 22,025 19,406
Diluted 26,124 19,524 24,177 19,884
GENESIS MICROCHIP INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands of dollars, except per share amounts)
(unaudited)
Three months ended Twelve months ended
Mar 31, Mar 31, Mar 31, Mar 31,
2002 2001 2002 2001
Revenues $ 56,104 $ 18,471 $163,370 $ 63,627
Cost of revenues 31,268 14,762 89,287 32,416
--------------------- ----------------------
Gross profit 24,836 3,709 74,083 31,211
--------------------- ----------------------
44.3% 20.1% 45.4% 49.1%
--------------------- ----------------------
Operating expenses:
Research and
development 6,575 4,156 21,252 17,413
Selling, general and
administrative 6,995 5,372 21,129 15,947
--------------------- ----------------------
Total operating
expenses 13,570 9,528 42,381 33,360
--------------------- ----------------------
Income (loss) from
operations 11,266 (5,819) 31,702 (2,149)
Interest and other
income (net) 332 433 1,463 2,328
--------------------- ----------------------
Income (loss) before
income taxes 11,598 (5,386) 33,165 179
Provision for
(recovery of) income
taxes 2,708 (2,540) 5,943 (2,483)
--------------------- ----------------------
Net income (loss) $ 8,890 $ (2,846) $ 27,222 $ 2,662
===================== ======================
Earnings (loss)
per share:
Basic 0.34 (0.15) 1.24 0.14
Diluted 0.32 (0.15) 1.13 0.13
Weighted average number
of common shares
outstanding
(in thousands):
Basic 26,124 19,524 22,025 19,406
Diluted 28,091 19,524 24,177 19,884
GENESIS MICROCHIP INC.
PRO FORMA FINANCIAL RECONCILIATION
(amounts in thousands of dollars, except per share amounts)
(unaudited)
Three months ended Twelve months ended
Mar 31, Mar 31, Mar 31, Mar 31,
2002 2001 2002 2001
Income (loss) from
operations (GAAP) $ 2,826 $ (5,819) $ 23,262 $ (2,149)
Pro forma Adjustments
Amortization of core
technology 1,032 -- 1,032 --
In-process research
and development
expense 4,700 -- 4,700 --
Amortization of
deferred stock
compensation 850 -- 850 --
Restructuring expenses 1,858 -- 1,858 --
--------------------- ----------------------
Income (loss) from
operations
(Pro Forma) 11,266 (5,819) 31,702 (2,149)
Interest income 332 433 1,463 2,328
--------------------- ----------------------
Income (loss) before
tax (Pro Forma) 11,598 (5,386) 33,165 179
===================== ======================
Provision for
(recovery of) income
taxes (GAAP) 3,494 (2,540) 6,729 (2,483)
Pro forma income tax
adjustments (786) -- (786) --
--------------------- ----------------------
Pro forma provision
for (recovery of)
income tax 2,708 (2,540) 5,943 (2,483)
===================== ======================
Net income (loss)
(GAAP) (336) (2,846) 17,996 2,662
===================== ======================
Net income (loss)
(Pro forma) 8,890 (2,846) 27,222 2,662
===================== ======================
EPS (GAAP) (0.01) (0.15) 0.74 0.13
EPS (Pro forma) 0.32 (0.15) 1.13 0.13
GENESIS MICROCHIP INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands of dollars)
(unaudited)
ASSETS
March 31, 2002 March 31, 2001
Current assets:
Cash and short-term investments $ 111,366 $ 32,827
Accounts receivable trade 32,326 14,412
Inventory 20,046 10,505
Other 5,614 6,093
------------ ------------
Total current assets 169,352 63,837
Capital assets 11,733 10,406
Acquired technology and
other intangibles 46,568 --
Goodwill 198,909 --
Deferred income taxes -- 6,561
Other 1,258 642
------------ ------------
Total assets $ 427,820 $ 81,446
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 14,318 6,851
Accrued liabilities 14,272 3,707
Current portion of long
term liabilities 1,129 89
------------ ------------
Total current liabilities 29,719 10,647
Long-term liabilities:
Deferred income taxes 5,183 --
Lease liability 9,019 --
Loan payable 328 410
------------ ------------
Total liabilities 44,249 11,057
------------ ------------
Shareholders' equity:
Share capital 388,498 75,912
Cumulative other comprehensive loss (94) (94)
Deferred compensation (17,587) (187)
Retained earnings (deficit) 12,754 (5,242)
------------ ------------
Total shareholders' equity 383,571 70,389
------------ ------------
Total liabilities and
shareholders' equity $ 427,820 $ 81,446
============ ============
Note to Editors: Genesis is a registered trademark of Genesis Microchip Inc. Genesis Display Perfection is a trademark of Genesis Microchip Inc.
--------------------------------------------------------------------------------
Contact:
Genesis Microchip Inc.
Eric Erdman, 905/889-5400 (CFO)
or 408/262-6599
or
Nagle & Ferri
Investor Relations, 415/575-1999
biz.yahoo.com |
