Broadcom Corporation Reports Third Quarter Revenue and Profit
October 12, 1998 04:13 PM
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 12, 1998--Broadcom Corporation BRCM Monday reported financial results for the quarter ended Sept. 30, 1998.
Revenue for the third quarter of 1998 was a record $52.5 million, an increase of 467 percent over the $9.3 million reported in the third quarter of 1997. Net income was a record $8.2 million, compared with a net loss of $1.8 million in the third quarter of 1997. Diluted earnings per share for the third quarter of 1998 were $0.17, based on weighted average shares outstanding of 48.4 million. This compares with a net loss of $0.07 per share on 27 million weighted average shares for the same period in 1997.
"Our results for the quarter reflect our strength in orders and deliveries of high-speed networking, digital cable set-top, and cable modem integrated circuits. Additionally, we made several announcements this quarter that represent significant achievements in the execution of our business plan and technology roadmap," said Dr. Henry Nicholas, Broadcom president and chief executive officer. "Specifically, we announced a strategic alliance with MIPS Technologies that will enable us to use MIPS processors in a wide range of digital communications products. The MIPS architecture provides us with an essential ingredient for us to create cost effective, complete systems-on-a-chip for cable modems, digital set-tops and Ethernet adapter cards."
"Also, this quarter we delivered the industry's first single-chip cable modem solution. This product represents the first single-chip integration of all of the communications and protocol functions needed for broadband interactivity and Internet access," said Dr. Nicholas. "But more significantly, this Data Over Cable Service Interface Specification (DOCSIS) standards-compliant chip also provides the first ever implementation of extensions to DOCSIS for the delivery of toll quality voice telephony and the ability to provision true Quality of Service (QoS) over a cable network. We also announced a strategic development and supply agreement with Scientific-Atlanta for their next generation interactive digital set-tops."
"In the high-speed networking market, we announced the industry's first 6-port 10/100 Fast Ethernet transceiver chip, achieving the highest level of integration for such a device," said Dr. Nicholas. "Also in the high-speed networking market, we received significant customer support for our Gigabit Ethernet program from 3Com Corporation, Cabletron Systems, Bay Networks, and Cisco Systems, who have each become members of the Accelerated Deployment Program (ADP) for our single-chip Gigabit Ethernet transceiver design."
About Broadcom
Broadcom Corporation is a leading developer of highly integrated silicon solutions that enable broadband digital data transmission to the home and within the business enterprise. Using proprietary technologies and advanced design methodologies, the company has designed and developed integrated circuits for some of the most significant broadband communications markets, including the markets for cable set-top boxes, cable modems, high-speed networking, direct broadcast satellite and terrestrial digital broadcast, and digital subscriber line (xDSL).
Broadcom is based in Irvine, Calif., and can be reached at 949-450-8700 or at broadcom.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release may contain forward-looking statements involving risks and uncertainties that may cause actual future events or results to differ materially and adversely from those described in the forward-looking statements. Important factors that may cause such a difference for Broadcom include, but are not limited to, the volume of product sales and pricing concessions on volume sales; the timing, rescheduling or cancellation of significant customer orders; the loss of a significant customer; the timing of customer qualification and industry interoperability certification of new products; the rate of adoption by customers and end-users of new and emerging technologies in the high-speed data networking, cable set-top box, cable modem, direct broadcast satellite and terrestrial digital broadcast, and digital subscriber line (xDSL) markets; the rate of adoption and acceptance of new industry standards in the foregoing markets; the company's ability to specify, develop, introduce and market new products and technologies on a timely basis; the qualification, availability and pricing of competing products and technologies from other vendors; fluctuations in manufacturing yields and other problems or delays in the fabrication, assembly, testing or delivery of products; uncertainties associated with international operations; the company's ability to retain and hire key executives, technical personnel and other employees; problems or delays in achieving higher levels of design integration and in migrating product designs to smaller geometry processes; intellectual property disputes; changes in product or customer mix; the quality of the company's products; the level of orders received that can be shipped in a quarter; the effects on operations and management of facility relocations; general economic conditions and market conditions in the markets addressed by Broadcom; and the other factors discussed in the company's filings from time to time with the Securities and Exchange Commission, including but not limited to the Registration Statement on Form S-1 (Amendment No. 6) and Final Prospectus dated April 16, 1998, the Registration Statement on Form S-1 dated Sept. 30, 1998, and the company's quarterly filings on Form 10-Q. Broadcom disclaims any obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.
BROADCOM CORPORATION
Unaudited Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
Revenue $ 52,485 $ 9,255 $132,997 $ 19,681
Cost of revenue 23,658 4,047 57,870 8,857
-------- -------- -------- --------
Gross profit 28,827 5,208 75,127 10,824
Operating expense:
Research and
development 10,877 5,503 25,496 11,708
Selling, general and
administrative 6,486 2,670 15,808 5,211
-------- -------- -------- --------
Total operating
expense 17,363 8,173 41,304 16,919
-------- -------- -------- --------
Income (loss) from
operations 11,464 (2,965) 33,823 (6,095)
Interest and other income
(expense), net 1,116 (41) 2,417 22
-------- -------- -------- --------
Income (loss) before
income taxes 12,580 (3,006) 36,240 (6,073)
Provision (benefit)
for income taxes 4,403 (1,202) 12,684 (2,428)
-------- -------- -------- --------
Net income (loss) $ 8,177 $ (1,804) $ 23,556 $(3,645)
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Basic earnings (loss)
per share $ 0.20 $ (0.07) $ 0.64 $ (0.14)
======== ======== ======== ========
Diluted earnings (loss)
per share $ 0.17 $ (0.07) $ 0.51 $ (0.14)
======== ======== ======== ========
Weighted average
shares (basic) 41,205 27,024 36,591 26,295
======== ======== ======== ========
Weighted average
shares (diluted) 48,425 27,024 45,866 26,295
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Condensed Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
1998 1997
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 42,706 $ 22,116
Short-term investments 14,944 ---
Accounts receivable, net 22,356 9,913
Inventory 5,877 2,705
Other current assets 6,514 1,785
-------- --------
Total current assets 92,397 36,519
Property and equipment, net 24,649 8,449
Long-term investments 43,152 ---
Other assets 2,139 276
-------- --------
Total assets $162,337 $ 45,244
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 13,465 $ 7,380
Accrued liabilities 7,019 1,779
Current portion of
long-term debt 110 1,098
-------- --------
Total current
liabilities 20,594 10,257
Long-term debt, less
current portion --- 1,595
Shareholders' equity 141,743 33,392
-------- --------
Total liabilities and
shareholders'
equity $162,337 $ 45,244
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