Company grows revenue 38 percent and reduces inventory days from 144 to 64
compared with prior quarter
SANTA CLARA, Calif., May 7 /PRNewswire-FirstCall/ -- NVIDIA Corporation
today reported financial results for the first quarter of fiscal 2010 ended
April 26, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020613/NVDALOGO)
For the first quarter of fiscal 2010, revenue was $664.2 million compared
with $1.2 billion for the first quarter of fiscal 2009, a decrease of 42
percent.
During the first quarter of fiscal 2010, NVIDIA recorded a non-recurring
charge of $140.2 million in connection with a previously announced cash tender
offer to purchase employee stock options. This charge represents stock-based
compensation expense associated with the stock options that were tendered,
plus associated payroll taxes and professional fees.
NVIDIA's results for the first quarter of fiscal 2010, computed in
accordance with U.S. generally accepted accounting principles (GAAP), included
a net loss of $201.3 million, or $0.37 per share. Non-GAAP net loss for the
first quarter of fiscal 2010, which excludes recurring stock-based
compensation charges, the non-recurring charge related to the tender offer,
and the associated tax impact of these items, was $46.7 million, or $0.09 per
share.
"We made good progress managing expenses and significantly reducing
inventory, while continuing to invest in our growth strategies," said Jen-Hsun
Huang, president and CEO of NVIDIA. "The GPU is ever-more central to our
computing experience. There is a rapidly growing number of applications that
rely on the GPU, and the industry is gearing up to launch the next generation
operating systems that adopt GPU computing."
First Quarter Fiscal 2010 and Recent Highlights:
-- Revenue grew 38 percent sequentially from fourth quarter fiscal 2009.
Inventory decreased from 144 to 64 days sequentially.
-- NVIDIA grew share, for the second consecutive quarter, in the total
desktop standalone GPU segment from 63 percent to 69 percent from the
fourth quarter of calendar 2008 to the first quarter of calendar 2009,
as reported in Mercury Research's First Quarter PC Graphics Report
2009.
-- NVIDIA and Acer set a new standard for small PCs with the introduction
of the world's first NVIDIA(R) ION(TM) platform, the Acer AspireRevo.
No larger than a typical hardcover book, the AspireRevo is a fully
capable desktop with advanced graphics and impressive multimedia
features.
-- NVIDIA released its OpenCL(TM) driver and software development kit to
developers participating in its OpenCL software Early Access Program.
NVIDIA is the first company to release OpenCL drivers to developers.
-- NVIDIA was first to demonstrate DirectX Compute on Microsoft Windows 7
at the Game Developers Conference. The upcoming DirectX Compute API
for Vista and Windows 7 supports NVIDIA's current DX10 GPUs, as well
as the company's future DX11 GPUs.
-- NVIDIA demonstrated the NVIDIA Tegra(TM) 600 Series computer-on-a-chip
that enables an always-on, always-connected HD netbook that can go
days between battery charges.
-- NVIDIA launched five new consumer applications accelerated by the
CUDA(TM) architecture on NVIDIA GPUs - Super LoiloScope Mars (video
editing); ArcSoft SimHD (DVD image enhancement); Nero Move It and
Cyberlink MediaShow Espresso (video format conversion); and Motion DSP
vReveal (real-time video quality enhancement).
-- NVIDIA and GeoStar, a leading Chinese geophysical services provider,
unveiled the launch of a new Tesla-based hardware and seismic software
suite that dramatically accelerates the performance of complex seismic
data computation for oil and gas companies in China.
-- NVIDIA and BNP Paribas' Corporate and Investment Banking division
recently replace 500 traditional CPU cores with a smaller cluster
consisting of CPU servers and two Tesla S1070 systems, which require
one-tenth the power. Taking into account the dramatic acceleration
achieved using Tesla GPUs, the division is using 190-times less
electricity than before.
-- NVIDIA announced that Harvard University has been recognized as a CUDA
Center of Excellence for its commitment to teaching GPU Computing and
its integration of CUDA-enabled GPUs for a host of science and
engineering research projects.
Conference Call and Web Cast Information
NVIDIA will conduct a conference call with analysts and investors to
discuss its first quarter fiscal 2010 financial results and current financial
prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen
to the call, please dial (212) 231-2900. A live Web cast (listen-only mode) of
the conference call will be held at the NVIDIA investor relations Web site
www.nvidia.com/ir and at www.streetevents.com. The Web cast will be recorded
and available for replay until the Company's conference call to discuss its
financial results for its second quarter fiscal 2010.
Non-GAAP Measures
To supplement the Company's Condensed Consolidated Statements of
Operations and Condensed Consolidated Balance Sheets presented in accordance
with GAAP, we use non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP
operating expenses, non-GAAP net income (loss), non-GAAP net income (loss) per
share, and free cash flow. In order for our investors to be better able to
compare our current results with those of previous periods, we have shown a
reconciliation of GAAP to non-GAAP financial measures. These reconciliations
adjust the related GAAP financial measures to exclude a non-recurring charge
related to previously-announced tender offer, recurring stock-based
compensation charges, and the associated tax impact of these items, where
applicable. Free cash flow is calculated as GAAP net cash provided by
operating activities less purchases of property and equipment and intangible
assets. We believe the presentation of our non-GAAP financial measures
enhances the user's overall understanding of our historical financial
performance. The presentation of our non-GAAP financial measures is not meant
to be considered in isolation or as a substitute for our financial results
prepared in accordance with GAAP, and our non-GAAP measures may be different
from non-GAAP measures used by other companies.
About NVIDIA
NVIDIA (Nasdaq: NVDA) is the world leader in visual computing technologies
and the inventor of the GPU, a high-performance processor which generates
breathtaking, interactive graphics on workstations, personal computers, game
consoles, and mobile devices. NVIDIA serves the entertainment and consumer
market with its GeForce(R) products, the professional design and visualization
market with its Quadro(R) products, and the high-performance computing market
with its Tesla(TM) products. NVIDIA is headquartered in Santa Clara,
California and has offices throughout Asia, Europe, and the Americas. For more
information, visit www.nvidia.com.
Certain statements in this press release including, but not limited to,
statements as to: the impact of the GPU on the computing experience; and the
impact and benefits of our products and technologies, are forward-looking
statements that are subject to risks and uncertainties that could cause
results to be materially different than expectations. Important factors that
could cause actual results to differ materially include: development of faster
or more efficient technology; the impact of technological development and
competition; design, manufacturing or software defects; changes in consumer
preferences or demands; changes in industry standards and interfaces;
unexpected loss of performance of our products or technologies when integrated
into systems; as well as other factors detailed from time to time in the
reports NVIDIA files with the Securities and Exchange Commission, or SEC,
including our Form 10-K for the fiscal year ended January 25, 2009. Copies of
reports filed with the SEC are posted on our website and are available from
NVIDIA without charge. These forward-looking statements are not guarantees of
future performance and speak only as of the date hereof, and, except as
required by law, NVIDIA disclaims any obligation to update these
forward-looking statements to reflect future events or circumstances.
Copyright (C) 2009 NVIDIA Corporation. All rights reserved. NVIDIA, the
NVIDIA logo, GeForce, Quadro, Tesla, PhysX, GeForce 3D Vision, CUDA, ION and
Tegra are registered trademarks and/or trademarks of NVIDIA Corporation in
the United States and other countries. All other company and/or product names
may be trade names, trademarks, and/or registered trademarks of the respective
owners with which they are associated. Features, pricing, availability, and
specifications are subject to change without notice.
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
--------------
April 26, April 27,
2009 2008
---- ----
Revenue $664,231 $1,153,388
Cost of revenue 463,123 638,545
Cost of revenue related to stock
option purchase (A) 11,412 -
------ ---
Gross profit 189,696 514,843
Operating expenses:
Research and development 211,341 218,830
Sales, general and administrative 80,491 93,034
Stock option purchase (A) 128,829 -
------- ---
Total operating expenses 420,661 311,864
------- -------
Operating income (loss) (230,965) 202,979
Interest and other income, net 6,144 10,039
----- ------
Income (loss) before income tax
expense (224,821) 213,018
Income tax expense (benefit) (B) (23,483) 36,213
------- ------
Net income (loss) $(201,338) $176,805
========= --------
Basic net income (loss) per share $(0.37) $0.32
====== =====
Diluted net income (loss) per share $(0.37) $0.30
====== =====
Shares used in basic per share
computation 542,307 555,673
Shares used in diluted per share
computation 542,307 591,989
--
(A) The $140,241 stock option purchase charge for the three months ended
April 26, 2009 relates to personnel associated with cost of revenue
(for manufacturing personnel), research and development, and sales,
general and administrative of $11,412, $90,456, and $38,373,
respectively, pursuant to a tender offer to purchase certain
outstanding employee stock options.
(B) The income tax expense (benefit) rate for the three months ended April
26, 2009 and April 27, 2008 was (10.4)% and 17.0%, respectively.
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
--------------
April 26, April 27,
2009 2008
---- ----
GAAP gross profit $189,696 $514,843
as a percent of GAAP revenue 28.6% 44.6%
Stock-based compensation expense included
in cost of revenue (A) 2,230 3,136
Stock option purchase charge related to
cost of revenue (B) 11,412 -
------ ---
Non-GAAP gross profit $203,338 $517,979
======== ========
as a percent of GAAP revenue 30.6% 44.9%
GAAP operating expenses $420,661 $311,864
Stock-based compensation expense (A) (31,883) (38,988)
Stock option purchase charge related to
operating expenses (B) (128,829) -
-------- ---
Non-GAAP operating expenses $259,949 $272,876
======== ========
GAAP net income (loss) $(201,338) $176,805
Stock-based compensation expense (A) 34,113 42,124
Stock option purchase charge (B) 140,241 -
Income tax impact of non-GAAP adjustments (19,690) (7,161)
------- ------
Non-GAAP net income (loss) $(46,674) $211,768
======== ========
Diluted net income (loss) per share
GAAP $(0.37) $0.30
====== =====
Non-GAAP $(0.09) $0.36
====== =====
Shares used in GAAP diluted net income (loss)
per share computation 542,307 591,989
Cumulative impact of non-GAAP adjustments
(C) - (10,653)
--- -------
Shares used in non-GAAP diluted net income
(loss) per share computation 542,307 581,336
======= =======
GAAP net cash flow provided by operating
activities $142,128 $145,245
Purchase of property and equipment and
intangible assets (20,777) (202,173)
------- --------
Free cash flow $121,351 $(56,928)
======== ========
(A) Results include stock-based compensation expense as follows (in
thousands):
Three Months
Ended
--------------
April 26, April 27,
2009 2008
---- ----
Cost of revenue $2,230 $3,136
Research and development $21,270 $24,534
Sales, general and administrative $10,613 $14,454
(B) During the three-months ended April 26, 2009, the Company completed a
tender offer to purchase an aggregate of 28.5 million outstanding
stock options for a total cash payment of $78.1 million. As a result
of the tender offer the Company incurred a charge of $140.2 million,
consisting of the remaining unamortized stock-based compensation
expenses associated with the unvested portion of the options tendered
in the offer, stock-based compensation expense resulting from amounts
paid in excess of the fair value of the underlying options, plus
associated payroll taxes and professional fees. The $140.2 million
stock option purchase charge for the three months ended April 26, 2009
relates to personnel associated with cost of revenue (for
manufacturing personnel), research and development, and sales, general
and administrative of $11.4 million, $90.5 million, and $38.3 million,
respectively.
(C) Reflects an adjustment to the diluted outstanding shares calculated
under SFAS 123R to conform to diluted outstanding shares calculated
under prior accounting standards (APB 25).
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 26, January 25,
2009 2009
---- ----
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $1,338,147 $1,255,390
Accounts receivable, net 304,393 318,435
Inventories 327,259 537,834
Prepaid expenses and other current assets 50,885 56,299
------ ------
Total current assets 2,020,684 2,167,958
Property and equipment, net 601,053 625,798
Goodwill 369,844 369,844
Intangible assets, net 142,446 147,101
Deposits and other assets 44,677 40,026
------ ------
Total assets $3,178,704 $3,350,727
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $226,114 $218,864
Accrued liabilities and other current
liabilities 476,058 559,727
------- -------
Total current liabilities 702,172 778,591
Other long-term liabilities 132,305 151,850
Capital lease obligations, long term 25,351 25,634
Stockholders' equity 2,318,876 2,394,652
--------- ---------
Total liabilities and stockholders' equity $3,178,704 $3,350,727
========== ==========
SOURCE NVIDIA Corporation
CONTACT: Michael Hara, Investor Relations, +1-408-486-2511,
mhara@nvidia.com, or Robert Sherbin, Corporate Communications,
+1-408-566-5150, rsherbin@nvidia.com, both of NVIDIA Corporation
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Web Site: http://www.nvidia.com
