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Entropic Communications Reports Second Quarter Results
Conference Call to be Webcast Today At 2:00 p.m. Pacific Time

SAN DIEGO, Jul 30, 2009 (GlobeNewswire via COMTEX News Network) -- Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of silicon and software solutions to enable connected home entertainment, today reported its second quarter results for the period ended June 30, 2009. Entropic reported second quarter net revenues of $26.1 million, an increase of 8 percent compared with $24.1 million in the first quarter of 2009 and 39 percent lower than in the second quarter of 2008.

In accordance with U.S. generally accepted accounting principles (GAAP), the company's second quarter net loss was $4.3 million, or ($0.06) per share (basic and diluted). This compares with GAAP net loss of $8.7 million, or ($0.13) per share (basic and diluted) in the first quarter of 2009. Non-GAAP net loss in the second quarter was $0.7 million, or ($0.01) per share (basic and diluted), compared to non-GAAP net loss of $4.2 million, or ($0.06) per share (basic and diluted) in the first quarter of 2009.

"We were pleased to see meaningful quarter over quarter revenue growth and we are now targeting non-GAAP profitability in the third quarter," said Patrick Henry, president and CEO of Entropic Communications. "Our core MoCA business at Verizon is strong and we have new MoCA revenue opportunities with other U.S. Pay-TV service providers, which we expect to drive growth for us later this year and into 2010. We believe the potential for higher penetration rates in the DIRECTV deployment and new international deployments of our DBS ODU products can provide further revenue opportunities this year and into 2010."

                                        Three months ended
 (In millions, except       ------------------------------------------
  per share data)           June 30, 2009  Mar. 31, 2009 June 30, 2008

 Net revenues                    $26.1         $24.1        $42.8
 GAAP net loss                   ($4.3)        ($8.7)       ($6.4)
 GAAP net loss per share
  (basic and diluted)           ($0.06)       ($0.13)      ($0.10)

 Non-GAAP net (loss)
  income (1)                     ($0.7)        ($4.2)        $1.2
 Non-GAAP net (loss)
  income per share (1)          ($0.01)       ($0.06)       $0.02


 1. Please refer to "Non-GAAP Financial Measures" below and the
 financial statements portion of this press release for an explanation
 of the non-GAAP financial measures contained in the table above and a
 reconciliation of such measures to the comparable GAAP financial
 measures.

Recent Highlights

 * Reached volume production of the EN4020 fully integrated CMOS
   multi-mode hybrid tuner to address the silicon tuner market, which
   is estimated to nearly double from 170M units in 2009 to over 300M
   units by 2013.
 * Celebrated the award-winning MTI DODECA Low Noise Block Feedhorn
   (LNBF) featuring Entropic's Channel Stacking Switch (CSS), which
   won the prestigious 2009 Taiwan Excellence Award. This is the second
   award for the DODECA LNBF, having received the "2008 Innovation
   Product Award" from the Hsinchu Science Park Administration in
   December 2008.
 * Announced that the company's next-generation CSS technology was
   tapped by top tier OEMS -- Axing, Jultec, Unitron and Wisi  -- for
   the large free-to-air (FTA) European satellite market. Entropic's
   RF5218 and RF5219 CSS chips are the industry-leading and de facto
   standard for single-cable solutions that fundamentally change and
   dramatically simplify direct broadcast satellite (DBS) delivery to
   the home.
 * Expanded our executive team with the addition of Dr. Tom Lookabaugh
   as chief technology officer. Lookabaugh is a seasoned executive with
   more than 20 years experience in developing communications
   technology solutions for satellite, cable, telco and broadcast
   industries. As CTO, Lookabaugh will define and drive the company's
   technology and advanced architectures roadmap and will support the
   company's business strategy.
 * Elected Keith Bechard to Entropic's board of directors. Bechard
   brings extensive technical expertise in interactive television
   services, high definition television (HDTV) and service provider
   deployment to support Entropic's strategy of enabling connected home
   entertainment with PayTV service providers.

For More Information

Entropic management will be holding a conference call today, July 30, 2009, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company's results for the second quarter and to provide guidance for the third quarter. You may access the conference call via any of the following:

 Teleconference:         719-325-2488

 Conference ID:          3146002

 Web Broadcast:          http://ir.entropic.com/events.cfm

 Replay:                 719-457-0820

About Entropic Communications

Entropic Communications, Inc. is a leading fabless semiconductor company that designs, develops and markets system solutions that enable connected home entertainment. The company's technologies significantly change the way high-definition television-quality video and other multimedia content such as movies, music, games and photos are brought into and delivered throughout the home. For more information please visit: www.entropic.com.

The Entropic Communications logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4255

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: net (loss) income and net (loss) income per share. These non-GAAP financial measures exclude the income statement effects of, among others, all forms of stock-based compensation and the effects of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, non-cash acquired intangibles amortization and impairment charges, and restructuring charges (benefits), upon the number of diluted shares used in calculating non-GAAP earnings per share.

Management uses these non-GAAP financial measures to manage the company's business, including setting operating budgets and executive compensation plans. These non-GAAP measures are also used to (i) supplement the financial results and forecasts reported to the company's board of directors, (ii) evaluate the company's operating performance, (iii) compare the company's performance to internal forecasts, and (iv) manage the company's business and benchmarking performance internally. The non-GAAP measures have been made available to stockholders consistently in the past to provide transparency on how management manages the company's operating performance. Management believes that these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP measures, in evaluating the company's ongoing operational performance.

The non-GAAP financial measures disclosed by the company should not be considered in isolation or a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Forward Looking Statements

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements regarding quarter over quarter revenue growth, reaching non-GAAP profitability and our expectations regarding future revenue opportunities and growth. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Entropic's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, our dependence on a limited number of customers for a substantial portion of our revenues; risks associated with adverse U.S. and international economic conditions; the ability of our customers or the service providers who purchase their products to successfully compete and continue to grow in their markets; the continued development of the market for HD video and other multi-media content delivery and networking solutions based on the MoCA standard; risks associated with competing against larger and more established companies and our ability to compete successfully in the market for MoCA-compliant chipsets; risks associated with timely development and introduction of new or enhanced products; risks related to international operations including political and economic conditions in foreign markets; and other factors discussed in the "Risk Factors" section of Entropic's Annual Report on Form 10-Q for the quarter ended March 31, 2009. All forward-looking statements are qualified in their entirety by this cautionary statement. Entropic is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.

Entropic Communications(r) and the stylized Entropic "curve" logo are either trademarks or registered trademarks of Entropic Communications, Inc. in the United States and/or other countries.

                    ENTROPIC COMMUNICATIONS, INC.
 GAAP Condensed Consolidated Statements of Operations (In thousands,
        except for share information and footnote disclosures)


                        Three Months Ended          Six Months Ended
                  June 30,   March 31,  June 30,   June 30,   June 30,
                    2009       2009       2008       2009       2008
                  --------   --------   --------   --------   --------
                (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)

 Net revenues     $ 26,146   $ 24,123   $ 42,836   $ 50,269   $ 84,824
 Cost of net
  revenues          13,201     11,904     23,869     25,105     46,706
                  --------   --------   --------   --------   --------

 Gross profit       12,945     12,219     18,967     25,164     38,118
 Operating
  expenses:
   Research and
    development     10,102     13,323     15,678     23,425     28,990
   Sales and
    marketing        3,395      3,637      4,455      7,032      8,599
   General and
    administrative   2,712      2,689      3,541      5,401      7,064
   Write off of
    in-process
    research and
    development         --         --      1,300         --      1,300
   Amortization
    of purchased
    intangibles         --         16        713         16      1,309
   Restructuring
    charges
    (benefit) (1)      979      1,124        (10)     2,103      1,069
   Impairment of
    goodwill and
    intangible
    assets (2)          --        208         --         208        --
                  --------   --------   --------    --------  --------
     Total
      operating
      expenses      17,188     20,997     25,677     38,185     48,331
                  --------   --------   --------   --------   --------
 Loss from
  operations        (4,243)    (8,778)    (6,710)   (13,021)   (10,213)
 Other income
  (expense), net        30         59        191         89         (7)
                  --------   --------   --------   --------   --------
 Loss before
  income taxes      (4,213)    (8,719)    (6,519)   (12,932)   (10,220)
                  --------   --------   --------   --------   --------
 Income tax
  provision
  (benefit)             74         17        (72)        91         82
                  --------   --------   --------   --------   --------
 Net loss
  attributable
  to common
  stockholders    $ (4,287)  $ (8,736)  $ (6,447)  $(13,023)  $(10,302)
                  ========   ========   ========   ========   ========
 Net loss per
  share
  attributable
  to common
  stockholders -
  basic and
  diluted         $  (0.06)  $  (0.13)  $  (0.10)  $  (0.19)  $  (0.15)
                  ========   ========   ========   ========   ========
 Weighted
  average number
  of shares used
  to compute loss
  per share
  attributable
  to common
  stockholders      69,424     68,799     67,215     69,113     67,023
                  ========   ========   ========   ========   ========

 (1) During the three months ended June 30, 2009 and March 31, 2009,
 the company recorded restructuring charges of $979,000 and
 $1,124,000, respectively, related to a restructuring plan implemented
 in March 2009 to improve its operating cost structure which included
 a reduction-in-force and the closing of its France location and one
 of its Israel locations.  Additional costs are expected to be
 recorded in the third quarter as the company completes the plan.

 During the three and six months ended June 30, 2008, the company
 recorded a restructuring benefit of $10,000 and a restructuring
 charge of $1,069,000, respectively, related to exiting the lease
 agreement for the company's former headquarters in San Diego,
 California, as well as related charges for the impairment of
 property and equipment and other long term assets.

 (2) During the three months ended March 31, 2009, the company
 recorded an impairment charge on intangible assets of $208,000.
 The company determined that the intangible assets associated with
 its 2007 acquisition of Arabella Software, Ltd. were fully impaired
 as the developed technology acquired would no longer be used in the
 company's ongoing business operations.




                    ENTROPIC COMMUNICATIONS, INC.
              GAAP Condensed Consolidated Balance Sheets
                            (In thousands)

                                       June 30,  March 31,   Dec. 31,
                                        2009       2009       2008
                                      ---------  ---------  ---------
                                     (unaudited)(unaudited)

 ASSETS
 Current assets:
   Cash and cash equivalents          $  31,403  $  30,602  $  30,071
   Marketable securities                    850        849      4,339
   Accounts receivable, net              14,930     17,181     13,915
   Inventory                             13,462     14,979     18,693
   Prepaid expenses and other
    current assets                        3,153      3,345      2,785
                                      ---------  ---------  ---------
     Total current assets                63,798     66,956     69,803
   Property and equipment, net           12,154     12,802     13,046
   Intangible assets, net                 2,434      2,839      3,469
   Other long-term assets                   278        262        284
                                      ---------  ---------  ---------
     Total assets                     $  78,664  $  82,859  $  86,602
                                      =========  =========  =========

 LIABILITIES AND STOCKHOLDERS'
  EQUITY
 Current liabilities:
   Accounts payable and accrued
    expenses                          $   8,311  $  10,440  $   7,873
   Accrued payroll and benefits           3,088      3,559      3,498
   Deferred revenues                        184        185        467
                                      ---------  ---------  ---------
     Total current liabilities           11,583     14,184     11,838
   Stock repurchase liability               512        677        784
   Other long-term liabilities            3,059      3,088      3,231
 Stockholders' equity                    63,510     64,910     70,749
                                      ---------  ---------  ---------
     Total liabilities and
      stockholders' equity            $  78,664  $  82,859  $  86,602
                                      =========  =========  =========




                     ENTROPIC COMMUNICATIONS, INC.
            Unaudited Reconciliation of Non-GAAP Adjustments
 (In thousands, except for share information and footnote disclosures)


 This press release contains the following non-GAAP financial
 measures: net (loss) income and net (loss) income per share.  The
 presentation of such measures is not intended to be considered in
 isolation or as a substitute for, or superior to, the financial
 information prepared and presented in accordance with GAAP.
 Our non-GAAP net (loss) income and net (loss) income per share
 exclude the items listed below.

 The following table sets forth such non-GAAP measures for the
 applicable periods as well as the reconciliation of such measures to
 the directly comparable GAAP measures for the periods shown.


                           Three Months Ended        Six Months Ended
                     ----------------------------- -------------------
                      June 30, March 31,  June 30,  June 30,  June 30,
                       2009      2009      2008      2009      2008
                     --------- --------- --------- --------- ---------

 GAAP net loss
  attributable to
  common stockholders  $(4,287)  $(8,736)  $(6,447) $(13,023) $(10,302)
 Non-GAAP
  adjustments:
   Stock-based
    compensation:
     Cost of net
      revenues              45        16        64        61       110
     Research and
      development          996     1,522     1,829     2,518     3,587
     Sales and
      marketing            326       368       611       694     1,234
     General and
      administrative       853       902       868     1,755     2,065
                     --------- --------- --------- --------- ---------
       Total
        stock-based
        compensation     2,220     2,808     3,372     5,028     6,996
   Acquisition
    -related items:
     Amortization of
      purchased
      intangible
      assets:
       Cost of net
        revenues           405       406     1,590       811     2,830
       Operating
        expenses            --        16       713        16     1,309
     Impairment of
      goodwill and
      intangible
      assets                --       208        --       208        --
   Restructuring
    charges (benefit)      979     1,124       (10)    2,103     1,069
   Write off of debt
    issuance costs          --        --        --        --       476
   Retention bonuses        --        --       698        --       698
   Write off of
    in-process
    research and
    development             --        --     1,300        --     1,300
                     --------- --------- --------- --------- ---------
   Total of non-GAAP
    adjustments          3,604     4,562     7,663     8,166    14,678
                     --------- --------- --------- --------- ---------
 Non-GAAP net (loss)
  income                 $(683)  $(4,174)   $1,216   $(4,857)   $4,376
                     ========= ========= ========= ========= =========

 GAAP weighted
  average shares
  (basic)               69,424    68,799    67,215    69,113    67,023
   Non-GAAP
    adjustment for
    dilutive shares(a)      --        --     6,146       --      6,429
                     --------- --------- --------- --------- ---------
 Non-GAAP weighted
  average shares
  (basic and diluted)   69,424    68,799    73,361    69,113    73,452
                     ========= ========= ========= ========= =========

 GAAP net loss per
  share (basic and
  diluted)              $(0.06)   $(0.13)   $(0.10)   $(0.19)   $(0.15)
   Non-GAAP
    adjustments
    detailed above(a)     0.05      0.07      0.12      0.12      0.21
                     --------- --------- --------- --------- ---------
 Non-GAAP net (loss)
  income per share
  (basic and diluted)   $(0.01)   $(0.06)    $0.02    $(0.07)    $0.06
                     ========= ========= ========= ========= =========

  (a) Shares included for calculating diluted earnings per share for
  periods with non-GAAP net income. For the periods shown with a net
  loss, no shares were included for the diluted earnings per share
  calculation, as including such shares would be antidilutive.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Entropic Communications

Entropic Communications, Inc.
          Investor Contact:
          Debra Hart, Director, Investor Relations
          858.768.3852
          debra.hart@entropic.com

          The Ardell Group
          Media Contacts:
          Angela Edgerton
          858.792.2941
          angela@ardellgroup.com

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