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Sigma Designs Inc. Reports Operating Results (10-Q)

September 12, 2013 | About:
Joe Ponzio

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Sigma Designs Inc. (SIGM) filed Quarterly Report for the period ended 2013-08-03.

Sigma Designs, Inc. has a market cap of $216.9 million; its shares were traded at around $6.35 with and P/S ratio of 0.90.
This is the annual revenues and earnings per share of SIGM over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SIGM.


Highlight of Business Operations:

Our net revenue for the three months ended August 3, 2013 decreased by $14.5 million compared to the corresponding period in the prior fiscal year mainly driven by a decrease in DTV revenue of $14.6 million. For the six months ended August 3, 2013, our net revenue decreased by $2.2 million, or 2%, compared to the corresponding period in the prior fiscal year. This was primarily driven by a decrease in set-top box revenue of $4.7 million, home networking revenue of $3.5 million and DTV revenue of $1.2 million, partially offset by home control revenue increasing by $4.0 million and license and other revenue increasing by $3.2 million as we successfully transitioned to the next generation products where Internet protocol services and OTT delivery are converging with traditional broadcasting.

The decrease in sales and marketing, S&M, expenses of $2.3 million, or 29%, for the three months ended August 3, 2013 compared to the three months ended July 28, 2012 was primarily due to reductions of $1.3 million in employee-related expenses, $0.2 million in stock-based compensation expense, $0.4 million in marketing and travel costs and $0.2 million each in sales commission and other variable costs.

The decrease in sales and marketing expense of $3.5 million, or 24%, for the six months ended August 3, 2013 compared to the six months ended July 28, 2012 was due to decreases of $1.9 million in employee-related expenses, $0.3 million in stock-based compensation, $0.9 million in travel and marketing costs and $0.6 million in other variable costs. These decreases were partially offset by a $0.2 million increase in outside services. The overall decrease in our S&M expense is a result of our reduction in force and our restructuring efforts.

The increase in cash flow from operating assets and liabilities for the six months ended August 3, 2013 included a decrease in inventory of $4.3 million, an increase in accounts payable of $13.8 million, a decrease in prepaid expenses and other current assets of $2.4 million, and a decrease in accrued compensation and related benefits and other liabilities of $1.9 million. These increases in cash flows were partially offset by an increase in accounts receivable of $17.4 million, a decrease in income taxes payable of $1.0 million and a decrease in other long-term liabilities of $0.3 million. The changes in operating assets and liabilities reflect the increase in back-end loaded revenue resulting in increase in accounts receivable and our overall restructuring efforts.

Net cash used in operating activities of $3.2 million for the six months ended July 28, 2012 was primarily due to a net loss of $27.1 million, partially offset by $16.4 million of non-cash charges included in the net loss and $7.5 million of cash flow increases reflected in the net change of operating assets and liabilities. Non-cash charges consisted primarily of $10.7 million of depreciation and amortization, $5.6 million of stock-based compensation and a $1.7 million provision for excess and obsolete inventories, partially offset by a $1.4 million gain related to the acquisition of the DTV business from Trident Microsystems, reflecting that the sum of the fair value of net assets we acquired exceeded the acquisition cost. Cash flow increases reflected in the net change of operating assets and liabilities consisted primarily of a $13.0 million increase in accrued compensation and related benefits and other liabilities, a $9.1 million increase in accounts payable and a $1.6 million decrease in inventories, partially offset by a $8.5 million increase in accounts receivable, a $3.2 million increase in prepaid expenses and other current assets, a $2.6 million increase in other non-current assets and a $1.0 million reduction in other long-term liabilities. The changes in operating assets and liabilities generally reflect the increase in revenues and related expenses resulting from the expansion of our DTV business subsequent to the Trident Microsystems asset acquisition, partially offset by a reduction of media processor wafer inventory.

Read the The complete Report

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