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IRVINE, Calif., April 21, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Broadcom Corporation (Nasdaq: BRCM) today reported unaudited financial results for its first quarter ended March 31, 2009.
Net revenue for the first quarter of 2009 was $853.4 million, a decrease of 24.2% compared with the $1.127 billion reported for the fourth quarter of 2008 and a decrease of 17.3% compared with the $1.032 billion reported for the first quarter of 2008. Net loss computed in accordance with U.S. generally accepted accounting principles (GAAP) for the first quarter of 2009 was $91.9 million, or $.19 net loss per share (basic and diluted), compared with GAAP net loss of $159.2 million, or $.32 net loss per share (basic and diluted), for the fourth quarter of 2008, and GAAP net income of $74.3 million, or $.14 per share (diluted), for the first quarter of 2008.
Net revenue for the first quarter ended March 31, 2009 included royalties of $19.0 million received pursuant to a patent license agreement entered into in July 2007. The royalties received in the first and fourth quarters of 2008 were $35.6 million and $40.0 million, respectively.
"While we were not able to completely offset the impact of the current economic downturn with our product, customer and end market breadth, we believe Broadcom was successful in experiencing a lesser peak-to-trough revenue decline than many of our peers," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "Even in the midst of this revenue decline, Broadcom demonstrated strong operating expense control and generated solid cash flow from operations, enabling us to continue to invest in next generation products to stay ahead of our competition."
"As we progressed through the first quarter, customer bookings strengthened, which is reflected in our anticipated sequential revenue growth in the second quarter of 2009."
Conference Call Information
As previously announced, Broadcom will conduct a conference call with analysts and investors to discuss its first quarter 2009 financial results and current financial prospects today at 6:00 a.m. Pacific Time (9:00 a.m. Eastern Time). The company will broadcast the conference call via webcast over the Internet. To listen to the webcast, or to view the financial or other statistical information required by Securities and Exchange Commission (SEC) Regulation G, please visit the Investors section of the Broadcom website at www.broadcom.com/investors. Please note that we have added additional information to this presentation regarding our revenue, gross margin and operating expenses. The webcast will be recorded and available for replay until 5:00 p.m. Pacific Time, Friday, June 19, 2009.
About Broadcom
Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom(R) products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry's broadest portfolio of state-of-the-art system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything(R).
Broadcom is one of the world's largest fabless semiconductor companies, with 2008 revenue of $4.66 billion, holds over 3,300 U.S. and over 1,300 foreign patents, and has more than 7,500 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video, data and multimedia.
Broadcom is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5000 or at www.broadcom.com.
Cautions regarding Forward Looking Statements:
All statements included or incorporated by reference in this release and the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. Examples of such forward-looking statements include, but are not limited to, guidance provided on future revenue, gross margin and operating expense targets for the second quarter of 2009. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
These risks and uncertainties include, but are not limited to:
-- general economic and political conditions and specific conditions in the
markets we address, including the continuing volatility in the
technology sector and semiconductor industry, current global economic
recession, trends in the broadband communications markets in various
geographic regions, including seasonality in sales of consumer
electronic products into which our products are incorporated, and
possible disruption in commercial activities related to terrorist
activity or armed conflict;
-- the timing, rescheduling or cancellation of significant customer orders
and our ability, as well as the ability of our customers, to manage
inventory;
-- our ability to adjust our operations in response to changes in demand
for our existing products and services or demand for new products
requested by our customers;
-- the effectiveness of our expense and product cost control and reduction
efforts;
-- our dependence on a few significant customers for a substantial portion
of our revenue;
-- the gain or loss of a key customer, design win or order;
-- our ability to specify, develop or acquire, complete, introduce, market
and transition to volume production new products and technologies in a
cost-effective and timely manner;
-- risks and uncertainties resulting from Broadcom's equity award
review, including pending and potential new claims and proceedings
related to such matters, such as shareholder litigation and any action
by the SEC, U.S. Attorney's Office or other governmental agency
that has resulted in, and could result in further, civil or criminal
sanctions against the company and/or certain of our current or former
officers, directors or employees, or other actions taken or required as
a result of the review, and the extent to which we are able to receive
reimbursement of our expenses related to such litigation and actions
through our directors' and officers' liability insurance
carriers. In the event that the company's coverage under these
policies is reduced or denied, our financial exposure would be
increased;
-- the risks inherent in acquisitions of technologies and businesses,
including the timing and successful completion of technology and product
development through volume production, integration issues, potential
contractual, intellectual property or employment issues, the risk that
anticipated benefits of an acquisition may not be realized, and
accounting treatment and charges;
-- intellectual property disputes and customer indemnification claims and
other types of litigation risk;
-- the quality of our products and any potential remediation costs;
-- our ability to retain, recruit and hire key executives, technical
personnel and other employees in the positions and numbers, with the
experience and capabilities, and at the compensation levels needed to
implement our business and product plans;
-- the availability and pricing of third party semiconductor foundry,
assembly and test capacity and raw materials;
-- the rate at which our present and future customers and end-users adopt
Broadcom's technologies and products in our target markets;
-- competitive pressures and other factors such as the qualification,
availability and pricing of competing products and technologies and the
resulting effects on sales and pricing of our products;
-- changes in our product or customer mix;
-- the risks and uncertainties associated with our international
operations, particularly in light of terrorist activity, armed conflict
or political unrest;
-- our ability to timely and accurately predict market requirements and
evolving industry standards and to identify opportunities in new
markets;
-- the volume of our product sales and pricing concessions on volume sales;
-- problems or delays that we may face in shifting our products to smaller
geometry process technologies and in achieving higher levels of design
integration;
-- the risks of producing products with new suppliers and at new
fabrication and assembly and test facilities;
-- delays in the adoption and acceptance of industry standards in our
target markets;
-- the timing of customer-industry qualification and certification of our
products and the risks of non-qualification or non-certification;
-- fluctuations in the manufacturing yields of our third party
semiconductor foundries and other problems or delays in the fabrication,
assembly, testing or delivery of our products; and
-- the level of orders received that can be shipped in a fiscal quarter.
Our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release and the related conference call for analysts and investors speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement, except as required by law.
Broadcom, the pulse logo, Connecting everything, and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Any other trademarks or trade names mentioned are the property of their respective owners.
Broadcom Trade Press Contact
Bill Blanning
Vice President, Global Media Relations
949-926-5555
blanning@broadcom.com
Broadcom Investor Relations Contact
T. Peter Andrew
Vice President, Corporate Communications
949-926-5663
andrewtp@broadcom.com
BROADCOM CORPORATION
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
March 31,
---------
2009(a) 2008(a)
------- -------
Net revenue $853,436 $1,032,210
Cost of revenue 446,277 481,163
------- -------
Gross profit 407,159 551,047
Operating expense:
Research and development 372,724 355,688
Selling, general and administrative 125,048 111,946
Amortization of purchased intangible
assets 4,159 183
In-process research and development - 10,900
Settlement costs 1,150 15,810
Restructuring costs 7,111 -
----- ------
Income (loss) from operations (103,033) 56,520
Interest income, net 4,398 20,104
Other income, net 1,646 924
----- ------
Income (loss) before income taxes (96,989) 77,548
Provision (benefit) for income taxes (5,049) 3,234
------- -------
Net income (loss) $(91,940) $74,314
======== =======
Net income (loss) per share (basic) $(.19) $.14
====== ====
Net income (loss) per share (diluted) $(.19) $.14
====== ====
Weighted average shares (basic) 490,195 530,338
======= =======
Weighted average shares (diluted) 490,195 539,827
======= =======
(a) Includes royalties of $19.0 million and $35.6 million in the three
months ended March 31, 2009 and 2008, respectively, received pursuant to
a patent license agreement entered into in July 2007.
The following table presents details of total stock-based compensation
expense included in each functional line item in the unaudited condensed
consolidated statements of operations above:
Three Months Ended
March 31,
---------
2009 2008
---- ----
Cost of revenue $5,877 $5,465
Research and development 89,262 78,706
Selling, general and administrative 28,634 29,065
BROADCOM CORPORATION
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31,
----------------
2009 2008
---- ----
Operating activities
Net income (loss) $(91,940) $74,314
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 21,749 17,992
Stock-based compensation expense:
Stock options and other awards 46,744 58,029
Restricted stock units issued by Broadcom 77,029 55,207
Acquisition-related items:
Amortization of purchased intangible assets 8,272 4,118
In-process research and development - 10,900
Non-cash restructuring costs 2,663 -
Gain on sale of marketable securities (1,046) -
Changes in operating assets and liabilities:
Accounts receivable 17,446 6,581
Inventory 101,260 9,911
Prepaid expenses and other assets (1,467) (6,296)
Accounts payable (76,616) 46,014
Accrued settlement liabilities - 10,000
Other accrued and long-term liabilities (13,384) (46,959)
-------- --------
Net cash provided by operating activities 90,710 239,811
------ -------
Investing activities
Net purchases of property and equipment (12,457) (25,662)
Net cash received from (paid for) acquired
companies 2,139 (19,795)
Purchases of strategic investments - (355)
Purchases of marketable securities (109,706) (135,937)
Proceeds from sales and maturities of
marketable securities 134,112 148,183
------- -------
Net cash provided by (used in)
investing activities 14,088 (33,566)
------ --------
Financing activities
Repurchases of Class A common stock - (391,732)
Minimum tax withholding paid on behalf of
employees for restricted stock units (16,076) (12,130)
Proceeds from issuance of common stock, net 4,805 12,314
----- ------
Net cash used in financing activities (11,271) (391,548)
-------- ---------
Increase (decrease) in cash and cash
equivalents 93,527 (185,303)
Cash and cash equivalents at beginning of
period 1,190,645 2,186,572
--------- ---------
Cash and cash equivalents at end of period $1,284,172 $2,001,269
========== ==========
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
March 31, December 31,
2009 2008
---- ----
(In thousands)
Cash and cash equivalents $1,284,172 $1,190,645
Short-term marketable securities 677,638 707,477
------- -------
Total cash, cash equivalents and marketable
securities $1,961,810 $1,898,122
============ ===========
Increase from prior year end $63,688
=======
BROADCOM CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash and cash equivalents $1,284,172 $1,190,645
Short-term marketable securities 677,638 707,477
Accounts receivable, net 354,865 372,311
Inventory 264,846 366,106
Prepaid expenses and other current assets 113,414 114,674
------- -------
Total current assets 2,694,935 2,751,213
Property and equipment, net 228,495 234,691
Goodwill 1,277,104 1,279,243
Purchased intangible assets, net 53,686 61,958
Other assets 69,066 66,160
------ ------
Total assets $4,323,286 $4,393,265
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $232,047 $310,487
Wages and related benefits 154,773 153,772
Deferred revenue 13,779 12,338
Accrued liabilities 228,892 240,506
------- -------
Total current liabilities 629,491 717,103
Commitments and contingencies
Long-term deferred revenue 2,836 3,898
Other long-term liabilities 62,153 65,197
Shareholders' equity 3,628,806 3,607,067
--------- ---------
Total liabilities and shareholders' equity $4,323,286 $4,393,265
========== ==========
BROADCOM CORPORATION
Unaudited Supplementary Financial Data
(In thousands)
The following table presents details of supplementary financial data
included in each functional line item in the unaudited condensed
consolidated statements of operations:
Three Months Ended
March 31,
---------------
2009 2008
---- ----
Cost of revenue:
Stock-based compensation $5,877 $5,465
Amortization of purchased intangible assets 4,113 3,935
Research and development:
Stock-based compensation 89,262 78,706
Selling, general and administrative:
Stock-based compensation 28,634 29,065
Other operating expense:
Amortization of purchased intangible assets 4,159 183
In-process research and development (1) - 10,900
Restructuring costs (2) 7,111 -
Settlement costs (3) 1,150 15,810
Other:
Employer payroll tax expense on certain
stock option exercises 733 930
Non-operating gains (7) -
(1) Recorded in connection with the company's acquisitions of Sunext
Design, Inc. in the three months ended March 31, 2008.
(2) Recorded in connection with the company's restructuring plan
announced and implemented in the three months ended March 31, 2009.
(3) Recorded accrued settlement costs included $12.0 million related to
Broadcom's settlement with the Securities and Exchange Commission in
the three months ended March 31, 2008. Also includes settlement
costs of $3.8 million and $1.2 million, related to a patent
infringement claims settled in the three months ended March 31, 2008
and 2009, respectively.
BROADCOM CORPORATION
Guidance for the Three Months Ending June 30, 2009
Three Months
Ending June 30, 2009
--------------------
Net revenue $900 to $975 million
Increase 25 to 50 basis points
sequentially from
Gross margin 46.5% (which excludes the effect
of Verizon royalty)
Total operating expense
(including stock-based
compensation) Up $10 to $20 million sequentially
Broadcom has based the preceding guidance for the three months ending June 30, 2009 on expectations, assumptions and estimates that we believe are reasonable given our assessment of historical trends and other information reasonably available as of April 21, 2009. Our guidance consists of predictions only, however, and is subject to a wide range of known and unknown business risks and uncertainties, many of which are beyond our control. The forecasts and projections contained in the table above should not be regarded as representations by Broadcom that the estimated results will be achieved. Projections and estimates are necessarily speculative in nature and actual results may vary materially from the guidance we provide today.
The guidance set forth in the table above should be read together with the information under the caption, "Cautions regarding Forward Looking Statements" above, our Annual Report on Form 10-K for the year ended December 31, 2008, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and our other Securities and Exchange Commission filings. We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein.
SOURCE Broadcom Corporation; BRCM Corporate
http://www.broadcom.com
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