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IRVINE, Calif., July 23, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Broadcom Corporation (Nasdaq: BRCM) today reported unaudited financial results for its second quarter ended June 30, 2009.
Net revenue for the second quarter of 2009 was $1.040 billion. This represents an increase in net revenue of 21.9% compared with the $853.4 million reported for the first quarter of 2009 and a decrease of 13.4% compared with the $1.201 billion reported for the second quarter of 2008. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the second quarter of 2009 was $13.4 million, or $.03 per share (diluted), compared with GAAP net loss of $91.9 million, or $.19 net loss per share (basic and diluted), for the first quarter of 2009, and GAAP net income of $134.8 million, or $.25 per share (diluted), for the second quarter of 2008.
On April 26, 2009, Broadcom and QUALCOMM Incorporated announced that they had entered into a settlement and multi-year patent agreement. Under the agreement, QUALCOMM will pay Broadcom $891.2 million over a four-year period. In connection with this agreement, Broadcom recorded a $65.3 million gain on settlement and $67.3 million of licensing revenue in the three months ended June 30, 2009.
As previously disclosed, in connection with the establishment of the Broadcom Foundation, Broadcom recorded a charitable contribution expense of $50.0 million in the three months ended June 30, 2009.
Net revenue for the six months ended June 30, 2009 was $1.893 billion. This represents a decrease in net revenue of 15.2% from the $2.233 billion reported for the six months ended June 30, 2008. Net loss computed in accordance with GAAP for the six months ended June 30, 2009 was $78.5 million, or $.16 net loss per share (basic and diluted), compared with GAAP net income of $209.1 million, or $.39 per share (diluted), for the six months ended June 30, 2008.
For a further discussion of non-recurring transactions and their related accounting impact for all periods presented, see the "Unaudited Supplementary Financial Data" schedule below.
"Despite the continued global economic uncertainty, Broadcom's results for the second quarter reflected a return to a more stable ordering pattern and the ramp of new products from our end customers," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "In the second quarter, Broadcom generated strong sequential revenue growth, with product revenue near the top end of the range provided in April. We are pleased that research and development and selling, general and administrative expenses once again increased less than anticipated from the first quarter of 2009, reflecting our continued focus on maintaining solid financial discipline. In addition, we generated strong cash flow in excess of $325 million from operations."
"Our operating strategy for 2009 remains focused on managing our business to gain share and generate positive quarterly cash flow from operations. Based upon the customer activity we have experienced to date we anticipate that future revenue growth will be broad based with slightly stronger growth within our mobile and wireless targeted end market, driven by new product ramps and the upcoming holiday season."
Conference Call Information
As previously announced, Broadcom will conduct a conference call with analysts and investors to discuss its second quarter 2009 financial results and current financial prospects today at 1:45 p.m. Pacific Time (4:45 p.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. The webcast will be recorded and available for replay until 5:00 p.m. Pacific Time, August 28, 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, one of the world's largest fabless semiconductor companies, with 2008 revenue of $4.66 billion, holds more than 3,450 U.S. and 1,350 foreign patents, and has more than 7,350 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video, data and multimedia.
A FORTUNE 500(R) company, 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 product margin and operating expense targets for the third 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 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;
-- 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;
-- 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;
-- intellectual property disputes and customer indemnification claims and
other types of litigation risk;
-- our dependence on a few significant customers for a substantial portion
of our revenue;
-- changes in current or future laws or the imposition of new laws or
regulations, including new or changed tax regulations, or changes in the
interpretation or enforcement of those laws or regulations;
-- 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, costs 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 Six Months Ended
June 30, June 30,
--------------------- ----------------------
2009 2008 2009 2008
--------- ---------- ---------- ----------
Product revenue $966,317 $1,161,965 $1,794,547 $2,154,968
Licensing revenue 73,627 38,966 98,833 78,173
--------- ---------- ---------- ----------
Total net revenue 1,039,944 1,200,931 1,893,380 2,233,141
Operating costs and
expenses:
Cost of product revenue 518,674 554,596 964,951 1,035,759
Research and development 374,770 380,035 747,494 735,723
Selling, general and
administrative 127,410 142,017 252,458 253,963
Amortization of
purchased intangible
assets 4,139 184 8,298 367
In-process research and
development - - - 10,900
Impairment of long-lived
assets 11,261 1,900 11,261 1,900
Restructuring costs
(reversals) 447 (1,000) 7,558 (1,000)
Settlement costs (gains) (58,406) - (57,256) 15,810
Charitable contribution 50,000 - 50,000 -
--------- ---------- ---------- ----------
Total operating
costs and expenses 1,028,295 1,077,732 1,984,764 2,053,422
--------- ---------- ---------- ----------
Income (loss) from
operations 11,649 123,199 (91,384) 179,719
Interest income, net 3,986 12,428 8,384 32,532
Other income (expense),
net 1,019 (191) 2,665 733
--------- ---------- ---------- ----------
Income (loss) before
income taxes 16,654 135,436 (80,335) 212,984
Provision (benefit) for
income taxes 3,253 647 (1,796) 3,881
--------- ---------- ---------- ----------
Net income (loss) $13,401 $134,789 $(78,539) $209,103
========= ========== ========== ==========
Net income (loss) per
share (basic) $.03 $.26 $(.16) $.40
========= ========== ========== ==========
Net income (loss) per
share (diluted) $.03 $.25 $(.16) $.39
========= ========== ========== ==========
Weighted average shares
(basic) 495,110 512,875 492,652 521,606
========= ========== ========== ==========
Weighted average shares
(diluted) 507,993 529,977 492,652 534,902
========= ========== ========== ==========
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 Six Months Ended
June 30, June 30,
------------------ -------------------
2009 2008 2009 2008
------ ------ ------- -------
Cost of product revenue $6,128 $6,237 $12,005 $11,702
Research and development 86,607 90,003 175,869 168,709
Selling, general and
administrative 29,893 31,268 58,527 60,333
Certain prior period amounts in the unaudited condensed consolidated
statements of operations have been reclassified to conform with the
current period presentation of product and licensing revenue.
BROADCOM CORPORATION
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Operating activities
Net income (loss) $13,401 $134,789 $(78,539) $209,103
Adjustments to
reconcile net
income (loss)
to net cash
provided by
operating
activities:
Depreciation and
amortization 14,292 18,427 36,041 36,419
Stock-based
compensation
expense:
Stock options
and other
awards 38,813 57,178 85,557 115,207
Restricted stock
units 83,815 70,330 160,844 125,537
Acquisition-related
items:
Amortization of
purchased
intangible
assets 8,251 4,118 16,523 8,236
In-process
research and
development - - - 10,900
Impairment of
long-lived
assets 11,261 1,900 11,261 1,900
Loss on
strategic
investment, net - 1,760 - 1,760
Non-cash
restructuring
costs - - 2,663 -
Gain on sale of
marketable
securities - - (1,046) -
Changes in
operating
assets and
liabilities:
Accounts
receivable (89,181) (117,396) (71,735) (110,815)
Inventory (14,452) (34,944) 86,808 (25,033)
Prepaid expenses
and other
assets (6,319) 25,054 (7,786) 18,758
Accounts payable 156,377 77,815 79,761 123,829
Deferred revenue 100,387 (1,521) 100,766 (10,580)
Other accrued
and long-term
liabilities 11,146 9,907 (2,617) (17,993)
---------- ---------- ---------- ----------
Net cash
provided by
operating
activities 327,791 247,417 418,501 487,228
---------- ---------- ---------- ----------
Investing
activities
Net purchases of
property and
equipment (13,837) (23,405) (26,294) (49,067)
Net cash
received from
(paid for)
acquired
companies - (9,943) 2,139 (29,738)
Purchases of
strategic
investments - - - (355)
Purchases of
marketable
securities (401,344) (202,584) (511,050) (338,521)
Proceeds from
sales and
maturities of
marketable
securities 287,733 72,415 421,845 220,598
---------- ---------- ---------- ----------
Net cash used
in investing
activities (127,448) (163,517) (113,360) (197,083)
---------- ---------- ---------- ----------
Financing
activities
Repurchases of
Class A common
stock (38,434) (444,131) (38,434) (835,863)
Proceeds from
issuance of
common stock 78,889 78,300 83,694 90,614
Minimum tax
withholding
paid on behalf
of employees
for restricted
stock units (18,452) (13,623) (34,528) (25,753)
---------- ---------- ---------- ----------
Net cash
provided by
(used in)
financing
activities 22,003 (379,454) 10,732 (771,002)
---------- ---------- ---------- ----------
Increase
(decrease) in
cash and cash
equivalents 222,346 (295,554) 315,873 (480,857)
Cash and cash
equivalents at
beginning of
period 1,284,172 2,001,269 1,190,645 2,186,572
---------- ---------- ---------- ----------
Cash and cash
equivalents at
end of period $1,506,518 $1,705,715 $1,506,518 $1,705,715
========== ========== ========== ==========
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
June 30, March 31, December 31,
2009 2009 2008
---------- ---------- ----------
(In thousands)
Cash and cash equivalents $1,506,518 $1,284,172 $1,190,645
Short-term marketable securities 700,585 677,638 707,477
Long-term marketable securities 92,699 - -
---------- ---------- ----------
Total cash, cash equivalents and
marketable securities $2,299,802 $1,961,810 $1,898,122
========== ========== ==========
Increase from prior period end $337,992
==========
Increase from prior year end $401,680
==========
BROADCOM CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2009 2008
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $1,506,518 $1,190,645
Short-term marketable securities 700,585 707,477
Accounts receivable, net 444,046 372,311
Inventory 279,298 366,106
Prepaid expenses and other current assets 108,078 114,674
---------- ----------
Total current assets 3,038,525 2,751,213
Property and equipment, net 224,238 234,691
Long-term marketable securities 92,699 -
Goodwill 1,277,104 1,279,243
Purchased intangible assets, net 34,174 61,958
Other assets 81,581 66,160
---------- ----------
Total assets $4,748,321 $4,393,265
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $389,630 $310,487
Wages and related benefits 129,547 157,758
Deferred revenue 115,387 12,338
Accrued liabilities 277,979 236,520
---------- ----------
Total current liabilities 912,543 717,103
Long-term deferred revenue 1,615 3,898
Other long-term liabilities 60,851 65,197
Commitments and contingencies
Shareholders' equity 3,773,312 3,607,067
---------- ----------
Total liabilities and shareholders' equity $4,748,321 $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 Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
------- ------ ------- -------
Cost of product revenue:
Stock-based compensation $6,128 $6,237 $12,005 $11,702
Amortization of purchased
intangible assets 4,112 3,934 8,225 7,869
Research and development:
Stock-based compensation 86,607 90,003 175,869 168,709
Selling, general and
administrative:
Stock-based compensation 29,893 31,268 58,527 60,333
Other operating expense:
Amortization of purchased
intangible assets 4,139 184 8,298 367
In-process research and
development (1) - - - 10,900
Impairment of long-lived
assets (2) 11,261 1,900 11,261 1,900
Restructuring costs
(reversals) (3) 447 (1,000) 7,558 (1,000)
Settlement costs (gains) (4) (58,406) - (57,256) 15,810
Charitable contribution (5) 50,000 - 50,000 -
Other:
Employer payroll tax expense
on certain stock option
exercises 1,208 1,169 1,941 2,099
Loss on strategic investments,
net - 1,760 - 1,760
Non-operating gains (7) - (14) -
----------------------
(1) Recorded in connection with the company's acquisition of Sunext
Design, Inc. in the six months ended June 30, 2008.
(2) A long-lived asset impairment charge of $11.3 million related to
the company's acquisition of the digital television business of
AMD, Inc. was recorded in the three and six months ended June 30,
2009.
(3) Recorded in connection with the company's restructuring plan
announced and implemented in the six months ended June 30, 2009,
as well as a restructuring cost reversal of a prior restructuring
plan in the six months ended June 30, 2008.
(4) Recorded a $65.3 million gain on settlement in connection with the
QUALCOMM litigation, offset in part by estimated additional
settlement costs of $6.9 million related to certain employment tax
items in the three and six months ended June 30, 2009, and an
additional $1.2 million related to patent infringement claims in
the six months ended June 30, 2009. Also includes settlement
costs of $15.8 million, of which $12.0 million related to
Broadcom's settlement with the Securities and Exchange Commission
and $3.8 million related to a patent infringement claims settled
in the six months ended June 30, 2008.
(5) Recorded in connection with an accrued $50.0 million charitable
contribution to the recently established Broadcom Foundation in
the three and six months ended June 30, 2009.
BROADCOM CORPORATION
Unaudited Supplementary Financial Data
(In thousands)
Three Months Ended
---------------------------------------------
June 30, 2009 June 30, 2008 March 31, 2009
------------- ------------- --------------
Product revenue $966,317 $1,161,965 $828,230
Licensing revenue 73,627 38,966 25,206
---------- ---------- --------
Total net revenue $1,039,944 $1,200,931 $853,436
========== ========== ========
Cost of product
revenue $518,674 $554,596 $446,277
========== ========== ========
Product gross
margin(1) 46.3% 52.3% 46.1%
========== ========== ========
Total gross margin 50.1% 53.8% 47.7%
========== ========== ========
-----------------------------
(1) Product gross margins in the three months ended June 30, 2008 and
March 31, 2009 has been adjusted from 52.4% to 52.3% and 46.5% to
46.1%, respectively, to conform with the current period
presentation of product and licensing revenue.
BROADCOM CORPORATION
Guidance for the Three Months Ending September 30, 2009
Three Months
Ending September 30, 2009
--------------------------------------
Total net revenue Up 7% to 14% from Q2
Product revenue ~$1.060 to ~$1.130 billion
Licensing revenue ~ $55 million
Total net revenue ~$1.115 to ~$1.185 billion
Product gross margin Increase by around 125 basis points or
more from Q2
Research and development and
selling, general and
administrative expenses
(including stock-based
compensation) Up $20 to $26 million from Q2
Broadcom has based the preceding guidance for the three months ending
September 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 July 23, 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
Copyright (C) 2009 PR Newswire. All rights reserved