IRVINE, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM [1]) today reported unaudited financial results for its third quarter ended September 30, 2009.
Net revenue for the third quarter of 2009 was $1.254 billion. This represents an increase in net revenue of 20.6% compared with the $1.040 billion reported for the second quarter of 2009 and a decrease of 3.4% compared with the $1.298 billion reported for the third quarter of 2008. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the third quarter of 2009 was $84.6 million, or $.16 per share (diluted), compared with GAAP net income of $13.4 million, or $.03 per share (diluted), for the second quarter of 2009, and GAAP net income of $164.9 million, or $.31 per share (diluted), for the third quarter of 2008.
Net revenue for the nine months ended September 30, 2009 was $3.148 billion. This represents a decrease in net revenue of 10.9% from the $3.532 billion reported for the nine months ended September 30, 2008. Net income computed in accordance with GAAP for the nine months ended September 30, 2009 was $6.1 million, or $.01 per share (diluted), compared with GAAP net income of $374.0 million, or $.70 per share (diluted), for the nine months ended September 30, 2008.
For a discussion of non-recurring transactions and their related accounting impact for all periods presented, see the "Unaudited Supplementary Financial Data" schedule below.
"Broadcom executed well in the third quarter, generating revenue growth of over 20% sequentially for the second quarter in row," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "This strong revenue growth is well above the semiconductor industry growth rate, and was driven by a combination of our target markets continuing to recover, new product ramps and the breadth of Broadcom's product line."
"In addition, Broadcom was successful in generating strong sequential gross and operating margin leverage and cash flow from operations in the quarter. The third quarter spending included an unforecasted increase in performance-based compensation, which grew significantly due to Broadcom's strong operating performance, showing our continued focus on generating positive financial leverage."
Conference Call Information
As previously announced, Broadcom will conduct a conference call with analysts and investors to discuss its third 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 [2]. The webcast will be recorded and available for replay until 5:00 p.m. Pacific Time, December 2, 2009.
About Broadcom
Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom(®) 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(®).
Broadcom, one of the world's largest fabless semiconductor companies, with 2008 revenue of $4.66 billion, holds more than 3,650 U.S. and 1,450 foreign patents, and has more than 7,750 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® 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 [3].
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 fourth 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:
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 Broadcom Investor Relations Contact
Bill Blanning T. Peter Andrew
Vice President, Global Media Vice President, Corporate
Relations Communications
949-926-5555 949-926-5663
blanning@broadcom.com [4] andrewtp@broadcom.com
[5]
BROADCOM CORPORATION
Unaudited Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Product revenue $1,194,745 $1,254,083 $2,989,292 $3,409,051
Licensing revenue 59,452 44,392 158,285 122,565
------ ------ ------- -------
Total net revenue 1,254,197 1,298,475 3,147,577 3,531,616
Operating costs and
expenses:
Cost of product revenue 615,349 619,459 1,580,300 1,655,218
Research and development 391,170 379,279 1,138,664 1,115,002
Selling, general and
administrative 142,480 141,941 394,938 395,904
Amortization of purchased
intangible assets 4,159 183 12,457 550
In-process research and
development - - - 10,900
Impairment of long-lived
assets 7,634 250 18,895 2,150
Restructuring costs
(reversals) 4,772 - 12,330 (1,000)
Settlement costs (gains) - - (57,256) 15,810
Charitable contribution - - 50,000 -
--- --- ------ ---
Total operating costs
and expenses 1,165,564 1,141,112 3,150,328 3,194,534
--------- --------- --------- ---------
Income (loss) from
operations 88,633 157,363 (2,751) 337,082
Interest income, net 2,978 12,451 11,362 44,983
Other income (expense), net (178) (3,720) 2,487 (2,987)
----- ------- ----- -------
Income before income taxes 91,433 166,094 11,098 379,078
Provision for income taxes 6,837 1,188 5,041 5,069
----- ----- ----- -----
Net income $84,596 $164,906 $6,057 $374,009
======= ======== ====== ========
Net income per share (basic) $.17 $.32 $.01 $.72
==== ==== ==== ====
Net income per share (diluted) $.16 $.31 $.01 $.70
==== ==== ==== ====
Weighted average shares
(basic) 495,491 509,041 493,599 517,418
======= ======= ======= =======
Weighted average shares
(diluted) 521,443 523,759 508,559 531,187
======= ======= ======= =======
The following table presents details of total stock-based compensation
expense included in each functional line item in the unaudited condensed
consolidated statements of income above:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Cost of product revenue $6,579 $6,652 $18,584 $18,354
Research and development 90,829 93,334 266,698 262,043
Selling, general and
administrative 31,290 33,328 89,817 93,661
Certain prior period amounts in the unaudited condensed consolidated
statements of income 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 Nine Months Ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Operating activities
Net income $84,596 $164,906 $6,057 $374,009
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 11,273 19,351 47,314 55,770
Stock-based compensation
expense:
Stock options and
other awards 40,904 53,684 126,461 168,891
Restricted stock
units 87,794 79,630 248,638 205,167
Acquisition-related
items:
Amortization of
purchased
intangible assets 8,035 4,118 24,558 12,354
In-process
research and
development - - - 10,900
Impairment of long-lived
assets 7,634 250 18,895 2,150
Loss on strategic
investment, net - 2,506 - 4,266
Non-cash restructuring
costs 808 - 3,471 -
Loss (gain) on sale of
marketable securities - 1,781 (1,046) 1,781
Changes in operating
assets and liabilities:
Accounts receivable (97,541) (21,183) (169,276) (131,998)
Inventory (27,918) (66,259) 58,890 (91,292)
Prepaid expenses
and other assets 27,758 (20,387) 19,972 (1,629)
Accounts payable 32,764 23,503 112,525 147,332
Deferred revenue (19,944) 1,618 80,822 (8,962)
Other accrued and
long-term liabilities 80,301 42,712 77,684 24,719
------ ------ ------ ------
Net cash provided by
operating activities 236,464 286,230 654,965 773,458
------- ------- ------- -------
Investing activities
Net purchases of property
and equipment (22,480) (16,084) (48,774) (65,151)
Net cash received from
(paid for) acquired
companies (1,297) (57) 842 (29,795)
Purchases of strategic
investments (2,000) - (2,000) (355)
Purchases of marketable
securities (546,922) (771,993) (1,057,972) (1,110,514)
Proceeds from sales and
maturities of marketable
securities 315,532 291,424 737,377 512,022
------- ------- ------- -------
Net cash used in
Investing
activities (257,167) (496,710) (370,527) (693,793)
--------- --------- --------- ---------
Financing activities
Repurchases of Class A
Common stock (168,083) (23,912) (206,517) (859,775)
Proceeds from issuance
of common stock 53,535 23,968 137,229 114,582
Minimum tax withholding
paid on behalf of
employees for restricted
stock units (26,046) (19,433) (60,574) (45,186)
-------- -------- -------- --------
Net cash used in
financing
activities (140,594) (19,377) (129,862) (790,379)
--------- -------- --------- ---------
Increase (decrease) in
cash and cash equivalents (161,297) (229,857) 154,576 (710,714)
Cash and cash equivalents
at beginning of period 1,506,518 1,705,715 1,190,645 2,186,572
--------- --------- --------- ---------
Cash and cash equivalents
at end of period $1,345,221 $1,475,858 $1,345,221 $1,475,858
========== ========== ========== ==========
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
September 30, June 30, December 31,
2009 2009 2008
------------ ------- -----------
(In thousands)
Cash and cash equivalents $1,345,221 $1,506,518 $1,190,645
Short-term marketable securities 561,287 700,585 707,477
Long-term marketable securities 470,643 92,699 -
------- ------ ---
Total cash, cash equivalents and
marketable securities $2,377,151 $2,299,802 $1,898,122
========== ========== ==========
Increase from prior period end $77,349
=======
Increase from prior year end $479,029
========
BROADCOM CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash and cash equivalents $1,345,221 $1,190,645
Short-term marketable securities 561,287 707,477
Accounts receivable, net 541,587 372,311
Inventory 307,216 366,106
Prepaid expenses and other current assets 95,296 114,674
------ -------
Total current assets 2,850,607 2,751,213
Property and equipment, net 228,621 234,691
Long-term marketable securities 470,643 -
Goodwill 1,277,951 1,279,243
Purchased intangible assets, net 21,324 61,958
Other assets 67,019 66,160
------ ------
Total assets $4,916,165 $4,393,265
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $423,199 $310,487
Wages and related benefits 182,394 157,758
Deferred revenue 96,421 12,338
Accrued liabilities 301,371 236,520
------- -------
Total current liabilities 1,003,385 717,103
Long-term deferred revenue 637 3,898
Other long-term liabilities 62,688 65,197
Commitments and contingencies
Shareholders' equity 3,849,455 3,607,067
--------- ---------
Total liabilities and shareholders'
equity $4,916,165 $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 income:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Cost of product revenue:
Stock-based compensation $6,579 $6,652 $18,584 $18,354
Amortization of purchased
intangible assets 3,876 3,935 12,101 11,804
Research and development:
Stock-based compensation 90,829 93,334 266,698 262,043
Selling, general and administrative:
Stock-based compensation 31,290 33,328 89,817 93,661
Other operating expense:
Amortization of purchased intangible
assets 4,159 183 12,457 550
In-process research and development(1) - - - 10,900
Impairment of long-lived assets(2) 7,634 250 18,895 2,150
Restructuring costs (reversals)(3) 4,772 - 12,330 (1,000)
Settlement costs (gains)(4) - - (57,256) 15,810
Charitable contribution(5) - - 50,000 -
Other:
Employer payroll tax expense on certain
stock option exercises 1,625 1,532 3,566 3,631
Loss on strategic investments, net - 2,506 - 4,266
Non-operating gains 27 (193) 13 (193)
(1) Recorded in connection with the company's acquisition of Sunext
Design, Inc. in the nine months ended September 30, 2008.
(2) Long-lived asset impairment charges of $11.3 million and $7.6 million
related to the company's acquisition of the digital television
business of AMD, Inc. were recorded in the three months ended June 30,
2009 and September 30, 2009, respectively.
(3) Recorded in connection with the company's restructuring plans
announced or implemented in the nine months ended September 30, 2009,
as well as a restructuring cost reversal of a prior restructuring plan
in the nine months ended September 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 and an
additional $1.2 million related to patent infringement claims in the
nine months ended September 30, 2009. Recorded 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 nine months ended
September 30, 2008.
(5) Recorded in connection with an accrued $50.0 million charitable
contribution to the recently established Broadcom Foundation in the
nine months ended September 30, 2009.
BROADCOM CORPORATION
Unaudited Supplementary Financial Data
(In thousands)
Three Months Ended
------------------
September 30, September 30, June 30,
2009 2008 2009
------------- ------------- --------
Product revenue $1,194,745 $1,254,083 $966,317
Licensing revenue 59,452 44,392 73,627
------ ------ ------
Total net revenue $1,254,197 $1,298,475 $1,039,944
========== ========== ==========
Cost of product revenue $615,349 $619,459 $518,674
======== ======== ========
Product gross margin(1) 48.5% 50.6% 46.3%
===== ===== =====
Total gross margin 50.9% 52.3% 50.1%
===== ===== =====
(1) Product gross margin in the three months ended September 30, 2008 has
been adjusted from 50.9% to 50.6% to conform with the current period
presentation of product and licensing revenue.
BROADCOM CORPORATION
Guidance for the Three Months Ending December 31, 2009
Three Months
Ending December 31, 2009
------------------------
Total net revenue Flat from Q3
Product gross margin Increase by around 20 - 50 basis points from Q3
Research and development
and selling, general and
administrative expenses
(including stock-based
compensation) Up ~$20 million from Q3
Broadcom has based the preceding guidance for the three months ending December 31, 2009 on expectations, assumptions and estimates that we believe are reasonable given our assessment of historical trends and other information reasonably available as of October 22, 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
Links:
[1] http://studio-5.financialcontent.com/prnews?Page=Quote&Ticker=BRCM
[2] http://www.broadcom.com/investors
[3] http://www.broadcom.com/
[4] mailto:blanning@broadcom.com
[5] mailto:andrewtp@broadcom.com