-- Reached milestone of more than 100 million high-speed analog
semiconductors shipped, demonstrating continued demand for Inphi's
high-performance solutions across multiple market segments.
-- Announced Advanced Register for DDR3 Memory Module
Applications -- the Inphi INSSTE32882UV-GS02 register for
high-performance servers, workstations and high reliability
networking and telecom systems. This product offers a low-power,
high-speed registering clock driver designed to help meet the
challenge of reducing energy consumption in next-generation
data centers while reducing core power consumption by 100 mW,
and designed to satisfy the rigorous demand for high-speed timing
accuracy.
-- Announced Expanded 100 Gbps Portfolio -- the expansion of our 100
Gbps coherent product portfolio with the new Inphi IN3212SZ
Single-Ended Mach-Zehnder Driver that is designed to enable the
rollout of next generation 40 Gbps, 100 Gbps and cloud computing
network infrastructures.
Full Year 2010 Results
For the year ended December 31, 2010 revenue was $83.2 million representing
41% growth over revenue of $58.9 million in 2009. GAAP net income for 2010
was $26.1 million, or $0.61 per diluted share on approximately 8.5 million
diluted weighted average common shares outstanding, compared with GAAP net
income of $7.3 million, or $0.05 per diluted share on approximately 2.8
million diluted weighted average common shares outstanding, for 2009.
Non GAAP net income for the year ended December 31, 2010 was $9.9 million
or approximately $0.46 per diluted weighted average common share
outstanding assuming the conversion of preferred shares into common for the
entire year. This compared with non-GAAP net income of $8.5 million or
$0.49 per diluted weighted average common shares outstanding including the
assumed conversion of preferred shares into common for the year ended
December 31, 2009.
Business Outlook
The following statements are based on our current expectations for the
first quarter of 2011. These statements are forward looking and actual
results may differ materially.
-- Revenues are expected to be approximately flat with the fourth
quarter of 2010.
-- GAAP Gross Margin and Non GAAP gross margin are expected to be
approximately 65 percent.
-- Stock-based compensation expense is expected to be in the range
of $0.9 million to $ 1.0 million.
-- GAAP net income is expected to be in the range of $1.9 million to
$ 2.3 million, or $0.06-$0.08 per diluted share on approximately
29.2 million diluted weighted average shares outstanding.
-- Non-GAAP net income, excluding stock-based compensation expense,
is expected to be between $ 2.6 million and $3.0 million, or
$0.09-$0.11 per diluted share.
Quarterly Conference Call Today
Inphi plans to hold a conference call at 5:00 p.m. Eastern Time/2:00 p.m.
Pacific Time today with Young K. Sohn, President and Chief Executive
Officer, and John S. Edmunds, Vice President and Chief Financial Officer,
to discuss fourth quarter and full year 2010 results.
The call can be accessed by dialing 888-396-2298; international callers
should dial 617-847-8708, participant passcode: 25072204. Please dial-in
ten minutes prior to the scheduled conference call time. A live and
archived webcast of the call will be available on Inphi's Website at
http://investors.inphi.com for up to 30 days after the call.
About Inphi
Inphi Corporation is a leading provider of high-speed analog semiconductor
solutions for the communications and computing markets, providing high
signal integrity at leading-edge data speeds that are designed to address
bandwidth bottlenecks in networks, minimize latency in computing
environments and enable the rollout of next generation communications
infrastructure. Inphi's solutions provide a vital interface between analog
signals and digital information in high-performance systems, such as
telecommunications transport systems, enterprise networking equipment,
enterprise and data center servers, storage platforms, test and measurement
equipment and military systems. To learn more about Inphi, visit
www.inphi.com.
Cautionary Note Concerning Forward-Looking Statements
Statements in the press release and certain matters to be discussed on the
fourth quarter conference call regarding Inphi Corporation, which are not
historical facts, are "forward-looking statements" within the meaning the
Private Securities Litigation Reform Act of 1995. These forward looking
statements may be identified by terms such as believe, expect, may, will,
provide, could and should and the negative of these terms or other similar
expressions. These statements, including statements relating to
expectations of future revenue, stock-based compensation expenses, net
income and operating margin performance, benefits of using non-GAAP
financial measures, opportunities for datacenter and networking
environments, future success for various products, the demand for our
solutions, our ability to enable the rollout of next generation products
and other operating prospects. These statements are based on current
expectations and assumptions that are subject to risks and uncertainties.
Actual results could differ materially from those anticipated as a result
of various factors, including: the Company's ability to sustain profitable
operations due to its history of losses and accumulated deficit; dependence
on a limited number of customers for a substantial portion of revenue and
lack of long-tem purchase commitments from our customers; product defects;
risk related to intellectual property matters, lengthy sales cycle and
competitive selection process; lengthy and expensive qualification process;
ability to develop new or enhance products in a timely manner; market
development of and demand for the Company's products, reliance on third
parties to manufacture, assemble and test products; ability to compete and
other risks inherent in fabless semiconductor businesses. In addition
actual results could differ materially due to changes in tax rates or tax
benefits available as well as changes in claims that may or may not be
asserted as well as changes in pending litigation. For a discussion of
these and other related risks, please refer to Inphi Corporation's recent
SEC filings, including its Registration Statement on Form S-1, which are
available on the SEC's website at www.sec.gov. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only
as of the date thereof. Inphi Corporation undertakes no obligation to
update forward-looking statements for any reason, except as required by
law, even as new information becomes available or other events occur in the
future.
Inphi is a registered trademark of Inphi Corporation. All other trademarks
used herein are the property of their respective owners.
INPHI CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except share and per share amounts)
Three Months Ended Year Ended
December 31, December 31,
--------------------- --------------------
2010 2009 2010 2009
---------- --------- --------- ---------
Revenue $ 21,146 $ 17,160 $ 83,193 $ 58,852
Cost of revenue 7,352 6,541 29,438 21,269
---------- --------- --------- ---------
Gross margin 13,794 10,619 53,755 37,583
---------- --------- --------- ---------
Operating expenses:
Research and development 6,870 4,099 23,781 17,847
Sales and marketing 2,352 2,268 8,823 7,704
General and administrative 2,409 1,296 9,212 3,947
---------- --------- --------- ---------
Total operating expenses 11,631 7,663 41,816 29,498
---------- --------- --------- ---------
Income from operations 2,163 2,956 11,939 8,085
Other income (expense) (113) 71 (50) 73
---------- --------- --------- ---------
Income before income tax 2,050 3,027 11,889 8,158
Provision (benefit)for income
tax (925) 306 (14,242) 829
---------- --------- --------- ---------
Net income $ 2,975 $ 2,721 $ 26,131 $ 7,329
========== ========= ========= =========
Net income allocable to common
stockholders $ 2,795 $ 137 $ 5,240 $ 130
========== ========= ========= =========
Earnings per share:
Basic $ 0.20 $ 0.08 $ 1.03 $ 0.08
========== ========= ========= =========
Diluted $ 0.11 $ 0.03 $ 0.61 $ 0.05
========== ========= ========= =========
Weighted-average shares used in
computing earnings per share:
Basic 13,700,174 1,802,099 5,086,169 1,668,876
Diluted 24,869,317 4,462,788 8,546,537 2,785,277
The following table presents details of stock-based compensation expense
included in each functional line item in the consolidated statements of
operations above:
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
2010 2009 2010 2009
--------- --------- --------- ---------
(in thousands of dollars)
Cost of revenue $ 48 $ 14 $ 107 $ 31
Research and development 470 163 1,381 475
Sales and marketing 202 82 526 238
General and administrative 202 107 691 421
--------- --------- --------- ---------
$ 922 $ 366 $ 2,705 $ 1,165
========= ========= ========= =========
INPHI CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
December 31, December 31,
2010 2009
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 110,172 $ 19,061
Accounts receivable, net 10,052 7,981
Inventories 5,095 3,942
Deferred tax assets and other current assets 5,245 374
----------- -----------
Total current assets 130,564 31,358
Property and equipment, net 7,206 3,114
Goodwill and intangible assets, net 7,471 -
Deferred tax assets and other assets 13,716 -
----------- -----------
Total assets $ 158,957 $ 34,472
=========== ===========
Liabilities, Convertible Preferred Stock and
Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable $ 6,692 $ 4,438
Deferred revenue 2,647 3,383
Accrued expenses and other current
liabilities 4,338 3,482
----------- -----------
Total current liabilities 13,677 11,303
Other liabilities 2,594 285
----------- -----------
Total liabilities 16,271 11,588
----------- -----------
Convertible preferred stock - 77,616
----------- -----------
Stockholders' equity (deficit):
Common Stock 25 2
Additional paid-in capital 176,505 6,041
Accumulated deficit (34,644) (60,775)
Accumulated other comprehensive income 800 -
----------- -----------
Total stockholders' equity (deficit) 142,686 (54,732)
----------- -----------
Total liabilities, convertible preferred stock
and stockholders' equity (deficit) $ 158,957 $ 34,472
=========== ===========
INPHI CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(in thousands of dollars, except share and per share amounts)
To supplement the audited financial data presented on a GAAP basis, the
Company discloses certain non-GAAP financial measures, which exclude
stock-based compensation, taxes related to the transition to a more
international business structure and the release of the valuation allowance
on our deferred tax assets . It also includes the assumed conversion of all
outstanding shares of preferred stock into shares of common stock which
occurred in connection with the initial public offering. These non-GAAP
financial measures are not in accordance with GAAP, and do not serve as an
alternative to GAAP. These results should only be used to evaluate the
Company's results of operations in conjunction with the corresponding GAAP
measures. The Company believes that its non-GAAP financial information
provides useful information to management and investors regarding financial
and business trends relating to its financial condition and results of
operations because it excludes charges or benefits that management
considers to be outside of the Company's core operating results. The
Company believes that the non-GAAP measures of Gross Margin, net income,
earnings per share and weighted average shares outstanding in combination
with the Company's financial results calculated in accordance with GAAP,
provides investors with additional perspective and a more meaningful
understanding of the Company's ongoing operating performance. In addition,
the Company's management uses these non-GAAP measures to review and assess
the financial performance of the Company, to determine executive officer
incentive compensation and to plan and forecast performance in future
periods. The Company's non-GAAP measurements are not prepared in accordance
with GAAP, and are not an alternative to GAAP financial information, and
may be calculated differently than non-GAAP financial information disclosed
by other companies.
INPHI CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(in thousands of dollars, except share and per share amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
GAAP net income $ 2,975 $ 2,721 $ 26,131 $ 7,329
Adjusting items
to GAAP net
income:
Operating
expenses
related to
stock-based
compensation
expense, net
of tax effect 751 (a) 366 (a) 2,388 (a) 1,151 (a)
Transitional tax
effects of
moving to an
internationally
based structure 1,345 (b) - 5,357 (b) -
Reversal of
valuation
allowance on
deferred tax
assets (2,573)(c) - (24,023)(c) -
---------- ---------- ---------- ----------
Non-GAAP net
income $ 2,498 $ 3,087 $ 9,853 $ 8,480
========== ========== ========== ==========
Shares used in
computing GAAP
basic earnings
per share 13,700,174 1,802,099 5,086,169 1,668,876
Weighted average
effect of the
assumed conversion
of convertible
preferred stock
from the
beginning of
each period 7,397,706 (d) 14,481,700 (d) 12,776,077 (d) 14,481,700 (d)
---------- ---------- ---------- ----------
Shares used in
computing
non-GAAP basic
earnings
per share 21,097,880 16,283,799 17,862,246 16,150,576
========== ========== ========== ==========
Shares used in
computing GAAP
diluted
earnings per
share 24,869,317 4,462,788 8,546,537 2,785,277
Weighted average
effect of the
assumed conversion
of convertible
preferred stock
from the
beginning of
each period - 14,481,700 (d) 12,776,077 (d) 14,481,700 (d)
---------- ---------- ---------- ----------
Shares used in
computing
non-GAAP diluted
earnings per
share 24,869,317 18,944,488 21,322,614 17,266,977
========== ========== ========== ==========
Non-GAAP earnings
per share:
Basic $ 0.12 $ 0.19 $ 0.55 $ 0.53
========== ========== ========== ==========
Diluted $ 0.10 $ 0.16 $ 0.46 $ 0.49
========== ========== ========== ==========
GAAP gross margin
as a % of revenue 65.2% 61.9% 64.6% 63.9%
Stock-based
compensation:
Cost of revenue 0.3% 0.1% 0.1% 0.0%
---------- ---------- ---------- ----------
Non-GAAP gross
margin as a %
of revenue 65.5% 62.0% 64.7% 63.9%
========== ========== ========== ==========
(a) Reflects the stock-based compensation expense recorded relating to
stock based awards. The Company excludes this item when it evaluates the
continuing operational performance of the Company as management believes
this GAAP measure is not indicative of its core operating performance.
(b) Reflects the transitional tax effects in 2010 of moving to an
internationally based structure. The Company excludes this item when it
evaluates the continuing operational performance of the Company as
management believes this GAAP measure is not indicative of its core
operating performance.
(c) Reflects the tax benefit as a result of the reversal of the valuation
allowance established against deferred tax assets. The Company excludes
this item when it evaluates the continuing operational performance of the
Company as management believes this GAAP measure is not indicative of its
core operating performance.
(d) The shares used to compute non-GAAP basic and diluted earnings per
share include the assumed conversion of all outstanding shares of preferred
stock into shares of common stock using the as-if converted method as of
the beginning of each period presented or the date of issuance, if later.
In November 2010, in connection with the closing of our initial public
offering, all of our outstanding preferred stock was converted into shares
of our common stock.
Contact Information: Corporate Contact: Amy Lee Inphi 408-217-7333 alee@inphi.com