This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements include, but are not limited to, statements related to Silicon Image's future operating results, including revenue, gross margin, operating expenses, tax rates, company growth, progress and stock repurchases. These forward-looking statements involve risks and uncertainties, including the risks of uncertain economic conditions, competition in our markets, Silicon Image's ability to deliver financial performance in-line with its stated goals and other risks and uncertainties described from time to time in Silicon Image's filings with the U.S. Securities and Exchange Commission (SEC). These risks and uncertainties could cause the actual results to differ materially from those anticipated by these forward-looking statements. In addition, see the Risk Factors section of the most recent Form 10-K and 10-Q filed by Silicon Image with the SEC. These forward-looking statements are made on the date of this press release, and Silicon Image assumes no obligation to update any such forward-looking information.

SILICON IMAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Unaudited
				Three Months Ended																		Six Months Ended
				June 30, 2014					March 31, 2014						June 30, 2013							June 30, 2014					June 30, 2013
Revenue:
Product				$	50,938				$	46,766					$	63,681						$	97,704				$	114,022
Licensing					8,598					14,795						9,998							23,393					21,696
Total revenue					59,536					61,561						73,679							121,097					135,718
Cost of revenue and operating expenses:
Cost of product revenue (1)(2)					24,814					24,795						31,023							49,609					56,821
Cost of licensing revenue					-					20						162							20					429
Research and development (3)					17,416					16,957						20,225							34,373					38,783
Selling, general and administrative (4)					15,166					16,865						16,097							32,031					32,499
Amortization of acquisition-related intangible assets					510					208						230							718					481
Restructuring expense (recoveries) (5)					113					129						-							242					(7	)
Total cost of revenue and operating expenses					58,019					58,974						67,737							116,993					129,006
Income from operations					1,517					2,587						5,942							4,104					6,712
Proceeds from legal settlement					-					-						1,275							-					1,275
Other than temporary impairment of a privately held company investment					-					-						(1,500	)						-					(1,500	)
Interest income and other, net					1,043					18						500							1,061					891
Income before provision for income taxes and equity in net loss of an unconsolidated affiliate					2,560					2,605						6,217							5,165					7,378
Income tax expense					1,487					2,554						1,888							4,041					3,630
Equity in net loss of an unconsolidated affiliate					-					150						136							150					259
Net income (loss)				$	1,073				$	(99	)				$	4,193						$	974				$	3,489
Net income (loss) per share – basic				$	0.01				$	(0.00	)				$	0.05						$	0.01				$	0.05
Net income (loss) per share – diluted				$	0.01				$	(0.00	)				$	0.05						$	0.01				$	0.04
Weighted average shares – basic					78,150					77,858						77,245							78,261					76,934
Weighted average shares – diluted					79,988					77,858						78,713							80,367					78,353
(1) Includes amortization of acquisition-related intangible assets				$	225				$	225					$	250						$	450				$	500
(2) Includes stock-based compensation expense				$	148				$	173					$	153						$	321				$	288
(3) Includes stock-based compensation expense				$	792				$	913					$	827						$	1,705				$	1,845
(4) Includes stock-based compensation expense				$	1,344				$	1,951					$	1,438						$	3,295				$	3,209
(5) Includes stock-based compensation expense				$	44				$	30					$	-						$	74				$	-

SILICON IMAGE, INC.
GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME RECONCILIATION
(In thousands, except per share amounts)
Unaudited
				Three Months Ended																	Six Months Ended
				June 30, 2014					March 31, 2014					June 30, 2013							June 30, 2014					June 30, 2013
GAAP net income (loss)				$	1,073				$	(99	)			$	4,193						$	974				$	3,489
Non-GAAP adjustments:
Stock-based compensation expense (1)					2,328					3,067					2,418							5,395					5,342
Amortization of intangible assets (2)					735					433					480							1,168					981
Amortization of intangible assets of an unconsolidated affiliate (2)					-					40					41							40					76
Strategic initiative and acquisition related expenses (2)					138					-					-							138					-
Gain from business acquisition (2)					(361	)				-					-							(361	)				-
Restructuring expense (recoveries) (3)					69					99					-							168					(7	)
Other than temporary impairment of a privately held company investment (3)					-					-					1,500							-					1,500
Other income from prepaid royalty settlement (3)					(639	)				-					-							(639	)				-
Proceeds from legal settlement (3)					-					-					(1,275	)						-					(1,275	)
Non-GAAP net income before tax adjustments					3,343					3,540					7,357							6,883					10,106
Tax adjustments (4)					38					726					(886	)						764					(491	)
Non-GAAP net income				$	3,381				$	4,266				$	6,472						$	7,647				$	9,615
Non-GAAP net income per share — basic				$	0.04				$	0.05				$	0.08						$	0.10				$	0.12
Non-GAAP net income per share — diluted				$	0.04				$	0.05				$	0.08						$	0.10				$	0.12
Weighted average shares — basic					78,150					77,858					77,245							78,261					76,934
Weighted average shares — diluted					79,988					80,100					78,713							80,367					78,353
Stock-based compensation expense is composed of the following:
Cost of revenue				$	148				$	173				$	153						$	321				$	288
Research and development					792					913					827							1,705					1,845
Selling, general and administrative					1,344					1,951					1,438							3,295					3,209
Restructuring expense					44					30					-							74					-
Total				$	2,328				$	3,067				$	2,418						$	5,395				$	5,342

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