Pixelworks Reports Fourth Quarter and Fiscal Year 2018 Financial

Pixelworks Reports Fourth Quarter and Fiscal Year 2018 Financial Results


PIXELWORKS, INC. RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands, except per share data) (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2018			2018			2017			2018			2017
Reconciliation of GAAP and non-GAAP gross profit
GAAP gross profit	$	10,905		$	11,237		$	9,160		$	39,478		$	41,764
Amortization of acquired intangible assets		298			298			298			1,192			497
Stock-based compensation		93			87			64			324			243
Inventory step-up and backlog amortization		17			97			949			475			1,965
Deferred revenue fair value adjustment		—			52			68			52			93
Total reconciling items included in gross profit		408			534			1,379			2,043			2,798
Non-GAAP gross profit	$	11,313		$	11,771		$	10,539		$	41,521		$	44,562
Non-GAAP gross profit margin		55.1	%		54.7	%		56.9	%		54.2	%		55.2	%

Reconciliation of GAAP and non-GAAP operating expenses
GAAP operating expenses	$	12,412		$	10,806		$	12,202		$	44,298		$	43,797
Reconciling item included in research and development:
Stock-based compensation		635			609			527			2,466			1,648
Reconciling items included in selling, general and administrative:
Stock-based compensation		910			762			556			2,893			2,352
Amortization of acquired intangible assets		101			101			101			404			168
Acquisition and integration		—			—			(45	)		—			2,460
Restructuring		429			414			439			1,464			1,920
Total reconciling items included in operating expenses		2,075			1,886			1,578			7,227			8,548
Non-GAAP operating expenses	$	10,337		$	8,920		$	10,624		$	37,071		$	35,249

Reconciliation of GAAP and non-GAAP net income (loss)
GAAP net income (loss)	$	(1,641	)	$	231		$	(3,552	)	$	(4,621	)	$	(4,173	)
Reconciling items included in gross profit		408			534			1,379			2,043			2,798
Reconciling items included in operating expenses		2,075			1,886			1,578			7,227			8,548
Reconciling items included in interest expense and other, net		—			—			716			(1,203	)		910
Tax effect of non-GAAP adjustments		237			(181	)		(157	)		—			—
Benefit related to tax reform		—			—			(343	)		—			(343	)
Non-GAAP net income (loss)	$	1,079		$	2,470		$	(379	)	$	3,446		$	7,740
Non-GAAP net income (loss) per share:
Basic	$	0.03		$	0.07		$	(0.01	)	$	0.10		$	0.25
Diluted	$	0.03		$	0.07		$	(0.01	)	$	0.09		$	0.23
Non-GAAP weighted average shares outstanding:
Basic		36,736			36,195			34,359			35,959			31,507
Diluted		38,320			37,993			34,359			37,819			33,668

*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

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