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NVIDIA Reports Financial Results for Third Quarter Fiscal Year 2010
About NVIDIA NVIDIA ( Certain statements in this press release including, but not limited to, statements as to: the benefits and impact of, and demand and enthusiasm for, NVIDIA's products and technologies; and NVIDIA's revenue outlook for the fourth quarter of fiscal 2010; are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; development of faster or more efficient technology; the impact of technological development and competition; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended July 26, 2009. Copies of reports filed with the SEC are posted on NVIDIA's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. Copyright © 2009 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra, NVIDIA ION and CUDA are registered trademarks and/or trademarks of NVIDIA Corporation in the United States and other countries. All other company and/or product names may be trade names, trademarks, and/or registered trademarks of the respective owners with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------- ------------------------
October 25, October 26, October 25, October 26,
2009 2008 2009 2008
------------ ----------- ----------- ------------
Revenue $ 903,206 $ 897,655 $ 2,343,957 $ 2,943,719
Cost of revenue 511,423 529,812 1,605,755 1,911,116
------------ ----------- ----------- ------------
Gross profit 391,783 367,843 738,202 1,032,603
Operating expenses
Research and
development 197,948 212,360 692,600 644,100
Sales, general and
administrative 85,990 90,349 278,829 275,782
Restructuring charges - 8,338 - 8,338
------------ ----------- ----------- ------------
Total operating
expenses 283,938 311,047 971,429 928,220
------------ ----------- ----------- ------------
Operating income (loss) 107,845 56,796 (233,227) 104,383
Interest and other
income, net 2,362 4,207 11,512 23,038
------------ ----------- ----------- ------------
Income (loss) before
income tax expense 110,207 61,003 (221,715) 127,421
Income tax expense
(benefit) 2,630 (745) (22,652) 9,797
------------ ----------- ----------- ------------
Net income (loss) $ 107,577 $ 61,748 $ (199,063) $ 117,624
============ =========== =========== ============
Basic net income (loss)
per share $ 0.20 $ 0.11 $ (0.36) $ 0.21
============ =========== =========== ============
Diluted net income
(loss) per share $ 0.19 $ 0.11 $ (0.36) $ 0.20
============ =========== =========== ============
Shares used in basic
per share computation 551,283 543,807 546,737 551,623
Shares used in diluted
per share computation 574,381 564,536 546,737 590,490
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 25, January 25,
2009 2009
----------- -----------
ASSETS
Current assets:
Cash, cash equivalents and marketable securities $ 1,634,079 $ 1,255,390
Accounts receivable, net 397,820 318,435
Inventories 277,643 537,834
Prepaid expenses and other current assets 48,174 56,299
----------- -----------
Total current assets 2,357,716 2,167,958
Property and equipment, net 565,296 625,798
Goodwill 369,844 369,844
Intangible assets, net 127,817 147,101
Deposits and other assets 42,901 40,026
----------- -----------
Total assets $ 3,463,574 $ 3,350,727
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 321,530 $ 218,864
Accrued liabilities and other current liabilities 567,276 559,727
----------- -----------
Total current liabilities 888,806 778,591
Other long-term liabilities 126,373 151,850
Capital lease obligations, long term 24,760 25,634
Stockholders' equity 2,423,635 2,394,652
----------- -----------
Total liabilities and stockholders' equity $ 3,463,574 $ 3,350,727
=========== ===========
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------------- ------------------------
October 25, July 26, October 26, October 25, October 26,
2009 2009 2008 2009 2008
--------- ----------- ---------- ----------- -----------
GAAP gross
profit $ 391,783 $ 156,723 $ 367,843 $ 738,202 $ 1,032,603
GAAP gross
margin 43.4% 20.2% 41.0% 31.5% 35.1%
Stock-based
compensation
expense
included in
cost of
revenue (A) 2,650 4,828 3,558 9,708 10,027
Net
warranty
charge
against
cost of
revenue
arising
from a
weak
die/packaging
material
set (B) (24,115) 119,993 - 95,878 195,954
Non-recurring
charge
related
to a
royalty
dispute - - 4,500 - 4,500
Stock
option
purchase
charge
related
to cost of
revenue
© - - - 11,412 -
--------- ----------- ---------- ----------- -----------
Non-GAAP
gross profit $ 370,318 $ 281,544 $ 375,901 $ 855,200 $ 1,243,084
========= =========== ========== =========== ===========
Non-GAAP
gross
margin 41.0% 36.3% 41.9% 36.5% 42.2%
GAAP net
income
(loss) $ 107,577 $ (105,302) $ 61,748 $ (199,063) $ 117,624
Stock-
based
compensation
expense (A) 22,982 25,376 38,384 82,471 120,873
Net
warranty
charge
against
cost of
revenue
arising
from a
weak
die/packaging
material
set (B) (25,105) 119,054 - 93,949 195,954
Restructuring
charges - - 8,338 - 8,338
Non-recurring
charge
related
to a
royalty
dispute - - 4,500 - 4,500
Stock
option
purchase
charge © - - - 140,241 -
Income tax
impact of
non-GAAP
adjustments 4,876 (1,398) (1,540) (16,212) (49,624)
--------- ----------- ---------- ----------- -----------
Non-GAAP net
income $ 110,330 $ 37,730 $ 111,430 $ 101,386 $ 397,665
========= =========== ========== =========== ===========
Diluted net
income
(loss) per
share
GAAP $ 0.19 $ (0.19) $ 0.11 $ (0.36) $ 0.20
========= =========== ========== =========== ===========
Non-GAAP $ 0.19 $ 0.07 $ 0.20 $ 0.18 $ 0.68
========= =========== ========== =========== ===========
Shares used
in GAAP
diluted net
income
(loss) per
share
computation 574,381 546,639 564,536 546,737 590,490
Impact of
non-GAAP
adjustments
on dilutive
share
computation (1,190) 15,996 (3,374) 16,291 (9,058)
--------- ----------- ---------- ----------- -----------
Shares used
in non-GAAP
diluted net
income per
share
computation 573,191 562,635 561,162 563,028 581,432
========= =========== ========== =========== ===========
Metrics:
GAAP net cash
flow
provided by
operating
activities $ 141,317 $ 135,117 $ 43,003 $ 418,562 $ 269,205
Purchase
of property
and equipment
and intangible
assets (16,593) (17,656) (109,008) (55,026) (364,695)
--------- ----------- ---------- ----------- -----------
Free cash
flow $ 124,724 $ 117,461 $ (66,005) $ 363,536 $ (95,490)
========= =========== ========== =========== ===========
GAAP cost of
revenue [1] $ 511,423 $ 619,797 $ 529,812 $ 1,605,755 $ 1,911,116
GAAP
inventory
[2] $ 277,643 $ 279,216 $ 523,988 $ 277,643 $ 523,988
Days in
period [3] 91 91 91 273 273
--------- ----------- ---------- ----------- -----------
GAAP days
sales in
inventory
[2]*[3]÷[1] 49 41 90 47 75
========= =========== ========== =========== ===========
GAAP revenue $ 903,206 $ 776,520 $ 897,655 $ 2,343,957 $ 2,943,719
Less:
Non-GAAP
gross
profit (370,318) (281,544) (375,901) (855,200) (1,243,084)
--------- ----------- ---------- ----------- -----------
Non-GAAP cost
of revenue
[4] $ 532,888 $ 494,976 $ 521,754 $ 1,488,757 $ 1,700,635
========= =========== ========== =========== ===========
GAAP ending
inventory
[5] $ 277,643 $ 279,216 $ 523,988 $ 277,643 $ 523,988
Days in
period [6] 91 91 91 273 273
Non-GAAP days
sales in
inventory
[5]*[6]÷[4] 47 51 91 51 84
========= =========== ========== =========== ===========
(A) Results include stock-based compensation expense as follows (in
thousands):
Three Months Ended Nine Months Ended
----------------------------------- -------------------------
October 25, July 26, October 26, October 25, October 26,
2009 2009 2008 2009 2008
---------- ------------ ----------- ------------ ------------
Cost of
revenue $ 2,650 $ 4,828 $ 3,558 $ 9,708 $ 10,027
Research and
development $ 12,853 $ 13,268 $ 22,740 $ 47,391 $ 71,500
Sales, general
and adminis-
trative $ 7,479 $ 7,280 $ 12,086 $ 25,372 $ 39,346
(B) Excludes a charge related to the weak die/packaging material set that
was used in certain versions of our previous generation chips, net of
insurance reimbursement.
(C) During the three months ended April 26, 2009, the Company completed a
tender offer to purchase an aggregate of 28.5 million outstanding stock
options for a total cash payment of $78.1 million. As a result of the
tender offer the Company incurred a charge of $140.2 million,
consisting of the remaining unamortized stock-based compensation
expenses associated with the unvested portion of the options tendered
in the offer, stock-based compensation expense resulting from amounts
paid in excess of the fair value of the underlying options, plus
associated payroll taxes and professional fees. The $140.2 million
stock option purchase charge for the three months ended April 26, 2009
relates to personnel associated with cost of revenue (for
manufacturing personnel), research and development, and sales, general
and administrative of $11.4 million, $90.5 million, and $38.3 million,
respectively.
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