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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 25, 2005
PORTALPLAYER, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-51004 | 77-0513807 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
|
70 W. Plumeria Drive San Jose, California |
95134 | |
| (Address of principal executive offices) | (Zip Code) |
(408) 521-7000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
The information in this Current Report is being furnished and shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On July 25, 2005, PortalPlayer, Inc. (the “Company”) issued a press release regarding the Company’s financial results for its fiscal
quarter ended June 30, 2005. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
|
Exhibit No.
|
Description |
|
| 99.1 | Press release dated July 25, 2005. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 25, 2005
| PORTALPLAYER, INC. | ||
| By: |
/s/ Svend-Olav Carlsen |
|
| Svend-Olav Carlsen | ||
| Vice President and Chief Financial Officer | ||
EXHIBIT INDEX
|
Exhibit No.
|
Description |
|
| 99.1 | Press release dated July 25, 2005. |
Exhibit 99.1
|
Contacts: |
||
|
S. Olav Carlsen |
Kristine Mozes | |
|
PortalPlayer, Inc. |
Mozes Communications LLC | |
|
(408) 521-7000 |
(781) 652-8875 |
PortalPlayer, Inc. Reports Q2 2005 Financial Results
Q2 Revenue Nearly Quadrupled Year-Over-Year
SAN JOSE, Calif. – July 25, 2005 – PortalPlayer, Inc (NASDAQ: PLAY), a leading supplier of advanced semiconductor, firmware and software solutions for the MP3 personal media player market, today announced financial results for the second quarter of fiscal 2005, ended June 30, 2005.
Net revenue for the second quarter of 2005 was $44.6 million, compared with $44.5 million in the first quarter of 2005 and $12.0 million in the second quarter of 2004. Net income for the second quarter of 2005 was $6.3 million, or $0.25 per diluted share, based on 25.1 million weighted average shares outstanding. Net income in the first quarter of 2005 was $7.8 million, or $0.31 per diluted share, based on 25.0 million weighted average shares outstanding. Net loss in the second quarter of 2004 was approximately $880,000, or $0.64 per share, based on 1.4 million basic weighted average shares outstanding.
PortalPlayer reports net income (loss) and basic and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation charges. In the second quarter of 2005, non-GAAP net income was $6.8 million, or $0.27 per diluted share. This compares with non-GAAP net income of $8.2 million, or $0.33 per diluted share, in the first quarter of 2005 and a net income of approximately $780,000, or $0.05 per diluted share, in the second quarter of 2004.
“The second quarter of 2005 was another great quarter for PortalPlayer,” said Gary Johnson, president and chief executive officer of PortalPlayer. “We successfully executed on our product roadmap and business plan, and demand for personal media players that incorporate our technology was again stronger than seasonal trends this quarter. As a result, our second quarter revenue nearly quadrupled from the second quarter a year ago, and we again generated more than $13 million in cash during the quarter. As planned, we also invested in additional engineering resources to support our strategic roadmap going forward.”
“During the quarter, we smoothly ramped production on our new PP5022 device and, as of today, we reached a significant milestone of shipping more than six million of the
devices. We have completed the design win activity for our customers’ exciting new models intended to ship in the second half of 2005. In addition, we worked with the supply chain to prepare our operations for significant demand in the second half of the year. During the second quarter, we also accelerated our investment in innovative wireless technologies that we believe will help fuel our growth in 2006 and beyond.”
“We are excited about the upcoming back-to-school and holiday season and believe we are very well positioned for significant growth in the second half of the year. We believe that our revenue for the third quarter of 2005, which is the quarter we expect to begin to recognize revenue from flash-based designs, could be in the range of $50 million to $60 million,” said Mr. Johnson.
Highlights
| • | PortalPlayer quickly ramped production of its PP5022 device, which is based on the 0.13 micron manufacturing process. With the strength and support of its world-class partners, United Microelectronic Corp. and LSI Logic, ramping production on the 0.13 micron process was fast and seamless. The Company achieved full volume production in about three months. By adding the 0.13 micron process to its existing 0.18 micron process, PortalPlayer further extends its lead over its competition. |
| • | During the second quarter, PortalPlayer successfully taped out the next generation of its technology, in preparation for the 2006 product cycle. |
| • | The company believes that the high-capacity flash player market (one gigabyte or greater) could ramp faster than originally expected. Due to NAND flash price declines, PortalPlayer believes that market demand for high-capacity flash players has accelerated, and could now exceed 20 percent of the total flash player run rate some time before the end of 2005. |
| • | PortalPlayer recently acquired real estate in Hyderabad, India, where it expects to complete the construction of a new building in the second half of 2006 to support its planned future growth. |
Current Financial Outlook for Third Quarter 2005
The following outlook statements are based upon current expectations. These statements are forward-looking, and actual results could differ materially.
The company expects revenue to be in the range of $50 million to $60 million. GAAP net income per diluted share for the third quarter is expected to be in the range of $0.28 to $0.36, based on approximately 26 million weighted average shares outstanding. The effective tax rate for the second quarter is expected to be about 25 percent, which takes into consideration, among other factors, the company’s net operating loss carryforwards for income tax purposes. Non-GAAP net income per diluted share, which excludes approximately $520,000 of stock-based compensation charges, is expected to be in the range of $0.30 to $0.38. Operating expenses are expected to be approximately $13.2 million.
Conference Call
The company will hold a conference call at 2:30 pm Pacific Time today, July 25, 2005, to discuss the second quarter 2005 financial results. To participate, please dial (913) 981-5510 at approximately 2:20 pm PT. A live webcast of the conference call will be available via the investor relations page of the company’s website at www.portalplayer.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. A recording of the conference call will be available for one week, starting one hour after the completion of the call, until August 1, 2005. The phone number to access the recording is (719) 457-0820, and the passcode is 6446864. An archived webcast replay will be available on the web site for 12 months.
About PortalPlayer
PortalPlayer is a leading supplier of advanced semiconductor, firmware and software solutions for the MP3 personal media player market. These products empower consumers to easily purchase, rent, manage, listen to and watch large amounts of digital music, photos and video content. PortalPlayer is headquartered in San Jose, Calif., with offices in Kirkland, Wash., and Hyderabad, India. For more information, visit www.portalplayer.com.
Safe Harbor Statement
Except for the historical information contained herein, the statements in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements as to our strategic roadmap, our design win activity for our customers’ models intending to ship in the second half of 2005, our work with our supply chain to prepare our operations for significant demand in the second half of the year, our belief that our investment in wireless technologies will help fuel our growth in 2006 and beyond, our belief that we are very well positioned for significant growth in the second half of the year, our belief regarding our revenue for the third quarter of 2005 and our belief that we will begin to recognize revenue from flash-based designs in the third quarter of 2005, the impact of adding the 0.13 micron process on extending PortalPlayer’s lead over its competition, the successful tapeout of the next generation of its technology in preparation for the 2006 product cycle, our belief that the high-capacity flash player market (one gigabyte or greater) could ramp faster than originally expected and future financial results, both GAAP and non-GAAP, including revenue, net income, operating expenses, tax rates, weighted average shares outstanding, and stock-based compensation expense. Words such as “intends,” “expect,” “believe,” “anticipates,” “going forward”, “plans,” “will”, “prepare”, “increases,” “could” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed in these statements. These risks and uncertainties include, but are not limited to, the growth of the market for personal media players, cancellation or reduction of orders, component shortages, successful development of new platforms and other products, market acceptance of our products and technologies, delays in product introductions, product defects, decreases in average selling prices, impact of technological advances, our ability to compete and other risks detailed in our SEC filings,
including our Form 10-Q for the quarter ended March 31, 2005. These forward-looking statements speak only as of the date hereof. PortalPlayer disclaims any intent or obligation to update these forward-looking statements.
PortalPlayer and the PortalPlayer logo are trademarks of PortalPlayer, Inc. All other trademarks or registered trademarks are the property of their respective owners.
###
PORTALPLAYER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Revenue
Cost of revenue
Gross profit
Operating expenses:
Research and development
Selling, general and administrative
Stock-based compensation
Total operating expenses
Operating income (loss)
Interest and other income (expense), net
Income (loss) before income taxes
Provision for income taxes
Net income (loss)
Basic net income (loss) per share
Diluted net income (loss) per share
Shares used in computing basic and non-GAAP basic net income (loss) per share
Shares used in computing diluted net income (loss) per share
Shares used in computing non-GAAP diluted net income per share
Non-GAAP net income (1)
Non-GAAP basic net income (loss) per share (1)
Non-GAAP diluted net income (loss) per share (1)
GAAP net income (loss)
Stock-based compensation
Non-GAAP net income
PORTALPLAYER, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventory, net
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Other assets
Total assets
Liabilities:
Current liabilities:
Accounts payable
Accrued liabilities
Deferred income
Deferred rent
Income taxes payable
Total current liabilities
Deferred rent, long-term
Total liabilities
Stockholders’ equity:
Common stock
Deferred stock-based compensation
Accumulated other comprehensive loss
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
Three Months Ended
June 30,
Six Months Ended
June 30,
2005
2004
2005
2004
$
44,567
$
12,035
$
89,035
$
22,231
25,402
6,915
50,693
13,503
19,165
5,120
38,342
8,728
7,900
2,986
14,251
5,594
3,476
1,345
6,408
2,791
470
1,660
854
3,637
11,846
5,991
21,513
12,022
7,319
(871
)
16,829
(3,294
)
1,119
(9
)
2,027
3
8,438
(880
)
18,856
(3,291
)
2,105
—
4,714
—
$
6,333
$
(880
)
$
14,142
$
(3,291
)
$
0.27
$
(0.64
)
$
0.61
$
(4.32
)
$
0.25
$
(0.64
)
$
0.56
$
(4.32
)
23,258
1,368
23,203
762
25,103
1,368
25,068
762
25,103
17,161
25,068
17,006
$
6,803
$
780
$
14,996
$
346
$
0.29
$
0.57
$
0.65
$
0.45
$
0.27
$
0.05
$
0.60
$
0.02
Reconciliation of GAAP Net Income (Loss) to
Non-GAAP Net Income (Loss)
Three Months Ended
June 30,
Six Months Ended
June 30,
2005
2004
2005
2004
$
6,333
$
(880
)
$
14,142
$
(3,291
)
470
1,660
854
3,637
$
6,803
$
780
$
14,996
$
346
(1)
To supplement our consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP measure of net income, which is adjusted from results based on
GAAP to exclude stock-based compensation. This non-GAAP measure is provided to enhance the user’s overall understanding of our historical financial performance. Specifically, we believe the non-GAAP results provide useful information to both
management and investors by excluding stock-based compensation expenses.
June 30,
2005
December 31,
2004
ASSETS
$
45,831
$
58,892
104,625
64,708
25,165
20,080
1,050
1,762
3,379
1,872
180,050
147,314
1,930
661
672
521
$
182,652
$
148,496
LIABILITIES AND STOCKHOLDERS’ EQUITY
$
15,585
$
1,290
7,204
4,195
5,013
4,024
15
55
—
479
27,817
10,043
231
5
28,048
10,048
209,619
205,468
(6,794
)
(4,799
)
(179
)
(37
)
(48,042
)
(62,184
)
154,604
138,448
$
182,652
$
148,496
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