Trident Microsystems, Inc. (
Q2 2011 Earnings Call Transcript
July 28, 2011 5:00 a.m. ET
John Swenson - Director, Corporate Finance & IR
Bami Bastani - CEO and President
Pete Mangan - EVP and CFO
Arjun Sadani - Needham & Company
Glenn Primack - PEAK 6
Raji Gill - Needham & Company
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Good day, ladies and gentlemen, and welcome to the Q2 2011 Trident Microsystems Incorporated earnings conference call. My name is Ed and I will be your operator for today. (Operator Instruction).
At this time, I would like to turn the call over to Mr. John Swenson. Please proceed.
Welcome, everyone, to Trident Microsystems conference call for the second quarter ended June 30, 2011. After the market closed today, Trident issued a press release, discussing results for the quarter. The press release is accessible online at www.tridentmicro.com. This call is being broadcast live over the web and is accessible using the link found in today’s earnings press release. A replay of the webcast will be available starting tomorrow by accessing the Investor Relations section of our website.
Before we begin, please note that during this call, we will make forward-looking statements. These include comments related to guidance on anticipated revenues and operating losses, the pace of restructuring and integration activity, future product shipments and other statements. We are not obligated to update these statements.
Actual results may differ materially from the forward-looking statements made today and have in fact done so in the past. These projections or forward-looking statements are subject to certain risks and uncertainties. These risks include, in particular, our ability to realize the benefits from our acquisition of product lines and IP from NXP, our ability to reduce expenses, the timing of new product introductions, the ability to obtain design wins among major OEMs for Trident’s products; the availability of wafers from our suppliers; and competitive pressures, including pricing and competitors’ new product introductions; the impact of the uncertain global macroeconomic environment; the increasingly competitive TV and Set-top Box semiconductor markets and our ability to retain key employees globally.
These and other factors are discussed in our press releases and in the company’s filing with the SEC. We encourage you to read these documents and to come to your own conclusions about the risks and uncertainties inherent in Trident’s business.
Also please note that we will present non-GAAP financial information in this call. For a reconciliation of our non-GAAP information to the most comparable information under GAAP, please refer to our earnings press release.
Now to our call; on today’s call are Dr. Bami Bastani, Trident’s recently appointed CEO and President; and Pete Mangan, Executive VP and CFO. Bami will begin with the discussion of the company’s turnaround plan and an operational update, and Pete will review the financial results for the quarter and our financial outlook, then we will open the call for questions.
Now I’ll turn the call over to Dr. Bastani. Bami.
Welcome everyone and thank you for joining the call today. Let me begin with a few words of introduction. I was named CEO of Trident in early June, with the task and objective of turning around the company. I am 30 year veteran of the semiconductor industry and well known as the former CEO and President at ANADIGICS for a decade between 1998 and 2008.
During this period, the company turnaround drove an expansion of the market cap to more than $1 billion. We successfully positioned ANADIGICS that sold source to Intel in the Centrino product family for several years and maintained sole source position in Motorola’s connected home set-top box, as well as Cisco SSA, CATV infrastructure for the entire decade; and in handsets we capture primary position of Qualcomm’s 3G, HSPA reference designs; a position we maintained for many years.
All of these experiences are very relevant to Trident, as we serve the consumer space and address to connected home through our set-top box and DTV business units. Prior to ANADIGIS I served in executive leadership roles at Fujitsu Microelectronics and National Semiconductor. At ANADIGICS and at National I’ve earned a reputation of business transformation, which in part explains why the Board chose me to lead Trident at this critical time in its history.
In the call, I would like to speak openly with you, about my views and action plans for turning around Trident. I welcome your questions in the Q&A session. I believe that Trident’s Q2 results reflect a bottom in 2011, with revenues of 70 million near the low end of our guidance and operating loss of 22 million, which was in the favorable end of our guidance, and cash were up 52 million, which was above our guidance. The 38% gross margin in the quarter benefited from one-time items, but otherwise was inline with our expectations. Pete will elaborate on our detailed financials later in the call.
Let’s now talk about Trident turnaround. First, I am excited about the company, as it possesses world-class technologies, dedicated global employees and tier-one customer base. Trident has the wherewithal to produce world-class system level products for the DTV and STB markets. The company has an extensive patent portfolio, which we are actively monetizing as evidenced by the press release today.
It is the leader in picture quality, and its Motion Estimation Motion Compensation or MEMC has become a de facto standard. And finally company’s early start in connectivity including Android, gives it a true first mover advantage.