|By Marketwired .||
|May 1, 2014 04:05 PM EDT||
MOUNTAIN VIEW, CA -- (Marketwired) -- 05/01/14 -- Audience, Inc. (NASDAQ: ADNC), the leader in advanced voice and audio processing for mobile devices, today announced its first quarter 2014 financial results.
Revenue for the first quarter of 2014 was $36.1 million, compared with $47.2 million for the same period in 2013. As reported under U.S. generally accepted accounting principles (GAAP), first quarter 2014 net loss was ($7.2) million, or ($0.32) per diluted share based on weighted average shares outstanding of 22.2 million. This compares with GAAP net income of $4.6 million, or $0.20 per diluted share based on weighted average shares outstanding of 23.3 million, for the same period in 2013. Gross margin on a GAAP basis for the first quarter of 2014 was 51.9% of revenue, compared to 54.0% of revenue for the same period in 2013.
Non-GAAP net loss, as defined below, for the first quarter of 2014 was ($3.3) million, or ($0.15) per diluted share based on weighted average shares outstanding of 22.2 million. This compares with non-GAAP net income of $6.2 million, or $0.27 per diluted share based on weighted average shares outstanding of 23.3 million, for the same period in 2013. Gross margin on a non-GAAP basis for the first quarter of 2014 was 52.1% of revenue, compared to 54.2% of revenue for the same period in 2013.
"From a product standpoint, 2014 is off to a strong start with the introduction of new Always-on voice and motion products, and the announcement of devices from key customers like Samsung and leading Chinese OEMs, including ZTE, Meizu, Yulong and Huawei," said Peter Santos, president and chief executive officer. "This year we anticipate growing interest in our next generation voice, as well as new motion technology, as we diversify our product offerings for smartphone, tablet and other adjacent markets."
"We were pleased to deliver financial results meeting or exceeding our guidance for the first quarter," said Kevin Palatnik, chief financial officer. "With the product announcements made at both CES and MWC and their delivery in the second half of the year, we expect continued sequential revenue growth throughout the year."
For the second quarter of 2014, Audience expects total revenue to be in the range of $37.5 to $40.5 million. Second quarter GAAP gross margin is expected to be in the range of 51.5% to 54.5%. Second quarter GAAP net loss, which includes $1.5 million of expected stock-based compensation expense, is expected to be in the range of ($3.7) to ($4.7) million, or ($0.17) to ($0.21) per diluted share on approximately 22.5 million diluted weighted average shares outstanding.
Second quarter non-GAAP gross margin is expected to be in the range of 51.5% to 54.5%. Second quarter non-GAAP net loss is expected to be in the range of ($2.2) to ($3.2) million, or ($0.10) to ($0.14) per share on a diluted basis.
A schedule showing a reconciliation of the business outlook from GAAP diluted net loss per share to non-GAAP diluted net loss per share is included with this release.
The above information concerning guidance represents Audience's outlook only as of the date hereof and is subject to change as a result of amendments to material contracts and other changes in business conditions. Audience undertakes no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise.
Quarterly Conference Call Today
Peter Santos, president and chief executive officer, and Kevin Palatnik, chief financial officer, will host a conference call today at 1:30 pm (Pacific) / 4:30 pm (Eastern). Attendees are asked to join the call at least ten minutes prior to the scheduled conference call time. The call may be accessed by dialing 1-877-212-6076 (toll free) or 1-707-287-9331 (international). The passcode is 24719431. A live and archived webcast of the call will be available on Audience's website at http://investor.audience.com for 30 days.
Audience expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Audience may reiterate the business outlook published in this press release. At the same time, Audience will keep this press release, including the business outlook, publicly available on its website.
Beginning June 13, 2014, Audience will observe a Quiet Period during which Audience's representatives will not comment on Audience's business outlook, financial results or expectations. The Quiet Period will extend until the day when Audience's Second Quarter 2014 Earnings Release is published, which is currently scheduled to be July 31, 2014.
Use of Non-GAAP Financial Measures
Audience prepares its financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures, such as gross margin, net income and earnings per share information for the three months ended March 31, 2014 and similar periods from the prior year included in this press release are different from those otherwise presented under GAAP. The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:
Stock-based compensation expense relates to equity incentive awards granted to our employees, directors and consultants under GAAP. Stock-based compensation expense has been and will continue to be a significant recurring expense for Audience. While we include the dilutive impact of such equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.
On June 5, 2012, Audience entered into a lease agreement for its future corporate headquarters facility in Mountain View, California. Pursuant to the lease agreement, the lease falls under "build-to-suit" accounting treatment and therefore, in accordance with accounting for the effect of lessee involvement in asset construction, the company is considered to be the owner of the real estate project during the construction period. As such, Audience recorded an asset for construction in progress for incurred construction costs, and a liability for those costs that are not funded by the company. Additionally, the rent costs associated with the ground lease during construction was recorded to the income statement. This rent cost is a non-cash charge that the company excluded from its non-GAAP net income. The construction was completed and the lease commenced October 1, 2013. Upon lease commencement, "build-to-suit" accounting treatment was terminated. The company concluded that the lease qualifies for sale-leaseback accounting treatment and that the lease is to be recorded as an operating lease.
Non-GAAP financial information is adjusted for a tax rate equal to our three year annual estimated tax rate on non-GAAP income. Our three year estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenues and expenses and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.
Audience has provided these measures in addition to GAAP financial results because management believes these non-GAAP measures help provide a consistent basis for comparison between quarters and annual growth rates that are not influenced by certain non-cash charges and therefore are helpful in understanding Audience's underlying operating results. These non-GAAP measures are some of the primary measures Audience's management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, GAAP and these non-GAAP measures may not be comparable to information provided by other companies. Reconciliations of the GAAP to non-GAAP results are presented at the end of this press release.
Cautionary Note Concerning Forward-Looking Statements
Statements in the press release and certain matters to be discussed on the first quarter conference call regarding Audience, Inc., which are not historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide, could and should and the negative of these terms or other similar expressions. These statements, including statements relating to expectations of future revenue, net income and operating margin performance, diversification of our customer base, future success for various products and our leadership position in the market, reporting on wins in the market and the demand for our solutions including continued demand by customers upon whom we are substantially dependent are based on current expectations and assumptions that are subject to risks and uncertainties. Our actual results could differ materially from those we anticipate as a result of various factors, including: completion of our 2014 audit and potential fluctuations in the company's quarterly and annual operating results and financial condition, including but not limited to matters related to tax; our dependence on a single OEM, Samsung Electronics Co. Ltd., for a substantial portion of our revenue; weak demand for high end smart phones and the impact on our business; our need to maintain and expand our existing relationships with our OEMs, including Samsung and leading Chinese OEMs and to establish relationships with new OEMs in order to maintain and increase our revenue; our ability to sustain profitable operations due to our history of losses and accumulated deficit; quarterly fluctuations in our results due to factors such as the timing of OEM product launches, customer purchasing behavior in light of anticipated mobile phone launches; our assessments of whether we have excess or obsolete inventory; increasing competition and new entrants in the market for our products; our need to diversify our sources of revenue; our ability to enter new end user product markets, as well as new geographic markets; pressure on the average selling prices for our products; our lengthy sales cycle and the lack of certainty as to whether any given OEM's products will achieve market acceptance; our OEMs' lengthy and expensive process to qualify our products; our ability to develop new or enhanced products in a timely manner that achieve market acceptance; our reliance on third parties to manufacture, assemble and test our products; increased defects that may be present in our products as we scale our manufacturing processes; the impact of future intellectual property litigation and claims for indemnification; changes in tax laws or our ability to utilize our tax structure and net operating losses and other risks inherent in fabless semiconductor businesses. For a discussion of these and other related risks, please refer to "Risk Factors" in our most recent Annual Report on Form 10-K for the year ended December 31, 2013, which is available on the SEC's website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Audience is the leader in advanced voice and audio processing for mobile devices, and in early 2014 announced its expansion into advanced multisensory and motion processing. Its family of earSmart intelligent voice processors is based on the processes of human hearing, to suppress background noise and enhance mobile voice quality. Audience's technology substantially improves the mobile voice experience, while also improving the performance of speech-based services, and enhancing audio quality for multimedia. Audience earSmart processors are featured in mobile devices from leading providers in Asia-Pacific, Europe and the U.S. The company is based in Mountain View, California. For more information, see www.audience.com.
For more information on Audience® earSmart Advanced Voice processors, please go here.
Audience, Inc. Condensed consolidated balance sheets (in thousands) (unaudited) March 31, December 31, 2014 2013 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 107,604 $ 124,691 Short-term investments 17,749 14,855 Restricted cash -- 170 Accounts receivable, net 11,692 5,670 Inventories 18,704 13,422 Other current assets 5,065 4,676 ------------- ------------- Total current assets 160,814 163,484 Property and equipment, net 12,998 13,533 Other noncurrent assets 2,673 2,402 ------------- ------------- Total assets $ 176,485 $ 179,419 ============= ============= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 9,040 $ 6,304 Accrued and other current liabilities 8,393 10,673 Deferred credits and income 642 265 ------------- ------------- Total current liabilities 18,075 17,242 Taxes payable - noncurrent 1,109 935 Other liabilities - noncurrent 1,924 1,861 ------------- ------------- Total liabilities 21,108 20,038 ------------- ------------- Stockholders' equity: Common stock 22 22 Additional paid-in capital 187,027 183,840 Accumulated other comprehensive income 1 (1) Accumulated deficit (31,673) (24,480) ------------- ------------- Total shareholders' equity 155,377 159,381 ------------- ------------- Total liabilities and stockholders' equity $ 176,485 $ 179,419 ============= ============= Audience, Inc. Condensed consolidated statements of operations (in thousands, except per share data) (unaudited) Three months ended March 31, ---------------------------- 2014 2013 ------------- ------------- Revenue: Hardware $ 34,194 $ 43,668 Licensing 1,884 3,561 ------------- ------------- Total revenue 36,078 47,229 Cost of revenue 17,338 21,720 ------------- ------------- Gross profit 18,740 25,509 Operating expenses: Research and development 12,188 9,450 Selling, general and administrative 12,245 10,345 ------------- ------------- Total operating expenses 24,433 19,795 ------------- ------------- Income (loss) from operations (5,693) 5,714 Interest income, net 18 54 Other expense, net (33) (75) ------------- ------------- Income (loss) before income taxes (5,708) 5,693 Income tax expense (benefit) 1,485 1,048 ------------- ------------- Net income (loss) $ (7,193) $ 4,645 ============= ============= Net income (loss) per share: Basic $ (0.32) $ 0.22 ============= ============= Diluted $ (0.32) $ 0.20 ============= ============= Weighted average shares used in computing net income (loss) per share: Basic 22,221 20,961 ============= ============= Diluted 22,221 23,324 ============= ============= Audience, Inc. GAAP to Non-GAAP net income (loss) reconciliation (in thousands) (unaudited) Three months ended March 31, ---------------------------- 2014 2013 ------------- ------------- GAAP net income (loss) $ (7,193) $ 4,645 Stock-based compensation 1,576 1,317 Non-cash rent expense -- 248 Tax adjustments 2,310 -- ------------- ------------- Non-GAAP net income (loss) $ (3,307) $ 6,210 ============= ============= Audience, Inc. Reconciliation of GAAP to non-GAAP diluted earnings (loss) per share (in thousands, except per share data) (unaudited) Three months ended March 31, ---------------------------- 2014 2013 ------------- ------------- GAAP net income (loss) - basic and diluted $ (7,193) $ 4,645 Non-GAAP adjustments: Stock-based compensation 1,576 1,317 Non-cash rent expense -- 248 Tax adjustments 2,310 -- ------------- ------------- Non-GAAP net income (loss) - diluted $ (3,307) $ 6,210 ============= ============= GAAP - diluted weighted average shares 22,221 23,324 ============= ============= Non-GAAP - diluted weighted average shares 22,221 23,324 ============= ============= GAAP - diluted net income (loss) per share $ (0.32) $ 0.20 Non-GAAP adjustments: Stock-based compensation 0. 07 0.06 Non-cash rent expense -- 0.01 Tax adjustments 0.10 -- ------------- ------------- Non-GAAP - diluted net income (loss) per share $ (0.15) $ 0.27 ============= ============= Audience, Inc. Reconciliation of GAAP to Non-GAAP Operating Results (in thousands, except per share data) (unaudited) Three months ended March 31, Three months ended March 31, 2014 2013 ---------------------------- ---------------------------- Reported Adjustments Non- Reported Adjustments Non- GAAP GAAP GAAP GAAP -------- --------- ------- -------- --------- -------- Total revenue $ 36,078 $ -- $36,078 $ 47,229 $ -- $ 47,229 Cost of revenue(1) 17,338 (62) 17,276 21,720 (69) 21,651 -------- --------- ------- -------- --------- -------- Gross profit 18,740 62 18,802 25,509 69 25,578 Total operating costs(1) 24,433 (1,514) 22,919 19,795 (1,496) 18,299 -------- --------- ------- -------- --------- -------- Income (loss) from operations $ (5,693) $ 1,576 $(4,117) $ 5,714 $ 1,565 $ 7,279 Income (loss) before income taxes $ (5,708) $ 1,576 $(4,132) $ 5,693 $ 1,565 $ 7,258 Income tax expense (benefit)(2) 1,485 (2,310) (825) 1,048 -- 1,048 -------- --------- ------- -------- --------- -------- Net income (loss) $ (7,193) $ 3,886 $(3,307) $ 4,645 $ 1,565 $ 6,210 ======== ========= ======= ======== ========= ======== (1) Adjustment relates to stock-based compensation expense and non-cash rent expense recognized during the period for GAAP purposes. (2) Adjustment reflects the tax benefit from all non-GAAP adjustments for the period. Audience, Inc. Estimated computation of GAAP to non-GAAP diluted net loss per share (unaudited) Three months ending June 30, 2014 ------------------- Estimated GAAP diluted net loss per share ($0.17) - ($0.21) Estimated stock-based compensation expense per share $0.07 ------------------- Non-GAAP diluted net loss per share ($0.10) - ($0.14) ===================
Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting and anomaly detection (SPM), log management and analytics (Logsene), and search analytics (SSA). We also provide Search and Big Data consulting services and offer 24/7 production support for Solr and Elasticsearch.
Mar. 28, 2015 02:15 PM EDT Reads: 1,421
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, will explain the best practices of continuous testing at high scale, which is r...
Mar. 28, 2015 02:00 PM EDT Reads: 1,913
Modern Systems announced completion of a successful project with its new Rapid Program Modernization (eavRPMa"c) software. The eavRPMa"c technology architecturally transforms legacy applications, enabling faster feature development and reducing time-to-market for critical software updates. Working with Modern Systems, the University of California at Santa Barbara (UCSB) leveraged eavRPMa"c to transform its Student Information System from Software AG's Natural syntax to a modern application lev...
Mar. 28, 2015 02:00 PM EDT Reads: 798
Cloud is not a commodity. And no matter what you call it, computing doesn’t come out of the sky. It comes from physical hardware inside brick and mortar facilities connected by hundreds of miles of networking cable. And no two clouds are built the same way. SoftLayer gives you the highest performing cloud infrastructure available. One platform that takes data centers around the world that are full of the widest range of cloud computing options, and then integrates and automates everything. J...
Mar. 28, 2015 02:00 PM EDT Reads: 1,554
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
Mar. 28, 2015 01:00 PM EDT Reads: 1,422
SYS-CON Events announced today Sematext Group, Inc., a Brooklyn-based Performance Monitoring and Log Management solution provider, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting and anomaly detection (SPM), log management and analytics (Logsene), search analytics (S...
Mar. 28, 2015 01:00 PM EDT Reads: 3,327
DevOps is all the rage these days and with good reason as it promises to reduce the time-to-market for new applications. It also promises to improve change management, allowing teams to deploy changes to their applications quickly and efficiently. However, DevOps isn’t something you buy, install, or implement; rather it is the symptom of an appropriate organizational system. In his session at DevOps Summit, Mark Thiele, EVP, Data Center Technologies at SUPERNAP International, will discuss how ...
Mar. 28, 2015 01:00 PM EDT Reads: 1,274
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
Mar. 28, 2015 01:00 PM EDT Reads: 1,341
SYS-CON Events announced today Arista Networks will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Arista Networks was founded to deliver software-driven cloud networking solutions for large data center and computing environments. Arista’s award-winning 10/40/100GbE switches redefine scalability, robustness, and price-performance, with over 3,000 customers and more than three million cloud networking ports depl...
Mar. 28, 2015 12:45 PM EDT Reads: 2,381
Hosted PaaS providers have given independent developers and startups huge advantages in efficiency and reduced time-to-market over their more process-bound counterparts in enterprises. Software frameworks are now available that allow enterprise IT departments to provide these same advantages for developers in their own organization. In his workshop session at DevOps Summit, Troy Topnik, ActiveState’s Technical Product Manager, will show how on-prem or cloud-hosted Private PaaS can enable organ...
Mar. 28, 2015 12:45 PM EDT Reads: 993
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Mar. 28, 2015 12:45 PM EDT Reads: 4,592
Countless business models have spawned from the IaaS industry. Resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his General Session at 16th Cloud Expo, Phil Jackson, Lead Developer Advocate at SoftLayer, will break down what we've got to work with and discuss the benefits and pitfalls to discover how we can best use them t...
Mar. 28, 2015 12:15 PM EDT Reads: 1,377
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on T...
Mar. 28, 2015 12:00 PM EDT Reads: 1,361
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting we...
Mar. 28, 2015 12:00 PM EDT Reads: 1,194
Getting started is often the hardest part of any project, and converting your data center into a Git Repository is no different. In his session at 16th Cloud Expo, Christopher Gallo, Developer Advocate for SoftLayer, an IBM Company, will discuss some of the more popular configuration management suites, with some practical examples showing off the power of SaltStack. Hopefully, by the end of this presentation, you’ll be ready to stop deploying changes manually and enter the magical world of sof...
Mar. 28, 2015 12:00 PM EDT Reads: 1,326