Earnings Review and Free Research Report: Sigma Designs Reported Lower than Expected Results

LONDON, UK / ACCESSWIRE / September 29, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Sigma Designs, Inc. (NASDAQ: SIGM), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SIGM, following the Company’s release of its second quarter fiscal 2018 financial results on September 07, 2017. The maker of chips used for internet TV, Blu-Ray players, and other media platforms reported a y-o-y decline in revenue and earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

Sigma Designs’ net revenue was $39.5 million compared to net revenue of $61.3 million in Q2 FY17. The Company’s revenue numbers fell short of analysts’ expectations by $0.13 million.

For Q2 FY18, Sigma Designs recorded GAAP gross margin of 47.6% compared to GAAP gross margin of 48.2% for Q2 FY17. The Company’s non-GAAP gross margin in the reported quarter was 48.1% versus non-GAAP gross margin of 49.9% for the year-ago corresponding period.

Sigma Designs’ GAAP operating expenses were $29.8 million in Q2 FY18 compared to GAAP operating expenses of $29.9 million for Q2 FY17. The Company’s non-GAAP operating expenses in the reported quarter were $26.1 million versus non-GAAP operating expenses of $27.2 million for the year-earlier same period.

During Q2 FY18, Sigma Designs recorded GAAP operating loss of $11.0 million compared to a GAAP operating loss GAAP operating loss of ($0.3) million for Q2 FY17. The Company’s non-GAAP operating loss in the reported quarter were ($7.1) million versus non-GAAP operating income of $3.4 million for the year-ago same period.

Sigma Designs posted GAAP net loss was $12.7 million, or $0.33 per share, in Q2 FY18 compared to GAAP net loss of $1.7 million, or $0.05 per share, for Q2 FY17. The Company’s non-GAAP net loss in the reported quarter was $8.8 million, or $0.23 per share, versus non-GAAP net income of $2.5 million, or $0.07 per diluted share, for the year-ago comparable period. Sigma Designs’ net loss was wider than Wall Street’s estimates of $0.19 per share.

Cash Matters

Sigma Designs’ cash, cash equivalents, restricted cash, and marketable securities totaled $67.5 million at the end of Q2 FY18 compared to $74.8 million at the end of Q2 FY17. The decline was primarily due to a net loss in the reported quarter.

At the end of Q2 FY18, Sigma Designs’ working capital was $77.4 million compared to $86.1 million at the end of the prior quarter. The Company’s net accounts receivable was $24.9 million at the end of the reported quarter compared to $45.9 million in the prior year’s corresponding quarter.

Sigma Designs’ average days sales outstanding for receivables as of the end of Q2 FY18 was 58 days, a decrease of approximately 10 days compared to the previous year’s same quarter. The Company’s net inventory was $16.1 million at the end of the reported quarter compared to $18.9 million in the previous quarter and $21.5 million in Q2 FY17, bringing its inventory turns for the quarter to 5.9 on an annualized basis, up from 5.6 in the same quarter a year ago.

Sigma Designs’ accounts payable was $15.6 million at the end of Q2 FY18 compared to $23.1 million at the end of Q2 FY17. The Company’s accrued liabilities were $15 million at the end of the reported quarter compared to $21.4 million at the end of the prior year’s same quarter.

Strategic Alternatives Review

On July 26, Sigma Designs announced it had engaged Deutsche Bank to help explore alternatives for enhancing stockholder value. The Company is continuing to work with Deutsche Bank and will provide an update on this process when it determines that further disclosures are appropriate. During this review period, the Company continues to implement its previously announced restructuring plans with a goal of exiting fiscal 2018 at a 10% lower operating expense rate on a y-o-y basis.

Stock Performance

At the closing bell, on Thursday, September 28, 2017, Sigma Designs’ stock marginally climbed 0.81%, ending the trading session at $6.25. A total volume of 158.52 thousand shares have exchanged hands. The Company’s stock price advanced 6.84% in the last three months and 5.04% in the past six months. Moreover, the stock gained 4.17% since the start of the year. The stock currently has a market cap of $242.75 million.

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