SAN DIEGO, July 2, 2013 (GLOBE NEWSWIRE) -- Entropic (Nasdaq:ENTR), a world leader in semiconductor solutions for the connected home, today narrowed its previously announced financial guidance for the second quarter of 2013 to the low end of the revenue range. Entropic now expects revenue of approximately $70 million and is reaffirming prior guidance for non-GAAP earnings per share of $0.00 for the second quarter.
Entropic also announced it is implementing a restructuring plan designed to refine business operations with the goal of driving long-term profitable growth. In connection with the corporate restructuring plan, Entropic is making strategic organizational changes across its marketing and business operations to focus on key vertical markets, streamline global manufacturing resources, and consolidate several engineering activities to drive efficiencies.
Entropic anticipates the restructuring plan will be substantially completed within the next month. The restructuring plan is expected to result in a reduction in force of approximately 70 employees, constituting approximately 10 percent of Entropic's global workforce. Once fully implemented, Entropic estimates that the full annualized costs associated with the 70 employees will be approximately $9 million. Entropic has plans to reinvest these savings in the development of new products and programs.
"The restructuring activities are designed to maximize engineering efficiencies, optimize business operations and align our investments with key vertical market requirements," said Patrick Henry, president and chief executive officer, Entropic. "It also gives us an opportunity to increase investment in strategic areas with more long-term growth potential, including analog mixed-signal and software."
Entropic estimates it will incur pre-tax GAAP charges of approximately $1.7 million in connection with this restructuring plan, the majority of which will be recorded during the second quarter of 2013.
Entropic will release financial results for the second quarter 2013, and host a conference call for analysts and investors on July 31, 2013. At that time, Entropic will review its second quarter results and provide an outlook for the third quarter of 2013. Details on the conference call will be announced, prior to that date.
Entropic™ (Nasdaq:ENTR) is a world leader in semiconductor solutions for the connected home. Entropic transforms how traditional HDTV broadcast and IP-based streaming video content is seamlessly, reliably, and securely delivered, processed, and distributed into and throughout the home. Entropic's next-generation Set-top Box (STB) System-on-a-Chip (SoC) and Connectivity solutions enable Pay-TV operators to offer consumers more captivating whole-home entertainment experiences by transforming the way digital entertainment is delivered, connected and consumed – in the home and on the go. For more information, visit Entropic at: www.entropic.com.
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Non-GAAP Financial Measures
This press release contains non-GAAP earnings per share. Non-GAAP earnings per share can be reconciled to GAAP earnings per share by excluding the effects of all forms of stock-based compensation, transaction and integration costs related to Entropic's Trident Microsystems and PLX Technology transactions, amortization of intangible assets, the loss related to equity method investment, the impact of fair value adjustments related to contingent consideration payable in Entropic's acquisition of PLX Technology assets, the cash tax difference and restructuring charges. Management uses non-GAAP financial measures to manage Entropic's business, including setting operating budgets and executive compensation plans. Non-GAAP measures are also used to (i) supplement the financial results and forecasts reported to Entropic's board of directors, (ii) evaluate Entropic's operating performance, (iii) compare Entropic's performance to internal forecasts, and (iv) manage Entropic's business and benchmarking performance internally. Non-GAAP measures have been made available to stockholders consistently in the past to provide transparency on how management manages Entropic's operating performance. Management believes that non-GAAP operating measures are useful to investors, when used as a supplement to GAAP measures, in evaluating Entropic's ongoing operational performance. Non-GAAP financial measures disclosed by Entropic should not be considered in isolation or a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by Entropic may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding the expected costs of the restructuring plan, the goals and expected benefits of the restructuring plan, including the operating expense reductions and engineering efficiencies, Entropic's ability to make strategic investments and continue product development, Entropic's growth opportunities and expectations for future revenue and earnings per share. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Entropic's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties associated with estimating revenues and earnings per share prior to Entropic closing its books and verifying such information; Entropic's ability to successfully implement its restructuring plan to leverage synergies and optimize its resources; the impact of the restructuring plan on Entropic's business, including a potential adverse effect on revenues and Entropic's other financial results; unanticipated charges not currently contemplated that may occur as a result of the restructuring plan, Entropic's dependence on a limited number of supply chain partners for the manufacture of its products and other factors that could affect its ability to meet customer demand; Entropic's dependence on a limited number of customers for a substantial portion of its revenues; risks associated with adverse U.S. and international economic conditions; the ability of Entropic's customers or the service providers who purchase their products to successfully compete and continue to grow in their markets; the continued development of the market for High Definition (HD) video and other multi-media content delivery and networking solutions; risks associated with competing against larger and more established companies and Entropic's ability to compete successfully in the connected home entertainment market; risks associated with timely development and introduction of new or enhanced products including those associated with IP Video delivery; risks related to international operations; risks related to intellectual property, including third party licensing or patent infringement claims; risks associated with acquisitions including their integration into Entropic's existing operations; and other factors discussed in the "Risk Factors" section of Entropic's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. All forward-looking statements are qualified in their entirety by this cautionary statement. Entropic is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
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