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PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP GROSS PROFIT MARGIN * (Figures may not sum due to rounding) (Unaudited) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Reconciliation of GAAP and non-GAAP gross profit margin | |||||||||||||||
| GAAP gross profit margin | 53.1 | % | 52.3 | % | 49.7 | % | 51.6 | % | 51.8 | % | |||||
| Amortization of acquired intangible assets | 1.5 | % | 1.4 | % | 1.6 | % | 1.6 | % | 0.6 | % | |||||
| Stock-based compensation | 0.5 | % | 0.4 | % | 0.3 | % | 0.4 | % | 0.3 | % | |||||
| Inventory step-up and backlog amortization | 0.1 | % | 0.5 | % | 5.1 | % | 0.6 | % | 2.4 | % | |||||
| Deferred revenue fair value adjustment | — | % | 0.2 | % | 0.4 | % | 0.1 | % | 0.1 | % | |||||
| Total reconciling items included in gross profit | 2.0 | % | 2.5 | % | 7.4 | % | 2.7 | % | 3.5 | % | |||||
| Non-GAAP gross profit margin | 55.1 | % | 54.7 | % | 56.9 | % | 54.2 | % | 55.2 | % | |||||
| *Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
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PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION * (In thousands) (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Reconciliation of GAAP net income (loss) and adjusted EBITDA | ||||||||||||||||||||
| GAAP net income (loss) | $ | (1,641 | ) | $ | 231 | $ | (3,552 | ) | $ | (4,621 | ) | $ | (4,173 | ) | ||||||
| Stock-based compensation | 1,638 | 1,458 | 1,147 | 5,683 | 4,243 | |||||||||||||||
| Restructuring | 429 | 414 | 439 | 1,464 | 1,920 | |||||||||||||||
| Amortization of acquired intangible assets | 399 | 399 | 399 | 1,596 | 665 | |||||||||||||||
| Tax effect of non-GAAP adjustments | 237 | (181 | ) | (157 | ) | — | — | |||||||||||||
| Inventory step-up and backlog amortization | 17 | 97 | 949 | 475 | 1,965 | |||||||||||||||
| Deferred revenue fair value adjustment | — | 52 | 68 | 52 | 93 | |||||||||||||||
| Fair value adjustment on convertible debt conversion option | — | — | 621 | — | 743 | |||||||||||||||
| Benefit related to tax reform | — | — | (343 | ) | — | (343 | ) | |||||||||||||
| Discount accretion on convertible debt fair value | — | — | 124 | 69 | 196 | |||||||||||||||
| Acquisition and integration | — | — | (45 | ) | — | 2,460 | ||||||||||||||
| Gain on debt extinguishment | — | — | (29 | ) | (1,272 | ) | (29 | ) | ||||||||||||
| Non-GAAP net income (loss) | $ | 1,079 | $ | 2,470 | $ | (379 | ) | $ | 3,446 | $ | 7,740 | |||||||||
| EBITDA adjustments: | ||||||||||||||||||||
| Depreciation and amortization | $ | 873 | $ | 933 | $ | 863 | $ | 3,555 | $ | 3,577 | ||||||||||
| Interest expense and other, net | 82 | 112 | 203 | 556 | 737 | |||||||||||||||
| Non-GAAP provision (benefit) for income taxes | (185 | ) | 269 | 91 | 448 | 836 | ||||||||||||||
| Adjusted EBITDA | $ | 1,849 | $ | 3,784 | $ | 778 | $ | 8,005 | $ | 12,890 | ||||||||||
| *Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
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