UBS Global Technology and Services Conference November 14, 2007

Transcription

1 The Leader The in Leader Digital Content in Digital Delivery Content Delivery The value is in the connectivity The value is in the connectivity UBS Global Technology and Services Conference November 14, 2007 August 6,

2 Safe Harbor Statement and Trade Mark References Except for historical information contained herein, this presentation contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements include statements regarding our current and future products, our product development activities, customer and market demand, target markets, the anticipated benefits of our products, expected financial results, expansion plans, our growth strategies and anticipated growth drivers, our standardization efforts, evolution and growth in the adoption of the HDMI and SPMT standards, and our expected penetration of the DTV, mobile and memory markets. In addition, we may also make other forward-looking statements regarding events that could potentially impact the future of the company and its financial results. These forward-looking statements involve risks and uncertainties, including those described in the most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed by Silicon Image with the SEC, that could cause our actual results to differ materially from those anticipated by the forward-looking statements contained in this presentation. Silicon Image assumes no obligation to update these statements. Silicon Image, Simplay Labs, Simplay HD, SteelVine, VastLane, PinnaClear, InstaPort, stylizations and design marks associated with all the preceding, and trade dress associated with Silicon Image, Inc.'s products, are among the trademarks or registered trademarks owned by or licensed to Silicon Image, Inc. Any other trademarks referenced herein and their associated stylizations and designs are the property of the respective owners thereof. 2

3 Vision 3

4 Mission Leader in the design, development, and implementation of intellectual property and semiconductors for the secure storage, distribution, and presentation of HD content in the home and mobile environment 4

5 Leader in Digital Connectivity Securely Distribute Store Game STB DVD Input Processor DTV PC Monitor Mobile 5

6 Digital Content Everywhere DTV Game STB DVD New Security New Protocol CE Centric DTV PC DTV Mobile 6

7 Unique Eco-system Approach Content Protection: Establishment of HDMI Founders Group: Wide spread adoption, including many of the world s best known CE and PC suppliers and OEMs: Interoperability and Reliability Testing 7

8 First-to-Market Innovations DVI for PCs SATA and SteelVine for Storage applications HDMI and MHL for CE products 1 st with HDMI 1.0, 1.1, 1.2, 1.3 InstaPort for fast switching MHL mobile connectivity Leading edge input processors 8

9 HDMI Device Growth In million units 1,800 1,600 1,400 1,200 1, HDMI Devices Shipped* Growing Installed Base ,629 18,271 80, , , , , ,252 4,653 22, , , , ,258 1,170,396 1,655,648 *Source: In-stat, Dec

10 Fast Switching Innovation Input Processors adding Connectivity Innovations 10

11 Diversification Initiatives Mobile connectivity Serial Port Memory Technology (SPMT tm ) Personal Entertainment Network (PEN) 11

12 Digital Content Goes Mobile Mobile Home Theater Computing 12

13 Mobile Expands SIMG Opportunities 750 Units in millions Smart Phones Digital Camcorders Digital Cameras Handheld Games Portable Media Players Source: Company data 13

14 Sharing Pictures on the Big Screen HDMI Analog Note: Model brands shown for illustrative purposes only. 14

15 Mobile HD Link Receiver 9223 Mobile HD 9220 Mobile HD 9220 Bridge 9290 Note: Model brands shown for illustrative purposes only. 5 pins HD, Data, Power Low power, cost, package 15

16 Serial Port Memory Technology New memory interface architecture targeted for Dynamic Random Access Memory (DRAM) chips Serial interface technology benefits over parallel Reduces pin count by a minimum of 40 percent Provides a bandwidth range from GB/s and higher Reduces input/output power by 50 percent or more over other currently available DRAM offerings Provides the ability to use either a single port or multiple ports into a single SPMT-enabled memory chip Industry leaders backing SPMT 16

17 Personal Entertainment Network 17

18 Digital Interoperability Leadership 200+ products Simplay HD verified Expanded operations - now on 3 continents Promoting rock solid interoperability between devices Providing confidence to consumers, retailers, OEMs and content providers 18

19 Simplay HD Momentum Content Providers Positive Consumer Experience Digital Rights Management Original End Manufacturers R&D Effectiveness Cost Control Product Differentiation Retailers Fewer Returns Easier Floor Sales Quality Partnership Consumers Peace of Mind Quality Experience Beauty For more information please see: 19

20 Key Take Aways First-to-Market Innovations HDMI MHL InstaPort Discrete and Integrated Solutions (Input Processors) Diversification Initiatives Mobile connectivity Memory SPMT tm Personal Entertainment Network (PEN) Digital Interoperability Leadership Simplay Labs 20

21 Revenue Summary $300 Consumer electronics Personal computer Storage $295.0 $320.5 $284-$289 $80 $70 $67.1 $70.1 $250 $212.4 $60 In Millions $200 $150 $100 $103.5 $173.2 $ Millions $50 $40 $30 $20 $ 50 $10 $ $0 Q1-08 Q

22 Income Statement Highlights* Revenue Gross Margins In Millions $100 $80 $60 $40 $20 $0 *Non-GAAP measures. Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 60% 59% 58% 57% 56% 55% 54% 53% 52% 51% 22

23 Gross Margin Summary* 100% Product Licensing Total Gross Margins 80% 60% 40% 20% 0% Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 *Non-GAAP measures. 23

24 Income Statement Highlights* Research and development General and administrative Selling and marketing Operating Income 35% 30% 25% 20% 15% 10% 5% 0% Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 *Non-GAAP measures. 24

25 Balance Sheet Highlights Days Sales Outstanding Non-GAAP Annualized Inventory Turns Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '

26 Balance Sheet Highlights Cash and Cash Equivalents and Short-term Investments $250 In Millions $200 $150 $100 $50 $0 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 26

27 Non-GAAP Financial Model* FY 2007 Q2, 08 Long term Revenue $313.8M $70.1M 15 20% Growth Gross Margin 56.6% 59.1% 55 57% Research & Development Expense Sales & Marketing Expense General & Administrative Expense 22.2% 28.7% 18 20% 9.8% 12.1% 8 10% 9.6% 10.0% 8 9% Operating Profit 15.0% 8.4% 15 20% *See appendix for a reconciliation between Non-GAAP and GAAP measures. 27

28 Key Success Factors Solid Execution Leveraging Operating Infrastructure Focus On Revenue Growth Benchmarked key performance indicators Critical action plans Routine monitoring and measurement Streamline, integrate and automate business processes Utilize core technology across all product families Organizational alignment Continue innovative leadership position Expand product offering Alignment with sampling and purchase cycles Strengthening Balance Sheet Working capital management Cash flow from operations 28

29 Q&A 29

30 Thank You! 30

31 Use of Non-GAAP Financial Information Silicon Image reports gross profit, product gross margin, operating expense, operating margin, net income and basic and diluted net income per share in accordance with GAAP and supplementally on a non-gaap basis for informational purposes only. These non-gaap financial measures give effect to the adjustments noted in the following slides for non-gaap measures and in the reconciliations contained in the Company s first quarter 2008 financial results press release and our press releases for other periods available on Silicon Image believes that non-gaap reporting, giving effect to the adjustments shown in the attached reconciliations, provide meaningful information and therefore uses non-gaap reporting to supplement its GAAP reporting and internally in evaluating operations, managing and monitoring performance, and determining bonus compensation. Silicon Image's presentation of non-gaap financial information excludes stock-based compensation, amortization of intangible assets recorded in connection with our acquisitions, gain on investment securities and the non-cash portion of the income tax provision recorded to additional paid in capital. Silicon Image has chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of our operating results and to illustrate the results of operations giving effect to such non-gaap adjustments. The non-gaap financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, the Company s financial results presented in accordance with GAAP. 31

32 Appendix: Revenue Silicon Image, Inc. Financial Metrics Unaudited June 30, 2008 ($ in thousands except share and per share data) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Supplemental analysis of operations Revenue Product: Total product revenue 53,480 62,541 69,619 66,662 56,339 66,532 74,827 74,676 57,187 61,836 % of total revenue 90.5% 88.6% 88.9% 76.7% 81.5% 83.4% 86.7% 87.5% 85.2% 88.2% Adjustments to product revenue: Adjustment related to change in disti revenue recognition (6,723) - - Non GAAP Product revenue 53,480 62,541 69,619 66,662 56,339 66,532 74,827 67,953 57,187 61,836 Development, licensing, and royalties revenue: Total Development, licensing, and royalties revenue 5,619 8,038 8,708 20,291 12,780 13,239 11,455 10,655 9,926 8,247 % of total revenue 9.5% 11.4% 11.1% 23.3% 18.5% 16.6% 13.3% 12.5% 14.8% 11.8% Adjustments to Development, licensing, and royalties revenue: Adjustments related to Genesis (10,592) Non GAAP Licensing revenue 5,619 8,038 8,708 9,699 12,780 13,239 11,455 10,655 9,926 8,247 Total revenue after adjustments 59,099 70,579 78,327 76,361 69,119 79,771 86,282 78,608 67,113 70,083 Total revenue excluding adjustments 59,099 70,579 78,327 86,953 69,119 79,771 86,282 85,331 67,113 70,083 32

33 Appendix: Cost of Revenue and Operating Expenses Silicon Image, Inc. Financial Metrics Unaudited June 30, 2008 ($ in thousands except share and per share data) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Supplemental analysis of operations Cost of Revenue Product and Development, licensing and royalties cost of revenue 24,720 29,231 31,949 32,619 30,412 36,495 37,079 32,241 27,787 28,676 Adjustment related to Genesis Adjustmented related to change in disti revenue recognition , Stock based compensation Total cost of revenue 25,348 29,785 32,721 33,393 30,758 36,938 37,500 35,247 28,137 29,107 Gross margin not including stock based compensation and adjustments 34,379 41,348 46,378 43,742 38,707 43,276 49,203 46,367 39,326 41,407 % of total revenue after adjustments 58.2% 58.6% 59.2% 57.3% 56.0% 54.3% 57.0% 59.0% 58.6% 59.1% Gross Margin 33,751 40,794 45,606 53,560 38,361 42,833 48,782 50,084 38,976 40,976 % of total revenue 57.1% 57.8% 58.2% 61.6% 55.5% 53.7% 56.5% 58.7% 58.1% 58.5% Operating Expense Research and development 12,754 12,379 13,085 14,272 14,887 16,969 18,308 19,419 20,308 20,085 % of Non GAAP revenue 21.6% 17.5% 16.7% 18.7% 21.5% 21.3% 21.2% 24.7% 30.3% 28.7% Selling and marketing 6,421 8,373 8,002 8,377 8,479 7,310 7,220 7,769 8,114 8,463 % of Non GAAP revenue 10.9% 11.9% 10.2% 11.0% 12.3% 9.2% 8.4% 9.9% 12.1% 12.1% General and administrative 5,125 4,953 5,384 7,266 7,275 7,145 6,876 8,825 7,765 6,990 % of Non GAAP revenue 8.7% 7.0% 6.9% 9.5% 10.5% 9.0% 8.0% 11.2% 11.6% 10.0% Stock based compensation 6,655 5,997 7,854 4,298 3,685 4,743 4,912 4,512 3,673 5,827 % of total revenue 11.3% 8.5% 10.0% 4.9% 5.3% 5.9% 5.7% 5.3% 5.5% 8.3% Amortization of intangible assets ,857 1,587 1,587 % of total revenue 0.5% 0.1% 0.1% 0.1% 0.9% 0.7% 0.6% 2.2% 2.4% 2.3% Other expense (5,369) % of total revenue 0.1% 0.1% 0.0% -6.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total 31,301 31,820 34,416 28,922 34,954 36,713 37,856 42,382 41,447 42,952 % of total revenue 53.0% 45.1% 43.9% 33.3% 50.6% 46.0% 43.9% 49.7% 61.8% 61.3% Adjustment related to Genesis , Operating profit excluding stock based compensation, amorization of intangible assets and adjustments related to Genesis 10,007 15,603 19,894 15,656 8,053 11,843 16,799 10,354 3,139 5,869 % of total revenue after adjustments 16.9% 22.1% 25.4% 20.5% 11.7% 14.8% 19.5% 13.2% 4.7% 8.4% Operating profit (loss) 2,450 8,974 11,190 24,638 3,407 6,120 10,926 7,702 (2,471) (1,976) % of total revenue 4.1% 12.7% 14.3% 28.3% 4.9% 7.7% 12.7% 9.0% -3.7% -2.8% 33

34 Appendix: Balance Sheet Silicon Image, Inc. Financial Metrics Unaudited June 30, 2008 ($ in thousands except share and per share data) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Supplemental analysis of operations Select balance sheet items ($ in thousands) Cash and short-term investments 167, , , , , , , , , ,456 Accounts receivable, net 37,339 38,219 32,004 39,931 33,226 45,701 45,597 21,254 27,011 28,636 Days sales outstanding [(Net AR/Total revenue excluding adjustments)*90] Non GAAP Days sales outstanding [(Net AR/Total revenue after adjustments)*90] Inventories, net 18,039 18,944 19,619 28,287 24,551 22,781 19,741 20,198 14,116 17,686 Annualized inventory turns [(Product cost of revenue/inventory)*4] Non GAAP Annualized inventory turns [(Non GAAP Product cost of revenue/inventory)*4] Depreciation and amortization 1,894 1,674 1,906 2,142 2,881 3,298 2,969 3,865 4,309 4,122 34