Broadcom Reports First Quarter 2015 Results

IRVINE, Calif., April 21, 2015 /PRNewswire/ -- 

Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today reported unaudited financial results for its first quarter ended March 31, 2015.

"Broadcom delivered better-than-expected results in the March quarter driven by strength in the high-end smartphone and broadband access markets," said Scott McGregor, Broadcom's President and Chief Executive Officer. "Looking to the June quarter, we see operating performance continuing to strengthen on tight operating expense discipline and strong margins, consistent with our objective of driving profitable growth."

Net revenue for the first quarter of 2015 was $2.06 billion. This represents a decrease of 4.0% compared with the $2.14 billion reported for the fourth quarter of 2014 and an increase of 3.7% compared with the $1.98 billion reported for the first quarter of 2014. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the first quarter of 2015 was $209 million, or $0.34 per share (diluted), compared with GAAP net income of $390 million, or $0.64 per share (diluted), for the fourth quarter of 2014 and GAAP net income of $165 million, or $0.28 per share (diluted), for the first quarter of 2014.

GAAP net income for the first quarter of 2015 included impairment charges for long-lived assets of $143 million, or $0.23 per share. GAAP net income for the fourth quarter of 2014 included charges for restructuring and the impairment of long-lived assets, primarily related to Broadcom's decision to exit from its cellular baseband business, of $30 million, or $0.05 per share. GAAP net income for the first quarter of 2014 included impairment charges for long-lived assets of $25 million, or $0.04 per share, and a net gain on sale of assets $52 million, or $0.09 per share.

In addition to GAAP results, Broadcom reports adjusted net income and adjusted net income per share, referred to respectively as "non-GAAP net income" and "non-GAAP diluted net income per share." A discussion of Broadcom's use of these and other non-GAAP financial measures is set forth below. Reconciliations of GAAP to non-GAAP financial measures for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014 appear in the financial statements portion of this release under the heading "Unaudited Schedule of Selected GAAP to Non-GAAP Adjustments."

Non-GAAP net income for the first quarter of 2015 was $390 million, or $0.64 per share (diluted), compared with non-GAAP net income of $463 million, or $0.76 per share (diluted), for the fourth quarter of 2014 and non-GAAP net income of $197 million, or $0.33 per share (diluted), for the first quarter of 2014.

Conference Call Information
As previously announced, Broadcom will conduct a conference call with analysts and investors to discuss its first quarter 2015 financial results and current financial prospects today at 1:45 p.m. Pacific Time (4:45 p.m. Eastern Time). The conference call will be broadcast via webcast over the Internet. To listen to the webcast, or to view the financial and other statistical information required by Securities and Exchange Commission (SEC) Regulation G relating to the conference call, please visit the Investors section of the Broadcom website at www.broadcom.com/investors. The webcast will be recorded and available for replay until 11:59 p.m. Pacific Time on Thursday, May 21, 2015.

The financial results included in this release are unaudited. The audited financial statements of the company for the year ended December 31, 2014 are included in Broadcom's Annual Report on Form 10-K, filed with the SEC on January 29, 2015.

About Broadcom
Broadcom Corporation (NASDAQ: BRCM), a FORTUNE 500^® company, is a global leader and innovator in semiconductor solutions for wired and wireless communications. Broadcom^® products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. With one of the industry's broadest portfolio of state-of-the-art system-on-a-chip solutions, Broadcom is changing the world by Connecting everything^®. For more information, go to www.broadcom.com.

Note Regarding Use of Non-GAAP Financial Measures
Broadcom reports the following measures in accordance with GAAP and on a non-GAAP basis: (i) cost of revenue, (ii) gross profit, (iii) gross margin, (iv) net income (loss), and (v) diluted net income (loss) per share (EPS). Broadcom's non-GAAP cost of revenue, non-GAAP gross profit, and non-GAAP gross margin excludes certain charges related to acquisitions and certain inventory charges relating to its decision to exit the cellular baseband business. Acquisition-related charges include the amortization of purchased intangible assets and the amortization of acquired inventory valuation step-up. In addition to the exclusions noted above, Broadcom's non-GAAP net income and diluted net income per share also exclude impairment of long-lived assets, settlement costs (gains), restructuring costs (reversals), charitable contributions, gain on sale of assets, gains (losses) on strategic investments, other charges (gains), tax benefits resulting from reductions in U.S. valuation allowance on certain deferred tax assets due to the recording of net deferred tax liabilities for identifiable intangible assets under purchase accounting, and tax benefits resulting from the reduction of certain foreign deferred tax liabilities due to the impairment of long-lived assets. Reconciliations of GAAP to non-GAAP financial measures for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively, appear in the financial statements portion of this release under the heading "Unaudited Schedule of Selected GAAP to Non-GAAP Adjustments." Some totals or amounts may not add or conform to prior period presentations due to rounding.

Broadcom believes that the presentation of these non-GAAP measures provides important supplemental information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Broadcom's management believes that the use of these non-GAAP financial measures provides consistency and comparability among and between results from prior periods or forecasts and future prospects, and also facilitates comparisons with other companies in its industry, many of which use similar non-GAAP financial measures to supplement their GAAP results. Broadcom's management has historically used these non-GAAP financial measures when evaluating operating performance, because they believe that the inclusion or exclusion of the items described above provides insight into core operating results, the ability to generate cash and underlying business trends affecting performance. Broadcom has chosen to provide this information to investors to enable them to perform additional analysis of past, present and future operating performance and as a supplemental means to evaluate ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

For additional information on the items excluded by Broadcom from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the SEC.

Cautions Regarding Forward-Looking Statements:
All statements included or incorporated by reference in this release and the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Broadcom's current expectations, estimates and projections about its business and industry, management's beliefs, and certain assumptions made by Broadcom, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. Examples of such forward-looking statements include, but are not limited to, guidance provided on future revenue, product gross margin and operating expenses for the second quarter of 2015 (on both a GAAP and non-GAAP basis). These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause Broadcom's actual results to differ materially and adversely from those expressed in any forward-looking statement.

These risks and uncertainties include, but are not limited to the following:

• Broadcom's quarterly operating results may fluctuate significantly.
• Broadcom depends on a few significant customers for a substantial portion of its revenue.
• Broadcom may fail to appropriately adjust its operations in response to changes in its strategy or market demand.
• Broadcom faces intense competition.
• Broadcom manufactures and sells complex products and may be unable to successfully develop and introduce new products.
• Broadcom is exposed to risks associated with its international operations.
• Broadcom's operating results may be adversely impacted by worldwide economic uncertainties and specific conditions in the markets it addresses.
• Broadcom may be unable to attract, retain or motivate key personnel.
• Broadcom's stock price is highly volatile.
• Broadcom's business is subject to potential tax liabilities.
• Broadcom may be required to defend against alleged infringement of intellectual property rights of others and/or may be unable to adequately protect or enforce its own intellectual property rights.
• Broadcom faces risks associated with its acquisition strategy.
• Broadcom is subject to order and shipment uncertainties.
• Broadcom depends on third parties to fabricate, assemble and test its products.
• Broadcom's systems are subject to security breaches and other cybersecurity incidents.
• Government regulation may adversely affect Broadcom's business.
• Broadcom's future ability to return capital to shareholders in the form of dividends or share repurchases may be impacted by the availability of U.S. cash.
• Broadcom's articles of incorporation and bylaws contain anti-takeover provisions.
• Broadcom's co-founders and their affiliates may strongly influence the outcome of matters that require the approval of Broadcom's shareholders.

Broadcom's Annual Report on Form 10-K for the year ended December 31, 2014, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect Broadcom's business, results of operations and financial condition. The forward-looking statements used in this release and the related conference call for analysts and investors speak only as of the date they are made. Broadcom undertakes no obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.

Broadcom^®, the pulse logo, Connecting everything^®, and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Any other trademarks or trade names mentioned are the property of their respective owners.

Broadcom has based the preceding guidance for the three months ending June 30, 2015 on expectations, assumptions and estimates that it believes are reasonable given its assessment of historical trends and other information reasonably available as of April 21, 2015. Broadcom's guidance consists of predictions only, however, and is subject to a wide range of known and unknown business risks and uncertainties, many of which are beyond Broadcom's control. The forecasts and projections contained in the table above should not be regarded as representations by Broadcom that the estimated results will be achieved. Projections and estimates are necessarily speculative in nature and actual results may vary materially from the guidance provided today. The non-GAAP guidance presented above is consistent with the presentation of non-GAAP results included elsewhere herein. The guidance set forth in the above table should be read together with the information under the caption, "Cautions Regarding Forward-Looking Statements" above, Broadcom's Annual Report on Form 10-K for the year ended December 31, 2014, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and Broadcom's other SEC filings. Broadcom undertakes no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances.

SOURCE Broadcom Corporation; BRCM Corporate

Related Links

http://www.broadcom.com

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