Net revenue for the second quarter was $51.3 million, relatively unchanged from $51.2 million reported in the previous quarter and down $6.9 million, or 12%, from $58.2 million reported for the same period last year.

GAAP net income for the second quarter was $4.8 million, or $0.18 per diluted share. This compares to GAAP net income of $2.7 million, or $0.10 per diluted share, for the previous quarter and $9.6 million, or $0.35 per diluted share, in the same period last year.

At the end of Sigma's second quarter, cash, cash equivalents and marketable securities totaled $228.8 million, or $8.55 per share outstanding, an increase of $36.6 million, or $1.31 per share for the first half of this fiscal year. This increase was primarily due to reductions in inventory and accounts receivable and $17.0 million, or $0.62 per share, generated by other operating activities.

Non-GAAP net income for the second quarter was $7.8 million, or $0.28 per diluted share. This compares to non-GAAP net income of $8.3 million, or $0.30 per diluted share for the previous quarter and non-GAAP net income of $12.7 million, or $0.47 per diluted share during the same period one year ago. Non-GAAP adjustments for the second quarter consisted of $796,000 in amortization expense for acquired intangibles related to the Zensys, VXP and Blue7 acquisitions and $2.2 million in non-cash share-based compensation expenses. The reconciliation between GAAP and non-GAAP net income for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Management Comment

"We are pleased to report that our revenue for the second quarter was in line with our expectations as we began the quarter. We feel that our primary markets have shown continued stability in the face of a difficult economy and we are continuing to place heavy efforts on bolstering sales as well as expanding the breadth of our market opportunities. The IPTV market has remained relatively flat during this year and we remain confident that it will start to demonstrate growth by the end of the year. We are also pursuing design activity in the cable industry and helping to drive the transition to Tru2way IP cable solutions, deployments of which could substantially increase our addressable market. We are continuing to pursue consumer opportunities on multiple fronts, including Blu-ray players, digital media adapters and home entertainment connectivity devices. Finally, we have begun to pursue strategic relationships in the set-top box market with our Z-wave brand of wireless home control solutions," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.

    Second Quarter and More Recent Highlights    * Announced that the company has begun sampling its new SMP8642      media processor SoC, designed for mainstream Blu-ray players.      The SMP8642, coupled with Sigma's proven Blu-ray Profile 2.0      software suite, provides a high performance interactive      experience and a cost effective architecture for competing in      today's player market.    * Announced the availability of the company's new SMP8652 media      processor SoC.  The SMP8652 is designed to provide the optimal      price/performance configuration for thin client applications,      which include IPTV set-top boxes (STBs), digital media adapters      (DMAs), and hybrid cable/IP thin clients.    * Announced several strategic partnerships with original design      manufacturers (ODM) Alpha Networks Inc., GigaFast and Gemtek.  As      a result of these partnerships, each ODM will offer a reliable      coax to Ethernet bridge solution at a lower cost for consumer      electronics manufacturers that are looking to make home network      installation easy to achieve and affordable to their customers.    * Announced a partnership with 4Home, Inc., a leading provider of      home control services, to expand the range of additional services      in the home through Sigma's set-top box reference designs.  As a      result of this partnership, Sigma will be able to offer set-top      box suppliers an integrated home control solution, based on      4Home's innovative software platform and the complete Z-Wave      ecosystem of RF-based home control devices.    * Announced a cooperative relationship with Entropic Communications,      Inc., a leading provider of home connectivity silicon and      software solutions, to develop high definition, MoCA compliant      Cable TV and IPTV set-top box reference designs powered by      Entropic's EN2510 and Sigma Designs' SMP8654.    * Was named by FORTUNE magazine as the second fastest growing      company in their 2009 "100 Fastest Growing Companies" list, an      annual ranking based on three-year records of revenue growth,      profit growth and total shareholder return.    * Was selected by Standard & Poor's to join the S&P SmallCap 600      index which will become effective as of today's market close. 

Investor Conference Call

The conference call relating to Sigma's second quarter fiscal 2010 results will take place following this announcement at 5:00 PM ET today, August 26, 2009. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com/IR or www.earnings.com. Institutional investors can access the call via Thomson StreetEvents at www.streetevents.com. To listen to the live call, please go to the website at least 15 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call via the internet through www.sigmadesigns.com/IR or www.earnings.com. The audio replay will be available for one week after the call.