SIGM

[la-onda]

wow!
1)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:35:19 PM ET
CE Unterberg Towbin
NEW YORK, November 29 (newratings.com) - Analysts at CE Unterberg Towbin reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $21 to $32.
2)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:34:34 PM ET
BWS Financial
NEW YORK, November 29 (newratings.com) - Analysts at BWS Financial reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $24 to $30.
3)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:33:20 PM ET
American Technology Research
NEW YORK, November 29 (newratings.com) - Analysts at American Technology Research reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $27 to $31.
4)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 12:32:34 PM ET
Roth Capital
NEW YORK, November 29 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs (SIGM.NAS). The target price has been raised from $27 to $29.
5)
Sigma Designs "buy," target price raised
Wednesday, November 29, 2006 3:16:53 AM ET
Montgomery & Co
NEW YORK, November 29 (newratings.com) - Analysts at Montogomery & Co maintain their "buy" rating on Sigma Designs Inc (SIGM.NAS). The 12-18-month target price has been raised from $24 to $30.
In a research note published this morning, the analysts mention that the company has reported robust 3Q results, ahead of the consensus. Sigma Designs has indicated that the improvement in gross margins remains on track on account of a better product mix and cost controls. The company has guided to 10% growth in the January quarter.
6)
Unbelievable chart:

[la-onda]

fyi:
Sigma Designs "strong buy," target price raised

Monday, December 11, 2006 9:53:57 AM ET
BWS Financial

NEW YORK, December 11 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS).
The target price has been raised from $30 to $40.

[BigSully1]

fyi:
Sigma Designs "strong buy," target price raised

Monday, December 11, 2006 9:53:57 AM ET
BWS Financial

NEW YORK, December 11 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS).
The target price has been raised from $30 to $40.

target exceeded.

[la-onda]

1)
Sigma Designs "buy," target price raised
Thursday, August 30, 2007 9:42:44 AM ET
Roth Capital
NEW YORK, August 30 (newratings.com) - Analysts at Roth Capital reiterate their "buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $42 to $50.

2)
Sigma Designs "strong buy," target price raised
Thursday, August 30, 2007 1:15:40 PM ET
BWS Financial
NEW YORK, August 30 (newratings.com) - Analysts at BWS Financial reiterate their "strong buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $40 to $70.

3)
Sigma Designs "buy," target price raised
Thursday, August 30, 2007 2:45:59 AM ET
Montgomery & Co
NEW YORK, August 30 (newratings.com) - Analyst Erik Rasmussen of Montgomery & Co reiterates his "buy" rating on Sigma Designs Inc (SIGM.NAS). The target price has been raised from $39 to $49.
In a research note published this morning, the analyst mentions that the company has posted robust 2Q results ahead of the estimates and the guidance. Sigma Designs' 2Q top-line growth was driven by IPTV momentum and the overall results were boosted by a solid performance in the high-definition DVD (Blu-ray) markets and robustness in the company's HDTV segment, the analyst says. The company has guided to sequential revenue growth of more than 20%.

4)
Sigma Designs upgraded to "neutral" - update
Tuesday, August 28, 2007 1:17:51 PM ET
American Technology Research
NEW YORK, August 28 (newratings.com) - Analyst Jeff Schreiner of American Technology Research upgrades Sigma Designs Inc (SIGM.NAS) from "sell" to "neutral," while raising his estimates for the company.
In a research note published this morning, the analyst mentions that the IPTV and Blu-ray markets are likely to be robust in the near term. Sigma Designs' performance in the July quarter is likely to have been substantially better than expected and the company is expected to raise its guidance for the October quarter, the analyst says. The EPS estimates for FY08 and FY09 have been raised from $1.11 to $1.43 and from $0.96 to $1.00, respectively.

awesome chart (of course nor holding 

[David Randolph]

The following analysis was written on October 21st, 2007:

David: 

When you get a chance could you take a look at SIMG and see what you think?  I bought some in the mid 5's.

Thanks, Poli

1. Profile

Silicon Image, Inc. (SIMG) engages in the design, development, and implementation of semiconductors for the secure storage, distribution, and presentation of digital content. The company's solutions facilitate movement of digital content between and among digital devices across the consumer electronics, personal computers (PC), and storage markets. Its products are used in various devices, including digital television, digital versatile disc (DVD) players, high definition and Blu-ray DVD recorders, set-top boxes, audio/video receivers, game consoles, high definition camcorders, and digital still cameras. The company offers various consumer electronics products, including high-definition multimedia interface transmitters and receivers, as well as products that connect PCs to digital displays. It also offers storage controllers, bridges, and processors. The company markets its products to the consumer electronics, personal computer, display, and storage markets. It also provides semiconductor intellectual property solutions for digital multimedia and data storage applications. The company sells its products to distributors and original equipment manufactures worldwide directly through direct sales force; and indirectly through a network of distributors and manufacturer's representatives. Silicon Image has strategic relationships with Hollywood studios, such as Universal, Warner Brothers, Disney, and Fox; and consumer electronics companies, such as Sony, Hitachi, Toshiba, Matsushita, Phillips, and Thomson. The company was founded in 1995 and is headquartered in Sunnyvale, California.

2. SIMG's history



We can identify 4 phases in terms of stock price for SIMG:

Red - It was the technology bubble run, with SIMG rising from its debut price of $11.5, in October, 6, 1999, to a high of $66 in February 16, 2000, a 474% advance in five months.

Back in 1999 the company had $21 M in revenue and $7 M in losses. The share count was 51.5 million, so at its high the market cap was 51.5*$66 = $3.4 B, incredible.

Blue - The inevitable collapse came, and SIMG fell 98.4% to an all time low of $1.03, set in October 23, 2001. Fundamentally things got really bad, with 2001 revenue at $51 M and losses at $76 M. However, the bad fundamentals seemed priced in, as the market cap at the low point was 63.5*$1.03 = $65 M.

Green - Then a recovery phase, with SIMG rising almost 18 fold between late 2001 and late 2004. Revenue rose from $51 M to $173 M in 2004. There weren't any more losses, as the company posted break even results. The market cap at the 2004 high was 78.1*$18.37 = $1.4 B. The Price to Sales Ratio was quite high, at 8.1.

Yellow - Somewhat strangely, the stock started trending down again. I say that's strange because fundamentals kept improving. Probably it was just that the stock got too expensive and couldn't keep up with expectations.

In October 16, 2006, SIMG still closed at $14.52, so let's take a closer look at what happened since then.

3. SIMG's short term chart



I want to know what was the cause for the wild price swings and huge volume in points 1, 2 and 3:

1 - On October 27, 2006, SIMG fell 17%, with 6.5 million shares changing hands. The news out that day was:

• Silicon Image Warns
at TheStreet.com (Thu, Oct 26)

Because the company blamed seasonality for the revenue weakness, the stock came back up to close the gap over the next few weeks. However ...

2 - The actual results for the 4th quarter 2006 came in weaker than expected and 2007 guidance was cut. The stock dived 24% to $9.24.

3 - On August 3, 2007, SIMG fell 25.3% with 9.2 million shares volume, due to the following news release:

• Silicon Image Reports Second Quarter Results
PR Newswire (Thu, Aug 2)

Guidance was the main problem:



Anyway, with analysts expecting $311 M revenue in 2007 and $338 M in 2008:



... this gives me a Price to Sales Ratio of 1.7, which is well below the 8 the company achieved at its 2004 high, and much more closer to the sales multiple it had at its low point ($1.03 in late 2001, when the sales multiple was 1.27).

4. Valuation Model



According to my fundamental estimates, I would expect SIMG to recover back up to $11.34 in late 2010, rising 22% a year, on average. Given this, the optimal selling price today (the price where the expected return would fall below 16% a year), calculated by the model, is $7.25, that is, 16% above where it is now.

5. Conclusion

I believe SIMG is moderately attractive at this point, good luck poli

[David Randolph]

The following analysis was written on October 31st:

SIGM, this stock seems holding up very well during the latest pullback.

David, care to comment on this? I got SIGM from this guy, and his talking fits your thesis pretty well ...

http://www.changewave.com/freecontent/2007/09/freetobymain20070919.html

Yes, I fully agree with the macro views inside this article. And SIGM has been doing reasonably well

1. Profile

Sigma Designs, Inc. (SIGM) offers silicon-based digital media processors primarily for Internet protocol (IP) video technology, connected media players, high-definition televisions, and personal computers add-in and other markets. Its REALmagic video streaming technology is used in various consumer applications providing integrated solutions for decoding of H.264, MPEG-4, MPEG-2, MPEG-1, and Windows Media Video 9. The company offers silicon-based media processors for Internet protocol television set-top boxes, digital media receivers, high definition DVD players, high definition television, and portable media players. It also provides video and audio decoding chips under the names of EM8400 series, EM8500 series, EM8610 series, EM8620L series, and SMP8630 series for the IP video technology market and connected media player market, as well as the PC add-in market. In addition, the company offers development kits, engineering support services, and chipset customization engineering development. Sigma Designs sells its products to consumer equipment manufacturers, distributors, value-added resellers, and corporate customers through direct sales force and distributors. The company was founded in 1982 and is headquartered in Milpitas, California.

2. SIGM's History



SIGM traded within a range for twenty years, between roughly $5 and $20. It broke out of this 20 year old range in late 2006, and more upside followed.

I notice that the share count doubled between 1998 and 2007 and the current market cap is 24,398,318*$58.59 = $1.43 B.

I think the crucial question in SIGM's historical analysis is: "What was the catalyst for the late 2006 breakout?"

As usual, the answer is given by a change in the fundamentals. Revenues were more or less flat for 10 years, but in 2006 quarterly revenues and profits began to improve dramatically:



3. Recent Developments



I've selected points 1 and 2 to get a feel of which are the news driving the stock higher:

1 - In August 30, 2006, SIGM rose 17% to $13.73, on volume of 4.3 million shares. The news out that day was:

SIGMA DESIGNS, INC. REPORTS SECOND QUARTER RESULTS

«Net revenues for the second quarter were $20.1 million, up 36% from $14.8 million for the previous quarter and up 153% from $8.0 million reported for the same period last year. The increase in revenue and selected financial results was primarily attributable to increased chipset sales to manufacturers of IPTV set-top boxes.»

«"We are pleased to report another 36% sequential increase in revenue resulting in a year-over-year revenue growth of 153%. This further demonstrates the inflection point in demand for IPTV based deployments at a widening set of telco carriers as well as Sigma's dominance in this market. We are now shipping media processor chips for volume consumption in every major region of the world and believe that our SMP8634 chipset is becoming a defacto standard for IPTV set-top boxes.»

2 - Exactly one year later, in August 30, 2007, SIGM rose 10.5% on 10.5 million shares changing hands, due to the following news:

• Sigma Designs, Inc. Reports Second Quarter Results
Business Wire (Wed, Aug 29)

«The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes, Blu-ray Players, and HDTVs. Net revenues for the first two quarters of fiscal year 2008 were $78.6 million, up 125% from $34.9 million for the same period in the prior fiscal year.»

So, after 20 years asleep, SIGM landed a very fast growing market, chips for IPTV set top boxes. It appears telcos want to replace cable companies in our homes, through IPTV. I saw some commercials here in Portugal, with Sonaecom (a mobile phone operator), offering TV in a similar way cable does, and thought it was strange, but now I see it had to do with IPTV already being in the marketplace.

4. Valuation

There's no doubt SIGM is in a very hot sector and it has been growing revenues and profits in a spectacular way. The stock reflected this growth by rising 500% over the last 12 months. The question now is: "Is there more to come or SIGM is fully valued now?"

To try answering this question first let me consider analysts estimates:



They're expecting $1.94 EPS in the fiscal year ending in January 31st, 2008. So the Price/Earnings Ratio is 30. I think the fiscal 2009 estimates are way too conservative, since they're expecting just 7.7% growth, which is ridiculous in my opinion. I think this sort of thing happens because analysts are fast in upgrading the current year estimates (due to positive earnings surprises), but they "forget" to raise next year's estimates as quickly:



As usual I'm going to use my valuation model and my best guesses to determine if SIGM is attractive and if so, by how much:



Considering 5% share count CAGR, 50% revenue CAGR, 25% net profit margin and 25 times earnings multiple, SIGM's shares will rise roughly 33% a year, to $137.65 three years from now.

And I'm being fairly aggressive in my estimates, because, let's see, I have 5% dilution factor, while the historical share count growth rate is 8.2%. I have 50% revenue CAGR, but analysts are expecting just 34% growth in fiscal 2009. I estimate net profit margin will remain at 25%, but in the latest earnings release management said the following:

«The Company expects a continued increase in demand for its products with over 20% growth in net revenues for the third quarter. The Company's gross margin target remains within 200 basis points of 50% with some variance expected due to the timing of its cost reduction efforts and pressure from its customers to lower its selling prices as their order levels grow.»

And an earnings multiple of 25 is above the general market average which is about 15.

5. Conclusion

33% a year is attractive, but considering my goals for the Main Portfolio, which are "at least 30% average annual growth", it just barely beats the objective. I need to own stocks which I expect to rise a lot more than 30% a year to compensate for the ones that will rise less, or not even rise at all.

The ideal time to buy SIGM was in August 2006 when the stock jumped above $13 on better than expected earnings, since back then it was already clear that was due to an emerging trend, IP TV.

Now, even though the stock is still quite attractive, it seems a bit late for my goals. I don't think making chips for IP TV set top boxes can ever be a $5 B business, $2 B - $3 B is the top in my opinion. And of course, there are risks (there are always risks), IP TV can be a flop, with not a lot of market acceptance, or there can be competition for SIGM's chips. Moreover, what happens after every potential consumer already has an IP TV set top box? While telcos providing the IP TV service have recurring revenues (monthly subscriptions), the set top box is sold only once every 5 years or more. This can put pressure in the earnings multiple in the future.

Balancing the potential and the risks I wont invest in SIGM's shares at this point, but good luck if you own it

[BigSully1]

Oh yeaaaah. Up, Up, and away!

http://stockcharts.com/h-sc/ui?s=SIGM&p=D&b=5&g=0&id=59191861522

Sigma Designs, Inc. Reports Fiscal Third Quarter Results
Wednesday November 28, 4:05 pm ET


MILPITAS, Calif.--(BUSINESS WIRE)--Sigma Designs®, Inc. (NASDAQ:SIGM - News), a leading provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home, today reported financial results for its third fiscal quarter ended November 3, 2007.


Net revenues for the third quarter were $66.2 million, up 56% from $42.5 million for the previous quarter and up 164% from $25.1 million reported for the same period last year. The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes and Blu-ray players. Net revenues for the first three quarters of fiscal year 2008 were $144.8 million, up 141% from $60.0 million for the same period in the prior fiscal year.

GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago. GAAP net income for the first three quarters of fiscal year 2008 was $34.9 million, or $1.27 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.

Non-GAAP net income for the quarter was $23.0 million or $0.79 per diluted share. This compares to non-GAAP net income of $13.0 million, or $0.48 per diluted share for the previous quarter and a non-GAAP net income of $4.8 million or $0.19 per diluted share during the same period one year ago. Non-GAAP adjustments for the third quarter of fiscal year 2008 consisted of the exclusion of $306,000 in amortization expense of acquired intangibles related to the Blue7 acquisition and $1.7 million in non-cash stock-option compensation expenses. The reconciliation between GAAP and non-GAAP results for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Income tax expense for the quarter was $2.9 million which brings our year to date tax rate to approximately 10%, the rate expected for the balance of this fiscal year.

Management Comment

"We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players. We have established a leadership position in the IPTV market and are benefiting from the widespread ramp in demand from our worldwide base of set-top box and telco customers. We have also established a leadership position in Blu-ray players and are enjoying an early ramp in demand from their increased popularity with consumers. Finally, we are encouraged by increasing customer interest in our products for Ultra-wideband (UWB) connectivity solutions. Looking forward, we maintain our expectation of further top-line growth and profitability for the fourth quarter," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.

Recent business developments include:


Announced that Samsung's new third generation Blu-ray player incorporates Sigma's industry leading media processors. Using Sigma's SMP8634, the BD-P1400 player from Samsung is designed to offer one of the best video and audio performances available, including a number of industry first features.
Announced that Microsoft and Sigma Designs are working together to offer Extender for Windows Media Center middleware ported to the Sigma Designs 8622 Secure Media Processor, enabling a new category of digital media extender products with high quality, low cost solutions to deliver digital content to every room in the home.
Announced that HP, D-Link and Linksys (Cisco), are each launching extenders for Windows Media Center products powered by Sigma media processors. Sigma's media processors are powering the latest media extender products, which include the recently launched HP MediaSmart LCD HDTV, which is the first high-definition TV to have media extenders built-in and available from the TV itself to offer consumers a high-quality, low-cost solution for delivering digital content to every room in a home.
Outlook

The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.

Investor Conference Call

The conference call relating to third quarter results will take place following this announcement at 5:00 PM ET today, November 28, 2007. The dial-in number is 866-700-7173 (international callers dial 617-213-8838) and the passcode is 21735684. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com or over Thomson/CCBN's Investor Distribution Network for both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.earnings.com. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, 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 by dialing into 1-888-286-8010 (international callers dial 617-801-6888) and use passcode 77048156. The audio replay will be available for one week after the call. For further information, please see the link on our website at www.sigmadesigns.com.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income, which excludes amortization of acquired intangibles, stock-based compensation calculated under APB No. 25 and SFAS No. 123(R) and, with respect to the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with a tender offer to employees to resolve potential personal income tax exposure and, with respect to the second fiscal quarter of 2007 through the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with the Company's review of its historical stock option granting practices and related financial restatements for prior periods. Sigma believes that its non-GAAP net income provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma believes that this non-GAAP net income, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma's management has no control over certain variables that have a major influence in the determination of share-based compensation such as the volatility of its stock price and changing interest rates. With respect to Sigma's stock option review and related restatement costs and expenses associated with its tender offer, the unique nature of these costs may limit the comparability of its on-going operations with prior and future periods. Sigma believes that all of these excluded expenses do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma's GAAP financial results in the foreseeable future.

The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of the Sigma's activities. Sigma's non-GAAP net income is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding Sigma's gross margin target and expectation of growth in net revenues for the fourth fiscal quarter. Actual results may vary materially due to a number of factors including, but not limited to, the risk that the SEC disagrees with the manner in which Sigma has accounted for and reported, or not reported, the financial impact of past stock option grants, actions by other regulatory agencies as a result of Sigma's past stock option practices, ongoing derivative litigation, a determination, upon completion of further quarterly closing and review procedures, that the financial results for the third quarter of fiscal year 2008 are different than the results set forth in this press release, general economic conditions, including continuance of the current economic conditions specific to the semiconductor industry, the rate of growth of the IPTV, high definition DVD and HDTV markets in general, the ramp in demand from our set-top box and telecommunication customers, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our SoCs to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes or consumer products. Other risk factors are detailed from time to time in our SEC reports, including our quarterly report on Form 10-Q as filed September 13, 2007. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Sigma Designs, Inc.

Sigma Designs (NASDAQ:SIGM - News) is a leading fabless provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home. Sigma's SoC solutions combine its semiconductors and software and are a critical component of multiple high-growth, consumer applications that process digital video and audio content, including internet protocol TV, or IPTV, high definition DVD players, high definition TVs, or HDTVs, and portable media players. Headquartered in Milpitas, Calif., the Company also has sales representatives in the United States, Belgium, China, Japan and Taiwan and sells its products through third-party distributors in Japan and Korea. For more information, please visit the Company's web site at www.sigmadesigns.com. REALmagic and Sigma Designs are registered trademarks of Sigma Designs, Inc. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
GAAP 
(In thousands) 
       
     

   November 3,

2007
  February 3,

2007 1

Assets     
       
Current assets:     
Cash and cash equivalents  $  164,899   $  24,413   
Short-term investments   85,847    8,791   
Accounts receivable, net   30,405    11,231   
Inventories    18,894    16,003   
Prepaid expenses and other current assets     2,248      1,095     
Total current assets   302,293    61,533   
       
Long term marketable securities   12,335    -   
Equipment and leasehold improvements, net   5,041    3,364   
Long-term investments   263    263   
Goodwill    5,020    5,020   
Intangible assets, net    4,609    5,527   
Other non-current assets     436      377     
       
Total assets  $  329,997   $  76,084     
       
Liabilities and shareholders' equity     
       
Current liabilities:     
Accounts payable  $  15,475   $  13,723   
Accrual liabilities and other   11,557    8,800   
Current portion of bank term loan     -      226     
Total current liabilities   27,032    22,749   
       
Long term portion of bank term loan   -    15   
Other long-term liabilities     673      348     
Total liabilities   27,705    23,112   
       
Shareholders' equity:     
Total shareholders' equity     302,292      52,972     
       
Total liabilities and shareholders' equity  $  329,997   $  76,084     
         
1 February 3, 2007 balances have been derived from the audited financial statements as of the same date.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(GAAP)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
Net revenues  $  66,244    $  25,055    $  144,808    $  59,990   
         
Cost of revenues     31,017         13,017         69,463         31,560     
Gross Profit   35,227     12,038     75,345     28,430   
Gross Margin Percent   53.2  %    48.0  %    52.0  %    47.4  % 
         
Operating expenses:         
Research and development   7,488     5,581     21,941     15,847   
Sales and marketing   2,785     1,921     7,709     5,406   
General and administrative     2,541         1,839         9,246         5,942     
Total operating expenses   12,814     9,341     38,896     27,195   
         
Income (loss) from operations   22,413     2,697     36,449     1,235   
Interest and other income, net     1,446         149         2,166         504
   
         
Income before income taxes   23,859     2,846     38,615     1,739
 
Provision for income taxes     2,909         104         3,708         137     
         
Net income  $  20,950      $  2,742      $  34,907      $  1,602
   
         
Net income per share:         
Basic  $  0.80
     $  0.12      $  1.43      $  0.07     
Diluted  $  0.72      $  0.11      $  1.27      $  0.06     
         
Weighted average common shares:         
Basic   26,234     22,794     24,360     22,642   
Diluted   28,958     25,572     27,532     25,365   
SIGMA DESIGNS, INC.

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(Unaudited)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
GAAP net income  $  20,950   $  2,742   $  34,907   $  1,602

         
Items reconciling GAAP net income         
to non-GAAP net income:         
         
Included in Cost of Revenues:         
Amortization of acquired developed technology         
189    189    567    536 
Share-based compensation   130    118    319    291 
Tender offer exchange employee options     ---      --      135      -- 
Total related to cost of revenues     319      307      1,021      827 
       
Included in Operating expenses:         
Research and development:         
Amortization of acquired noncompete agreement         
117    117    351    331 
Share-based compensation   762    604    2,315    1,795 
Tender offer to exchange employee options   ---    ---    1,518    --- 
Sales and marketing:
       
Share-based compensation   338    207    826    599 
Tender offer to exchange employee options   ---    ---    388    --- 
General and administrative:
       
Share-based compensation   468    341    1,277    944 
Tender offer to exchange employee options   ---    ---    326    --- 
Professional service fees and expenses from stock option review and related restatements
  ---    511    1,491    1,114 
Total related to operating expenses     1,685      1,780      8,492      4,783 
         
Net effects of proforma adjustments     2,004      2,087      9,513      5,610 
         
Non-GAAP net income  $  22,954   $  4,829   $  44,420   $  7,212

         
Non-GAAP net income per diluted share  $  0.79   $  0.19   $  1.61   $  0.28 




Contact:
Sigma Designs, Inc.
Ed McGregor, 646-259-2999 (Investor Relations)
[email protected]

--------------------------------------------------------------------------------

[BigSully1]

Oh yeaaaah. Up, Up, and away!

http://stockcharts.com/h-sc/ui?s=SIGM&p=D&b=5&g=0&id=59191861522

Sigma Designs, Inc. Reports Fiscal Third Quarter Results
Wednesday November 28, 4:05 pm ET


MILPITAS, Calif.--(BUSINESS WIRE)--Sigma Designs®, Inc. (NASDAQ:SIGM - News), a leading provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home, today reported financial results for its third fiscal quarter ended November 3, 2007.


Net revenues for the third quarter were $66.2 million, up 56% from $42.5 million for the previous quarter and up 164% from $25.1 million reported for the same period last year. The increase in net revenues was primarily attributable to increased SoC sales to manufacturers of IPTV set-top boxes and Blu-ray players. Net revenues for the first three quarters of fiscal year 2008 were $144.8 million, up 141% from $60.0 million for the same period in the prior fiscal year.

GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago. GAAP net income for the first three quarters of fiscal year 2008 was $34.9 million, or $1.27 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.

Non-GAAP net income for the quarter was $23.0 million or $0.79 per diluted share. This compares to non-GAAP net income of $13.0 million, or $0.48 per diluted share for the previous quarter and a non-GAAP net income of $4.8 million or $0.19 per diluted share during the same period one year ago. Non-GAAP adjustments for the third quarter of fiscal year 2008 consisted of the exclusion of $306,000 in amortization expense of acquired intangibles related to the Blue7 acquisition and $1.7 million in non-cash stock-option compensation expenses. The reconciliation between GAAP and non-GAAP results for all referenced periods is provided in a table immediately following the GAAP financial tables below.

Income tax expense for the quarter was $2.9 million which brings our year to date tax rate to approximately 10%, the rate expected for the balance of this fiscal year.

Management Comment

"We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players. We have established a leadership position in the IPTV market and are benefiting from the widespread ramp in demand from our worldwide base of set-top box and telco customers. We have also established a leadership position in Blu-ray players and are enjoying an early ramp in demand from their increased popularity with consumers. Finally, we are encouraged by increasing customer interest in our products for Ultra-wideband (UWB) connectivity solutions. Looking forward, we maintain our expectation of further top-line growth and profitability for the fourth quarter," stated Thinh Tran, chairman and chief executive officer, Sigma Designs.

Recent business developments include:


Announced that Samsung's new third generation Blu-ray player incorporates Sigma's industry leading media processors. Using Sigma's SMP8634, the BD-P1400 player from Samsung is designed to offer one of the best video and audio performances available, including a number of industry first features.
Announced that Microsoft and Sigma Designs are working together to offer Extender for Windows Media Center middleware ported to the Sigma Designs 8622 Secure Media Processor, enabling a new category of digital media extender products with high quality, low cost solutions to deliver digital content to every room in the home.
Announced that HP, D-Link and Linksys (Cisco), are each launching extenders for Windows Media Center products powered by Sigma media processors. Sigma's media processors are powering the latest media extender products, which include the recently launched HP MediaSmart LCD HDTV, which is the first high-definition TV to have media extenders built-in and available from the TV itself to offer consumers a high-quality, low-cost solution for delivering digital content to every room in a home.
Outlook

The Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company's gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.

Investor Conference Call

The conference call relating to third quarter results will take place following this announcement at 5:00 PM ET today, November 28, 2007. The dial-in number is 866-700-7173 (international callers dial 617-213-8838) and the passcode is 21735684. Investors will have the opportunity to listen live to the conference call via the Internet through www.sigmadesigns.com or over Thomson/CCBN's Investor Distribution Network for both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.earnings.com. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com). To listen to the live call, please go to the Web site at least 15 minutes early to register, 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 by dialing into 1-888-286-8010 (international callers dial 617-801-6888) and use passcode 77048156. The audio replay will be available for one week after the call. For further information, please see the link on our website at www.sigmadesigns.com.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Sigma reports non-GAAP net income, which excludes amortization of acquired intangibles, stock-based compensation calculated under APB No. 25 and SFAS No. 123(R) and, with respect to the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with a tender offer to employees to resolve potential personal income tax exposure and, with respect to the second fiscal quarter of 2007 through the second fiscal quarter of 2008 non-GAAP results, nonrecurring expenses associated with the Company's review of its historical stock option granting practices and related financial restatements for prior periods. Sigma believes that its non-GAAP net income provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Sigma believes that this non-GAAP net income, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective. Sigma also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Sigma, all of whom present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Sigma facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Sigma's management has no control over certain variables that have a major influence in the determination of share-based compensation such as the volatility of its stock price and changing interest rates. With respect to Sigma's stock option review and related restatement costs and expenses associated with its tender offer, the unique nature of these costs may limit the comparability of its on-going operations with prior and future periods. Sigma believes that all of these excluded expenses do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though some of these excluded items may be incurred and reflected in Sigma's GAAP financial results in the foreseeable future.

The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures do not reflect the full economic impact of the Sigma's activities. Sigma's non-GAAP net income is not prepared in accordance with GAAP, is not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding Sigma's gross margin target and expectation of growth in net revenues for the fourth fiscal quarter. Actual results may vary materially due to a number of factors including, but not limited to, the risk that the SEC disagrees with the manner in which Sigma has accounted for and reported, or not reported, the financial impact of past stock option grants, actions by other regulatory agencies as a result of Sigma's past stock option practices, ongoing derivative litigation, a determination, upon completion of further quarterly closing and review procedures, that the financial results for the third quarter of fiscal year 2008 are different than the results set forth in this press release, general economic conditions, including continuance of the current economic conditions specific to the semiconductor industry, the rate of growth of the IPTV, high definition DVD and HDTV markets in general, the ramp in demand from our set-top box and telecommunication customers, our ability to deploy and achieve market acceptance for Sigma products in these markets, the ability of our SoCs to compete with other technologies or products in these emerging markets, the risk that such products will not gain widespread acceptance, or will be rendered obsolete, by product offerings of competitors or by alternative technologies, the risk that anticipated design wins will not materialize and that actual design wins will not translate into launched product offerings, and other risks including delays in the manufacturer's deployment of set-top boxes or consumer products. Other risk factors are detailed from time to time in our SEC reports, including our quarterly report on Form 10-Q as filed September 13, 2007. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Sigma undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Sigma Designs, Inc.

Sigma Designs (NASDAQ:SIGM - News) is a leading fabless provider of highly integrated system-on-chip, or SoC, solutions that are used to deliver multimedia entertainment throughout the home. Sigma's SoC solutions combine its semiconductors and software and are a critical component of multiple high-growth, consumer applications that process digital video and audio content, including internet protocol TV, or IPTV, high definition DVD players, high definition TVs, or HDTVs, and portable media players. Headquartered in Milpitas, Calif., the Company also has sales representatives in the United States, Belgium, China, Japan and Taiwan and sells its products through third-party distributors in Japan and Korea. For more information, please visit the Company's web site at www.sigmadesigns.com. REALmagic and Sigma Designs are registered trademarks of Sigma Designs, Inc. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
GAAP 
(In thousands) 
       
     

   November 3,

2007
  February 3,

2007 1

Assets     
       
Current assets:     
Cash and cash equivalents  $  164,899   $  24,413   
Short-term investments   85,847    8,791   
Accounts receivable, net   30,405    11,231   
Inventories    18,894    16,003   
Prepaid expenses and other current assets     2,248      1,095     
Total current assets   302,293    61,533   
       
Long term marketable securities   12,335    -   
Equipment and leasehold improvements, net   5,041    3,364   
Long-term investments   263    263   
Goodwill    5,020    5,020   
Intangible assets, net    4,609    5,527   
Other non-current assets     436      377     
       
Total assets  $  329,997   $  76,084     
       
Liabilities and shareholders' equity     
       
Current liabilities:     
Accounts payable  $  15,475   $  13,723   
Accrual liabilities and other   11,557    8,800   
Current portion of bank term loan     -      226     
Total current liabilities   27,032    22,749   
       
Long term portion of bank term loan   -    15   
Other long-term liabilities     673      348     
Total liabilities   27,705    23,112   
       
Shareholders' equity:     
Total shareholders' equity     302,292      52,972     
       
Total liabilities and shareholders' equity  $  329,997   $  76,084     
         
1 February 3, 2007 balances have been derived from the audited financial statements as of the same date.

SIGMA DESIGNS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(GAAP)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
Net revenues  $  66,244    $  25,055    $  144,808    $  59,990   
         
Cost of revenues     31,017         13,017         69,463         31,560     
Gross Profit   35,227     12,038     75,345     28,430   
Gross Margin Percent   53.2  %    48.0  %    52.0  %    47.4  % 
         
Operating expenses:         
Research and development   7,488     5,581     21,941     15,847   
Sales and marketing   2,785     1,921     7,709     5,406   
General and administrative     2,541         1,839         9,246         5,942     
Total operating expenses   12,814     9,341     38,896     27,195   
         
Income (loss) from operations   22,413     2,697     36,449     1,235   
Interest and other income, net     1,446         149         2,166         504
   
         
Income before income taxes   23,859     2,846     38,615     1,739
 
Provision for income taxes     2,909         104         3,708         137     
         
Net income  $  20,950      $  2,742      $  34,907      $  1,602
   
         
Net income per share:         
Basic  $  0.80
     $  0.12      $  1.43      $  0.07     
Diluted  $  0.72      $  0.11      $  1.27      $  0.06     
         
Weighted average common shares:         
Basic   26,234     22,794     24,360     22,642   
Diluted   28,958     25,572     27,532     25,365   
SIGMA DESIGNS, INC.

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(Unaudited)

(In thousands, except per share data) 
             
Three months ended   Nine months ended 
Nov. 3, 2007   Oct. 28, 2006   Nov. 3, 2007   Oct. 28, 2006 
GAAP net income  $  20,950   $  2,742   $  34,907   $  1,602

         
Items reconciling GAAP net income         
to non-GAAP net income:         
         
Included in Cost of Revenues:         
Amortization of acquired developed technology         
189    189    567    536 
Share-based compensation   130    118    319    291 
Tender offer exchange employee options     ---      --      135      -- 
Total related to cost of revenues     319      307      1,021      827 
       
Included in Operating expenses:         
Research and development:         
Amortization of acquired noncompete agreement         
117    117    351    331 
Share-based compensation   762    604    2,315    1,795 
Tender offer to exchange employee options   ---    ---    1,518    --- 
Sales and marketing:
       
Share-based compensation   338    207    826    599 
Tender offer to exchange employee options   ---    ---    388    --- 
General and administrative:
       
Share-based compensation   468    341    1,277    944 
Tender offer to exchange employee options   ---    ---    326    --- 
Professional service fees and expenses from stock option review and related restatements
  ---    511    1,491    1,114 
Total related to operating expenses     1,685      1,780      8,492      4,783 
         
Net effects of proforma adjustments     2,004      2,087      9,513      5,610 
         
Non-GAAP net income  $  22,954   $  4,829   $  44,420   $  7,212

         
Non-GAAP net income per diluted share  $  0.79   $  0.19   $  1.61   $  0.28 




Contact:
Sigma Designs, Inc.
Ed McGregor, 646-259-2999 (Investor Relations)
[email protected]

[Houlahan]

A gain of $10.45 today!! 
I would say they were pleased with earnings report.

[BigSully1]

Yes, they blew away the published consensus top and bottom, but I'm sure the "whisper" #'s were higher than the consensus. Even so, I think they beat most all expectations, at least mine anyway. 

[David Randolph]

I know my valuation model (above on this thread) said SIGM would rise 33% a year going forward and at the time I considered SIGM attractive, but not enough to buy for the Main Portfolio. But I sure wasn't expecting EPS to more than double from one quarter to the next:

• Sigma Designs, Inc. Reports Fiscal Third Quarter Results
Business Wire (Wed, Nov 28)

«GAAP net income for the quarter was $21.0 million or $0.72 per diluted share. This compares to GAAP net income of $8.6 million, or $0.32 per diluted share for the previous quarter and GAAP net income of $2.7 million or $0.11 per diluted share during the same period one year ago.»

I'm not so sure if SIGM can never be a $5 B business anymore. I'm willing to open my mind and accept realcoolhead's suggestion of moving up a bit in the market cap arena, from micro-caps to perhaps $1 B - $3 B market caps. These still have "tenbagger potential" and look less risky. SIGM, with a $1.65 B market cap, will be the largest company in the Main Portfolio.

I've been seeing medium and large caps sporting a higher valuation than micro caps. I believe this happens because most mutual funds don't even bother looking at micro caps, they're too small to be worth the effort. I've seen $5 B - $10 B companies with p/e ratios of 50 or even 100 or more and then double and triple in price. It seems fund managers don't have a problem about pushing medium caps 2 or 3 times higher even if they seem overvalued ... but micro caps can be incredibly cheap, and they don't touch them.

Anyway, I'll hold the current micro-caps for as long as I find them attractive from a fundamental standpoint.

SIGM, trading at 23 times the $0.72 EPS (annualized) it earned in the latest quarter, doesn't seem all that overvalued, for a company which more than doubled EPS from the previous quarter (and rose EPS 554% from a year ago). Why not push this to 50 times earnings? I've seen it happen.

Trading Plan:

Buy SIGM, 6.66% of capital (I'm going slightly into margin here, since I have just 4.6% of available cash - but it's just 2%, no big deal).

[David Randolph]

This felt solid. Thanks realcoolhead, BigSully1 and Houlahan

I'll keep holding SIGM (gee, I'm late, sorry).

[David Randolph]

SIGM is so big (relatively speaking in the Main's context) that I feel like I don't even need to analyze it much. It's so easy I'll feel overpaid whenever I sell the stock for a big profit lol.

I've been a small and micro cap kind of investor but have to recognize that owning stocks in the $1 B to $5 B range certainly would make me sleep better at night.

I remember when AussieTrader alerted me about FSLR when it was around $50 and I said "it's a $3 B plus market cap, what's the point?". How wrong and silly I was. FSLR closed at $250 yesterday and it is a $19.5 B market cap company now

Five bags in six months given by a $3 B plus market cap company

Can SIGM do the same? Well, I don't know, but IPTV is as hot as solar energy and SIGM is the market leader in the space. SIGM isn't growing as rapidly as FSLR, but still, SIGM's EPS more than doubled from one quarter to the next and SIGM trades at 25 times the latest quarter EPS (annualized), while FSLR trades at 108 times its latest quarter's EPS (also annualized).

I don't know what the potential is, I'll just keep holding SIGM for the long term.

[David Randolph]

SIGM is so big (relatively speaking in the Main's context) that I feel like I don't even need to analyze it much. It's so easy I'll feel overpaid whenever I sell the stock for a big profit lol.

I've been a small and micro cap kind of investor but have to recognize that owning stocks in the $1 B to $5 B range certainly would make me sleep better at night.

I had to open my big mouth didn't I? SIGM replied: "you want trouble? I'll give you trouble"

I'll gladly take the trouble of making a more in depth analysis on SIGM, but unfortunately I have no more time today. Tomorrow I'll take care of SIGM.

I'll keep holding SIGM.

[pinoleropuro]

Cramer just gave this one a $100/share target price!

hmm, I am going to wait for the stochastic to get to just below 30% before I pull the triguer.

I am no technician but do you guys think this one may close the gap around $59/share before it goes back up towards $100/share.