Broadcom Posts Record Q1

IRVINE, Calif. -- Broadcom Corporation (Nasdaq: BRCM) today reported financial results for its first fiscal quarter ended March 31, 2004.

Net revenue for the first quarter of 2004 was a record $573.4 million, an increase of 19.7% from the $479.1 million reported for the fourth quarter of 2003 and an increase of 75.1% from the $327.5 million reported for the first quarter of 2003. Net income computed in accordance with generally accepted accounting principles (GAAP) for the first quarter of 2004 was $39.9 million, or $.12 per share (diluted), compared with GAAP net income of $6.1 million, or $.02 per share (diluted), for the fourth quarter of 2003, and a GAAP net loss of $67.9 million, or $.25 per share (basic and diluted), for the first quarter of 2003.

Broadcom reports net income (loss) and basic and diluted net income (loss) per share in accordance with U.S. GAAP and additionally on a non-GAAP basis, referred to as pro forma, which excludes stock-based compensation expense, amortization of purchased intangible assets, employer payroll tax expense on certain stock option exercises, certain charges such as impairment of goodwill and other intangible assets, stock option exchange expense, settlement costs, in-process research and development and restructuring costs, gains or losses on strategic investments, non-operating gains, valuation allowance on deferred tax assets, and related income tax effects.

After excluding the charges, gains and effects included in GAAP reporting, pro forma net income for the first quarter of 2004 was $98.8 million, or $.29 per share (diluted). This compares with pro forma net income of $61.3 million, or $.19 per share (diluted), for the fourth quarter of 2003, and pro forma net income of $17.0 million, or $.06 per share (diluted), for the first quarter of 2003.

Both GAAP and pro forma net income per share for the first quarter of 2004 were based on 342.6 million weighted average shares outstanding (diluted). Both GAAP and pro forma net income per share for the fourth quarter of 2003 were based on 330.8 million weighted average shares outstanding (diluted). GAAP net loss per share for the first quarter of 2003 was based on 276.3 million weighted average shares outstanding (basic and diluted) and pro forma net income per share for the first quarter of 2003 was based on 289.0 million weighted average shares outstanding (diluted).

Broadcom believes pro forma reporting provides meaningful insight into the company's on-going economic performance and therefore uses pro forma reporting internally to evaluate and manage the company's operations. Broadcom has chosen to provide this supplemental information to investors to enable them to perform additional comparisons of operating results and to illustrate the results of on-going operations. A reconciliation of GAAP net income (loss) to pro forma net income appears in the financial statements portion of this release.

"Convergence trends within the communications sector continue to present expanded market opportunities for Broadcom. By continuing our emphasis on execution and innovation, Broadcom has been able to attain record revenue levels and generate strong revenue growth on both a sequential and a year-over-year basis," said Alan E. Ross, Broadcom's President and CEO. "This strong revenue growth, combined with our ongoing focus on tight cost controls, enabled us to improve many of our profitability metrics. We also increased cash and marketable securities on hand by $123.3 million during the quarter."

Broadcom's record revenue of $573.4 million in the first quarter of 2004 reflected revenue increases generated across all four of its business groups on a sequential and year-over-year basis. The strongest revenue growth on a sequential basis was experienced in the company's Broadband Communications and Mobile & Wireless business groups. During the quarter Broadcom also began shipments of new products to enter into or expand its position within a variety of end markets, including the markets for enterprise-class RAID and Fibre Channel storage, digital television and personal storage applications.