Entropic Communications Annual Report 2009

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Entropic Communications Annual Report 2009 ENT_Covers_AR.aiENT_Covers_AR.aiENT_Covers_AR.ai 2 2 2 4/7/10 4/7/104/7/10 4:51 4:514:51 PM PMPM COMMUNICATIONS COMMUNICATIONS COMMUNICATIONS ENTROPIC ENTROPIC ENTROPIC ANNUALANNUALANNUAL REPORTREPORTREPORT 200920092009 CC C MM M YY Y CMCMCM MYMYMY CYCYCY CMYCMYCMY KK K 629062906290 SequenceSequence Sequence DriveDrive Drive SanSanSan Diego,Diego, Diego, CACA CA 9212192121 92121 858.768.3600858.768.3600858.768.3600 p.p. p. 858.768.3601858.768.3601858.768.3601 f.f. f. www.entropic.comwww.entropic.comwww.entropic.com 2009 2009 2009 REPORT REPORT REPORT ENABLINGENABLINGENABLING CONNECTEDCONNECTEDCONNECTED HOMEHOMEHOME ENTERTAINMENTENTERTAINMENTENTERTAINMENT™™™ ANNUAL ANNUAL ANNUAL 48113_A.indd 1 4/7/10 8:37:50 PM ENT_Covers_AR.aiENT_Covers_AR.ai 1 1 4/7/10 4/7/10 4:51 4:51 PM PM ENTROPICENTROPIC COMMUNICATIONS’ COMMUNICATIONS’ PRODUCTS PRODUCTS CORPORATECORPORATE INFORMATION INFORMATION BOARDBOARD OF OF DIRECTORS DIRECTORS EXECUTIVEEXECUTIVE TEAM TEAM UmeshUmesh Padval Padval PatrickPatrick Henry Henry ChairmanChairman of of the the Board, Board, Entropic Entropic Communications Communications PresidentPresident and and Chief Chief Executive Executive Officer Officer Partner,Partner, Bessemer Bessemer Venture Venture Partners Partners DavidDavid Lyle Lyle ThomasThomas Baruch Baruch ChiefChief Financial Financial Officer Officer FounderFounder and and Managing Managing Director, Director, CMEA CMEA Ventures Ventures TomTom Lookabaugh, Lookabaugh, PhD PhD KeithKeith Bechard Bechard ChiefChief Technology Technology Officer Officer Owner,Owner, Pear Pear Lake Lake Consulting Consulting LLC LLC BillBill Bradford Bradford PatrickPatrick Henry Henry SVPSVP Worldwide Worldwide Sales Sales PresidentPresident and and Chief Chief Executive Executive Officer Officer EntropicEntropic Communications Communications VinayVinay Gokhale Gokhale SVPSVP Marketing Marketing and and Business Business Development Development AmirAmir Mashkoori Mashkoori ChiefChief Executive Executive Officer, Officer, Kovio Kovio Inc. Inc. LanceLance Bridges Bridges VPVP General General Counsel Counsel KennethKenneth Merchant Merchant homehome dbsdbs outdooroutdoor siliconsilicon ProfessorProfessor of of Accountancy Accountancy DaleDale Hancock Hancock broadbandbroadband UniversityUniversity of of Southern Southern California California VPVP Engineering Engineering networkingnetworking unitunit tunerstuners accessaccess JohnJohn Walecka Walecka AntonAnton Monk, Monk, PhD PhD GeneralGeneral Partner, Partner, Redpoint Redpoint Ventures Ventures VPVP Technology Technology C C M M KurtKurt Noyes Noyes INDEPENDENTINDEPENDENT ACCOUNTANT ACCOUNTANT VPVP Accounting Accounting & & Treasury Treasury Y Y ErnstErnst & & Young Young CMCM SanSan Diego, Diego, California California SuzanneSuzanne Zoumaras Zoumaras MYMY VPVP Human Human Resources Resources OUTSIDEOUTSIDE LEGAL LEGAL COUNSEL COUNSEL CYCY HOMEHOME NETWORKING NETWORKING CooleyCooley Godward Godward Kronish Kronish INVESTORINVESTOR RELATIONS RELATIONS ®® CMYCMY OurOur home home networking networking solutions solutions are are based based on on the the MoCA MoCA standard standard which which uses uses the the SanSan Diego, Diego, California California DebraDebra Hart Hart existingexisting coax coax to to create create a a robust robust IP-based IP-based network network for for easy easy sharing sharing of of HD HD video video 858.768.3852858.768.3852 K K andand other other multimedia multimedia content content throughout throughout the the home. home. TRANSFERTRANSFER AGENT AGENT irir@@entropic.comentropic.com AmericanAmerican Stock Stock Transfer Transfer & & Trust Trust Company Company DIGITALDIGITAL BROADCAST BROADCAST SATELLITE SATELLITE SOLUTIONS SOLUTIONS 5959 Maiden Maiden Lane Lane OurOur DBS DBS outdoor outdoor unit unit solutions solutions significantly significantly reduce reduce the the deployment deployment costs costs for for NewNew York, York, New New York York 10038 10038 CORPORATECORPORATE HEADQUARTERS HEADQUARTERS DBSDBS providers providers by by allowing allowing them them to to send send multiple multiple video video streams streams from from individual individual 800.937.5449800.937.5449 EntropicEntropic Communications Communications oror multiple multiple satellites satellites into into the the home home over over a a single single cable. cable. 62906290 Sequence Sequence Drive Drive LISTINGLISTING SanSan Diego, Diego, California California 92121 92121 SILICONSILICON TV TV TUNERS TUNERS OurOur common common stock stock trades trades on on the the NASDAQ NASDAQ 858.768.3600858.768.3600 OurOur silicon silicon TV TV tuners tuners are are designed designed for for numerous numerous digital digital television television applications applications GlobalGlobal Market Market under under the the trading trading symbol symbol “ENTR”. “ENTR”. andand offer offer OEMs OEMs cost cost effective, effective, high high performance performance integrated integrated solutions. solutions. www.entropic.comwww.entropic.com BROADBANDBROADBAND ACCESS ACCESS ANNUALANNUAL MEETING MEETING OurOur broadbandbroadband accessaccess solutionssolutions useuse thethe coaxcoax infrastructureinfrastructure toto deliverdeliver "last"last TheThe Entropic Entropic Communications Communications annual annual meeting meeting of of kilometer"connectivitykilometer"connectivity forfor high-speedhigh-speed broadbandbroadband accessaccess toto single-familysingle-family stockholdersstockholders will will be be held held on on Thursday, Thursday, May May 20th 20th homeshomes and and multi-dwelling multi-dwelling units. units. atat 2 2 p.m. p.m. Pacific Pacific Daylight Daylight Time Time at at the the company’s company’s corporatecorporate headquarters. headquarters. StatementsStatements in in this this annual annual report report that that are are not not strictly strictly historical historical in in nature nature constitute constitute “forward-looking “forward-looking statements”. statements”. Such Such forward-looking forward-looking statementsstatements involve involve known known and and unknown unknown risks, risks, uncertainties uncertainties and and other other factors factors which which may may cause cause Entropic’s Entropic’s actual actual results results to to be be materially materially differentdifferent from from historical historical results results or or from from results results expressed expressed or or implied implied by by such such forward-looking forward-looking statements. statements. These These factors factors include, include, but but are are notnot limited limited to, to, the the effects effects of of competition; competition; Entropic’s Entropic’s dependence dependence on on a alimited limited number number of of customers customers and and ultimately ultimately service service providers; providers; Entropic’sEntropic’s abilityability toto introduceintroduce newnew andand enhancedenhanced productsproducts onon a a timelytimely basis;basis; thethe riskrisk thatthat thethe marketmarket forfor high-definitionhigh-definition television-qualitytelevision-quality video video and and other other multimedia multimedia content content delivery delivery solutions solutions may may not not develop develop as as anticipated; anticipated; and and other other factors factors discussed discussed in in thethe “Risk “Risk Factors” Factors” section section of of the the accompanying accompanying Form Form 10-K. 10-K. All All forward-looking forward-looking statements statements are are qualified qualified in in their their entirety entirety by by this this cautionarycautionary statement. statement. Entropic Entropic does does not not undertake undertake any any obligation obligation to to update update any any forward-looking forward-looking statements statements contained contained herein herein as as a aresult result ofof new new information, information, future future events events or or otherwise. otherwise. EntropicEntropic Communications Communications® ®and and the the stylized stylized Entropic Entropic “curve” “curve” logo, logo, c.LINK c.LINK® ®and and Enabling Enabling Connected Connected Home Home Entertainment EntertainmentTMTM are are either either trademarkstrademarks or or registered registered trademarks trademarks of of Entropic Entropic Communications, Communications, Inc. Inc. in in the the United United States States and/or and/or other other countries. countries. 48113_A.indd 2 4/7/10 8:37:55 PM EENT_LetterInsert_AR.aiNT_LetterInsert_AR.ai 1 44/7/10/7/10 44:51:51 PPMM TO OUR STOCKHOLDERS 2009 WAS A TRANSFORMATIONAL YEAR FOR their dish antenna deployments, DIRECTV utilizes ENTROPIC COMMUNICATIONS®. DESPITE A our Channel Stacking Switch (CSS) solutions in their single wire module (SWiM) dish antenna TEPID START TO 2009 DUE TO THE OVERALL product, and we saw an uptick in demand for our GLOBAL ECONOMIC ENVIRONMENT, ENTROPIC CSS solutions at DIRECTV in late 2009 as they COMMUNICATIONS GREW REVENUES significantly expanded their deployment of SWiM THROUGHOUT THE YEAR AND ENDED 2009 dish products to all new high-definition installations from just premium high definition WITH A STRONGER BALANCE SHEET, A MORE installations. In addition, an increasing number of DIVERSIFIED CUSTOMER BASE AND REPORTED international Free-to-Air (FTA) satellite market OUR HIGHEST QUARTER OF PROFITABILITY providers have embraced our CSS solutions in SINCE THE INCEPTION OF THE COMPANY. regions with a large FTA footprint. 2009 began in the midst of a difficult recessionary We also successfully leveraged our position as period. Many of our
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