English
MoSys, Inc. Reports Third Quarter 2007 Financial Results
Company Achieves Sequential and Year-over-Year Royalty Revenue Growth Led By Strong Consumer Game Console Demand
SUNNYVALE, Calif. --Oct. 30, 2007--MoSys, Inc. (MoSys), (Nasdaq:MOSY), a leading provider of high-density system-on-chip (SoC) memory and analog/mixed-signal intellectual property (IP), today reported financial results for its third quarter ended September 30, 2007.
Third Quarter Highlights
Total revenue for the third quarter of 2007 was $4.0 million, compared to $4.3 million in the second quarter of 2007 and $4.0 million in third quarter of 2006.
Third quarter total revenue included $1.5 million of license revenue compared to $2.1 million in the previous quarter and $3.3 million in the third quarter of 2006. Royalty revenue increased approximately 12 percent to $2.4 million compared to $2.2 million in the previous quarter. Royalty revenue was $705,000 in the third quarter of 2006 and has grown on the strong demand for the Nintendo Wii game console.
Business Summary
"The Technology Licenses that we have signed over the past year on 1T-SRAM are now starting to generate royalties. Based on information provided to us by our licensees, we believe that there are several design wins that are now entering the production phase. We expect quarter over quarter royalty growth to continue throughout 2008 as additional design wins ramp into volume production," stated Chet Silvestri, Chief Executive Officer of MoSys.
"In addition, we expect to see incremental licensing revenue from our 1T-FLASH and Mixed Signal technologies in 2008. Our licensing strategy for these newer technologies is also to focus on signing Technology Licenses at the advanced 65nm process nodes and beyond, similar to the approach we have taken with our 1T-SRAM," concluded Mr. Silvestri.
Financial Results
The third quarter gross margin percentage determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was 83 percent compared to 84 percent in the second quarter of 2007 and 96 percent in the third quarter of 2006.
Total operating expenses were $7.3 million compared to $4.9 million in the second quarter of 2007. Operating expenses included a one-time charge of in-process research and development and intangible asset amortization of $1.2 million related to the recent acquisition of intellectual property from Atmel Corporation, as well as, additional operating expenses for the engineering personnel and operating costs that we agreed to incur as part of that acquisition.
On a GAAP basis, net loss for the quarter was $2.8 million, or ($0.09) per share, including stock-based compensation charges of $894,000 and the in-process research and development and intangible asset amortization charge of $1.2 million. This compares to a net loss of $146,000, or ($0.00) per share, in the previous quarter and a net loss of $2.9 million, or ($0.09) per share, in the third quarter of 2006. Net loss per share for the quarter on a GAAP basis was computed using 32,274,000 shares.
Non-GAAP net loss for the third quarter of 2007, which excludes stock-based compensation charges of $894,000 and $1.2 million in the in-process research and development and amortization charges, was $766,000, or ($0.02) per share. Net loss per share for the quarter on a non-GAAP basis was computed using 32,274,000 shares. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
Cash, cash equivalents and long and short-term investments totaled approximately $85.6 million as of September 30, 2007. Cash expenditures during the quarter included $1.4 million for the acquisition of certain analog mixed/signal designs and intellectual property from Atmel Corporation and the repurchase of common stock under the Company's repurchase program at a cost of approximately $641,000.
Business Outlook
The Company expects royalty revenue to continue to grow sequentially in the fourth quarter while total revenue is projected to remain flat. Additional financial details regarding the Company's business outlook will be provided during their conference call at 1:30 p.m. Pacific Time (PT) on Tuesday, October 30, 2007.
Third Quarter 2007 Financial Results Webcast/ Conference Call
MoSys management will host a conference call and webcast with investors today, October 30, 2007, at 1:30 p.m. PT (4:30 p.m. ET) to discuss the third quarter 2007 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-866-277-1184 in the U.S. (1-617-597-5360 outside of the U.S.), and entering the passcode 76456881 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys website at http://www.mosys.com. A telephonic replay will be available for 48 hours following the call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.), passcode of 85202789.
Use of Non-GAAP Financial Measures
To supplement MoSys' consolidated financial statements presented in accordance with GAAP, MoSys uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation and a one-time charge of in-process research and development and amortization of intangibles in connection with the acquisition. MoSys management uses the above non-GAAP financial measures internally to understand, manage and evaluate our business. MoSys believes it is useful for itself and investors to review, as applicable, both GAAP information and the non-GAAP measures, which exclude the effects of stock-based compensation and in-process research and development and amortization charges of intangibles in connection with the acquisition, in order to assess the performance of our continuing operations and for planning and forecasting in future periods. The presentation of these non-GAAP measures is intended to provide investors with an understanding of our operational results and trends that enables them to analyze our base financial and operating performance and facilitate period-to-period comparisons and analysis of operational trends. MoSys believes the presentation of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is provided in a table immediately below the Condensed Consolidated Statements of Operations. For additional information regarding these non-GAAP financial measures, and management's explanation of why it considers such measures to be useful, refer to the Form 8-K dated October 30, 2007 that we have submitted to the Securities and Exchange Commission.
Financial Tables
Click here to read financial tables
About MoSys, Inc.
Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and markets innovative memory and analog/mixed-signal technologies for semiconductors. MoSys' patented 1T-SRAM technologies offer a combination of high density, low power consumption, high speed and low cost unmatched by other available memory technologies. The single transistor bit cell used in 1T-SRAM memory results in the technology achieving much higher density than traditional four or six transistor SRAMs while using the same standard logic manufacturing processes. 1T-SRAM technologies also offer the familiar, refresh-free interface and high performance for random address access cycles associated with traditional SRAMs. In addition, these technologies can reduce operating power consumption by a factor of four compared with traditional SRAM technology, making them ideal for embedding large memories in System on Chip (SoC) designs. MoSys' licensees have shipped more than 135 million chips incorporating 1T-SRAM embedded memory technologies, demonstrating excellent manufacturability in a wide range of silicon processes and applications. MoSys is headquartered at 755 N. Mathilda Avenue, Sunnyvale, California 94085. More information is available on MoSys' website at http://www.mosys.com.
SUNNYVALE, Calif. --Oct. 30, 2007--MoSys, Inc. (MoSys), (Nasdaq:MOSY), a leading provider of high-density system-on-chip (SoC) memory and analog/mixed-signal intellectual property (IP), today reported financial results for its third quarter ended September 30, 2007.
Third Quarter Highlights
Total revenue for the third quarter of 2007 was $4.0 million, compared to $4.3 million in the second quarter of 2007 and $4.0 million in third quarter of 2006.
Third quarter total revenue included $1.5 million of license revenue compared to $2.1 million in the previous quarter and $3.3 million in the third quarter of 2006. Royalty revenue increased approximately 12 percent to $2.4 million compared to $2.2 million in the previous quarter. Royalty revenue was $705,000 in the third quarter of 2006 and has grown on the strong demand for the Nintendo Wii game console.
Business Summary
"The Technology Licenses that we have signed over the past year on 1T-SRAM are now starting to generate royalties. Based on information provided to us by our licensees, we believe that there are several design wins that are now entering the production phase. We expect quarter over quarter royalty growth to continue throughout 2008 as additional design wins ramp into volume production," stated Chet Silvestri, Chief Executive Officer of MoSys.
"In addition, we expect to see incremental licensing revenue from our 1T-FLASH and Mixed Signal technologies in 2008. Our licensing strategy for these newer technologies is also to focus on signing Technology Licenses at the advanced 65nm process nodes and beyond, similar to the approach we have taken with our 1T-SRAM," concluded Mr. Silvestri.
Financial Results
The third quarter gross margin percentage determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was 83 percent compared to 84 percent in the second quarter of 2007 and 96 percent in the third quarter of 2006.
Total operating expenses were $7.3 million compared to $4.9 million in the second quarter of 2007. Operating expenses included a one-time charge of in-process research and development and intangible asset amortization of $1.2 million related to the recent acquisition of intellectual property from Atmel Corporation, as well as, additional operating expenses for the engineering personnel and operating costs that we agreed to incur as part of that acquisition.
On a GAAP basis, net loss for the quarter was $2.8 million, or ($0.09) per share, including stock-based compensation charges of $894,000 and the in-process research and development and intangible asset amortization charge of $1.2 million. This compares to a net loss of $146,000, or ($0.00) per share, in the previous quarter and a net loss of $2.9 million, or ($0.09) per share, in the third quarter of 2006. Net loss per share for the quarter on a GAAP basis was computed using 32,274,000 shares.
Non-GAAP net loss for the third quarter of 2007, which excludes stock-based compensation charges of $894,000 and $1.2 million in the in-process research and development and amortization charges, was $766,000, or ($0.02) per share. Net loss per share for the quarter on a non-GAAP basis was computed using 32,274,000 shares. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
Cash, cash equivalents and long and short-term investments totaled approximately $85.6 million as of September 30, 2007. Cash expenditures during the quarter included $1.4 million for the acquisition of certain analog mixed/signal designs and intellectual property from Atmel Corporation and the repurchase of common stock under the Company's repurchase program at a cost of approximately $641,000.
Business Outlook
The Company expects royalty revenue to continue to grow sequentially in the fourth quarter while total revenue is projected to remain flat. Additional financial details regarding the Company's business outlook will be provided during their conference call at 1:30 p.m. Pacific Time (PT) on Tuesday, October 30, 2007.
Third Quarter 2007 Financial Results Webcast/ Conference Call
MoSys management will host a conference call and webcast with investors today, October 30, 2007, at 1:30 p.m. PT (4:30 p.m. ET) to discuss the third quarter 2007 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-866-277-1184 in the U.S. (1-617-597-5360 outside of the U.S.), and entering the passcode 76456881 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys website at http://www.mosys.com. A telephonic replay will be available for 48 hours following the call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.), passcode of 85202789.
Use of Non-GAAP Financial Measures
To supplement MoSys' consolidated financial statements presented in accordance with GAAP, MoSys uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation and a one-time charge of in-process research and development and amortization of intangibles in connection with the acquisition. MoSys management uses the above non-GAAP financial measures internally to understand, manage and evaluate our business. MoSys believes it is useful for itself and investors to review, as applicable, both GAAP information and the non-GAAP measures, which exclude the effects of stock-based compensation and in-process research and development and amortization charges of intangibles in connection with the acquisition, in order to assess the performance of our continuing operations and for planning and forecasting in future periods. The presentation of these non-GAAP measures is intended to provide investors with an understanding of our operational results and trends that enables them to analyze our base financial and operating performance and facilitate period-to-period comparisons and analysis of operational trends. MoSys believes the presentation of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is provided in a table immediately below the Condensed Consolidated Statements of Operations. For additional information regarding these non-GAAP financial measures, and management's explanation of why it considers such measures to be useful, refer to the Form 8-K dated October 30, 2007 that we have submitted to the Securities and Exchange Commission.
Financial Tables
Click here to read financial tables
About MoSys, Inc.
Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and markets innovative memory and analog/mixed-signal technologies for semiconductors. MoSys' patented 1T-SRAM technologies offer a combination of high density, low power consumption, high speed and low cost unmatched by other available memory technologies. The single transistor bit cell used in 1T-SRAM memory results in the technology achieving much higher density than traditional four or six transistor SRAMs while using the same standard logic manufacturing processes. 1T-SRAM technologies also offer the familiar, refresh-free interface and high performance for random address access cycles associated with traditional SRAMs. In addition, these technologies can reduce operating power consumption by a factor of four compared with traditional SRAM technology, making them ideal for embedding large memories in System on Chip (SoC) designs. MoSys' licensees have shipped more than 135 million chips incorporating 1T-SRAM embedded memory technologies, demonstrating excellent manufacturability in a wide range of silicon processes and applications. MoSys is headquartered at 755 N. Mathilda Avenue, Sunnyvale, California 94085. More information is available on MoSys' website at http://www.mosys.com.
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