MoSys, Inc. Reports First Quarter 2011 Financial Results

SANTA CLARA, Calif., Apr 28, 2011 -- MoSys, Inc., (NASDAQ: MOSY), a leading provider of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems and advanced system-on-chip (SoC) designs, today reported financial results for the first quarter ended March 31, 2011.

First Quarter 2011 Highlights

• Reported total revenue of $3.5 million;
• Ended the quarter with total cash and investments of approximately $34.6 million;
• Closed first order for multi-protocol SerDes IP at 28-nanometer;
• Continued sampling of the Bandwidth Engine(R) family of ICs with prospective customers; and
• Achieved interoperability of the Bandwidth Engine IC with SerDes from Avago Technologies and with FPGA devices from Altera Corporation and Xilinx, Inc.

Management Commentary

"During the first quarter, we implemented several initiatives aimed at strengthening our IP sales and marketing efforts, as we pursued an increasing number of IP opportunities in our target markets," commented Len Perham, MoSys' President and Chief Executive Officer. "As a result of these initiatives and the hard work of our team, we had a strong first quarter in the IP business, including MoSys' first order for a 28-nanometer SerDes solution. Our IP business remains the foundation for revenue growth in the near-term as we transition toward becoming an IP-rich fabless semiconductor company and bring the Bandwidth Engine family of ICs to market.

"In addition to strengthening our IP business, we made solid advancements in the characterization and verification of our Bandwidth Engine IC platform. We expect to complete these efforts in the third quarter of this year and are targeting the second half of 2011 to begin prototype production builds. We continue to work toward an ISO 9000 certification, a necessary step in becoming a top flight preferred supplier to our customers and partners. Additionally, in close collaboration with our foundry partner, TSMC, work has begun to optimize the yield, quality and reliability of our new family of advanced networking system integrated circuits. We remain optimistic that we will achieve an enterprise grade rating for the Bandwidth Engine IC family.

Mr. Perham concluded, "Demand for stand-alone Bandwidth Engine samples and for reference boards remains strong, and feedback from potential customers has been very positive. We are closely collaborating with potential customers in order to facilitate the early adoption of this very advanced networking system IC family. Our goal is to begin securing identifiable design wins in the fourth quarter of this year. Presently and for the remainder of the year, we will remain focused on leveraging our core IP portfolio to achieve near term revenue goals, while simultaneously making a targeted effort to accelerate the adoption of our Bandwidth Engine IC family."

First Quarter Results

Total net revenue for the first quarter of 2011 was $3.5 million, compared with $4.0 million reported in the fourth quarter of 2010 and $3.6 million in the first quarter of 2010.

First quarter 2011 total revenue included licensing revenue of $1.3 million, compared with $1.4 million for the previous quarter and $1.5 million for the first quarter of 2010. First quarter 2011 royalty revenue was $2.2 million, compared with $2.6 million in the previous quarter and $2.0 million for the first quarter of 2010. First quarter 2011 royalty revenue was driven by royalties from licensees in the gaming and networking markets.

Gross margin for the first quarter of 2011 was 81 percent, compared with 81 percent for the fourth quarter of 2010 and 78 percent for the first quarter of 2010.

Total operating expenses on a GAAP basis for the first quarter of 2011 were $8.9 million, compared with $8.9 million in the previous quarter and $8.6 million for the first quarter of 2010. First quarter 2011 operating expenses included $0.7 million of amortization of intangible assets and $0.7 million of stock-based compensation expense.

GAAP net loss for the first quarter of 2011 was $6.0 million, or ($0.16) per share, compared with a net loss of $5.7 million, or ($0.17) per share, for the previous quarter and a net loss of $5.7 million, or ($0.18) per share, for the first quarter of 2010. The non-GAAP net loss for the first quarter of 2011 was $4.7 million, or ($0.13) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the first quarter of 2011 were computed using approximately 37.3 million shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

As of March 31, 2011, cash and short and long-term investments totaled $34.6 million.

Financial Tables

To read financial tables, click here

About MoSys, Inc.

MoSys, Inc. (NASDAQ: MOSY) is a leading provider of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems. MoSys' Bandwidth Engine(R) family of ICs combines the company's patented 1T-SRAM(R) high-density memory with its high-speed interface technology. MoSys' IP portfolio includes silicon proven SerDes and DDR3 PHYs that support a wide range of data rates across a variety of standards and 1T-SRAM memory cores that provide a combination of high-density, low-power consumption, high-speed and low cost advantages for high-performance networking, computing, storage and consumer/graphics applications. MoSys is headquartered in Santa Clara, California. More information is available on MoSys' website at www.mosys.com.