MIPS Technologies, Inc. Reports First Quarter Fiscal 2002 Financial Results

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Oct. 11, 2001--MIPS Technologies, Inc., a leading provider of industry standard processor architectures and cores for digital consumer and business products, today reported financial results for its first fiscal quarter ended September 30, 2001.

Revenue for the first quarter of fiscal 2002 was $12.5 million, a 38 percent decline compared to $20.2 million for the same quarter a year ago. Revenue excluding revenue from Nintendo 64 video game products declined by 24 percent compared to the same quarter a year ago. Contract revenue was $7.8 million, a decrease of 31 percent compared to $11.3 million in the comparable period in fiscal 2001. Royalties were $4.7 million, a decrease of 47 percent compared to $8.9 million in the same quarter a year ago due to lower royalties from Nintendo 64 video game products. Royalties excluding royalties from Nintendo 64 were $3.4 million and remained flat compared to the same quarter a year ago.

Net loss for the first quarter of fiscal 2002 was $930,000 compared to a net income of $4.3 million for the same quarter a year ago. The diluted net loss per share for the first quarter of fiscal 2002 was $0.02 compared to a net income of $0.10 for the same quarter a year ago.

``Although we met analysts' earnings expectations in this challenging business environment, first quarter revenue did not meet our goals,'' said Casey Eichler, chief financial officer. ``On top of recent cost savings measures, we are taking additional steps to manage our spending in what continues to be an uncertain global economy.'' The company will provide guidance for the second fiscal quarter in its quarterly earnings call today at 1:45 pm Pacific DT.

``Despite the continuing unprecedented declines in the semiconductor industry, further exacerbated by the events of September 11, we grew the number of new processor core license agreements significantly quarter over quarter,'' said John Bourgoin, chairman & CEO. ``While I am disappointed with the revenue results, MIPS Technologies is strong financially, and I am confident that our investment in intellectual property combined with cost reductions will result in us being strongly positioned for an industry turnaround.''

MIPS invites you to listen to management's discussion of Q1 fiscal 2002 results and guidance for Q2 fiscal 2002 in a conference call live beginning at 1:45 p.m. Pacific DT. Conference call number is 1-913-981-5510. Replay number is 1-719-457-0820 and will be available for 5 business days, beginning shortly after the end of the conference call. The access code is 460553 for both numbers.

Q1 2002 Highlights: Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers.

MIPS Technologies Announces New Marketing Vice President
MIPS Technologies Receives Favorable Ruling in Markman Hearing of Patent Infringement Case Against Lexra
MIPS Technologies, Intrinsix Alliance Offers SoC Design Services for MIPS-Based(TM) Solutions
MIPS Technologies Licenses New MIPS64(TM) 5Kf(TM) Core to Broadcom
MIPS Technologies Licenses 32-Bit MIPS32(TM) 4Kc(TM) Core to IDT for High-Growth Communications Market
MIPS Technologies and Tality Team to Deliver SoC Solutions for MIPS-Based(TM) Technology
REDSonic Joins the MIPS(TM) Alliance Program
Toshiba Announces 32-Bit RISC MIPS-Based Microprocessor With Increased Performance and Reduced Power Consumption
Philips and Microsoft reach major milestone with availability of advanced MIPS-Based(TM) iTV cable set-top box solutions
IDT's MIPS-Based(TM) Integrated Communications Processor to be Used in Highly Configurable LAN Switch From Hewlett-Packard
Philips Speech Processing To Be Available On Alchemy's Low Power, High Performance MIPS® Microprocessor Family
Wind River support for MIPS32 and MIPS64
Ampro Delivers MIPS32 Module to Speed and Simplify Embedded Design; First RISC-Based Entry to New Encore Product Line Validates Processor-Independent Architecture
Microcross Joins the MIPS Alliance Program
Broadcom Delivers Industry's Highest Performance 64-Bit MIPS-Based, Multi-Processor Solution for Broadband Networking
NeoMagic Enabling New Generations of Handheld Internet Appliances With The MIPS-Based(TM) MiMagic(TM) Family of Systems-on-Chip
Green Hills Software Announces INTEGRITY Real-Time Operating System for MIPS32 Cores; INTEGRITY Now Available for MIPS-based Systems
Ricoh Unveils the MIPS-Based(TM) Aficio 1105 Segment 6 On-Demand Digital Imaging System and Enhanced Fiery EB-105e Controller

MIPS Technologies, Inc.

MIPS Technologies, Inc. is a leading provider of industry standard processor architectures and cores for digital consumer and business products. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers, and system OEMs. MIPS Technologies, Inc. and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products. MIPS Technologies, Inc. is based in Mountain View, California, and can be reached at 650-567-5000 or www.mips.com.

This press release contains forward-looking statements regarding future events or the future financial performance of MIPS Technologies, Inc. Actual events or results may differ materially. Many important factors could cause the actual results to differ materially from those contained in such forward-looking statements, including but not limited to the following risks: that products will fail to achieve market acceptance, the timing of or delays in customer orders, the mix of revenue generated by Nintendo 64 and non-Nintendo 64 video game products, delays in the design process, the length of MIPS Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and market new products and product enhancements, and the demand for semiconductors and end-user products that incorporate semiconductors. With respect to MIPS Technologies, we refer you to the documents that it files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2001 and subsequent Forms 10-Q and 8-K.

Note to Editors: MIPS is a registered trademark and MIPS-based and MIPS32, MIPS64, 4Kc, and 5Kf are trademarks of MIPS Technologies, Inc. in the United States and other countries. All other trademarks are the property of their respective companies. All press materials are available on the World Wide Web via: http://www.mips.com/

                        MIPS TECHNOLOGIES, INC.

            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                 (In thousands, except per share data)

                                     Three Months Ended

                                         September 30,

                                       2001        2000

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

                                         (unaudited)

Revenue:

     Royalties                      $  4,728    $  8,864

     Contract revenue                  7,767      11,316

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

          Total revenue               12,495      20,180

Costs and expenses:

     Cost of contract revenue           --          --

     Research and development          8,796       7,653

     Sales and marketing               4,282       3,493

     General and administrative        1,625       2,218

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

          Total costs

           and expenses               14,703      13,364

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

Operating income (loss)               (2,208)      6,816

Other income (expense), net            1,078       1,568

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

Income (loss) before income taxes     (1,130)      8,384

Provision for income taxes              (203)      3,353

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

Income (loss) before

 cumulative effect of

 a change in accounting principle   $   (927)   $  5,031

Cumulative effect of

 change in accounting

 principal, net of tax benefit      $   --      $   (741)

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

Net income (loss)                   $   (927)   $  4,290

                                    ========    ========

Per diluted share amounts:

Income (loss) before

 cumulative effect of

 a change in accounting principle   $  (0.02)   $   0.12

Cumulative effect of

 change in accounting principle     $   --      $  (0.02)

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

Net income (loss)                   $  (0.02)   $   0.10

                                    ========    ========

Common shares

 outstanding-diluted                  38,912      41,134

                                    ========    ========

                       MIPS TECHNOLOGIES, INC.

                 CONDENSED CONSOLIDATED BALANCE SHEETS

                            (In thousands)

                                    September 30,  June 30,

                                         2001       2001

                                     (unaudited)

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

Assets

Current assets:

  Cash and cash equivalents            $108,443   $116,520

  Accounts receivable                     5,730      6,443

  Prepaid expenses and other

    current assets                        7,722      7,720

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

        Total current assets            121,895    130,683  

  Equipment and furniture, net              9,277      8,089  Other assets                              3,229      1,661                                         --------   --------

                                         $134,401   $140,433

                                         ========   ========

  

  Liabilities and Stockholders' Equity

  

  Current liabilities:

        Accounts payable                 $  1,221   $  3,184

        Accrued liabilities                 8,058     10,472

        Deferred revenue                    2,816      4,069

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

            Total current liabilities      12,095     17,725

  

  Stockholders'  equity                   122,306    122,708

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

                                         $134,401   $140,433

                                         ========   ========

  

  
Contact:

  
     MIPS Technologies, Inc.

  
     Bonnie Gardiner, 650/567-7007