MoSys, Inc. Reports First Quarter 2010 Financial Results

SUNNYVALE, Calif., Apr 28, 2010  --MoSys, Inc., (NASDAQ: MOSY), a leading provider of differentiated, high-density memory and high-speed interface (I/O) intellectual property (IP), today reported financial results for the first quarter ended March 31, 2010.

First Quarter Highlights

• Reported total revenue of $3.6 million, an increase of 38 percent over the first quarter of 2009;
• Reported licensing revenue of $1.5 million, an increase of 195 percent over the first quarter of 2009;
•  Ended the quarter with total cash and investments of approximately $34.0 million;
• Announced development of the Bandwidth Engine(TM) family of integrated circuits (ICs), and expansion of business model to include fabless IC sales; and
• Acquired MagnaLynx, Inc., a developer of high-speed, low-power serial chip-to-chip communications technology.

Management Commentary

"During the first quarter, we announced the expansion of our business model to include plans for the Bandwidth Engine family of ICs," commented Len Perham, President and Chief Executive Officer of MoSys. "In addition to being a world-class IP provider, MoSys is developing high-performance ICs that combine our patented 1T-SRAM(R) high-density embedded memory and ultra high-speed 10 Gigabit per second SerDes with computational capability. We believe the Bandwidth Engine represents a breakthrough solution for developers of next-generation networking systems and high-performance computing applications. At the end of the quarter, we also announced the acquisition of MagnaLynx, which expands our engineering expertise in high-performance, low-power serial chip-to-chip communications and complements our Bandwidth Engine and next-generation IP product roadmap."

Mr. Perham continued, "Also, during the quarter, we announced a major technology agreement with ROHM for use of our 1T-SRAM in its next-generation IC designs. Revenue from the ROHM project along with our ongoing serial interface and memory IP projects drove license revenue to the highest level since the second quarter of 2007. With several projects in the early stages of development, we expect license revenue to ramp throughout 2010 as additional delivery milestones are achieved."

"Overall, we made significant progress on our strategic initiatives in the first quarter of 2010 and remain focused on positioning the Company for future growth by expanding our business model, market opportunities and product roadmap. In the coming quarters, we expect to further the development of our Bandwidth Engine family of ICs, while capitalizing on our serial interface and embedded memory IP in the networking, consumer and high performance computing markets," concluded Mr. Perham.

First Quarter Results

Total net revenue for the first quarter of 2010 was $3.6 million, compared with $3.5 million reported for the fourth quarter of 2009 and $2.6 million in the first quarter of 2009.

First quarter 2010 total revenue included licensing revenue of $1.5 million, compared with $1.3 million for the previous quarter and $0.5 million for the first quarter of 2009. The increase in first quarter license revenue was primarily due to ongoing serial interface IP projects, early stage revenue from two new license agreements signed in the previous quarter and increased revenue from the 1T-SRAM technology agreement with ROHM. First quarter 2010 royalty revenue was $2.0 million, compared with $2.2 million for the previous quarter and $2.0 million for the first quarter of 2009. The sequential decrease in royalty revenue was due to decreased royalties from consumer products containing 1T-SRAM embedded memory.

Gross margin for the first quarter of 2010 was 78 percent, compared with 80 percent for the fourth quarter of 2009 and 87 percent for the first quarter of 2009.

Total operating expenses on a GAAP basis for the first quarter of 2010 were $8.6 million, compared with $8.2 million for the previous quarter and $6.6 million for the first quarter of 2009. First quarter 2010 operating expenses included $0.6 million of amortization of intangible assets, $0.7 million in acquisition-related contingent compensation and transaction costs, and $0.6 million of stock-based compensation expense.

GAAP net loss for the first quarter of 2010 was $5.7 million, or ($0.18) per share, compared with a net loss of $4.9 million, or ($0.16) per share, for the previous quarter and a net loss of $4.2 million or ($0.13) per share for the first quarter of 2009. The non-GAAP net loss for the first quarter of 2010 was $3.7 million, or ($0.12) per share, which excludes acquisition-related charges and stock-based compensation expense. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Cash and investments totaled $33.9 million as of March 31, 2010, compared with approximately $40.4 million as of December 31, 2009. The sequential decrease in cash and investments included cash used in operations, as well as $2.3 million in cash payments related to the acquisition of MagnaLynx.

Financial Tables

To reader financial tables, click here

Financial Results Webcast / Conference Call

MoSys will host a conference call and webcast with investors today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss the first quarter 2010 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-866-831-6270 in the U.S. (1-617-213-8858) outside of the U.S.), and entering the pass code 26594017 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys Web site at http://www.mosys.com. A telephone replay will be available for 2 business days following the call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.), pass code of 81342952.

About MoSys, Inc.

MoSys, Inc. (NASDAQ: MOSY) develops serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems and advanced system-on-chip (SoC) designs. MoSys' IP portfolio includes DDR3 PHYs and SerDes IP that support data rates from 1 - 11 Gigabits per second (Gbps) across a variety of standards. In addition, MoSys offers its flagship, patented 1T-SRAM(R) and 1T-Flash(R) memory cores, which offer 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' IP is production-proven in more than 225 million devices. MoSys is headquartered in Sunnyvale, California. More information is available on MoSys' website at www.mosys.com.