MoSys, Inc. Reports Second Quarter 2010 Financial Results

SUNNYVALE, Calif., Jul 23, 2010  -- 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 second quarter ended June 30, 2010.

Second Quarter and Recent Highlights

• Reported total revenue of $4.3 million, an increase of 115 percent over the second quarter of 2009;
• Announced partnerships for the development of integrated PHY and controller solutions that support the PCI Express, DDR3, 40/100Gbps Ethernet, and Interlaken and SATA 3.0 standards;
• Announced the GigaChip(TM) Alliance, an ecosystem of semiconductor device suppliers supporting the GigaChipTM Interface; and
• Completed tape-out of first product in the Bandwidth Engine(TM) family.

Management Commentary

"During the quarter, total revenue increased 20 percent sequentially driven by license revenue from both our 1T-SRAM(R) and high speed I/O IP and increased royalties from licensees in the gaming and networking markets," commented Len Perham, President and Chief Executive Officer of MoSys. "Our IP business continues to be a strong contributor to our overall growth strategy and is very synergistic with our move to become a fabless semiconductor company."

"We achieved significant progress in the development of the Bandwidth Engine family of ICs, which integrates our patented 1T-SRAM high-density embedded memory with our high-speed 10 Gigabits per second SerDes interface to create a very advanced system solution for next generation networking and storage systems. Earlier this week, we announced that Altera Corporation and NetLogic Microsystems have joined MoSys in the GigaChip Alliance to support the GigaChip Interface. The GigaChip Interface is a state of the art I/O protocol in the Bandwidth Engine IC and, more broadly, is an open, CEI-11 compatible interface developed to enable highly efficient serial chip-to-chip communications at the board-level. We expect other companies to join the Alliance in the coming months. Yesterday, we completed the tape out of our Bandwidth Engine IC, which is a major milestone in the development of this revolutionary product. The interest from potential customers and partners in the Bandwidth Engine family has been gratifying, and we are making good progress towards our goal of having samples available by the end of this year and ramping into production during the second half of 2011."

"In summary, we made solid progress in the first half of 2010 positioning the Company to be a provider of both differentiated IP and innovative IC solutions for networking, computing, storage and consumer applications. Looking at the second half of 2010, we are focused on growing our IP licensing business and continuing to make progress with the Bandwidth Engine family of products in order to achieve our strategic plan and strongly drive shareholder value," concluded Mr. Perham.

Second Quarter Results

Total net revenue for the second quarter of 2010 was $4.3 million, compared with $3.6 million reported in the first quarter of 2010 and $2.0 million in the second quarter of 2009.

Second quarter 2010 total revenue included licensing revenue of $2.0 million, compared with $1.5 million for the previous quarter and $0.3 million for the second quarter of 2009. Second quarter 2010 royalty revenue was $2.3 million, compared with $2.0 million for the previous quarter and $1.7 million for the second quarter of 2009.

Gross margin for the second quarter of 2010 was 87 percent, compared with 78 percent for the first quarter of 2010 and 86 percent for the second quarter of 2009.

Total operating expenses on a GAAP basis for the second quarter of 2010 were $9.2 million, compared with $8.6 million for the previous quarter and $6.9 million for the second quarter of 2009. The increase in operating expenses was primarily related to Bandwidth Engine development initiatives. Second quarter 2010 operating expenses included $0.8 million of amortization of intangible assets, $0.5 million in acquisition-related contingent compensation costs and $0.8 million of stock-based compensation expense.

GAAP net loss for the second quarter of 2010 was $5.4 million, or ($0.17) per share, compared with a net loss of $5.7 million, or ($0.18) per share, for the previous quarter and a net loss of $5.0 million, or ($0.16) per share, for the second quarter of 2009. The non-GAAP net loss for the second quarter of 2010 was $3.4 million, or ($0.11) 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 $31.2 million as of June 30, 2010, compared with approximately $33.9 million as of March 31, 2010.

Financial Tables

To read financial tables, click here

Financial Results Webcast / Conference Call

MoSys will host a conference call and webcast with investors today at 5:30 a.m. Pacific time (8:30 a.m. Eastern time) to discuss the second quarter 2010 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-866-800-8652 in the U.S. (1-617-614-2705) outside of the U.S.), and entering the pass code 50628951 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 16348667.

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 and advanced system-on-chip (SoC) designs. MoSys' Bandwidth Engine(TM) family of ICs combines the company's patented 1T-SRAM(R) high-density memory technology with its high-speed 10 Gigabits per second (Gbps) SerDes interface (I/O) technology. A key element of Bandwidth Engine technology is the GigaChip(TM) Interface, an open, CEI-11 compatible interface developed to enable highly efficient serial chip-to-chip communications. MoSys' IP portfolio includes SerDes IP and DDR3 PHYs that support data rates from 1 - 11 Gbps across a variety of standards. In addition, MoSys offers its flagship, patented 1T-SRAM and 1T-Flash(R) memory cores, which 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 IP is production-proven and has shipped in more than 325 million devices. MoSys is headquartered in Sunnyvale, California. More information is available on MoSys' website at http://www.mosys.com.