SUNNYVALE, Calif.—(BUSINESS WIRE)—February 12, 2007—
MoSys, Inc. (NASDAQ:
MOSY), the industry's leading provider of
high-density system-on-chip (SoC) embedded memory intellectual
property (IP), today reported financial results for its fourth quarter
and fiscal year ended December 31, 2006.
Fourth Quarter Highlights
-- Reported total revenue of $5.0 million
-- Decreased quarterly operating expenses by 40 percent
-- Recorded GAAP net profit of $567,000, and $0.02 fully diluted
earnings per share
-- Non-GAAP net profit of $1.4 million, and $0.04 fully diluted
earnings per share, excluding the stock-based compensation
expense (See table of reconciliation of GAAP to non-GAAP net
income (loss) and net income (loss) per share)
-- Delivered multiple CLASSIC Memory Macro designs to wide range
of semiconductor customers
-- Signed technology license agreement with TSMC at 65nm and
future geometries
Fourth Quarter Results
Total net revenue for the fourth quarter of 2006 was $5.0 million
compared to $4.0 million in the third quarter of 2006 and $2.4 million
in the fourth quarter of 2005. Fourth quarter total revenue
represented a sequential increase of 24 percent over the previous
quarter and 109 percent compared to the fourth quarter of 2005.
Fourth quarter total revenue included licensing revenue of $1.8
million compared to $3.3 million in the third quarter of 2006 and $1.3
million in the fourth quarter of 2005. Royalty revenue increased
significantly to $3.2 million, which included royalty revenue related
to the Nintendo Wii(TM) game console for the fourth quarter. These
results compare to $705,000 of royalty revenues in the third quarter
of 2006 and $1.1 million in the fourth quarter of 2005. The Company
recorded licensing revenue from 12 different chip development
projects, compared to 13 in the previous quarter, and royalty revenue
from 16 different licensees, compared to 15 in the third quarter of
2006.
During the quarter, MoSys announced a partnership with
VeriSilicon, a leading ASIC design foundry. This partnership enables
VeriSilicon Holding, Co., Ltd. to integrate 1T-SRAM technology into
designs for system-on-chip (SoC) customers across a wide range of
foundry options and advanced process geometries. Also in the quarter,
the Company signed 4 new Macro licenses and 2 additional re-use
licenses for previous Macros.
Commenting on the quarter, Chet Silvestri, CEO of MoSys stated,
"The fourth quarter was marked by significant strength in our royalty
revenues due to the widely successful release of the Nintendo Wii(TM)
game console. These results, combined with our reduction in operating
expenses, allowed us to achieve solid profitability for the quarter.
We also continued to make progress with both our technology licensing
and CLASSIC Macro programs by signing macro agreements covering
applications such as cellular handsets, portable multimedia devices,
networking storage controllers and consumer graphics applications. We
also signed a licensing agreement with TSMC which allows them to
develop and market embedded memory macro products which incorporate
MoSys technology at earlier process geometries as well as at 65nm and
future geometries."
In accordance with Generally Accepted Accounting Principles (GAAP)
the fourth quarter gross margin percentage was 88 percent, compared to
96 percent in the third quarter of 2006 and 90 percent in the fourth
quarter of 2005. The sequential decrease in total gross margin for the
quarter was due to higher costs associated with product deliverables
accounted for under the percentage of completion method.
Total operating expenses for the fourth quarter were $4.6 million
compared to $7.8 million in the previous quarter, which included $3.2
million in legal expenses and settlement charges related to the UniRAM
litigation.
GAAP net income for the quarter was $567,000, and $0.02 fully
diluted earnings per share, including stock-based compensation expense
under Statement of Financial Accounting Standard No. 123R (FAS 123R)
of $816,000. This compares to a net loss of $2.9 million, or ($0.09)
per share, in the third quarter of 2006 and a net loss of $1.1
million, or ($0.04) per share, in the fourth quarter of 2005. Fully
diluted earnings per share for the quarter on a GAAP basis were
computed using 32,862,000 shares.
The non-GAAP net income for the fourth quarter, which excludes the
total stock-based compensation charges of $816,000, was $1.4 million,
and $0.04 fully diluted earnings per share. Fully diluted earnings per
share for the quarter on a non-GAAP basis also were computed using
32,862,000 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 both long and short-term investments
totaled approximately $84.3 million as of December 31, 2006 compared
to approximately $87.1 million as of September 30, 2006. The decrease
in cash was primarily due to the $2.4 million cash payment related to
the UniRAM settlement agreement.
Fiscal 2006 Results
For fiscal year 2006, total revenue was $14.9 million compared to
$12.3 million in fiscal 2005. GAAP net loss in 2006 was $5.3 million,
or ($0.17) per share. The non-GAAP net loss for the fiscal 2006
excluding the total stock-based compensation charges of $2.7 million
was $2.6 million or a loss of ($0.08). Furthermore, the one time
litigation settlement charge of $2.4 million increased the net loss
by($0.07) per share.
The Company's Chief Executive Officer and Chief Financial Officer
will comment on the business highlights of the fourth quarter and full
fiscal year and provide additional financial details during their
financial results conference call at 1:30 p.m. (PT) on Monday,
February 12, 2007.
Fourth Quarter and Fiscal 2006 Financial Results Webcast/
Conference Call
MoSys management will host a conference call and webcast with
investors today, February 12, 2007, at 1:30 p.m. Pacific time (4:30
p.m. Eastern time) to discuss the fourth quarter and fiscal 2006
financial results and the business outlook. Investors and other
interested parties may access the call by dialing 866-383-7989 in the
U.S. (617-597-5328 outside of the U.S.), and entering the passcode
42264550 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
www.mosys.com A telephone 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 68107821.
Use of Non-GAAP Financial Measures
To supplement MoSys' consolidated financial statements presented
in accordance with GAAP (Generally Accepted Accounting Principles),
MoSys uses non-GAAP financial measures that exclude from the income
statement the effects of stock-based compensation and the effects of
our adoption of SFAS 123R upon the number of diluted shares used in
calculating non-GAAP loss per share. MoSys' management believes that
the presentation of these non-GAAP financial measures is useful to
investors and other interested persons because they are one of the
primary indicators MoSys' management uses for planning and forecasting
future performance. In addition, MoSys believes that it is important
to provide investors and other interested persons with a consistent
basis for comparison between quarters, particularly in light of the
Company's adoption of the modified prospective transition method under
SFAS 123R, which requires application of the accounting standard as of
January 1, 2006 but not for prior periods.
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
February 12, 2007 that we have submitted to the Securities and
Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about
the Company including, without limitation, benefits and performance
expected from use of the Company's 1T-SRAM technology.
Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors include
but are not limited to, customer acceptance of our 1T-SRAM
technologies and embedded memory designs, the timing and nature of the
license agreements being signed with our customers and their requests
for our services under existing license agreements, the timing of
customer acceptance of our work under such agreements, the level of
commercial success of licensees' products such as cell phone hand
sets, ease of manufacturing and yields of devices incorporating our
1T-SRAM, our ability to enhance the 1T-SRAM technology or develop new
technologies, the level of intellectual property protection provided
by our patents, the expenses and other consequences of litigation,
including intellectual property infringement litigation, to which we
may be or may become a party from time to time, the vigor and growth
of markets served by our licensees and customers and operations of the
Company and other risks identified in the Company's most recent annual
report on Form 10-K filed with the Securities and Exchange Commission,
as well as other reports that MoSys files from time to time with the
Securities and Exchange Commission. MoSys undertakes no obligation to
update publicly any forward-looking statement for any reason, except
as required by law, even as new information becomes available or other
events occur in the future.
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