SUNNYVALE, Calif. — (BUSINESS WIRE) — February 4, 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 fourth quarter and year ended December 31, 2009.

Fourth Quarter and Recent Highlights

• Reported revenue of $3.5 million for the fourth quarter and $11.5 million for full year 2009
• Signed a major technology license agreement with ROHM for use of 1T-SRAM^® in ROHM’s next generation IC designs
• Ended year with total cash and investments of $40.4 million
• Announced future expansion of the Company’s business model to include fabless integrated circuit (IC) sales
• Announced product development efforts for the Bandwidth Engine™ family of ICs, combining the attributes of 1T-SRAM and high-speed, serial I/O

Management Commentary

“During 2009, we implemented several strategic initiatives that have strengthened our organization and positioned MoSys for future growth,” commented Len Perham, MoSys’ president and CEO. “In particular, we reorganized our corporate structure to increase efficiencies, reduced operating costs on a year-over-year basis, focused resources on our core product lines and furthered the development of our long-term product road map. Through our acquisition of Prism Circuits, we expanded our product offerings to include silicon-proven high-speed interface IP, which has broadened our customer base and engineering capabilities and significantly increased our total addressable market. As a result of these efforts, we grew licensing revenue over the prior year and signed eight new customers for our IP in 2009. We have established the foundation for expanding our business to become a fabless semiconductor company, as well as a differentiated IP provider.

“We recently announced plans for the Bandwidth Engine family of integrated circuits. As the industry's first serial chip-to-chip communications solution for advanced networking devices, this innovative product offering will provide unparalleled bandwidth performance, while addressing the performance challenges of next generation networking systems. Bandwidth Engine combines the fast random access and low latency of our 1T-SRAM with a serial I/O that operates at a datarate of 10 Gigabits per second. We expect sampling to begin in late 2010 with production quantities available in the first half of 2011. We are currently working with multiple potential partners to support the Bandwidth Engine as we bring this revolutionary new solution to market.”

Mr. Perham concluded, “We enter 2010 with a more efficient organization to meet current and future customer needs with expanded technology offerings and engineering capabilities enabling us to capitalize on a wider range of targeted growth opportunities in the networking, communications and consumer markets. Looking forward, we believe our new strategic direction will expand our addressable markets, broaden our product offerings and position the Company for future growth.”

Fourth Quarter Results

Total net revenue for the fourth quarter of 2009 was $3.5 million, compared with $3.4 million for the third quarter of 2009 and $4.0 million for the fourth quarter of 2008.

Fourth quarter total revenue included licensing revenue of $1.3 million, compared with $1.3 million in the previous quarter and $0.9 million for the fourth quarter of 2008. Fourth quarter 2009 license revenue primarily consisted of new and ongoing interface IP projects as well as a new 1T-SRAM project with ROHM, a major Japanese IDM. Royalty revenue for the fourth quarter was $2.2 million, compared with $2.0 million for the previous quarter and $3.1 million for the fourth quarter of 2008.

Gross margin for the fourth quarter of 2009 was 80 percent and consistent with the previous quarter. Gross margin for the fourth quarter of 2008 was 84 percent.

Total operating expenses on a GAAP basis for the fourth quarter of 2009 were $8.2 million, compared with $7.8 million for the previous quarter and $9.9 million for the fourth quarter of 2008. Fourth quarter 2009 operating expenses included $0.6 million of amortization of intangible assets, $0.5 million in acquisition-related compensation charges and $0.9 million of stock-based compensation expense.

GAAP net loss for the fourth quarter of 2009 was $4.9 million, or ($0.16) per share, compared with a net loss of $5.0 million, or ($0.16) per share, in the previous quarter and a net loss of $6.4 million or ($0.20) per share for the fourth quarter of 2008. The non-GAAP net loss for the fourth quarter 2009 was $2.8 million, or ($0.09) 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. Earnings per share for the fourth quarter of 2009 was computed using 31.2 million shares on both a GAAP and non-GAAP basis.

Cash and investments totaled approximately $40.4 million as of December 31, 2009, compared with approximately $67.5 million as of December 31, 2008. The year-over-year decrease in cash and investments included cash used in operations, as well as a $13.6 million cash payment related to the acquisition of Prism Circuits, approximately $1.0 million in expenditures related to the exit of the analog/mixed-signal product lines, approximately $0.9 million of stock repurchases and approximately $0.6 million related to the closure of our Korea design center and headcount reductions in the United States.