MOSAID Announces Second Quarter Results for Fiscal Year 2006
OTTAWA, Ontario November 22, 2005
MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the second quarter of fiscal 2006, ended October 31, 2005.
Revenues for the second quarter of fiscal year 2006 were $16,253,000, an increase of 131% over the revenues of $7,049,000 in the second quarter of fiscal year 2005. Net income for the quarter was $4,292,000 or $0.37 per diluted share, compared to a net loss of $1,159,000 or $0.11 per diluted share a year ago.
Revenues for the year to date were $30,486,000, an increase of 87% over the revenues of $16,304,000 reported for the same period last year. Net income for the first six months of fiscal 2006 was $8,725,000 or $0.75 per diluted share, compared to a net loss of $1,067,000 or $0.10 per diluted share reported in the first half of fiscal 2005.
"During our second quarter, we delivered on a number of key initiatives which form part of our strategy to grow the Company," said George Cwynar, President and Chief Executive Officer of MOSAID. "In addition to growing revenues and recording operating margins which are among the best in the semiconductor industry, we signed another patent license with a major semiconductor manufacturer during the quarter; we acquired Virtual Silicon Technology Inc. to expand our SIP business; and our Systems business launched its sixth generation tester into the marketplace."
"MOSAID's cash balance and marketable securities at the end of the quarter stood at $64.5 million, a decline of $2.4 million from the level at the end of Q1. The principal use of cash was the payment of $6.4 million for the purchase of Virtual Silicon," said Richard Boadway, Executive Vice President and Chief Financial Officer.
"We regularly assess the right balance of investment versus vehicles of immediate shareholder return, such as dividends or the normal course issuer bid," said Boadway. "Now, with the steady underpinning of our fixed payment patent licenses, augmented by the royalty bearing licenses, including that of our latest licensee in Taiwan, we are in a position to increase the dividend. Therefore, effective immediately, we are declaring an increase in our quarterly dividend from the current $0.125 per share to $0.20 per share."
"In June 2005 we initiated a normal course issuer bid," added Boadway. "However, in the intervening months, we have found that the Company has been frequently in possession of undisclosed material information, which has prevented such purchases of stock on the open market. We remain committed to exercising the normal course issuer bid and expect that we will be active with the program in the balance of this fiscal year."
Major Taiwanese Semiconductor Manufacturer Licensed Patent Portfolio
During the quarter, MOSAID signed a five year running royalty license with a major Taiwanese semiconductor company, which is one of the world's largest DRAM manufacturers. This type of five year license model is important because it yields a revenue stream during the entire term of the license while offering an opportunity for its renewal at the conclusion of the term when the license expires.
Acquired Leading Supplier of Semiconductor Intellectual Property (SIP)
During the quarter, MOSAID broadened its product offering and extended its reach within the semiconductor industry with the acquisition of an established SIP supplier, Virtual Silicon Technology Inc. Virtual Silicon's products include standard cell libraries, basic and application specific I/Os, memory compilers and programmable phase locked loops (PLLs). Virtual Silicon's patented gate bias techniques in the MobilizeTM family of low power library products enable standby current reduction to a level substantially below that of competing offerings. The acquisition has bolstered MOSAID's SIP business with the addition of award winning SIP technology, complementary product lines, established sales channels, and a solid customer base. Court Granted MOSAID Motion to Proceed with Appeal in Lawsuit Against Infineon
In Texas, on October 17, 2005, Judge Davis denied Infineon's motion to transfer the case to Northern California. A Court ordered mediation is scheduled to take place in February 2006, and if necessary, a Jury Trial has been scheduled to begin on October 10, 2006 in the Texas case.
In California, on October 31, 2005, Judge Fogel granted MOSAID's motion requesting the Court to certify the District Court of New Jersey's Summary Judgement ruling as being ready for immediate appeal. As a result, MOSAID plans to appeal the Summary Judgment Order. The trial in California will be postponed until the appeal is completed. MOSAID believes this is a positive development which will ultimately provide a faster overall resolution of this case.
Systems Division Unveiled Next Generation Tester
On November 8, 2005, the Systems Division introduced a new test system, the MS5205, at the IEEE International Test Conference in Austin, Texas. The MS5205 is MOSAID's sixth generation of automatic test equipment and is targeted at engineering test, analysis and bitmapping of Flash, DRAM and embedded memories. This new tester offers significant advantages over its predecessor, including: double the number of data I/O pins and address/clock pins at a significantly reduced cost per pin; increased bitmapping capability from 8Gb to 16Gb; and a new remote test head allowing for the incorporation of third party PXI compliant instruments required for custom or special purpose testing.
Guidance for the Company's Q3 of fiscal year 2006 revenues is $17.0 to $18.0 million and net earnings is $2.5 to $3.0 million. Revenues for fiscal year 2006 are forecast to range between $62 to $66 million. Guidance for the Company's net earnings for fiscal year 2006 is unchanged at $13 to $15 million. It is expected that approximately 70% of the fiscal 2006 revenues will stem from the Intellectual Property Division.
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Conference Call and Webcast
Management will hold a conference call and webcast on Tuesday, , November 22, 2005 at 5:00 p.m. (EST). Participants wishing to access the conference call should dial 1-800-814-4859. The conference call will also be webcast live at www.mosaid.com and www.newswire.ca, and subsequently archived on MOSAIDs web site. A rebroadcast of the conference call will be available until midnight on Tuesday, November 29, 2005. To access the rebroadcast, please dial 1-877-289-8525 and enter the passcode 21163864#.
MOSAID Technologies Incorporated makes memory better through the development and licensing of intellectual property and the supply of memory test and analysis systems to semiconductor manufacturers, foundries and fabless semiconductor companies around the world.
Founded in 1975, MOSAID is based in Ottawa, Ontario, Canada, with offices in Santa Clara and Sunnyvale, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. For more information, visit the Company's web site at www.mosaid.com.
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