MOSAID Announces Third Quarter Results for Fiscal Year 2006
OTTAWA, Ontario February 23, 2006
MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the third quarter of fiscal 2006, ended January 31, 2006.
Revenues for the third quarter of fiscal year 2006 were $16,541,000, compared to revenues of $16,897,000 in the third quarter of fiscal year 2005. Net income for the quarter was $3,623,000 or $0.31 per diluted share, compared to net income of $34,106,000 or $2.96 per diluted share a year ago, when the Company posted a one-time income tax recovery of $28,300,000.
Revenues for the year-to-date were $47,027,000, compared to revenues of $33,201,000 reported for the same period last year. Net income for the first nine months of fiscal 2006 was $12,348,000 or $1.07 per diluted share, compared to net income of $33,039,000 or $3.05 per diluted share reported in the first nine months of fiscal 2005.
The Company's cash balance and short-term marketable securities at the end of the third quarter were $66.1 million, compared to $64.5 million at the end of the second quarter of fiscal 2006.
"In Q3 we delivered our fifth consecutive quarter with over 20% profitability. Further, for the year-to-date our pre-tax income from operations was almost triple that of last year, growing from $6.7 million to $18.5 million," said George Cwynar, President and Chief Executive Officer. "MOSAID was very active in the quarter developing opportunities to further grow the business. We rolled out and delivered new Semiconductor IP and tester products; our advanced research initiative continued to make significant progress on the development of future Flash memory technology; and we are assessing a variety of patent acquisition opportunities."
"Furthermore, in keeping with our ongoing commitment to balance strategic business investments and profitable growth with actions that provide direct returns to shareholders, our $0.20 per share dividend payment in Q3 reflected a 60% increase over the dividend paid in Q2. In addition, during the third quarter, we began buying MOSAID shares under our normal course issuer bid. We purchased and cancelled 214,000 shares at a cost of approximately $5 million," said Cwynar.
Semiconductor IP Products Available in 90nm Technologies
MOSAID's Semiconductor IP products, including the DDR2 memory controller solution, MOSAID Mobilize low power standard cell library, and fractional Phase Locked Loop (PLL) are now available in 90nm technologies. Early testing of 90nm silicon for all three product lines is yielding encouraging results in MOSAID's Sunnyvale and Kanata labs. During the quarter, MOSAID licensed the DDR2 controller solution to its first customer and licensed additional PLL customers. 90nm versions of all three product lines have now been licensed to early customers.
The integration of Virtual Silicon Technology's operations with MOSAID's Semiconductor IP business has been proceeding as expected since the acquisition last quarter. The sales force has been merged and is now cross-selling MOSAID's memory controller, MOSAID Mobilize low power library and PLL product lines.
Appeal in Lawsuit Against Infineon Advances
On November 25, 2005, MOSAID filed a Notice of Appeal in its patent infringement lawsuit with Infineon Technologies in California. This Notice effectively began the appeal process of the New Jersey summary judgment ruling in the Infineon litigation. MOSAID believes the appeal is a positive development, and will ultimately provide a faster overall resolution of this case.
In the Infineon Texas case, a Court ordered mediation was held on February 16, 2006. The Markman hearing is currently scheduled for April 6, 2006 and a jury trial is scheduled to begin on October 10, 2006. A further recent development in the case was the addition of patent number 6,992,950 and the withdrawal of patent number 6,057,676 from the suit. Systems Division Ships New Tester
During the third quarter, the Systems Division began shipping its new test system, the MS5205. The MS5205 is MOSAID's sixth generation of automatic test equipment targeted at engineering test, analysis and bitmapping applications for semiconductor memories. With double the available pins of previous systems and expanded logic test capability, the MS5205 addresses not only commodity Flash and DRAM memories, but also embedded memory and mixed memory/logic devices of many types.
Last month, the Systems Division successfully achieved re-certification of its quality management system to the ISO9001:2000 standard. Registration under ISO9000 confirms that the quality management system complies with the highest internationally accepted quality standard and demonstrates MOSAID's commitment to continuous improvement in the quality of its operations and products.
Guidance for the Company's Q4 of fiscal year 2006 revenues is $16.5 to $17.5 million and for net earnings is $2.5 to $3.0 million. Revenues for fiscal year 2006 are forecast to range between $63.5 to $64.5 million. Guidance for the Company's net earnings for fiscal year 2006 is $14.8 to $15.3 million. It is expected that approximately two thirds of the fiscal 2006 revenues will stem from the Intellectual Property Division. The Company is also tabling its initial guidance for fiscal 2007, where it is expected that revenues will range between $70 to $75 million and net earnings between $15 to $17 million.
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MOSAID Technologies Incorporated makes semiconductors better through the development and licensing of intellectual property and the supply of memory test and analysis systems. MOSAID counts many of the world's largest semiconductor companies among its customers. Founded in 1975, MOSAID is based in Ottawa, Ontario, with offices in Sunnyvale and Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. For more information, visit www.mosaid.com.
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