FREMONT, Calif.--Jan. 31, 2007--Virage Logic Corporation (Nasdaq:VIRL), the semiconductor industry's trusted IP partner and pioneer in Silicon Aware IP(TM), today reported financial results for the first quarter of fiscal year 2007 ended December 31, 2006.
In line with our previous announcement, revenue for the first quarter of fiscal 2007 was $11.5 million, compared with $13.7 million for the comparable quarter of fiscal 2006 and $15.0 million in the prior quarter. License revenue for the first quarter of fiscal 2007 was $8.4 million compared to $10.4 million in the first quarter of fiscal 2006 and $11.3 million in the previous quarter. Royalties for the first quarter of fiscal 2007 were $3.1 million, compared with $3.3 million for the first quarter of fiscal 2006 and $3.7 million in the prior quarter.
As reported under U.S. generally accepted accounting principles (GAAP), net loss for the first quarter of fiscal 2007 was $1.2 million, or $0.05 per share, compared with a net loss of $0.2 million, or $0.01 per share, for the same period a year ago and with net income of $0.8 million, or $0.03 per share, for the fourth quarter of fiscal 2006.
Excluding the effects of FAS123R, the company would have reported a net loss of $0.2 million, or $0.01 per share. Net loss for the first quarter of fiscal 2007 included $1.7 million of FAS123R stock-based compensation expense related to $1.5 million of equity incentive compensation expense and $0.2 million related to custom contracts.
Dan McCranie, president and chief executive officer of Virage Logic, said, "Clearly, the results of the quarter are not acceptable to our management team and we are reviewing all operational activities in order to make the necessary adjustments that will accelerate sales momentum. For the immediate future, I am assuming direct responsibility of the marketing and demand creation part of the organization and will be working closely with the staff to refocus our efforts on driving sales growth to the maximum extent possible."
Mr. McCranie continued, "Our revenue miss for this first quarter of fiscal 2007 was the result of two factors: poor revenue turns bookings and an un-forecasted reduction in royalty revenue from Q4 fiscal 2006. We are vigorously addressing both of these issues within our company. While we are encouraged that much of the customer license bookings opportunities from last quarter were delayed, rather than lost or cancelled, we will remain cautious in the short term with regard to future guidance. Accordingly, we anticipate total revenues of approximately $10.5 million to $12 million in the second fiscal quarter of 2007. License revenues are expected at $8 million to $9 million and royalty revenues are expected at $2.5 million to $3 million. The company expects to report a GAAP net loss of approximately $0.07 to $0.11 per share. The company also expects $1.2 million of stock-based compensation expense per FAS123R. Without the impact of stock-based compensation expense, the company would expect loss per share of $0.04 to $0.08 for the second fiscal quarter."
Virage Logic's management plans to hold a teleconference on first-quarter 2007 results at 1:30 p.m. PT / 4:30 p.m. ET today, January 31, 2007. A live webcast of management's teleconference regarding first-quarter results will be available to all investors, and an archived webcast will be available from January 31, 2007 until January 31, 2008 on the Investor Relations page of Virage Logic's website at http://www.viragelogic.com. In addition, a telephonic replay will be available through February 7, 2007 at (719) 457-0820, access code 8839640.
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About Virage Logic
Founded in 1996, Virage Logic Corporation (NASDAQ:VIRL) rapidly established itself as a technology and market leader in providing advanced embedded memory intellectual property (IP) for the design of complex integrated circuits. Today, as the semiconductor industry's trusted IP partner, the company is a global leader in IP platforms comprising embedded memories, logic, and I/Os, and is pioneering the development of a new class of IP called Silicon Aware IP(TM). Silicon Aware IP tightly integrates Physical IP (memory, logic and I/Os) with the embedded test, diagnostic, and repair capabilities of Infrastructure IP to help ensure manufacturability and optimized yield at the advanced process nodes. Virage Logic's highly differentiated product portfolio provides higher performance, lower power, higher density and optimal yield to foundries, integrated device manufacturers (IDMs) and fabless customers who develop products for the consumer, communications and networking, hand-held and portable, and computer and graphics markets. The company uses its FirstPass-Silicon(TM) Characterization Lab for certain products to help ensure high quality, reliable IP across a wide range of foundries and process technologies. The company also prides itself on providing superior customer support and was named the 2006 Customer Service Leader of the Year in the Semiconductor IP Market by Frost & Sullivan. Headquartered in Fremont, California, Virage Logic has R&D, sales and support offices worldwide. For more information, visit www.viragelogic.com.