Achieves Profitability in Fourth Quarter Due to Increased Royalty RevenueSUNNYVALE, Calif. -- 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
Fourth Quarter Results
- 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
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™ 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™ 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.Financial Tables
to read financial tablesFourth 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 http://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.ABOUT MOSYS, INC.
Founded in 1991, MoSys [NASDAQ: MOSY], develops, licenses and markets innovative memory technologies for semiconductors. MoSys' patented 1T-SRAM technologies offer a combination of high density, low power consumption, high speed and low cost unmatched by other available memory technologies. The single transistor bit cell used in 1T-SRAM memory results in the technology achieving much higher density than traditional four or six transistor SRAMs while using the same standard logic manufacturing processes. 1T-SRAM technologies also offer the familiar, refresh-free interface and high performance for random address access cycles associated with traditional SRAMs. In addition, these technologies can reduce operating power consumption by a factor of four compared with traditional SRAM technology, contributing to making them ideal for embedding large memories in System on Chip (SoC) designs. MoSys’ licensees have shipped more than 100 million chips incorporating 1T-SRAM embedded memory technologies, demonstrating excellent manufacturability in a wide range of silicon processes and applications. MoSys is headquartered at 755 N. Mathilda Avenue, Sunnyvale, California 94085. More information is available on MoSys' website at http://www.mosys.com