License Revenues Increased 13% Sequentially and 55% Year-Over-Year
FREMONT, Calif. -- Apr 30, 2008 -- Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry's trusted IP partner and pioneer in Silicon Aware IP(TM) today reported its financial results for the second fiscal quarter ended March 31, 2008.
Revenues for the second quarter of fiscal 2008 were $14.7 million, compared with $10.6 million for the second quarter of fiscal 2007 and $14.1 million for the first quarter of fiscal 2008. License revenue for the second quarter of fiscal 2008 was $12.1 million, compared with $7.8 million for the same period a year ago and $10.8 million for the prior quarter. Royalties for the second quarter of fiscal 2008 were $2.6 million, compared with $2.8 million for the second quarter of fiscal 2007 and $3.3 million for the first quarter of fiscal 2008.
As reported under U.S. generally accepted accounting principles (GAAP), net income for the second quarter of fiscal 2008 was $0.6 million, or $0.03 per share, compared with net loss of $1.8 million, or ($0.08) per share for the second quarter of fiscal 2007 and net income of $1.1 million or $0.05 per share for the first quarter of fiscal 2008.
Excluding the effects of FAS123R stock compensation expense and acquisition related charges, the company would have reported a net income of $1.0 million, or $0.04 per share for the quarter ended March 31, 2008. The reconciliation of GAAP to non GAAP includes $1.0 million of stock-based compensation expense and approximately $143,000 of acquisition related charges and other reduced by $0.8 million tax effect for a net total of $1.0 million.
Dan McCranie, president, chief executive officer and chairman of Virage Logic, said, "License revenue increased 13% sequentially, and 55% year-over-year. This is the highest license revenue the company has posted in 12 quarters. Total revenue, which includes royalties, increased 4% sequentially and 39% year-over-year. The growth in license revenue is a direct result of our efforts in the past year on two key initiatives:
Being first to market with next generation advanced technology products. Our recent introduction of 40nm SiWare(TM) memory compilers and logic libraries underscores our ability to develop and bring to the semiconductor market our feature-rich products at the most advanced foundry nodes.
Broadening our product portfolio. Examples of this include the 'productization' of our enhanced memory compiler and yield analysis tools for sales to our IDM customers, the expansion of our product portfolio to include advanced DDR memory interface IP, and the availability of our compiler and library offerings at all the major semiconductor foundries.
Mr. McCranie continued, "As we mentioned in last quarter's press release, we believe that the semiconductor industry in general continues to outsource building-block IP to third-party providers. We believe that we can benefit from this secular trend. In order to be successful, we must continue to define, develop and execute new business structures, processes and product portfolios to enable deeper, strategic partnerships with our customers."
Mr. McCranie concluded, "We enjoyed strong license bookings in this most recent quarter, including substantial orders from major foundries. In addition, our opportunity pipeline remains strong, particularly in advanced physical IP, as well as our DDR memory interface IP product family. As a result of these two Virage Logic-specific parameters, we continue to be optimistic with regard to our future license revenue growth for our current product portfolio. With regard to royalties, I believe our company will enjoy increased royalty revenue in future quarters, as our customers move their advanced node SoC products into full production. Royalty revenue in current quarters, however, is a reflection of wafer fabrication production at older process nodes. As such, we have seen soft royalty revenues in the first half of fiscal 2008, and we are forecasting continued soft royalty revenues for the third fiscal quarter ending June 30, 2008. However, royalty revenues should increase in the second half of calendar 2008, as our major customers move into production with products on the advanced process nodes."
Virage Logic also announced today its business outlook for the third quarter of fiscal 2008 ending June 30, 2008. The company currently anticipates total license revenues to be in the $12.4 to $13.0M range, or up 3 to 7 percent over the previous quarter. Royalty revenues for third fiscal quarter are projected to be $2.2 to $2.5M. The company expects to report a non-GAAP earnings per diluted share excluding FAS123R stock compensation expense and acquisition related expenses are expected to be in the range of $0.04 to $0.06 for the third fiscal quarter. The company expects $1.0 million of FAS123R stock compensation expense and $1.9 million acquisition related expenses that include $1.8 million of acquisition related performance based payments linked to predefined sales and technology goals for the third quarter of fiscal 2008. Although this news release will be available on the company's website, the company disclaims any duty or intention to update these or any other forward-looking statements. Financial Tables
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Virage Logic's management will hold a teleconference on second-quarter fiscal year 2008 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today, April 30, 2008. Participants can access the call by dialing (888) 413-9033 (domestic) or (706) 679-5076 (international) or can listen via a live Internet webcast, which can be found on the Investor Relations page of the Virage Logic website at www.viragelogic.com. A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 42100059 through May 3, 2008; and the webcast can be accessed at www.viragelogic.com for 30 days.
About Virage Logic
Founded in 1996, Virage Logic Corporation rapidly established itself as a technology and market leader in providing advanced embedded memory intellectual property (IP) for the design of complex integrated circuits. The company's Silicon Aware IP offering (embedded memories, logic libraries and I/Os) includes silicon behavior knowledge for increased predictability and manufacturability. Through its recent acquisition of Ingot Systems, the company has expanded its product offering to include Application Specific IP (ASIP) solutions such as Double Data Rate (DDR) Memory Controllers and design services. The highly differentiated product portfolio provides higher performance, lower power, higher density and optimal yield to foundries, integrated device manufacturers (IDMs) and fabless customers. The company uses its FirstPass-Silicon Characterization Lab(TM) for certain products to help ensure high quality, reliable IP across a wide range of foundries and process technologies. For more information, visit www.viragelogic.com.