Company Returns to Profitability and Revenues Increase 28% Year-Over-YearFREMONT, Calif. -- Nov 03, 2008
-- Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry's trusted IP partner, today reported its financial results for the fourth quarter and fiscal year ended September 30, 2008.
For fiscal 2008, total revenues were $59.3 million compared to $46.5 million for the prior year. Revenues for the fourth quarter of fiscal 2008 were $15.5 million, compared with $13.1 million for the fourth quarter of fiscal 2007 and $15.1 million for the third quarter of fiscal 2008.
License and maintenance revenue for the fourth quarter of fiscal 2008 was $12.1 million, compared with $9.9 million for the same period a year ago and $12.3 million for the prior quarter. Royalties for the fourth quarter of fiscal 2008 were $3.4 million, compared with $3.2 million for the fourth quarter of fiscal 2007 and $2.8 million for the third quarter of fiscal 2008.
Net loss for the fourth quarter ended September 30, 2008 on a GAAP basis was $47,000, or $(0.00) per share, compared with a net loss of $0.4 million, or ($0.02) per share for the fourth quarter of fiscal 2007. For the 2008 fiscal year net income was $0.6 million or $0.02 per share fully diluted compared to a loss of $4.6 million or ($0.20) per share for fiscal 2007.
On a non-GAAP basis which excludes the effects of FAS123R stock compensation expense, restructuring and acquisition related charges, the company would have reported a net income of $0.9 million, or $0.04 per share for the quarter ended September 30, 2008 and $4.8 million or $0.20 per share for the full fiscal year ended September 30, 2008. The reconciliation of GAAP to non-GAAP includes $1.4 million of stock-based compensation expense and approximately $0.2 million of acquisition related charges reduced by $0.7 million tax effect for a net total of $0.9 million.
Dan McCranie, executive chairman for Virage Logic, said, "Our Company performed well in almost every department last year. Out of our total fiscal 2008 revenue of $59.3 million, license and maintenance revenue for the year was at an historical high of $47.3 million and our earnings of $0.04 per share on a non-GAAP basis was the fifth quarter of consecutive non-GAAP profitability. In addition to these metrics, we also made good progress on the key transformative initiatives we established early in fiscal 2007, including the following:
Being first-to-market with next generation advanced technology products. We introduced our 40nm SiWare(TM) memory compiler and logic library IP and introduced our Intelli(TM) DDR3 memory controller interface IP on the 65-nanometer (nm) process node. I'm also particularly proud of the early successes we have had on the 32nm process node. In the fourth quarter, we taped out our first 32nm test chip and booked our first 32nm customer engagement with a major IDM.
Broadening our product portfolio. Our stated goal was to broaden our product portfolio through both organic and inorganic growth. During the year we executed well on this initiative and as a result we were able to expand our customer base, broaden our product offerings and increase our revenue. The acquisition of Ingot Systems in late fiscal 2007 established our Application Specific IP (ASIP) product line - comprising our advanced DDR offerings -- and in fiscal 2008 we experienced good acceptance with this new product line. In late fiscal 2008, we acquired Impinj Incorporated's IP business, thus broadening our non-volatile memory (NVM) electrically alterable product offerings and establishing ourselves as the NVM market leader. On the organic product front, in addition to our SiWare product family, we also introduced the latest release of the STAR(TM) Memory System that features an open memory interface to give designers the freedom to use the system's capabilities with their choice of Virage Logic memories, other commercially available third-party memories or internally developed embedded memories.
Building Virage Logic into a company that is a Trusted IP Partner in the industry. We made strong progress on this initiative through deeper engagements with long standing customers such as AMD, ADI, CSR, and four more tier one IDM partners, as well as through deeper strategic engagements with our foundry partners. We also engaged with numerous new customers including NextIO, 3Leaf, Movidia and a leading FPGA provider.
Improvement in royalties from advanced nodes. During this past quarter, we saw growth in royalties from our advanced node products, particularly at the 65 and 55nm process nodes. This contributed to total royalties for the fourth quarter of $3.4 million, a 19.7% increase over the previous quarter. We believe we will see increasing royalties at these advanced nodes in future quarters.
Mr. McCranie continued, "As a result of the work done by all of our employees this past year, we significantly expanded our bookings opportunity pipeline for fiscal Year 2009. This was a result of both organic and inorganic product line expansion, as well as a much improved demand creation program, enabling Virage Logic to engage on a broader and deeper basis with our global customer base. I am proud and appreciative of the efforts of our talented employees as we executed well on our transformation initiatives.
As we began fiscal 2009, we announced the promotion of Dr. Alex Shubat, Virage Logic's co-founder and chief operating officer, to president and chief executive officer, and my appointment to executive chairman. Alex provided the innovation leadership and strong management direction during the early phases of our transformation and it was with great confidence that I relinquished the CEO role, with all the responsibilities that the position holds, to him in early October. As executive chairman, I will focus on corporate strategies, demand creation, investor relations and merger and acquisition activities. Both Alex and I believe that, with this change, we can accelerate the drive to make our company the largest and most trusted IP partner in the semiconductor industry."
Dr. Alex Shubat stated, "As Dan noted, we made significant progress on our transformation initiatives in fiscal 2008. As we enter fiscal 2009, we have a strong executive team in place, a new product line operational structure, and robust, scalable productivity programs that I believe will enable us to make strong progress against our transformation goals. In terms of our business outlook for the first quarter of fiscal 2009, we enter the quarter with a strong opportunity pipeline and we believe that we are starting to see the increases in royalties as a result of the strong 65 and 55 nm license wins of fiscal 2007 and 2008. In projecting forward revenue, however, these positives must be weighed against the cautious outlook coming from our foundry partners, semiconductor IDM customers and fabless IC customers. Accordingly, we are being conservative in our outlook and are forecasting total revenue that will be flat to slightly up for the first quarter of fiscal 2009 as compared to the fourth quarter of fiscal 2008."
"In summary, we anticipate first quarter fiscal 2009 revenues of $15.5 million to $16.0 million and non-GAAP earnings per share of $0.02 to $0.04 per share. The company expects approximately $1 million in non-GAAP expense comprised of FAS123R stock compensation expense and acquisition related expenses."
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
to download financial tablesConference Call
Virage Logic's management will hold a teleconference on fourth-quarter and fiscal year 2008 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today, November 3, 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 68805118 through November 6, 2008; and the webcast can be accessed at www.viragelogic.com
for 30 days.About Virage Logic
Virage Logic is a leading provider of semiconductor intellectual property (IP) for the design of complex integrated circuits. The company's highly differentiated product portfolio includes embedded SRAMs, embedded NVMs, embedded test and repair, logic libraries, memory development software, and DDR memory controller subsystems. As the industry's trusted semiconductor IP partner, foundries, IDMs and fabless customers rely on Virage Logic to achieve higher performance, lower power, higher density and optimal yield, as well as shorten time-to-market and time-to-volume. For further information, visit www.viragelogic.com