License Revenues Increase 18% Quarter Over QuarterFREMONT, Calif. --- Jul 29, 2009
-- Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry's trusted IP partner, today reported its financial results for the third fiscal quarter ended June 30, 2009.
Total revenue for the third quarter of fiscal 2009 was $11.9 million, compared with $11.0 million for the second quarter and $15.1 million for the third quarter of fiscal 2008. License revenue for the third quarter of fiscal 2009 was $10.7 million, compared with $9.1 million for the prior quarter and $12.3 million for the same period a year ago. Royalties for the third quarter of fiscal 2009 were $1.2 million, compared with $1.9 million for the second quarter and $2.8 million for the third quarter of fiscal 2008.
As reported under U.S. GAAP, net loss for the third quarter of fiscal 2009 was $1.9 million, or ($0.08) per share, compared with a net loss of $26.3 million or ($1.15) per share for the second quarter of fiscal 2009 and a net loss of $1.1 million, or ($0.05) per share for the third quarter of fiscal 2008.
Excluding the effects of FAS123R expenses, acquisition related expenses, restructuring charges and amortization of intangibles, the Company would have reported a net loss of $0.7 million, or ($0.03) per share. The reconciliation of GAAP to Non-GAAP financial results includes $0.5 million of stock-based compensation expense, $0.2 million of amortization of intangibles and a net tax effect of $0.5 million for a total of $1.2 million.
Virage Logic President and CEO, Dr. Alex Shubat said, "In our third fiscal quarter, we grew our license revenues by 18% over the second fiscal quarter 2009. This is encouraging in light of the continued challenging global economic environment. As anticipated, royalty revenue came in below the previous quarter due to low foundry wafer shipments occurring in the first calendar quarter of 2009.
"Over two years ago, we embarked on a transformation process which included several operating and product initiatives. We are in the final stages of altering our engineering and marketing organizations to accommodate the company's transition to a predominately standard product versus custom product IP provider. This transition will result in a highly scalable business model for Virage Logic, a model that can accommodate increased creation and/or acquisition of new IP products with a minimum of additional operating costs. Key initiatives that we made particularly significant progress against in the third quarter include:
Broadening our product portfolio. Through our ongoing R&D efforts and inorganic growth initiatives, we have significantly increased our product offerings. In the third fiscal quarter, we reaped the benefits of this strategy with our Intelli(TM) DDR and Intelli(TM) LPDDR memory controller product lines which made a strong contribution to our overall bookings in the quarter. These products offer a full range of both high performance and low power solutions and are being adopted by FPGA and SoC developers worldwide.
Being first-to-market with next generation advanced technology products. As a result of our early leadership at 40nm, we believe our SiWare(TM) Memory and SiWare(TM) Logic products offer the industry's broadest portfolio of silicon proven IP on this technology node. As a result, more than ten customers have adopted our 40nm products and our 40nm royalty revenues are growing. During the quarter, we announced availability of our AEON(R) non-volatile embedded memory on TSMC's 65nm Low Power (LP) process, making it the industry's first multi-time programmable (MTP) logic NVM solution that is commercially available on a 65nm process.
During this quarter, we have seen a strong increase in our sales pipeline in terms of both dollar value and individual deal size. This increase was the result of both internal and external factors. Internally, we saw success in activity as a result of the company's execution on our stated initiatives, particularly with regard to our new product families. Externally, the movement of the large semiconductor IDMs toward a 'fabless' or 'fab-lite' business model is a positive factor and plays to our strengths.
This increase in opportunities resulted in a very strong bookings for the company during the third quarter, as well as in the first four weeks of the fourth quarter. As a result, our license backlog moved up significantly."
Dr. Shubat concluded, "With the positive trend affecting our business the Company should be able to post sequential quarterly license growth in the fourth fiscal quarter. As foundry utilization continues to recover, royalty performance for the fourth quarter, which is based on June ending quarter wafer shipments, should also improve."
"For the fourth quarter fiscal 2009, we are projecting revenues of $13.75 million to $14.75 million and non-GAAP EPS results of $0.01 to $0.04 per share. The Company expects to realize, before tax, approximately $3.0 million to $3.2 million in non-GAAP adjustments comprised primarily of FAS123R stock compensation 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 view financial tables, click hereConference Call
Virage Logic's management will hold a teleconference on third quarter fiscal 2009 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today, July 29, 2009. Participants can access the call by dialing (877) 941-8631 (domestic) or (480) 629-9820 (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) 406-7325 (domestic) or (303) 590-3030 (international), access number 4117030 through August 3, 2009; 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 memory test and repair, logic libraries, memory development software, and interface IP solutions. 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