Virage Logic Reports Fourth Quarter and Fiscal Year 2009 Results
Revenues Increase 10% Quarter Over Quarter
FREMONT, Calif. -- Nov 02, 2009 -- 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, 2009.
For fiscal 2009, total revenues were $47.4 million compared to $59.3 million for the prior year. Revenues for the fourth quarter of fiscal 2009 were $13.1 million, compared with $15.5 million for the fourth quarter of fiscal 2008 and $11.9 million for the third quarter of fiscal 2009.
License and maintenance revenue for the fourth quarter of fiscal 2009 was $10.9 million, compared with $12.1 million for the same period a year ago and $10.7 million for the prior quarter. Royalties for the fourth quarter of fiscal 2009 were $2.2 million, compared with $3.4 million for the fourth quarter of fiscal 2008 and $1.2 million for the third quarter of fiscal 2009.
Net loss for the fourth quarter ended September 30, 2009 on a GAAP basis was $3.2 million, or $(0.14) per share, compared with a net loss of $47,000, or $(0.00) per share in the fourth quarter of 2008. For the 2009 fiscal year net loss was $34.1 million or ($1.48) per share fully diluted compared to net income of $0.6 million or $0.02 per share for fiscal 2008.
On a non-GAAP basis which excludes the effects of stock-compensation expense, restructuring and acquisition-related charges, the company would have reported a net income of $0.5 million, or $0.02 per share for the quarter ended September 30, 2009 and a net loss of $3.4 million or $0.15 per share for the full fiscal year ended September 30, 2009. The reconciliation of GAAP to non-GAAP for the quarter includes $1.5 million of stock-based compensation expense, $1.4 million of deferred tax allowance and approximately $3.7 million of acquisition-related charges reduced by $2.9 million tax effect for a net total of $3.7 million.
Virage Logic President and CEO, Dr. Alex Shubat, said, "We grew our license revenues from $10.7 million in the third quarter to $10.9 million in the fourth quarter. Our royalty revenue grew from $1.2 million to $2.2 million as foundry utilization increased.
Fiscal 2009 was a pivotal year for the company and we are proud of the progress we made on our transformation goals, especially in light of the challenging global economic environment. As we outlined in early 2007, our transformation goals included:
Broadening our product portfolio. Through a combination of ongoing R&D efforts and inorganic growth initiatives, our product offerings quadrupled. This resulting non-captive SAM (served available market) grew from $200 million in 2007 to approximately $1 billion in 2010, positioning us well to serve as a single source supplier of a broad range of semiconductor IP.
- The acquisition of ARC International expanded our product portfolio to include microprocessor cores and media subsystems and software, representing the largest segment of the semiconductor IP market. With approximately $24 million in revenue for the trailing twelve months ended June 30, 2009 and over 150 customers, ARC should contribute meaningful scale to our business.
- Our recently announced agreement with NXP transfers part of their advanced CMOS IP portfolio and engineering talent to Virage Logic in a long-term licensing and IP development relationship between the two companies. NXP will pay Virage Logic $60 million over four years from the closing of the transaction which is expected to occur by the end of calendar year 2009.
- Early this year, we announced a licensing agreement with AMD that granted us the rights to license modify and sell high speed interfaces including PCI Express, HDMI/DVI/DisplayPort and MIPI IP. In the fourth fiscal quarter, we rolled out this new product line to market. The high speed interface business unit posted record bookings in Q4 and is poised for significant growth in 2010.
Being first-to-market with next generation advanced technology products. As a result of our early leadership at 40nm and more recently at 28nm, 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. Today about 15 customers are actively designing SoCs with our 40nm IP, contributing to about 25 tape-outs over the next six months thereby enabling our 40nm royalty revenues to continue growing. Also, during the quarter, we booked our 4th deal in the 28/32nm node. Specifically, we are very proud of this deal as it represents our first multi-year, multi-million dollar 28nm engagement with an end customer, a leading IDM.
Fiscal 2009 marked an inflection point and represented a pivotal year for Virage Logic. We executed well on our inorganic growth initiatives, made continued significant progress on becoming a standard product company versus custom shop, and established deeper, strategic engagements. Our sales pipeline continues to increase and points to strong future growth in terms of both dollar value and individual deal size. Finally, the continuing shift the large semiconductor IDMs are making towards a 'fabless' or 'fab-lite' business model, plays to our core strengths and enables us to serve as an increasingly trusted IP partner."
Dr. Shubat concluded, "As a result of all the progress that I've itemized above, as well as very strong license bookings for the past two quarters, we are entering Fiscal 2010 with record backlog. Beginning in fiscal 2009, we have worked with our major customers in constructing license contracts that will reflect longer term ratable revenue streams for our company. During the past two quarters, we were successful in booking several large, ratable agreements with major IDMs.
This strong backlog, coupled with the recent acquisitions and IP agreements of the past year, will enable our company to enjoy record license revenue in Fiscal 2010. In addition, we believe that revenue from royalties will increase sharply in fiscal 2010, as a result of strong growth in semiconductor wafer shipments.
For the first quarter fiscal 2010, we are projecting revenues of $18.5 million to $19.0 million and non-GAAP eps results of $0.02 to $0.04 per share. The Company expects to realize, before tax, approximately $2.6 million to $2.8 million in non-GAAP adjustments comprised primarily of 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.
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Virage Logic's management will hold a teleconference on fourth quarter and fiscal year 2009 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today, November 2, 2009. Participants can access the call by dialing (877) 941-9205 (domestic) or (480) 629-9835 (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 4171278 through November 7, 2009; and the webcast can be accessed at www.viragelogic.com for 30 days.
About Virage Logic
Virage Logic is a leading provider of both functional and physical semiconductor intellectual property (IP) for the design of complex integrated circuits. The company's highly differentiated product portfolio includes processor centric solutions, interface IP solutions, embedded SRAMs and NVMs, embedded memory test and repair, logic libraries, and memory development software. As the industry's trusted semiconductor IP partner, more than 350 foundry, IDM 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 http://www.viragelogic.com.