Record License and Royalty Revenue
FREMONT, Calif., May 05, 2010-- Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry's trusted IP partner, today reported its financial results for the second fiscal quarter ended March 31, 2010. Total revenue for the second quarter of fiscal 2010 was $25.2 million, compared with $11.0 million for the second quarter of fiscal 2009 and $21.7 million for the first quarter of fiscal 2010. License and maintenance revenue for the second quarter of fiscal 2010 was $19.2 million compared with $9.1 million for the same period a year ago and $16.9 million for the prior quarter. Royalty revenue for the second quarter of fiscal 2010 was $6.0 million, compared with $1.9 million and $4.7 million for the second quarter fiscal 2009 and first quarter of fiscal 2010, respectively.
As reported under U.S. generally accepted accounting principles (GAAP), net loss was $1.1 million, or ($0.04) per share, for the second quarter of fiscal 2010 compared to a net loss for the second quarter of fiscal 2009 of $26.3 million, or ($1.15) per share, and net loss of $2.2 million, or ($0.09) per share for the first quarter of fiscal 2010.
On a non-GAAP basis, excluding the effects of stock-based compensation expenses, acquisition related expenses and amortization of intangibles, the company would have reported total net income after tax of $2.1 million, or $0.08 per fully diluted share.
Non-GAAP net income excludes $1.7 million of stock-based compensation expense and $2.8 million of amortization of intangibles and other acquisition related charges reduced by $1.3 million tax effect for a net total exclusion of $3.2 million.
Virage Logic President and CEO, Dr. Alex Shubat said, "During the past several years, we've focused on all those corporate efforts necessary for building out our IP product portfolio through new product development as well as selective acquisitions. The positive results of these efforts were made apparent in our first quarter of fiscal 2010, when we achieved a record $21.7 million in revenue. Now, for the second quarter of fiscal 2010, we are posting another record revenue of $25.2 million. This revenue number represents a 17% quarter over quarter growth, and a 129% year over year increase. License and maintenance revenues increased 14% to $19.2 million during the quarter, while royalty revenue climbed 26% to $6.0 million. This robust increase in royalty revenue was a result of both increased sales of advanced technology semiconductor wafers from our foundry partners, and royalty income from semiconductor manufacturers for our ARC
processor product portfolio.
"License bookings during the quarter were strong and greater than our license revenue. In fact, our license book-to-bill ratio has been above unity for each of the last four quarters. We now enjoy a record license backlog. This backlog growth, coupled with the increase we see in new opportunities, gives us both comfort and confidence.
"We continue to believe that the recent growth in demand for our products is a result of both our increased product offering and a seminal change occurring in the semiconductor industry towards the use of third-party wafer foundries by almost every SoC integrated circuit manufacturer, including most major IDMs. This change is, we believe, partly responsible for further disaggregation in the semiconductor space, resulting in the increased use of standard third-party IP.
"During the quarter, we continued to expand our IP building block portfolio. We announced the availability of our SiPro(TM) Mobile Industry Processor Interface (MIPI) PHY and controller IP on the 40nm LP process node to target the mobile market. These products are created using the production proven IP that we licensed from AMD in early 2009.
"In the area of physical IP on advanced process nodes, we believe we have not only maintained but extended our early leadership position at 40nm. Today, more than 40 customers are actively designing SoCs at this node using our IP. We also continue our early leadership at 28nm and today count five customers, three of which are end customers, on this advanced node. We believe our SiWare(TM) Memory, SiWare(TM) Logic and High Speed Interface products offer the industry's broadest portfolio of silicon proven IP."
Dr. Shubat concluded, "For the third quarter fiscal 2010, we are projecting revenues of $26.0 million to $27.0 million and non-GAAP EPS results of $0.10 to $0.13 per share. Included in this forecast is an estimate of $0.01 from our Strategic Outsourcing business, acquired from NXP in mid-first quarter fiscal 2010. We had previously forecasted that this Strategic Outsourcing business would not contribute positively to our corporate EPS until fourth quarter fiscal 2010.
"We have now finalized our NXP IP business and productization plans and are scaling the operation accordingly; therefore, in the third quarter fiscal 2010, we will take a one-time restructuring charge of approximately $5.7 million to $6.0 million. The company expects to realize, before tax, a total of approximately $10.0 million to $10.5 million in non-GAAP adjustments in the third quarter, comprised primarily of the NXP IP business transition and restructuring costs, FAS123R stock-compensation, amortization and other acquisition-related expenses."
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Virage Logic's management will hold a teleconference on second fiscal quarter 2010 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today, May 5, 2010. Participants can access the call by dialing (866) 225-8754 (domestic) or (480) 629-9692 (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 4285984 through May 7, 2010; and the webcast can be accessed at www.viragelogic.com for 90 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 processor solutions, interface IP solutions, embedded SRAMs and NVMs, embedded test and yield optimization solutions, logic libraries, and memory development software. As the semiconductor industry's trusted IP partner, more than 400 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.