MoSys, Inc. Reports Third Quarter 2011 Financial Results

SANTA CLARA, Calif., Nov 03, 2011-- MoSys, Inc., (NASDAQ: MOSY), a leading provider of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems and advanced system-on-chip (SoC) designs, today reported financial results for the third quarter ended September 30, 2011.

Third Quarter and Recent Highlights

• Ended the quarter with total cash and investments of $26.4 million;
• Announced availability of a Bandwidth Engine® FPGA Companion and Characterization Kit;
• Announced interoperability of the Bandwidth Engine integrated circuit (IC) family with Avago's SerDes;
• Bandwidth Engine IC named a finalist for the prestigious UBM TechInsights Most Innovative Memory Product award; and
• Achieved first design wins for the Bandwidth Engine IC.

Management Commentary

"Revenue from license fees and royalties in the third quarter declined sequentially as our IP business was negatively impacted by global economic conditions and delays in customer acceptance of IP delivered under existing projects," commented Len Perham, MoSys' President and Chief Executive Officer. "Despite the current environment, we remain focused on further advancing our Bandwidth Engine family of ICs by continuing to engage with a growing list of prospective customers and partners. We recently achieved our first Bandwidth Engine design wins with two high-performance board suppliers. Additionally, the Bandwidth Engine IC is now being incorporated into system schematics at a number of design wins in progress with global networking equipment suppliers.

"During the quarter, we continued to make progress successfully demonstrating the interoperability of our Bandwidth Engine IC with high-performance network processing ASICs, such as those available from Avago Technologies. This achievement expands on our current interoperability success with FPGA devices from both Altera Corporation and Xilinx. We continue to work with both the network equipment companies and their SOC suppliers to further expand the acceptance and use of our GigaChip(TM) Interface for serial chip-to-chip applications in their future generations of line cards. Finally, we have now fully defined our next generation IC, Bandwidth Engine 2, and it has been released to the design team. Bandwidth Engine 2 will include significant performance upgrades and feature enhancements. We are very enthusiastic about the ongoing adoption of our revolutionary Bandwidth Engine family of products and look forward to sharing this information as it becomes available," concluded Mr. Perham.

Third Quarter Results

Total net revenue for the third quarter of 2011 was $2.1 million, compared with $3.3 million reported in the second quarter of 2011 and $3.8 million in the third quarter of 2010.

Third quarter 2011 total revenue included licensing revenue of $0.8 million, compared with $1.2 million for the previous quarter and $1.5 million for the third quarter of 2010. Third quarter 2011 royalty revenue was $1.4 million, compared with $2.1 million in the previous quarter and $2.3 million for the third quarter of 2010.

Gross margin for the third quarter of 2011 was 83 percent, compared with 86 percent in the second quarter of 2011 and 81 percent for the third quarter of 2010.

Total operating expenses on a GAAP basis for the third quarter of 2011 were $8.6 million, compared with $8.5 million in the previous quarter and $9.2 million for the third quarter of 2010. Third quarter 2011 operating expenses included $0.7 million of amortization of intangible assets and $0.9 million of stock-based compensation expense.

GAAP net loss for the third quarter of 2011 was $6.9 million, or ($0.18) per share, compared with a net loss of $5.7 million, or ($0.15) per share, in the previous quarter and a net loss of $6.2 million, or ($0.19) per share, for the third quarter of 2010. The non-GAAP net loss for the third quarter of 2011 was $5.3 million, or ($0.14) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the third quarter of 2011 were computed using approximately 38.1 million shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Financial Tables

To read financial tables, click here

Financial Results Webcast / Conference Call

MoSys will host a conference call and webcast with investors today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the third quarter 2011 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-866-277-1181 in the U.S. (1-617-597-5358) outside of the U.S.), and entering the pass code 18619848 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys Web site at http://www.mosys.com. A telephone replay will be available for two business days following the call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.), pass code of 50026134.

About MoSys, Inc.

MoSys, Inc. (NASDAQ: MOSY) is a leading provider of high-performance networking memory solutions and high-speed, multi-protocol serial interface intellectual property (SerDes IP). MoSys' leading edge Bandwidth Engine® ICs combine the company's patented 1T-SRAM® high-density memory with its SerDes IP and are initially targeted at providing breakthroughs in bandwidth and access performance in next generation networking systems. MoSys' SerDes IP and DDR3 PHYs support a wide range of data rates across a variety of standards, while its 1T-SRAM memory cores provide a combination of high-density, low-power consumption, high-speed and low cost advantages for high-performance applications. MoSys is headquartered in Santa Clara, California. More information is available on MoSys' website at http://www.mosys.com.