Virage Logic Reports Record Operating Results for Fourth Quarter and Fiscal year 2001 Posts Twelfth Consecutive Quarter of Growth in Pro Forma Operating Income on Continued Sequential Revenue Growth
FREMONT, Calif.--(BUSINESS WIRE)--Nov. 1, 2001-- News Release Highlights:
- Record Q4 revenues of $9.1 million, up 59 percent year over year and seven percent sequentially
- Record Q4 pro forma operating income(1) of $1.1 million, up 196 percent year over year and up 23 percent sequentially
- Q4 pro forma net income(1) of $1.1 million, or $0.05 per diluted share
- Q4 GAAP (reported) net income of $234,000 or $0.01 per diluted share
Virage Logic Corp. (Nasdaq:VIRL
), a leader in embedded memory, today reported record financial results for the fourth quarter and fiscal year of 2001.
For the fourth quarter ended September 30, 2001, revenues were $9.1 million, up 59 percent from $5.7 million a year ago, and up seven percent sequentially from $8.5 million for the prior quarter. Total license revenue for the fourth quarter was $8.9 million, compared with total license revenue of $5.7 million for the same quarter a year ago, and up sequentially from total license revenue of $8.3 million. Royalties for the fourth quarter of fiscal 2001 were $176,000, compared with royalties of $53,000 for the year-ago period and royalties of $164,000 for the previous quarter.
Pro forma net income for the fourth quarter was $1.1 million, or $0.05 per diluted share, compared with $645,000, or $0.03 per diluted share, for the year-ago quarter. Pro forma net income for the fourth quarter included operating income of $1.1 million and net interest income of $624,000, less a tax provision of $643,000.
Actual net income for the fourth quarter of fiscal 2001, including non-cash amortization expenses for deferred stock compensation and warrants of $1.2 million, was $234,000, or profit of $0.01 per share. Actual net loss for the same period a year ago, including non-cash amortization expenses for deferred stock compensation and warrants of $2.3 million, was $1.5 million, or a loss of $0.10 per share.
"We're very pleased with our continued strong financial performance and the sequential improvement in our revenues, despite worsening economic conditions," said Adam Kablanian, president and chief executive officer. "Our fiscal fourth quarter marked our twelfth consecutive quarter of profitable revenue growth, excluding non-cash charges. This attests to the increasing importance that customers are placing on our embedded memories and semiconductor intellectual property, which enable them to cost- effectively bring their chip designs to market quickly in the highly competitive semiconductor industry."
Kablanian continued, "During fiscal 2001, we made significant inroads in pursuing our strategy, enabling Virage Logic to take advantage of semiconductor industry trends and market growth opportunities. These initiatives included key product introductions, such as our STAR Memory System, which increases yield and lowers silicon costs through self-test and repair, and continued proliferation of 0.13-micron embedded memory technologies across all the leading third-party foundries. We believe that each of these initiatives should allow us to capture multiple revenue streams from both licensing and royalties as we move forward."
For fiscal year 2001, total revenues were $31.8 million, up 62 percent from $19.7 million for the prior year. Pro forma net income was $4.0 million, or $0.20 per diluted share. For fiscal 2000, pro forma net income was $1.1 million, or $0.07 per diluted share.
Actual net loss for fiscal 2001, including non-cash amortization expenses for deferred stock compensation and warrants of $6.3 million, was $2.1 million, or a loss of $0.11 per share. Actual net loss for the same period of fiscal 2000, including non-cash amortization expenses for deferred stock compensation, warrants and Series C redeemable convertible preferred stock of $16.9 million, was $15.8 million, or a loss of $1.98 per share.
Additional Recent Business Highlights
During the fourth quarter, and, more recently, Virage Logic:
- Announced that it will be the first memory provider to deliver embedded memory on Taiwan Semiconductor Manufacturing Company's (TSMC) 0.10-micron process standard, giving system-on-chip designers an early lead in simulating and floor-planning their 0.10-micron designs based on TSMC's process
- Announced that MIPS Technologies (Nasdaq:MIPS - news, MIPSSB - news) licensed Virage Logic's Custom-Touch(TM) Area, Speed and Power (ASAP) SRAM embedded memories for use in its 32-bit hard cores for digital consumer and networking applications and had joined the Virage Logic Memory Alliance Program to help expand the market for embedded memories
- Introduced binary NetCAM B-128K content-addressable memory (CAM) to Virage Logic's NetCAM(TM) product family, which includes embedded memories that generate both high-speed ternary and binary CAMS, key enablers in moving traffic through a network
- Completed additional direct royalty agreements for STAR Memory System products, including four agreements in which the customer purchased the embedded test and repair processor bringing the total number to 20 licensees
- Generated revenues from 47 customers - 36 existing and 11 new - including Agere, Alphamosaic, Avaz, IDT, Lightspeed and Tripath.
Virage Logic also reported today its current outlook for the first quarter and full year of fiscal 2002. Forward-looking statements for these periods are based on current expectations. Actual results may vary materially.
Virage Logic's expectations of first-quarter results are as follows:
- Revenues of approximately $9.5 million to $9.7 million
- Gross margin of about 80 percent
- Operating expenses of approximately $6.2 million to $6.4 million
- Net interest income of about $475,000, due to continued softening in interest rates
- Effective tax rate of 37 percent.
Virage Logic's expectations for full year fiscal 2002 results are as follows:
- Revenues of approximately $44 million to $46 million
- Gross margin of about 80 percent
- Operating expenses of approximately $28 million to $30 million
- Net interest income of about $1.5 million, due to continued softening in interest rates
- Effective tax rate of 37 percent.
Webcast and Taped Replay
An archived webcast of management's conference call regarding the company's fourth-quarter results is available to all investors on the Virage Logic website at http://www.viragelogic.com/company/ir.html. The webcast will be available until November 15, 2001. In addition, a telephonic replay will be available until this date at 800-633-8284, or 858-812-6440 (international callers), access code 19789339.
About Virage Logic
Virage Logic is a technology and market leader in embedded memory. To meet customer design goals with the highest level of quality, Virage Logic products are production tested, and optimized for area, power and speed. These products include embedded memory cores, which are critical components of communications, consumer and computer products including switches, routers, modems, cellular phones, set-top boxes, HDTVs, DVD players and PCs. In addition, the company offers software tools and custom memory design services. The company's customers include fabless semiconductor companies targeting pure-play foundries and semiconductor companies. Founded in January 1996, the company has over 200 employees and its headquarters are located at 46501 Landing Pkwy., Fremont, Calif., 94538. Telephone: (877) 360-6690 (toll free) or (510) 360-8000. Fax: (510) 360-8099. For more information, please visit www.viragelogic.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This news release includes forward-looking statements, each of which is subject to a number of known and unknown risks and uncertainties which might cause actual performance to differ materially from that expressed or implied by such statements. These risks and uncertainties include Virage Logic's ability to maintain and develop new relationships with third-party foundries, adoption of technologies by semiconductor companies and increases in the demand for their products, the company's ability to overcome the challenges associated with establishing licensing relationships with semiconductor companies, the company's ability to obtain royalty revenues from customers in addition to license fees, business and economic conditions generally and in the semiconductor industry in particular, competition in the market for embedded memories and other risks including those described in the Company's Annual Report on Form 10-K for the period ended September 30, 2000, filed with the Securities and Exchange Commission (SEC) on December 26, 2000, and in Virage Logic's other periodic reports filed with the SEC, all of which are available from Virage Logic or from the SEC's website (www.sec.gov), and in press releases and other communications.
Virage Logic Corporation
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