SANTA CLARA, Calif.---Feb. 7, 2012-- MoSys, Inc., (NASDAQ: MOSY), a 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 fourth quarter and fiscal year ended December 31, 2011.
Fourth Quarter and Year 2011 Highlights
- Reported full year 2011 revenue of $14.1 million;
- Increased fourth quarter revenue to $5.2 million, up 30 percent over the prior year period;
- Raised $35 million through a patent sale, ending the year with total cash and investments of $58 million;
- Announced and demonstrated interoperability of the Bandwidth Engine® integrated circuit (IC) family with SerDes from Avago Technologies and with FPGA devices from Altera Corporation and Xilinx, Inc.;
- Established new distribution channel partnerships for the Bandwidth Engine IC in China and Japan;
- Achieved first design wins for the Bandwidth Engine IC; and
- Achieved ISO 9001:2008 certification.
“During the fourth quarter, we significantly strengthened our cash position through the $35 million sale of a portion of our memory technology patent portfolio. We are very pleased to have completed this transaction, which provides us with ample funding to advance the development of our Bandwidth Engine IC business,” said Len Perham, MoSys’ President and Chief Executive Officer. “We are now well positioned to focus on executing our strategy to become an IP-rich fabless semiconductor company.
“In addition to the patent sale, fourth quarter financial results reflected a strong increase in revenue driven by completion of milestones on IP licensing projects, as well as ongoing royalty revenue. In the coming quarters, our primary focus will be to drive demand and achieve additional design wins for our Bandwidth Engine IC family.
“From a technology perspective, in 2012, we will also continue to focus on R&D activities for our Bandwidth Engine product roadmap, while closely managing our operating costs. MoSys recently earned ISO 9001:2008 certification for its IC operations, which is a significant step toward achieving enterprise-grade quality and furthering its evolution as an IP-rich fabless semiconductor company,” concluded Mr. Perham.
Fourth Quarter Results
Total net revenue for the fourth quarter of 2011 was $5.2 million, compared with $2.1 million reported in the third quarter of 2011 and $4.0 million in the fourth quarter of 2010.
Fourth quarter 2011 total revenue included licensing revenue of $2.7 million, compared with $0.8 million for the previous quarter and $1.4 million for the fourth quarter of 2010. Fourth quarter 2011 royalty revenue was $2.5 million, compared with $1.4 million in the previous quarter and $2.6 million for the fourth quarter of 2010.
Gross margin for the fourth quarter of 2011 was 66 percent, compared with 83 percent in the third quarter of 2011 and 81 percent for the fourth quarter of 2010. The sequential decrease in gross margin was due to higher costs associated with the increased license revenue.
Total operating expenses on a GAAP basis for the fourth quarter of 2011 were a net gain of $26.5 million, which was attributable to a one-time gain of $35.6 million from the Company’s sale of memory technology patents. Operating expenses also included $9.1 million in R&D and SG&A expense. Total operating expenses also included $0.7 million of amortization of intangible assets and $1.0 million of stock-based compensation expense. Fourth quarter 2011 R&D and SG&A total operating expenses of $9.1 million compared with $8.6 million in the previous quarter and $8.9 million for the fourth quarter of 2010.
GAAP net income for the fourth quarter of 2011 was $29.8 million, or $0.75 per diluted share, compared with a net loss of $6.9 million, or ($0.18) per share, in the previous quarter and a net loss of $5.7 million, or ($0.17) per share, for the fourth quarter of 2010. The non-GAAP net income for the fourth quarter of 2011 was $31.7 million, or $0.80 per diluted share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share on a GAAP and non-GAAP basis for the fourth quarter of 2011 were computed using approximately 39.8 million weighted diluted shares. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
Cash and investments totaled $58.0 million as of December 31, 2011, which included the $35 million in cash proceeds from the Company’s December 2011 patent sale.
Full Year 2011 Results
Total revenue for 2011 was $14.1 million, compared with $15.6 million for fiscal 2010. Net income for 2011 was $11.3 million, or $0.28 per diluted share, based on approximately 40.4 million weighted shares, compared with a net loss of $23.1 million, or ($0.72) per share, in 2010. Non-GAAP net income for 2011 was $17.6 million, or $0.44 per share, excluding stock-based compensation charges of $3.8 million and $2.6 million in intangible asset amortization charges. The Non-GAAP net loss for 2010 was $15.8 million, or ($0.49) per share, which excludes amortization of intangible assets, stock-based compensation expense and acquisition-related charges. Earnings per share for the full year 2011 were computed using approximately 40.4 million weighted diluted shares.
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 fourth quarter 2011 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-800-599-9816 in the U.S. (1-617-847-8705 outside of the U.S.), and entering the pass code 24242598 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 1-888-286-8010 in the U.S. (1-617-801-6888 outside of the U.S.), pass code of 41459235.
Use of Non-GAAP Financial Measures
To supplement MoSys’ consolidated financial statements presented in accordance with GAAP, MoSys uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation and certain acquisition-related charges, including amortization of acquired intangible assets, transaction costs and contingent compensation charges. MoSys’ management believes that the presentation of these non-GAAP financial measures is useful to investors and other interested persons because they are one of the primary indicators that MoSys’ management uses for planning and forecasting future performance. MoSys’ management believes that the presentation of non-GAAP financial measures that exclude these items is useful to investors because MoSys’ management does not consider these charges part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that would be used to evaluate management’s operating performance.
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is provided in a table below the Condensed Consolidated Statements of Operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. For additional information regarding these non-GAAP financial measures, and management’s explanation of why it considers such measures to be useful, refer to the Form 8-K dated February 7, 2012, that the Company filed with the Securities and Exchange Commission.
About MoSys, Inc.
MoSys, Inc. (NASDAQ: MOSY) is a 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 www.mosys.com.