Fremont, CA - January 3, 2003, Virage Logic Corp. (Nasdaq:VIRL), the leading provider of best-in-class application-optimized semiconductor IP platforms, today announced that it has revised its outlook for revenues and earnings for the first fiscal quarter of 2003 ended December 31, 2002, principally because of deferred purchasing decisions by certain customers.
For the first fiscal quarter, the company anticipates revenues of approximately $11.5 million to $11.7 million, and pro forma net income* of approximately $100,000 to $300,000, or $0.01 per diluted share. This compares with revenues of $9.6 million and pro forma diluted earnings per share of $0.06 for the first quarter of fiscal 2002.
"We are disappointed that certain customers deferred purchasing decisions for our 0.13-micron products during the first quarter," said Adam Kablanian, president and chief executive officer. "In addition, we believe that industry adoption of 90-nanometer process technology has slowed and that has impacted us in the near term after having posted sixteen consecutive quarters of sequential revenue growth since the company's founding. While these issues have negatively effected our near-term expectations, during the quarter we signed eight new direct royalty agreements - more than in any previous quarter - for our STAR Memory System™ on the 0.13- and 0.18-micron processes and continue to be pleased with customer adoption of STAR and other new products in our portfolio."
Virage Logic cautions that its anticipated results are preliminary, based on the best information currently available, and subject to the closing of its financial records and customary quarterly accounting procedures. The company plans to report its final results for the first fiscal quarter after the close of market on January 16, 2003 and provide a more detailed business outlook at that time.
*Anticipated pro forma net income represents the company's estimated operating results, excluding non-cash items resulting from the revaluation of stock options and warrants in connection with the company's initial public offering and acquisition activity, one-time effect of settlement of litigation as reported on Form 8-K filed today, one-time impairment of investment and related recovery, the amortization of purchased technology, and a one-time charge for in-process research and development.
About Virage Logic
Virage Logic (Nasdaq:VIRL) is the leading provider of best-in-class application-optimized semiconductor IP platforms based on memory, logic and design tools that are silicon proven and production ready. Virage Logic meets market demands for cost reduction, while improving performance and reliability for fabless and integrated device manufacturer (IDM) companies focused on the consumer, communications and networking, handheld and portable, and graphics markets. For more information, visit www.viragelogic.com or call (877) 360-6690 (toll free) or (510) 360-8000.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Statements made in this news release other than statements of historical fact are forward-looking statements, including, for example, statements relating to Virage Logic's outlook for revenues and earnings, its business outlook, its products and new relationships. Forward-looking statements are subject to a number of known and unknown risks and uncertainties, which might cause actual results to differ materially from those 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, 2002, filed with the Securities and Exchange Commission (SEC) on December 16, 2002, 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 disclaims any intention or duty to update any forward-looking statements made in this news release.