Posts 21-Percent Year-Over-Year Revenue Growth
Fremont, CA - January 16, 2003, News Release Highlights:
- Q1 revenues of $11.6 million, up from $9.6 million for Q1 of fiscal 2002
- Q1 GAAP (reported) net loss of $385,000, or $0.02 per share
- Q1 pro forma operating income* of $114,000
- Q1 pro forma net income* of $239,000, or $0.01 per diluted share
Virage Logic Corp. (Nasdaq:VIRL), a leading provider of best-in-class application-optimized semiconductor IP platforms, today reported its financial results for the first fiscal quarter ended December 31, 2002.
Revenues for the first quarter were $11.6 million, up from $9.6 million a year ago. Total license revenue for the first quarter was $11.0 million, up from $9.3 million for the first quarter of fiscal 2002, and down sequentially from $12.6 million. Royalties for the first quarter were $515,000, compared with royalties of $353,000 for the same quarter a year ago and $475,000 for the previous quarter.
As reported under generally accepted accounting principles (GAAP) in the U.S., net loss for the first quarter of fiscal 2003, including non-cash amortization expenses for deferred stock compensation of $575,000 and net interest income of $249,000, was $385,000, or $0.02 per share. Net income under GAAP for the same period a year ago, including non-cash amortization expenses for deferred stock compensation and warrants of $870,000 and net interest income of $438,000, was $332,000, or $0.02 per diluted share.
Pro forma net income for the first quarter of fiscal 2003 was $239,000, or $0.01 per diluted share, compared with $1.1 million, or $0.06 per diluted share for the same period of fiscal 2002. Pro forma net income for the first quarter included pro forma operating income of $114,000, and net interest income of $249,000, less a tax provision of $124,000.
"While we are disappointed that our first-quarter results did not meet our expectations, we continue to be encouraged by the overall market demand for our technology, including our newer products, such as the self-test and repair STAR Memory System™, NOVeA™ and the ASAP Logic™ product line," said Adam Kablanian, president and chief executive officer. "Furthermore, we are pleased with the progress we have made in positioning the company for long-term market growth through our recently initiated semiconductor IP platform strategy and key partnering programs, such as the alliance we signed with Taiwan Semiconductor Manufacturing Company to distribute their libraries in parallel with our own. We believe that this distribution agreement will provide our joint customers with enhanced flexibility in meeting their business and design needs."
Additional Recent Business Highlights
During the first quarter, Virage Logic:
- Expanded its partnership with Taiwan Semiconductor Manufacturing Company (TSMC)(NYSE:TSM) to distribute TSMC's internally-developed, process-tuned standard cell and I/O libraries in parallel with Virage Logic's libraries, which are differentiated in market focus and architecture, in order to enable designers to choose from a greater variety of application-optimized libraries that can support faster time-to-volume production.
- Initiated a strategic initiative that has focused the company on providing application-optimized semiconductor IP platforms to deliver best-in-class memory, logic, I/Os and IP development tools to meet the critical requirements of reducing design and manufacturing costs for system-on-chips (SoCs) while boosting performance and ensuring reliability.
- Licensed its Area, Speed and Power (ASAP) Logic Metal Programmable Cell Libraries, part of the company's recently introduced ASAP Logic product family, to LSI Logic Corporation (NYSE:LSI) for use in its RapidChip™ silicon platform on 0.18- and 0.13-micron processes.
- Announced a multi-year royalty bearing licensing agreement with Tower Semiconductor (Nasdaq:TSEM, TASE:TSEM) for several of Virage Logic's embedded memories, including the ASAP Memory™ High Speed and High Density SRAM memories, the ASAP ROM, the 2-Port Register file, and the 512K and 4Mb STAR Memory System on the 0.18-micron process.
- Signed eight new direct royalty agreements for the STAR Memory System, bringing the total number of STAR Memory System licensees to more than 40; completed one new direct royalty agreement for NOVeA, bringing the total number to eight.
- Shipped products under licensing agreements to 40 customers, 34 existing and six new.
Virage Logic also reported today its current outlook for the second quarter of fiscal 2003. Forward-looking statements for this period are based on current expectations. Actual results may vary materially. Although this earnings release will be available on the company's website, the company disclaims any duty or intention to update these or any other forward-looking statements.
Virage Logic's expectations for second-quarter 2003 results are as follows:
- Revenues of approximately $11.5 million to $12.0 million
- Gross margin of about 77-78 percent
- Pro forma operating expenses of approximately $8.8 million to $9.0 million
- Net interest income of about $240,000
- Effective tax rate of 34 percent.
Virage Logic intends to provide further updates as to its quarterly and full-year fiscal 2003 business outlook in the coming quarters.
Webcast and Taped Replay
An archived webcast of management's conference call regarding first-quarter results will be available to all investors from January 16 until January 30, 2003, on the Virage Logic Website. In addition, a telephonic replay will be available through this date at 706-645-9291, access code 7407939.
* Pro forma operating income and net income represent the company's operating results, excluding non-cash items resulting from deferred stock compensation for stock options and warrants issued, and the amortization of purchased technology.
About Virage Logic
Virage Logic (Nasdaq: VIRL) is a leading provider of best-in-class application-optimized semiconductor IP platforms based on memory, logic, I/Os, and IP development 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 further 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 trends, business outlook, products and customer 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 continue to develop new products, maintain and develop new relationships with third-party foundries and integrated device manufacturers, adoption of Virage Logic's 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, 2001, filed with the Securities and Exchange Commission (SEC) on December 19, 2001, 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 news releases and other communications. Virage Logic disclaims any intention or duty to update any forward-looking statements made in this news release.