Sequential Growth in Contract Revenue
MOUNTAIN VIEW, Calif., July 23, 2003 - MIPS Technologies, Inc. (NASDAQ: MIPS, MIPSB) today reported financial results for its fourth quarter and fiscal year ended June 30, 2003. Revenue for the fourth quarter of fiscal 2003 grew by 3 percent over the third quarter of fiscal 2003, primarily as a result of an increase in contract revenues. In addition, as previously announced in May 2003, the company implemented a restructuring plan that is expected to be concluded by September 2003.
Total revenue for the fourth quarter of fiscal 2003 was $9.8 million, a 7 percent decline compared to $10.5 million for the same quarter a year ago. Contract revenue was $6.1 million, a decrease of 17 percent compared to $7.3 million in the comparable period in fiscal 2002. Royalties were $3.7 million, an increase of 15 percent compared to $3.2 million in the same quarter a year ago. Net loss for the fourth quarter of fiscal 2003, which included a restructuring charge of $2.7 million, was $6.7 million compared to a net loss of $3.3 million for the same quarter a year ago. Net loss per share for the fourth quarter of fiscal 2003 was $0.17 compared to a net loss per share of $0.08 for the same quarter a year ago.
Total revenue for fiscal year 2003 was $39.1 million, a decrease of 18 percent compared to $47.8 million in fiscal 2002. Contract revenue was $23.4 million, a decline of 25 percent compared to $31.0 million in 2002. Royalties were $15.7 million, a decrease of 7 percent compared to $16.8 million in fiscal 2002. Net loss for fiscal 2003 was $28.9 million compared to a net loss of $9.4 million in fiscal 2002. Fiscal 2003 net loss per share was $0.73 compared to a net loss per share of $0.24 in fiscal 2002.
"Despite fiscal year 2003's reduced contract revenue when compared to fiscal year 2002, we were pleased with the 23% year-over-year increase in royalties excluding royalties from Nintendo," said Casey Eichler, chief financial officer for MIPS Technologies. "Our restructuring plans are on track to be completed by the end of September and we reiterate our guidance for breakeven by the December quarter."
"We believe that quarterly revenues stabilized during the recently concluded fiscal year. During the course of this year, we took some difficult, but appropriate, actions to reduce spending which we believe will set the stage for profitability during the second half of fiscal 2004," said John Bourgoin, Chairman & CEO. "We have also strengthened our development capability in key product areas such as synthesizable cores, and we expect to add to our industry-leading synthesizable core product offerings during the coming quarters."
MIPS invites you to listen to management's discussion of Q4 and fiscal 2003 results and guidance for fiscal 2004 in a live conference call today beginning at 1:45 p.m. Pacific. Conference call number is 1-719-457-2626. Replay number is 1-719-457-0820 and will be available for 5 days, beginning shortly after the end of the conference call. The access code is 426918. An audio replay of the conference call will be posted on the Company's website (www.mips.com/content/Corporate/InvestorRelations/ir) soon thereafter.
MIPS Technologies, Inc.
MIPS Technologies, Inc. is a leading provider of industry standard processor architectures and cores for digital consumer and business applications. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers, and system OEMs. MIPS Technologies, Inc. and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products. MIPS Technologies, Inc. is based in Mountain View, California, and can be reached at 650-567-5000 or www.mips.com.
This press release contains forward-looking statements regarding the ability of MIPS Technologies to achieve breakeven and to generate profit and the anticipated timing thereof, future revenue, future events or the future financial performance of MIPS Technologies, Inc., including those relating to relationships with our strategic partners and industry trends. Actual events or results may differ materially. Many factors could cause the actual results to differ materially from those contained in such forward-looking statements, including but not limited to: that products may fail to achieve market acceptance, changes in our research and development expenses, the anticipated benefits of our partnering relationships may be more difficult to achieve than expected, the timing of or delays in customer orders, delays in the design process, the length of MIPS Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors. With respect to MIPS Technologies, we refer you to the documents filed from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2002 and subsequent Forms 10-Q and 8-K.
FY2003 Highlights: Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers.
| MIPS TECHNOLOGIES, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (In thousands, except per share data)
| ||||||
| Three Months Ended June 30, | Twelve Months Ended June 30, | |||||
| 2003 | 2002 | 2003 | 2002 | |||
| Revenue: | ||||||
| Royalties | $3,691 | $3,211 | $15,693 | $16,791 | ||
| Contract revenue | 6,103 | 7,335 | 23,397 | 30,970 | ||
| Total revenue | 9,794 | 10,546 | 39,090 | 47,761 | ||
| | | |||||
| Costs and expenses: | ||||||
| Cost of contract revenue | - | - | 250 | 250 | ||
| Research and development | 7,613 | 8,730 | 32,863 | 34,045 | ||
| Sales and marketing | 3,253 | 3,920 | 13,759 | 17,189 | ||
| General and administrative | 2,341 | 1,928 | 8,508 | 7,435 | ||
| Aquired in process research and development | - | - | 394 | 1,737 | ||
| Restructuring | 2,665 | - | 10,282 | 437 | ||
| Total costs and expenses | 15,872 | 14,578 | 66,056 | 61,093 | ||
| Operating loss | (6,078) | (4,032) | (26,966) | (13,332) | ||
| Other income (expense), net | 314 | 614 | 303 | 3,028 | ||
| Loss before income taxes | (5,764) | (3,418) | (26,663) | (10,304) | ||
| Provision (benefit) for income taxes | 945 | (134) | 2,244 | (914) | ||
| Net loss | $(6,709) | $(3,284) | $(28,907) | $(9,390) | ||
| | | | | |||
| Net loss per basic and diluted share | $(0.17) | $(0.08) | $(0.73) | $(0.24) | ||
| Common shares outstanding-basic and diluted | 39,866 | 39,144 | 39,505 | 39,013 | ||
| MIPS TECHNOLOGIES, INC. | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (In thousands) | ||||
| June 30, 2003 | June 30, 2002 | |||
| | Assets | | ||
| Current assets: | ||||
| Cash and cash equivalents | $83,839 | $90,712 | ||
| Short-term investments | - | 5,000 | ||
| Accounts receivable | 4,762 | 6,046 | ||
| Prepaid expenses and other current assets | 3,648 | 9,883 | ||
| Total current assets | 92,249 | 111,641 | ||
| Equipment and furniture, net | 4,202 | 7,481 | ||
| Other assets | 8,898 | 9,866 | ||
| $105,349 | $128,988 | |||
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $504 | $1,203 | ||
| Accrued liabilities | 10,977 | 8,209 | ||
| Deferred revenue | 2,592 | 2,911 | ||
| Total current liabilities | 14,073 | 12,323 | ||
| | | |||
| Long-term liabilities | 1,900 | 770 | ||
| Stockholders' equity | 89,376 | 115,895 | ||
| 105,349 | $128,988 | |||