Pro Forma Earnings in Line with Previous Guidance
MOUNTAIN VIEW, Calif., January 15, 2002 - MIPS Technologies, Inc., (NASDAQ: MIPS, MIPSB) a leading provider of industry standard processor architectures and cores for digital consumer and business products, today reported financial results for its second fiscal quarter ended December 31, 2001. The company will discuss these results and provide guidance for the third fiscal quarter in its quarterly earnings call today at 2:00 pm Pacific.
Revenue for the second quarter was $12.0 million, a 37 percent decline compared to $19.0 million for the same quarter a year ago. Revenue excluding revenue from Nintendo 64 video game products declined by 22 percent compared to the same quarter a year ago. Contract revenue was $7.3 million, a decrease of 25 percent compared to $9.7 million in the comparable period in fiscal 2001. Royalties were $4.7 million, a decrease of 49 percent compared to $9.2 million in the same quarter a year ago, due primarily to lower royalties from Nintendo 64 video game products. Royalties excluding royalties from Nintendo 64 were $3.1 million, a decrease of 13 percent compared to the same quarter a year ago.
Pro forma net loss, excluding a one-time charge for acquired in process research and development costs related to the acquisition of processor IP assets announced at the end of December, was $1.8 million for the second quarter of fiscal 2002. The actual net loss for the quarter was $3.5 million compared to net income of $4.2 million for the same quarter a year ago. Pro forma net loss per share was $0.05. The diluted net loss per share for the second quarter of fiscal 2002 was $0.09 compared to net income of $0.10 per share for the same quarter a year ago.
"Though in line with expectations, Q2 was the weakest earnings quarter in MIPS history. We took actions in October to reduce our expenses in anticipation of reduced revenues from licensing activity and delayed royalty growth," said Casey Eichler, chief financial officer. "These actions will help position MIPS to recover more quickly as the market recovers."
"I am encouraged that during the quarter we signed nine new licenses - an increase over last quarter - which brings the total post-IPO licensing agreements to more than 60. Of these, there were five new licensees who joined the MIPS community, bringing the total post-IPO licensee base to more than 40," said John Bourgoin, chairman & CEO of MIPS Technologies. "The closure rate on new license agreements for MIPS products has increased for two consecutive quarters and has returned to the level of a year ago. While we still see reluctance from many companies to make larger upfront financial commitments associated with multiple use rights, we are securing more per use agreements which should ultimately result in more license fees to MIPS."
MIPS invites you to listen to management's discussion of Q2 fiscal 2002 results and guidance for Q3 fiscal 2002 in a conference call live beginning at 2:00 p.m. Pacific. Conference call number is (913) 981-5592. Replay number is (719) 457-0820 and will be available for 5 days, beginning shortly after the end of the conference call. The access code is 429875.
Q2 2002 Highlights: Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers. A complete listing of announcements for MIPS Technologies and the MIPS® architecture can be found at MIPS Technologies Website www.mips.com.
This press release contains forward-looking statements regarding future events or the future financial performance of MIPS Technologies, Inc. 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 will fail to achieve market acceptance, increases 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, the mix of revenue generated by Nintendo 64 and non-Nintendo 64 video game products, 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 that it files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2001 and subsequent Forms 10-Q and 8-K.
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MIPS® is a registered trademark and MIPS-based[tm] and MIPS32[tm], MIPS64[tm], 4Kc[tm], and 5Kf[tm] are trademarks of MIPS Technologies, Inc. in the United States and other countries. All other trademarks are the property of their respective companies. All press materials are available on the World Wide Web via: www.mips.com
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| (unaudited) | ||||||
| Ended December 31, | Ended December 31, | |||||
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| Revenue: | ||||||
| Royalties | $4,716 | $9,234 | $9,444 | $18,098 | ||
| Contract revenue | 7,262 | 9,737 | 15,029 | 21,053 | ||
| Total revenue | 11,978 | 18,971 | 24,473 | 39,151 | ||
| Costs and expenses: | ||||||
| Cost of contract revenue | 250 | 250 | 250 | 250 | ||
| Research and development | 8,071 | 7,671 | 16,867 | 15,324 | ||
| Sales and marketing | 4,072 | 3,649 | 8,354 | 7,142 | ||
| General and administrative | 1,934 | 2,026 | 3,559 | 4,244 | ||
| Aquired in process research and development | 1,737 | - | 1,737 | - | ||
| Restructuring | 437 | - | 437 | - | ||
| Total costs and expenses | 16,501 | 13,596 | 31,204 | 26,960 | ||
| Operating income (loss) | (4,523) | 5,375 | (6,731) | 12,191 | ||
| Other income (expense), net | 826 | 1,664 | 1,904 | 3,232 | ||
| Income (loss) before income taxes | (3,697) | 7,039 | (4,827) | 15,423 | ||
| Provision (benefit) for income taxes | (196) | 2,816 | (399) | 6,169 | ||
| Income (loss) before cumulative effect of change in accounting principle | $(3,501) | $4,223 | $(4,428) | $9,254 | ||
| Cumulative effect of change in accounting principal, net of tax benefit | $ - | $ - | $ - | $ (741) | ||
| Net income (loss) | $(3,501) | $4,223 | $(4,428) | $8,513 | ||
| Per diluted share amounts: | ||||||
| Income (loss) before cumulative effect of change in accounting principle | $(0.09) | $0.10 | $(0.11) | $0.23 | ||
| Cumulative effect of change in accounting principle | $ - | $ - | $ - | $(0.02) | ||
| Net income (loss) | $ (0.09) | $ 0.10 | $ (0.11) | $ 0.21 | ||
| Common shares outstanding-diluted | 38,982 | 40,358 | 38,947 | 40,476 | ||
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| (In thousands) | ||||
| 2001 | 2001 | |||
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| Current assets: | ||||
| Cash and cash equivalents | $104,311 | $116,520 | ||
| Accounts receivable | 5,593 | 6,443 | ||
| Prepaid expenses and other current assets | 7,313 | 7,720 | ||
| Total current assets | 117,217 | 130,683 | ||
| Equipment and furniture, net | 7,966 | 8,089 | ||
| Other assets | 9,118 | 1,661 | ||
| $134,301 | $140,433 | |||
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| Current liabilities: | ||||
| Accounts payable | $1,478 | $3,184 | ||
| Accrued liabilities | 10,268 | 10,472 | ||
| Deferred revenue | 3,097 | 4,069 | ||
| Total current liabilities | 14,843 | 17,725 | ||
| Stockholders' equity | 119,458 | 122,708 | ||
| $134,301 | $140,433 | |||
| Investor Contact: MIPS Technologies, Inc. Investor Relations Bonnie Gardiner +1 650 567 7007 bonnieg@mips.com | Media Contact MIPS Technologies, Inc. Corporate Communications Lee Garvin Flanagin + 1 650 567 5180 flanagin@mips.com |