Virage Logic (VIRL) 8-K Other events

Exhibit 99.1

Virage Logic Corporation
Consolidated Statements of Operations
(In thousands, except per-share amounts)

				Three Months Ended						Nine Months Ended
				June 30, 2003			June 30, 2002			June 30, 2003			June 30, 2002
Revenues:
			License	$	8,467		$	11,798		$	28,563		$	31,331
			Royalties		1,097			435			2,191			1,196
Revenues					9,564			12,233			30,754			32,527
Cost and expenses:
Cost of revenues					2,224			2,463			7,114			6,562
Research and development					4,678			3,575			14,328			9,443
Sales and marketing					3,344			3,115			9,357			8,340
General and administrative					1,135			1,206			3,629			3,336
Stock-based compensation					137			1,207			1,153			2,759
In-process R&D					—			1,100			—			1,100
	Total cost and expenses				11,518			12,666			35,581			31,540
Operating income (loss)					(1,954	)		(433	)		(4,827	)		987
Interest income and other, net					145			250			533			948
Impairment of investment					—			(5,284	)		—			(5,284	)
Loss before taxes					(1,809	)		(5,467	)		(4,294	)		(3,349	)
Income tax provision (benefit)					(596	)		537			(1,131	)		1,811
Net loss				$	(1,213	)	$	(6,004	)	$	(3,163	)	$	(5,160	)
Earnings per share:
		Basic and diluted		$	(0.06	)	$	(0.30	)	$	(0.15	)	$	(0.27	)
Shares used in computing per share amounts:
		Basic and diluted			20,822			20,039			20,742			19,355

Virage Logic Corporation
Reconciliation of Pro Forma Net Income to Reported Results
(In thousands, except per-share amounts)

		Three Months Ended						Nine Months Ended
		June 30, 2003			June 30, 2002			June 30, 2003			June 30, 2002
Pro forma net income (loss)		$	(1,039	)	$	1,417		$	(1,880	)	$	3,767
Revaluation of warrants			—			—			—			60
Stock-based compensation			137			1,207			1,153			2,759
Amortization of purchased technology			97			32			291			32
In-process R&D			—			1,100			—			1,100
Impairment of investment			—			5,284			—			5,284
Income tax provision (benefit)			(60	)		(202	)		(161	)		(308	)
	Total reconciling items		174			7,421			1,283			8,927
Reported net loss		$	(1,213	)	$	(6,004	)	$	(3,163	)	$	(5,160	)

Virage Logic Corporation
Pro Forma Consolidated Statements of Operations
(In thousands, except per-share amounts)

				Three Months Ended					Nine Months Ended
				June 30, 2003			June 30, 2002		June 30, 2003			June 30, 2002
Revenues:
	License			$	8,467		$	11,798	$	28,563		$	31,331
	Royalties				1,097			435		2,191			1,196
Revenues					9,564			12,233		30,754			32,527
Cost and expenses:
Cost of revenues					2,224			2,463		7,114			6,562
Research and development					4,678			3,575		14,328			9,443
Sales and marketing					3,344			3,115		9,357			8,340
General and administrative					1,038			1,174		3,338			3,244
			Total cost and expenses		11,284			10,327		34,137			27,589
Operating income (loss)					(1,720	)		1,906		(3,383	)		4,938
Interest income and other, net					145			250		533			948
Income (loss) before taxes					(1,575	)		2,156		(2,850	)		5,886
Income tax provision (benefit)					(536	)		739		(970	)		2,119
Pro forma net income (loss)				$	(1,039	)	$	1,417	$	(1,880	)	$	3,767
Pro forma earnings per share:
		Basic		$	(0.05	)	$	0.07	$	(0.09	)	$	0.19
		Diluted		$	(0.05	)	$	0.07	$	(0.09	)	$	0.18
Shares used in computing per share amounts:
		Basic			20,822			20,039		20,742			19,355
		Diluted			20,822			21,287		20,742			21,082

Pro forma statements of operations are intended to present the company’s operating results, excluding non-cash items resulting from deferred stock compensation for stock options and warrants issued, impairment of investment, the amortization of purchased technology as well as a one-time charge for in-process research and development.

The tax provision (benefit) in the pro forma statement for the fiscal year 2003 periods is computed using a tax rate of 34%, as compared with 36% for the fiscal year 2002 periods.

A reconciliation from pro forma net income to the reported results is presented on the prior page.

The format presented above is not in accordance with Generally Accepted Accounting Principles.

Virage Logic Corporation
Consolidated Balance Sheets
(In thousands)

			June 30, 2003			Sept. 30, 2002
ASSETS
Current assets:
	Cash and cash equivalents		$	41,399		$	35,422
	Investments			15,092			5,008
	Accounts receivable, net			12,381			15,688
	Costs in excess of related billings on uncompleted contracts			611			820
	Prepaid expenses and other			3,104			2,512
	Taxes receivable			925			—
		Total current assets		73,512			59,450
	Property, equipment and leasehold improvements, net			6,420			5,708
	Intangible assets, net			13,026			13,315
	Deferred tax assets			2,442			2,442
	Long-term investments			—			19,029
	Other assets			387			410
		Total assets	$	95,787		$	100,354
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	208		$	438
	Accrued expenses			4,099			4,240
	Current portion of capital lease obligations			15			96
	Deferred revenue			2,550			2,936
	Income taxes payable			—			2,049
		Total current liabilities		6,872			9,759
Deferred tax liability				1,343			1,343
Deferred acquisition costs				500			1,000
		Total liabilities		8,715			12,102
Stockholders’ equity:
	Common stock			21			20
	Additional paid-in capital			109,383			110,530
	Unrealized gains and losses			12			28
	Deferred stock-based compensation			(181	)		(3,326	)
	Accumulated deficit			(22,163	)		(19,000	)
		Total stockholders’ equity		87,072			88,252
		Total liabilities and stockholders’ equity	$	95,787		$	100,354

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