Media Contact: Jen Bernier-Santarini MIPS Technologies, Inc. +1 408 530-5178 jenb@mips.com | Investor Contact: Bill Slater MIPS Technologies, Inc. +1 408 530-5200 ir@mips.com |
MIPS Technologies Reports Fourth Quarter and Fiscal 2012 Financial Results
SUNNYVALE, Calif. – August 15, 2012 – MIPS Technologies, Inc. (NASDAQ: MIPS), a leading provider of industry-standard processor architectures and cores for home entertainment, networking, mobile and embedded applications, today reported consolidated financial results for its fourth fiscal quarter and fiscal year ended June 30, 2012. All financial results are reported in U.S. GAAP unless otherwise noted.
Selected Fiscal 2012 Financial Highlights:
| · | Revenue was $86.2 million, a year-to-year increase of five percent |
| · | Licensee royalty units grew to 708 million units from 656 million units in FY’11 |
| · | Non-GAAP net income was $21.8 million |
| · | Cash and investment balances ended the year at $110.9 million |
Fourth Quarter Fiscal 2012 Financial Details:
Revenue from royalties was $10.6 million, while license revenue was $27.8 million, including the Broadcom license. The Company’s fiscal Q4’12 GAAP net income was $17.3 million or $0.31 per share compared to a net loss of $2.5 million and $0.05 per share in the third quarter of fiscal 2012.
Non-GAAP net income in the fourth quarter of fiscal 2012, which excludes certain stock and non-recurring charges, was $19.2 million or $0.35 per share, compared with a loss of $0.8 million or $0.01 per share in the third quarter of fiscal 2012. The tables below provide a reconciliation of non-GAAP measures used in this press release to the corresponding GAAP results.
“In the fourth quarter, we signed one of the largest licensing agreements in MIPS Technologies’ history. This license is the first tangible result of our strategic efforts around patent monetization, and we continue to consider all of our options in this area. In Q4 we also entered a new era of product innovation with the announcement of our new Aptiv™ Generation of microprocessors, which push performance and efficiency to new levels,” said Sandeep Vij, chief executive officer, MIPS Technologies.
MIPS Technologies invites you to listen to management’s discussion of Q4 and fiscal 2012 results in a live conference call beginning today at 1:45 p.m. Pacific:
| · | Live webcast: visit www.mips.com/company/investor-relations/ for a link to the listen-only webcast |
| · | Live conference call: dial 312-470-0125; password: MIPS |
| · | Replay call (available for 30 days shortly following the end of the conference call): dial 203-369-1251; password: MIPS |
An audio replay of the conference call will also be posted on the company’s website at www.mips.com/company/investor-relations/.
About MIPS Technologies, Inc.
MIPS Technologies, Inc. (NASDAQ: MIPS) is a leading provider of industry-standard processor architectures and cores for home entertainment, networking, mobile and embedded applications. The MIPS architecture powers some of the world’s most popular products. Our technology is broadly used in products such as digital televisions, set-top boxes, Blu-ray players, broadband customer premises equipment (CPE), WiFi access points and routers, networking infrastructure and portable/mobile communications and entertainment products. Founded in 1998, MIPS Technologies is headquartered in Sunnyvale, California, with offices worldwide. For more information, contact (408) 530-5000 or visit www.mips.com.
Forward Looking Statements
This press release contains forward-looking statements; such statements are indicated by forward-looking language such as “plans”, “anticipates”, “expects”, “will”, and other words or phrases contemplating future activities including statements about future technology and growth. These forward-looking statements include MIPS Technologies’ expectation regarding improvements in financial results. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a number of different risks and uncertainties, including but not limited to: the ability of MIPS Technologies to realize anticipated results of its patent monetization strategy, the ability of MIPS Technologies to deliver and capitalize on the opportunities of its patent monetization strategy, the fact that there can be no assurance that our products will 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’ ability to develop, introduce and market new products and product enhancements, the level of demand for semiconductors and end-user products that incorporate semiconductors and our ability to compete effectively with larger companies and other companies that are active in our markets. For a further discussion of risk factors affecting our business, we refer you to the risk factors section in the documents we file from time to time with the Securities and Exchange Commission.
MIPS, Aptiv and MIPS-Based are trademarks or registered trademark of MIPS Technologies, Inc. in the United States and other countries.
MIPS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | June 30, 2012 | | | June 30, 2011 | |
| | | (unaudited) | | | | |
| Assets | | | | | | |
| Current assets: | | | | | | |
Cash and cash equivalents | | $ | 76,242 | | | $ | 69,202 | |
Short-term investments | | | 34,642 | | | | 40,194 | |
Accounts receivable, net | | | 27,044 | | | | 2,619 | |
Prepaid expenses and other current assets | | | 1,793 | | | | 1,615 | |
Total current assets | | | 139,721 | | | | 113,630 | |
| Equipment, furniture and property, net | | | 2,892 | | | | 2,014 | |
| Goodwill | | | 565 | | | | 565 | |
| Other assets | | | 11,962 | | | | 5,418 | |
Total assets | | $ | 155,140 | | | $ | 121,627 | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
Accounts payable | | $ | 2,578 | | | $ | 1,684 | |
Accrued liabilities | | | 11,852 | | | | 8,127 | |
Deferred revenue | | | 1,259 | | | | 1,812 | |
Total current liabilities | | | 15,689 | | | | 11,623 | |
| Long-term liabilities | | | 9,815 | | | | 5,231 | |
| Stockholders’ equity | | | 129,636 | | | | 104,773 | |
Total liabilities and stockholders’ equity | | $ | 155,140 | | | $ | 121,627 | |
MIPS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
| | | Three Months Ended June 30, | | | Twelve Months Ended June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Revenue: | | | | | | | | | | | | |
Royalties | | $ | 10,588 | | | $ | 11,844 | | | $ | 47,855 | | | $ | 53,690 | |
License and contract revenue | | | 27,791 | | | | 5,753 | | | | 38,376 | | | | 28,350 | |
Total revenue | | | 38,379 | | | | 17,597 | | | | 86,231 | | | | 82,040 | |
| Costs and expenses: | | | | | | | | | | | | | | | | |
Cost of sales | | | 322 | | | | 264 | | | | 1,275 | | | | 1,324 | |
Research and development | | | 10,644 | | | | 7,649 | | | | 35,914 | | | | 27,673 | |
Sales and marketing | | | 4,626 | | | | 4,914 | | | | 17,582 | | | | 19,129 | |
General and administrative | | | 4,502 | | | | 3,210 | | | | 14,548 | | | | 13,463 | |
Total costs and expenses | | | 20,094 | | | | 16,037 | | | | 69,319 | | | | 61,589 | |
| Operating income | | | 18,285 | | | | 1,560 | | | | 16,912 | | | | 20,451 | |
| Other income (expense), net | | | 47 | | | | (26 | ) | | | 183 | | | | 868 | |
| Income before income taxes | | | 18,332 | | | | 1,534 | | | | 17,095 | | | | 21,319 | |
| Provision for income taxes | | | 1,085 | | | | 806 | | | | 2,829 | | | | 3,774 | |
| Income from continuing operations | | | 17,247 | | | | 728 | | | | 14,266 | | | | 17,545 | |
| Income from discontinued operations, net of tax | | | — | | | | — | | | | — | | | | 212 | |
| Net income | | $ | 17,247 | | | $ | 728 | | | $ | 14,266 | | | $ | 17,757 | |
| Net income per share, basic – from continuing operations | | $ | 0.32 | | | $ | 0.01 | | | $ | 0.27 | | | $ | 0.35 | |
| Net income per share, basic – from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | 0.00 | |
| Net income per share, basic | | $ | 0.32 | | | $ | 0.01 | | | $ | 0.27 | | | $ | 0.35 | |
| Net income per share, diluted – from continuing operations | | $ | 0.31 | | | $ | 0.01 | | | $ | 0.26 | | | $ | 0.33 | |
| Net income per share, diluted – from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | 0.00 | |
| Net income per share, diluted | | $ | 0.31 | | | $ | 0.01 | | | $ | 0.26 | | | $ | 0.33 | |
| Common shares outstanding, basic | | | 53,435 | | | | 52,505 | | | | 52,992 | | | | 50,489 | |
| Common shares outstanding, diluted | | | 54,771 | | | | 54,161 | | | | 54,086 | | | | 53,328 | |
MIPS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In thousands)
| | | | |
| | | | | | | |
| | | | | | |
Net income - continuing operations | | $ | 14,266 | | | $ | 17,545 | |
Adjustments to reconcile net income to cash provided by (used in) operations | | | | | | | | |
| | | 1,093 | | | | 983 | |
| | | 6,463 | | | | 5,062 | |
Excess tax benefits from stock-based compensation | | | (920 | ) | | | — | |
Amortization of intangible assets | | | 504 | | | | 226 | |
Gain on exchange and sale of investment | | | — | | | | (611 | ) |
Amortization of investment premium, net | | | 519 | | | | 546 | |
| | | 123 | | | | 114 | |
Changes in operating assets and liabilities: | | | | | | | | |
| | | (24,425 | ) | | | 4,908 | |
| | | (65 | ) | | | (745 | ) |
| | | 90 | | | | 1,898 | |
| | | 921 | | | | 121 | |
| | | 1,082 | | | | (5,684 | ) |
| | | (524 | ) | | | (1,689 | ) |
| | | 790 | | | | (628 | ) |
Net cash provided by (used in) operating activities – continuing operations | | | (83 | ) | | | 22,046 | |
Net cash provided by operating activities – discontinued operations | | | — | | | | 212 | |
Net cash provided by (used in) operating activities | | | (83 | ) | | | 22,258 | |
| | | | | | | | |
Purchases of marketable securities | | | (50,000 | ) | | | (63,628 | ) |
Proceeds from sales of marketable securities | | | 2,613 | | | | 5,413 | |
Proceeds from maturities of marketable securities | | | 52,307 | | | | 38,591 | |
| | | (1,939 | ) | | | (866 | ) |
Net cash provided by (used in) investing activities | | | 2,981 | | | | (20,490 | ) |
| | | | | | | | |
Net proceeds from issuance of common stock | | | 3,286 | | | | 35,692 | |
Excess tax benefits from stock-based compensation | | | 920 | | | | — | |
Net cash provided by financing activities | | | 4,206 | | | | 35,692 | |
Effect of exchange rates on cash | | | (64 | ) | | | 117 | |
Net increase in cash and cash equivalents | | | 7,040 | | | | 37,577 | |
Cash and cash equivalents, beginning of period | | | 69,202 | | | | 31,625 | |
Cash and cash equivalents, end of period | | $ | 76,242 | | | $ | 69,202 | |
MIPS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) and NET INCOME (LOSS) PER SHARE
(In thousands, except per share data)
(unaudited)
| | | | Three Months Ended June 30, 2012 | | | Three Months Ended March 31, 2012 | | | Three Months Ended June 30, 2011 | |
| | GAAP net income (loss) | | $ | 17,247 | | | $ | (2,532 | ) | | $ | 728 | |
| | Net income (loss) per basic share | | $ | 0.32 | | | $ | (0.05 | ) | | $ | 0.01 | |
| | Net income (loss) per diluted share | | $ | 0.31 | | | $ | (0.05 | ) | | $ | 0.01 | |
| (a) | Stock-based compensation expense | | | 1,790 | | | | 1,720 | | | | 1,445 | |
| (b) | Severance adjustment | | | 197 | | | | 86 | | | | — | |
| (c) | Tax on change in legal structure | | | — | | | | — | | | | 98 | |
| (d) | Gain on investment | | | — | | | | (29 | ) | | | — | |
| | Non-GAAP net income (loss) | | $ | 19,234 | | | $ | (755 | ) | | $ | 2,271 | |
| | Non-GAAP net income (loss) per basic share | | $ | 0.36 | | | $ | (0.01 | ) | | $ | 0.04 | |
| | Non-GAAP net income (loss) per diluted share | | $ | 0.35 | | | $ | (0.01 | ) | | $ | 0.04 | |
| | Common shares outstanding – basic | | | 53,435 | | | | 53,111 | | | | 52,505 | |
| | Common shares outstanding – diluted | | | 54,771 | | | | 53,111 | | | | 54,161 | |
These adjustments reconcile the Company’s GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income (loss) and net income (loss) per share excluding stock-based compensation expense, severance adjustment, tax on change in legal structure, and gain on investment provides meaningful supplemental information to investors, as well as management, that is indicative of the Company’s ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results, and may be different than non-GAAP measures used by other companies.
| (a) | This adjustment reflects the stock-based compensation expense. For the fourth quarter of fiscal 2012 ending June 30, 2012, $1.8 million stock-based compensation expense was allocated as follows: $650,000 to research and development, $468,000 to sales and marketing and $672,000 to general and administrative. For the third quarter of fiscal 2012 ending March 31, 2012, $1.7 million stock-based compensation expense was allocated as follows: $541,000 to research and development, $466,000 to sales and marketing and $713,000 to general and administrative. For the fourth quarter of fiscal 2011 ending June 30, 2011, $1.4 million stock-based compensation expense was allocated as follows: $416,000 to research and development, $475,000 to sales and marketing and $554,000 to general and administrative. |
| (b) | This adjustment reflects the severance to the Company’s former executives and employees. For the fourth quarter of fiscal 2012 ending June 30, 2012, $85,000 was allocated to general and administrative and $112,000 was allocated to sales and marketing. For the third quarter of fiscal 2012 ending March 31, 2012, $86,000 was allocated to general and administrative. |
| (c) | This adjustment reflects the withholding tax in connection with the change in legal structure of foreign operations. |
| (d) | The adjustment reflects a gain on an investment in a privately held company that was acquired. This gain was recorded in other income (expense). |
MIPS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER SHARE
(In thousands, except per share data)
(unaudited)
| | | | Twelve Months Ended June 30, 2012 | | | Twelve Months Ended June 30, 2011 | |
| | GAAP net income | | $ | 14,266 | | | $ | 17,757 | |
| | Net income per basic share | | $ | 0.27 | | | $ | 0.35 | |
| | Net income per diluted share | | $ | 0.26 | | | $ | 0.33 | |
| (e) | Stock-based compensation expense | | | 6,463 | | | | 5,062 | |
| (f) | Severance adjustment | | | 643 | | | | 36 | |
| (g) | Expenses related to stockholder activities | | | 423 | | | | — | |
| (h) | Tax on change in legal structure | | | — | | | | 909 | |
| (i) | Gain from discontinued operations, net of tax | | | — | | | | (212 | ) |
| (j) | Gain on investment | | | (29 | ) | | | (611 | ) |
| | Non-GAAP net income | | $ | 21,766 | | | $ | 22,941 | |
| | Non-GAAP net income per basic share | | $ | 0.41 | | | $ | 0.45 | |
| | Non-GAAP net income per diluted share | | $ | 0.40 | | | $ | 0.43 | |
| | Common shares outstanding – basic | | | 52,992 | | | | 50,489 | |
| | Common shares outstanding – diluted | | | 54,086 | | | | 53,328 | |
These adjustments reconcile the Company’s GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding stock-based compensation expense, severance adjustment, expenses related to stockholder activities, tax on change in legal structure, gain from discontinued operations, net of tax, and gain on investment provides meaningful supplemental information to investors, as well as management, that is indicative of the Company’s ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results, and may be different than non-GAAP measures used by other companies.
| (e) | This adjustment reflects the stock-based compensation expense. For the twelve months ending June 30, 2012, $6.5 million stock-based compensation expense was allocated as follows: $2.2 million to research and development, $1.7 million to sales and marketing and $2.6 million to general and administrative. For the twelve months ending June 30, 2011, $5.1 million of stock-based compensation expense was allocated as follows: $1.5 million to research and development, $1.5 million to sales and marketing and $2.1 million to general and administrative. |
| (f) | This adjustment reflects the severance to the Company’s former executives and employees. For the twelve months ending June 30, 2012, $643,000 was allocated as follows: $424,000 to sales and marketing and $219,000 to general and administrative. For the twelve months ending June 30, 2011, $36,000 was allocated to sales and marketing. |
| (g) | This adjustment reflects the expenses in response to our activities and inquiries of Starboard Value LP allocated to general and administrative. |
| (h) | This adjustment reflects the withholding tax in connection with the change in legal structure of foreign operations. |
| (i) | The adjustment reflects the gain, net of tax, of the Analog Business Group. |
| (j) | The adjustment reflects a gain on an investment in a privately held company that was acquired. This gain was recorded in other income (expense). |
###
