Exhibit 99.1
Virage Logic Reports Second-Quarter Fiscal 2004 Results;
Company Returns to Profitability; Posts 35% Year-Over-Year Revenue Growth
and Record Royalties
FREMONT, Calif.--(BUSINESS WIRE)--April 20, 2004--Virage Logic
Corporation (Nasdaq:VIRL)
Quarterly News Release Highlights:
-- Q2 revenues of $13.0 million, compared with $9.6 million for
Q2 fiscal 2003, and $10.9 million for Q1 fiscal 2004
-- Q2 GAAP net income of $189,000, or $0.01 per share, compared
with a GAAP net loss of $1.6 million, or $0.08 per share, for
Q2 fiscal 2003, and a GAAP net loss of $359,000, or $0.02 per
share, for Q1 fiscal 2004
Virage Logic Corporation (Nasdaq:VIRL), a leading provider of
best-in-class semiconductor IP platforms, today reported its financial
results for the second fiscal quarter ended March 31, 2004.
Revenues for the second quarter of fiscal 2004 were $13.0 million,
up 35 percent from $9.6 million for the second quarter of fiscal 2003,
and up sequentially from $10.9 million for the first quarter of fiscal
2004. Total license revenue for the second quarter of fiscal 2004 was
$11.2 million, compared with $9.0 million for the same quarter a year
ago, and $9.5 million for the prior quarter. Royalties for the second
quarter of fiscal 2004 were a record $1.8 million, up from $579,000
for the second quarter of fiscal 2003, and up sequentially from $1.4
million for the previous quarter.
As reported under generally accepted accounting principles (GAAP)
in the U.S., net income for the second quarter of fiscal 2004 was
$189,000, or $0.01 per share, compared with a net loss for the second
quarter of fiscal 2003 of $1.6 million, or $0.08 per share. Net income
for the second quarter of fiscal 2004 improved sequentially from a net
loss of $359,000, or $0.02 per share.
For the first six months of fiscal 2004, revenues were $23.8
million, up 12 percent from $21.2 million for the first six months of
the prior fiscal year. Net loss for the first six months of fiscal
2004 was $170,000, or $0.01 per share. This compared with a net loss
of $2.0 million, or $0.09 per share, for the same period of fiscal
2003.
"We are pleased to have achieved our goal of returning to
profitability for the second quarter while continuing to invest in
developing new products," said Adam Kablanian, Virage Logic's
president and chief executive officer. "During the second quarter, we
experienced continued customer momentum for our 90-nanometer product
offering with additional design start wins and customer adoption of
our Self-Test and Repair (STAR) Memory System(TM) remained strong. In
recent months, we have also expanded our process technology footprint
to include additional foundry partners in order to broaden our market
opportunity while giving our customers increased flexibility in
producing their designs."
Additional Recent Business Highlights
During the second quarter, Virage Logic:
-- Announced a partnership whereby Virage Logic will provide its
Technology-Optimized Platform, as well as its ASAP Logic(TM)
Metal Programmable Cell Libraries, for Chartered Semiconductor
Manufacturing and IBM's jointly developed 90-nanometer
manufacturing process
-- Booked four new 90-nanometer agreements with foundry and
integrated device manufacturer (IDM) customers
-- Signed 10 new ASAP Logic and semiconductor IP platform
agreements
-- As part of a multi-million-dollar agreement with Kawasaki
Microelectronics, successfully delivered a comprehensive
portfolio of Virage Logic's ASAP Logic products based on
Taiwan Semiconductor Manufacturing Company's (TSMC) and United
Microelectronics Corporation's (UMC) 0.13-micron and
90-nanometer processes. As part of Kawasaki's Matrix ASIC
initiative, this offering enables customers to mix and match
logic components from several different Virage Logic libraries
-- Signed a total of 10 new direct royalty-bearing agreements for
the STAR Memory System and NetCAM(TM) Content Addressable
Memory products, bringing the total number of agreements to
over 70
-- Recorded revenue under licensing agreements from 55 customers
- 46 existing and 9 new.
Business Outlook
Virage Logic also announced today its outlook for the third
quarter of fiscal 2004. The company currently expects to continue to
be profitable on anticipated total revenues in the range of $13.5 to
$14.0 million. Expected total revenues for the quarter are anticipated
to include royalties of approximately $1.9 million. The company
expects to report GAAP net income of approximately $0.01 to $0.02 per
diluted share. Although this news 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.
Webcast and Taped Replay
Virage Logic's management plans to hold a teleconference on
second-quarter 2004 results at 1:30 p.m. PT / 4:30 p.m. ET today. Both
a live webcast and an archived webcast of management's teleconference
regarding second-quarter results will be available to all investors
from April 20, 2004 until April 20, 2005 on the Virage Logic website
at http://www.viragelogic.com/ir/. In addition, a telephonic replay
will be available through April 27, 2004 at (719) 457-0820, access
code 479808.
About Virage Logic
Virage Logic Corporation (Nasdaq:VIRL) is a leading provider of
best-in-class semiconductor IP platforms based on memory, logic, and
I/Os 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 computer and graphics markets. Virage Logic
is headquartered in Fremont, California and has sales and support
offices worldwide. For more 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 forecast its business, including its
revenue, income and order flow outlook; Virage Logic's ability to
execute on its strategy to become a provider of semiconductor IP
platforms; Virage Logic's ability to continue to develop new products
and maintain and develop new relationships with third-party foundries
and integrated device manufacturers; adoption of Virage Logic's
technologies by semiconductor companies and increases or fluctuations
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, to receive
accurate information necessary for calculating royalty revenues and to
collect royalty revenues from customers; business and economic
conditions generally and in the semiconductor industry in particular;
competition in the market for semiconductor IP platforms; and other
risks including those described in the company's Annual Report on Form
10-K for the period ended September 30, 2003, and in Virage Logic's
other periodic reports filed with the SEC, all of which are available
from Virage Logic's website (www.viragelogic.com) 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.
All trademarks are the property of their respective owners and are
protected herein.
Virage Logic Corporation
Consolidated Statements of Operations
(In thousands, except per-share amounts)
Three Months Ended Six Months Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2004 2003 2004 2003
------- ------- ------- -------
Revenues:
License $11,212 $ 9,046 $20,686 $20,096
Royalties 1,765 579 3,151 1,094
------- ------- ------- -------
Revenues 12,977 9,625 23,837 21,190
Cost and expenses:
Cost of revenues 2,867 2,239 5,303 4,890
Research and development 4,639 5,021 9,052 9,650
Sales and marketing 3,714 2,930 6,962 6,013
General and administrative 1,636 1,309 3,081 2,494
Stock-based compensation 49 441 99 1,016
------- ------- ------- -------
Total cost and expenses 12,905 11,940 24,497 24,063
------- ------- ------- -------
Operating income (loss) 72 (2,315) (660) (2,873)
Interest income and other, net 136 139 304 388
------- ------- ------- -------
Income (loss) before taxes 208 (2,176) (356) (2,485)
Income tax provision (benefit) 19 (611) (186) (535)
------- ------- ------- -------
Net income (loss) $ 189 $(1,565) $ (170) $(1,950)
======= ======= ======= =======
Earnings per share:
Basic $ 0.01 $ (0.08) $ (0.01) $ (0.09)
Diluted $ 0.01 $ (0.08) $ (0.01) $ (0.09)
Shares used in computing per share
amounts:
Basic 21,373 20,729 21,277 20,649
Diluted 22,168 20,729 22,071 20,649
Virage Logic Corporation
Consolidated Balance Sheets
(In thousands)
Mar. 31, Sept. 30,
2004 2003
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 55,346 $ 38,930
Investments 4,086 16,085
Accounts receivable, net 14,134 10,499
Costs in excess of related billings on
uncompleted contracts 585 619
Prepaid expenses and other 3,557 3,820
Taxes receivable 379 --
-------- --------
Total current assets 78,087 69,953
Property, equipment and leasehold improvements,
net 5,017 6,250
Intangible assets, net of amortization 12,737 12,930
Deferred tax assets 2,942 2,942
Long-term investments -- 4,095
Other long-term assets 398 392
-------- --------
Total assets $ 99,181 $ 96,562
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 318 $ 807
Accrued expenses 4,120 3,771
Deferred revenue 4,892 2,613
Income taxes payable -- 309
-------- --------
Total current liabilities 9,330 7,500
Deferred tax liability 1,189 1,189
Deferred acquisition costs -- 500
-------- --------
Total liabilities 10,519 9,189
Stockholders' equity:
Common stock 21 21
Additional paid-in capital 111,677 110,330
Unrealized gains and losses 16 2
Deferred stock-based compensation (32) (130)
Accumulated deficit (23,020) (22,850)
-------- --------
Total stockholders' equity 88,662 87,373
-------- --------
Total liabilities and stockholders'
equity $ 99,181 $ 96,562
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CONTACT: Virage Logic
Mike Seifert, 510-360-8025
Chief Financial Officer
michael.seifert@viragelogic.com