Exhibit 99.1
Virage Logic Reports Record Revenues for Third-Quarter Fiscal 2004;
Posts 45% Year-Over-Year Revenue Growth;
Record Royalties of $1.9 Million
FREMONT, Calif.--(BUSINESS WIRE)--July 20, 2004--Virage Logic
Corporation (Nasdaq:VIRL)
Quarterly News Release Highlights:
-- Record Q3 revenues of $13.9 million, compared with $9.6
million for Q3 fiscal 2003, and $13.0 million for Q2 fiscal
2004
-- Q3 GAAP net income of $571,000, or $0.03 per share, compared
with a GAAP net loss of $1.2 million, or $0.06 per share, for
Q3 fiscal 2003, and GAAP net income of $189,000, or $0.01 per
share, for Q2 fiscal 2004
Virage Logic Corporation (Nasdaq:VIRL), a leading provider of
semiconductor IP platforms, today reported its financial results for
the third fiscal quarter ended June 30, 2004.
Revenues for the third quarter of fiscal 2004 were the highest in
the company's history at $13.9 million, up 45 percent from $9.6
million for the third quarter of fiscal 2003, and up from $13.0
million for the second quarter of fiscal 2004. Total license revenue
for the third quarter of fiscal 2004 was $11.9 million, compared with
$8.5 million for the same quarter a year ago and $11.2 million for the
prior quarter. Royalties for the third quarter of fiscal 2004 were
$1.9 million, up from $1.1 million for the third quarter of fiscal
2003, and up sequentially from $1.8 million.
As reported under generally accepted accounting principles (GAAP)
in the U.S., net income for the third quarter of fiscal 2004 was
$571,000, or $0.03 per share, compared with a net loss for the third
quarter of fiscal 2003 of $1.2 million, or $0.06 per share. Net income
for the second quarter of fiscal 2004 was $189,000, or $0.01 per
share.
For the nine months of fiscal 2004, revenues were $37.7 million,
up 23 percent from $30.8 million for the first nine months of the
prior fiscal year. Net income for the first nine months of fiscal 2004
was $401,000, or $0.02 per share. This compared with a net loss of
$3.2 million, or $0.15 per share, for the same period of fiscal 2003.
"We are pleased with our quarterly results and our continued
progress in profitably growing the company," said Adam Kablanian,
Virage Logic's president and chief executive officer. "As indicated by
our business outlook, customers are continuing to adopt our highly
differentiated, silicon-proven semiconductor intellectual property for
advanced process nodes such as 0.13-micron and 90-nanometer, and we
have continued to invest in scaling our business for current and
anticipated market growth."
Additional Recent Business Highlights
During the third quarter and more recently, Virage Logic:
-- Launched IPrima Mobile(TM), the first offering in Virage
Logic's IPrima family of application-optimized semiconductor
IP platforms designed to address the requirements for such
markets as consumer, data communications and networking,
computer and graphics, and portable and handheld. By
delivering up to a 20X reduction in static and an 80 percent
reduction in dynamic power dissipation, IPrima Mobile
effectively manages power dissipation without paying a
performance penalty for such ubiquitous consumer electronics
products as cell phones, personal digital assistants (PDAs)
and handheld gaming platforms.
-- Signed a licensing and wafer-based royalty agreement with
Tower Semiconductor (Nasdaq:TSEM; TASE:TSEM), in which Virage
Logic's Technology-Optimized Platforms will be made available
to Tower's customers on the foundry's first 0.13-micron CMOS
process offering
-- Signed a new 90-nanometer wafer-based royalty agreement with a
large Japanese integrated device manufacturer (IDM) and booked
a total of 13 new 90-nanometer agreements overall with foundry
and IDM customers
-- Signed nine new ASAP Logic and semiconductor IP platform
agreements
-- Signed a total of 13 new direct royalty-bearing agreements for
the Self-Test and Repair (STAR) Memory System(TM) and
NetCAM(TM) Content Addressable Memory products, bringing the
total number of agreements to over 80
-- Recorded revenue under licensing agreements from 49 customers
- 44 existing and 5 new.
Business Outlook
Virage Logic also announced today its outlook for the fourth
quarter of fiscal 2004. The company currently anticipates total
revenues of approximately $15.0 million. Expected total revenues for
the quarter are anticipated to include royalties of approximately $2.1
million. The company expects to report GAAP net income of
approximately $0.04 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
third-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 third-quarter results will be available to all investors
from July 20, 2004 until July 20, 2005 on the Virage Logic website at
http://www.viragelogic.com/ir/. In addition, a telephonic replay will
be available through July 27, 2004 at (719) 457-0820, access code
537731.
About Virage Logic
Founded in 1996, Virage Logic Corporation (Nasdaq:VIRL) quickly
established itself as a technology and market leader in providing
advanced embedded memory intellectual property (IP) for the design of
complex integrated circuits. Virage Logic has evolved to become a
global leader in semiconductor IP platforms comprising embedded
memory, standard cells, and I/Os primarily for the consumer,
communications and networking, handheld and portable, and computer and
graphics markets. Virage Logic's highly differentiated product
portfolio provides foundries, integrated device manufacturers (IDMs)
and fabless customers with key competitive advantages including higher
performance, lower power, higher density and optimal yield. The
company's comprehensive quality efforts are validated in its
FirstPass-Silicon Characterization lab which ensures high quality,
reliable IP across a wide range of foundries and process technologies.
Headquartered in Fremont, California, Virage Logic has R&D, sales and
support offices worldwide. For more information, visit
www.viragelogic.com.
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 Nine Months Ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
-------- -------- -------- --------
Revenues:
License $11,933 $ 8,467 $32,619 $28,563
Royalties 1,919 1,097 5,070 2,191
Revenues 13,852 9,564 37,689 30,754
Cost and expenses:
Cost of revenues 2,872 2,224 8,175 7,114
Research and development 4,645 4,678 13,697 14,328
Sales and marketing 3,869 3,344 10,831 9,357
General and administrative 1,759 1,135 4,840 3,629
Stock-based compensation 32 137 131 1,153
Total cost
and expenses 13,177 11,518 37,674 35,581
Operating income (loss) 675 (1,954) 15 (4,827)
Interest income and
other, net 164 145 468 533
Income (loss) before taxes 839 (1,809) 483 (4,294)
Income tax provision
(benefit) 268 (596) 82 (1,131)
Net income (loss) $ 571 $(1,213) $ 401 $(3,163)
Earnings per share:
Basic $ 0.03 $ (0.06) $ 0.02 $ (0.15)
Diluted $ 0.03 $ (0.06) $ 0.02 $ (0.15)
Shares used in computing
per share amounts:
Basic 21,479 20,822 21,346 20,742
Diluted 21,874 20,822 21,996 20,742
Virage Logic Corporation
Consolidated Balance Sheets
(In thousands)
June 30, 2004 Sept. 30, 2003
------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 42,961 $ 38,930
Investments 9,610 16,085
Accounts receivable, net 13,718 10,499
Costs in excess of related
billings on uncompleted contracts 743 619
Prepaid expenses and other 3,829 3,820
Taxes receivable 1,911 -
Total current assets 72,772 69,953
Property, equipment and leasehold
improvements, net 4,535 6,250
Intangible assets, net of amortization 12,640 12,930
Deferred tax assets 2,942 2,942
Long-term investments 10,600 4,095
Other long-term assets 399 392
Total assets $ 103,888 $ 96,562
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 937 $ 807
Accrued expenses 5,208 3,771
Deferred revenue 5,904 2,613
Income taxes payable 1,390 309
Total current liabilities 13,439 7,500
Deferred tax liability 1,189 1,189
Deferred acquisition costs - 500
Total liabilities 14,628 9,189
Stockholders' equity:
Common stock 21 21
Additional paid-in capital 111,746 110,330
Unrealized gains and losses (58) 2
Deferred stock-based compensation - (130)
Accumulated deficit (22,449) (22,850)
Total stockholders' equity 89,260 87,373
Total liabilities and
stockholders' equity $ 103,888 $ 96,562
CONTACT: Virage Logic
Mike Seifert, 510-360-8025 (CFO)
michael.seifert@viragelogic.com