Exhibit 99.1
Monolithic System Technology, Inc. Announces Fourth Quarter and Fiscal Year 2004
Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--February 9, 2005--Monolithic System
Technology, Inc. (MoSys), (Nasdaq:MOSY) today reported financial results for its
fourth quarter and fiscal year ended Dec. 31, 2004.
Highlights
-- Signed license agreement for 1T-SRAM with K-Micro (Kawasaki
Microelectronics)
-- Expanded sales presence in Israel, Taiwan and China through the
appointment of independent sales representatives.
-- Strengthened board of directors and management team with four new
independent board appointees and a new Vice President of Sales and
Marketing
Fourth Quarter Results
Total net revenue in the fourth quarter was $1.2 million compared to $3.4
million of net revenue for the same period a year ago. Total net revenue for the
quarter consisted of $118,000 from licensing, $1.1 million in royalties and
approximately $33,000 in product revenue. This compares to licensing revenue of
$1.9 million, royalty revenue of $1.1 million and product revenue of $334,000 in
the fourth quarter of 2003.
Operating expenses for the quarter included a restructuring charge of
$585,000 for the closure of the Company's Canadian research and development
facility.
The net loss for the quarter was $2.4 million, or ($0.08) per share,
compared to net loss of $415,000, or ($0.01) per share in the same period last
year. The fourth quarter 2004 loss per share was computed using 30,296,000
shares.
Fiscal 2004 Results
For fiscal year 2004, net revenue was $10.8 million compared to the $19.2
million reported in fiscal 2003. Net loss in 2004 was $1.9 million, compared to
net income of $2.5 million reported in 2003. The loss per share in the year was
($0.06) compared to earnings of $0.08 per share in the prior year. The loss per
share was computed using 30,750,000 shares.
"Although 2004 was a year of unique and disruptive challenges for MoSys, we
have made significant progress with our restructuring initiatives aimed at
rebuilding MoSys," commented Mark Voll, Interim CEO and Chief Financial Officer
of MoSys. "In the wake of the aborted acquisition by Synopsys, we have
successfully enhanced our sales and marketing team, secured sales partnerships
that will provide MoSys with an expanded international presence and attracted
additional highly qualified members to our board of directors and management
team."
Mr. Voll commented further, "Our confidence in our proprietary 1T-SRAM
technologies remains strong with new projects from customers escalating. We
believe the embedded memory content in SOCs will continue to grow, thus
increasing the size of our addressable market. There is a spirit of excitement
and enthusiasm in the company as we enter 2005."
Sarbanes-Oxley Update
In connection with the company's 2004 year-end financial statement audit,
the Company has been testing and evaluating its internal controls over financial
reporting to assess their effectiveness as required under Section 404 of the
Sarbanes-Oxley Act of 2002.
Based upon our testing and evaluation to date, we identified post-closing
adjustments and reclassifications relating to fixed assets and accrued
liabilities due to errors in our account reconciliations, and a post-closing
adjustment between fourth quarter revenue and cost of sales. We have determined
that the Company will have one or more internal control deficiencies that
constitute a "material weakness," as defined by the Public Company Accounting
Oversight Board's Auditing Standard No. 2. As a result, management will be
unable to conclude that the company's internal controls over financial reporting
are effective as of Dec. 31, 2004. Consequently, the Company believes that its
registered independent public accounting firm will be unable to attest to the
effectiveness of the Company's internal controls over financial reporting as of
such date.
The Company expects to conclude its testing and evaluation of internal
controls over financial reporting and management's assessment of such internal
controls prior to filing the Company's annual report on Form 10-K with the
Securities and Exchange Commission in mid-March 2005.
Business Outlook
MoSys' Interim Chief Executive Officer and Chief Financial Officer, Mark
Voll and Vice President of Sales and Marketing Karen Lamar will host a
conference call to further discuss the financial results and business outlook at
2:15 p.m. PT on Feb. 9, 2005.
Fourth Quarter and FY 2004 Financial Results Web Cast/Conference Call
The MoSys live audio web cast and conference call to discuss Q4 and FY 2004
financial results begins at 2:15 p.m. (PT) on Wednesday, Feb. 9, 2005. Investors
and other interested parties may listen to the live audio web cast by visiting
the investor relations section of the MoSys Web site at www.mosys.com. A replay
of the conference call will be available for 48 hours beginning at 5 p.m. PT.
The replay number is 1-888-286-8010 with a pass code of 11040432. A web cast
replay will also be available on the company's website.
About MoSys
Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and markets
innovative memory technologies for semiconductors. MoSys' patented 1T-SRAM
technologies offer a combination of high density, low power consumption, high
speed and low cost unmatched by other available memory technologies. The single
transistor bit cell used in 1T-SRAM memory results in the technology achieving
much higher density than traditional four or six transistor SRAMs while using
the same standard logic manufacturing processes. 1T-SRAM technologies also offer
the familiar, refresh-free interface and high performance for random address
access cycles associated with traditional SRAMs. In addition, these technologies
can reduce operating power consumption by a factor of four compared with
traditional SRAM technology, contributing to making them ideal for embedding
large memories in System on Chip (SoC) designs. MoSys' licensees have shipped
more than 80 million chips incorporating 1T-SRAM embedded memory technologies,
demonstrating excellent manufacturability in a wide range of silicon processes
and applications. MoSys is headquartered at 1020 Stewart Drive, Sunnyvale,
California 94085. More information is available on MoSys' website at
http://www.mosys.com.
Forward-Looking Statements
This press release may contain forward-looking statements about the Company
including, without limitation, benefits and performance expected from use of the
Company's 1T-SRAM technology.
Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and uncertainties.
Actual results and trends may differ materially from historical results or those
projected in any such forward-looking statements depending on a variety of
factors. These factors include but are not limited to, customer acceptance of
our 1T-SRAM technologies, the timing and nature of customer requests for our
services under existing license agreements, the timing of customer acceptance of
our work under such agreements, the level of commercial success of licensees'
products such as the Nintendo GAMECUBE and cell phone hand sets, ease of
manufacturing and yields of devices incorporating our 1T-SRAM, our ability to
enhance the 1T-SRAM technology or develop new technologies, the level of
intellectual property protection provided by our patents, the vigor and growth
of markets served by our licensees and customers and other risks identified in
the Company's most recent annual report on Form 10-K filed with the Securities
and Exchange Commission, as well as other reports that MoSys files from time to
time with the Securities and Exchange Commission. MoSys undertakes no obligation
to update publicly any forward-looking statement for any reason, except as
required by law, even as new information becomes available or other events occur
in the future.
We may also identify additional deficiencies or material weaknesses in our
internal controls, or may be unable to remediate such deficiencies and
weaknesses. Despite the significant expense, time, and effort being expended on
our efforts to remediate our internal controls, there is no assurance that we
will be able to prevent additional errors, or that we will be able to
successfully remediate the significant deficiencies or material weaknesses in
our internal controls. Potential consequences of a failure to remediate such
significant deficiencies and material weaknesses could include, among other
things: enforcement action against us by the SEC or other federal or state
regulatory agency, lawsuits by private plaintiffs, adverse reaction by investors
and potential investors, and harm to our reputation in the business and
financial community. If any of our internal control significant deficiencies or
material weaknesses are not adequately addressed, we could continue to
experience accounting errors that could result in misstatements of our results
of operations, restatements of our financial statements, loss of confidence in
us as a company, a decline in our stock price, or otherwise adversely affect our
business, reputation and results of operations.
1T-SRAM(R) is a MoSys trademark registered in the U.S. Patent and Trademark
Office. All other trade, product, or service names referenced in this release
may be trademarks or registered trademarks of their respective holders.
MONOLITHIC SYSTEM TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
----------- ----------- --------- ----------
(unaudited) (unaudited)
Net Revenue
Product $33 $334 $952 $1,904
Licensing 118 1,929 4,544 10,418
Royalty 1,069 1,088 5,325 6,911
----------- ----------- --------- ----------
Total 1,220 3,351 10,821 19,233
----------- ----------- --------- ----------
Cost of Net Revenue
Product 25 259 655 1,217
Licensing 519 426 1,613 1,970
----------- ----------- --------- ----------
Total 544 685 2,268 3,187
----------- ----------- --------- ----------
Gross Profit 676 2,666 8,553 16,046
----------- ----------- --------- ----------
Operating Expenses:
Research and
development 1,724 2,087 8,052 8,593
Selling, general and
administrative 1,348 1,463 13,307 6,121
Restructuring charges 585 -- 585 --
Stock-based
compensation expense 8 38 68 459
----------- ----------- --------- ----------
Total operating
expenses 3,665 3,588 22,012 15,173
----------- ----------- --------- ----------
Income (loss) from
operations (2,989) (922) (13,459) 873
Interest and other
income 548 461 11,578 1,914
----------- ----------- --------- ----------
Income (loss) before
income taxes (2,441) (461) (1,881) 2,787
Benefit (provision) for
income taxes 30 46 (26) (279)
----------- ----------- --------- ----------
Net Income (Loss) $(2,411) $(415) $(1,907) $2,508
=========== =========== ========= ==========
Net Income (Loss) Per
Share
Basic ($0.08) ($0.01) ($0.06) $0.08
=========== =========== ========= ==========
Diluted ($0.08) ($0.01) ($0.06) $0.08
=========== =========== ========= ==========
Shares Used in Computing
Net Income (Loss) Per
Share
Basic 30,296 30,704 30,750 30,504
Diluted 30,296 30,704 30,750 30,998
MONOLITHIC SYSTEM TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2004 2003
------------- --------------
Assets
Current Assets
Cash, cash equivalents and short-term
investments $62,349 $41,365
Accounts receivable - net 1,125 1,027
Unbilled contract receivable 57 1,106
Inventories - net -- 474
Prepaid expenses and other assets 2,939 3,822
------------- --------------
Total Current Assets 66,470 47,794
Long-term investments 24,562 44,462
Property and equipment - net 685 1,796
Goodwill 12,326 12,326
Other Assets 539 514
------------- --------------
Total Assets $104,582 $106,892
============= ==============
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $120 $116
Accrued expenses and other liabilities 3,314 2,733
Deferred revenue 501 506
Current portion of capital lease
obligations -- 13
------------- --------------
Total Current Liabilities 3,935 3,368
Long term portion of restructuring
liability 239 --
Long term portion of capital lease
obligations -- 13
Common stock and additional paid in
capital 98,260 99,456
Retained earnings 2,148 4,055
------------- --------------
Total Stockholders' Equity 100,408 103,511
------------- --------------
Total Liabilities and Stockholders'
Equity $104,582 $106,892
============= ==============
CONTACT: Monolithic System Technology, Inc., Sunnyvale
Mark Voll, 408-731-1846
markv@mosys.com
or
Shelton IR
Beverly Twing, 972-239-5119 x126
btwing@sheltongroup.com