Exhibit 99.1
Monolithic System Technology, Inc. Announces Third Quarter 2005 Financial
Results; Achieves Net Income Break-Even with Total Net Revenue Increasing for
the Third Consecutive Quarter
SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 1, 2005--Monolithic System
Technology, Inc. (MoSys), (Nasdaq:MOSY), the industry's leading
provider of high-density system-on-chip (SoC) embedded memory, today
reported financial results for its third quarter ended September 30,
2005.
Financial Results
Total net revenue for the third quarter of 2005 increased to $4.1
million, a 35 percent sequential increase over the prior quarter.
Third quarter total revenue increased from $3.1 million reported in
the previous quarter and from $1.7 million in the same period a year
ago.
Total net revenue consisted of $3.2 million from licensing and
$897,000 from royalties. Licensing revenue for the third quarter
increased 67 percent from the $1.9 million reported in the previous
quarter and from the $128,000 reported in the same period a year ago.
Third quarter licensing revenue reflected the completion of several
existing projects under contract as well as revenue from newly secured
license agreements. Royalty revenues decreased by $224,000 compared to
the previous quarter and by $591,000 year-over-year, reflecting
seasonality in the consumer electronics business and product lifecycle
transitions of our customers.
The gross margin percentage in the third quarter of 2005 was 84
percent, increasing from 80 percent in the second quarter of 2005, and
above the 81 percent gross margin reported in the third quarter of
2004.
Total operating expenses for the quarter were $4.1 million and
included approximately $450,000 in expenses related to the UniRAM
litigation.
Under generally accepted accounting principles (GAAP) in the
United States, the operating loss for the third quarter was $618,000,
as compared to a second quarter loss of $1.2 million. Net income for
the quarter was $50,000, or $0.00 per share, compared to a net loss of
$579,000, or ($0.02) per share, in the previous quarter and net income
of $5.1 million, or $0.15 diluted earnings per share, in the same
period last year.
"We are pleased with the results of the third quarter as we
recorded a substantial increase sequentially and year-over-year in
total net revenue and made good progress towards our goal of
profitability by reaching break-even in net income," commented Chet
Silvestri, Chief Executive Officer of MoSys. "During the quarter, we
saw strong interest in our new CLASSIC Macro family of silicon-proven
off-the-shelf designs. The introduction of these new products, along
with our efforts to enhance and improve our sales and marketing
functions should contribute to a continued increase in licensing
revenues in 2006."
"We announced the appointment of Dhaval Ajmera to the position of
Vice President of Worldwide Sales and Business Development and believe
his 23 years of executive management and technology licensing
experience will further the proliferation of our 1T-SRAM solutions for
both our custom macros and off-the-shelf CLASSIC Macro configurations.
One of Dhaval's priorities will be to strengthen our sales presence in
Asia as that region represents the largest potential for our
high-density memories. As an example, during the quarter, we signed a
new license agreement with LG Electronics for a high volume consumer
electronic application. We look forward to working with companies like
LG to expand the acceptance and implementation of our unique 1T-SRAM
technologies in the high-volume consumer market, which requires the
density, reliability and cost-saving characteristics that 1T-SRAM
provides," concluded Mr. Silvestri.
Business Outlook
Chet Silvestri, Chief Executive Officer and Mark Voll, Chief
Financial Officer will update the business outlook and give guidance
for the fourth quarter of 2005 during their financial results
conference call at 2:15 p.m. PT on Tuesday, November 1, 2005.
Third Quarter 2005 Financial Results Webcast/ Conference Call
MoSys management will host a live conference call and Webcast with
investors today, November 1, 2005, at 2:15 p.m. Pacific time (5:15
p.m. Eastern time) to discuss the third quarter financial results and
the business outlook going forward. Investors and other interested
parties may listen to the live audio Webcast by visiting the investor
relation's section of the MoSys Web site at http://www.mosys.com. A
replay of the conference call will be available for 48 hours beginning
at 5 p.m. Pacific time. The replay telephone number is 1-888-286-8010
with a pass code of 31044075. A Webcast replay will also be available
on the company's website.
About MoSys, Inc.
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 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 98 million chips
incorporating 1T-SRAM embedded memory technologies, demonstrating
excellent manufacturability in a wide range of silicon processes and
applications. MoSys is headquartered at 755 N. Mathilda Avenue,
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 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 operations of the Company 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.
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 Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
----------- ----------- ------------ -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net Revenue
Product $- $76 $10 $919
Licensing 3,233 128 6,386 4,426
Royalty 897 1,488 3,484 4,256
----------- ----------- ------------ -----------
Total 4,130 1,692 9,880 9,601
----------- ----------- ------------ -----------
Cost of Net Revenue
Product - 86 - 630
Licensing 668 236 1,743 1,094
----------- ----------- ------------ -----------
Total 668 322 1,743 1,724
----------- ----------- ------------ -----------
Gross Profit 3,462 1,370 8,137 7,877
----------- ----------- ------------ -----------
Operating Expenses
Research and
development 1,359 2,174 4,282 6,368
Selling, general and
administrative 2,721 3,949 7,403 11,976
Restructuring
expenses - - 114 -
----------- ----------- ------------ -----------
Total operating
expenses 4,080 6,123 11,799 18,344
----------- ----------- ------------ -----------
Loss from operations (618) (4,753) (3,662) (10,467)
Interest and other
income 679 10,398 1,797 11,028
----------- ----------- ------------ -----------
Income (loss) before
income taxes 61 5,645 (1,865) 561
Provision for income
taxes (11) (565) (33) (57)
----------- ----------- ------------ -----------
Net Income (Loss) $50 $5,080 $(1,898) $504
=========== =========== ============ ===========
Net income (loss) per
share
Basic $0.00 $0.16 ($0.06) $0.02
=========== =========== ============ ===========
Diluted $0.00 $0.15 ($0.06) $0.02
=========== =========== ============ ===========
Shares used in
computing net income
(loss) per share
Basic 30,531 31,074 30,479 30,902
Diluted 31,504 33,350 30,479 32,184
MONOLITHIC SYSTEM TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2005 2004
------------- --------------
(unaudited)
Assets
Current Assets
Cash, cash equivalents and short-term
investments $64,110 $62,349
Accounts receivable - net 2,129 1,996
Unbilled contract receivable 720 57
Prepaid expenses and other assets 2,411 2,939
------------- --------------
Total Current Assets 69,370 67,341
Long-term investments 20,120 24,562
Property and equipment - net 1,209 685
Goodwill 12,326 12,326
Other Assets 560 539
------------- --------------
Total Assets $103,585 $105,453
============= ==============
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $155 $120
Accrued expenses and other
liabilities 2,874 3,314
Deferred revenue 1,210 1,372
------------- --------------
Total Current Liabilities 4,239 4,806
Long-term portion of restructuring
liability 228 239
Common stock and additional paid in
capital 98,868 98,260
Retained earnings 250 2,148
------------- --------------
Total Stockholders' Equity 99,118 100,408
------------- --------------
Total Liabilities and Stockholders'
Equity $103,585 $105,453
============= ==============
CONTACT: MoSys, Sunnyvale
Mark Voll, 408-731-1846
markv@mosys.com
or
Shelton Investor Relations
Beverly Twing, 972-239-5119 x126
btwing@sheltongroup.com