Exhibit 99.1
Monolithic System Technology, Inc. Announces Fourth Quarter and Fiscal Year 2005
Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 15, 2006--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 fourth quarter and fiscal year
ended December 31, 2005.
Fourth Quarter Results
Total net revenue in the fourth quarter was $2.4 million, as
compared to $1.2 million in the fourth quarter of 2004 and $4.1
million in the third quarter of 2005. Total revenue for the quarter
was in line with the Company's updated guidance of $2.3 million to
$2.5 million, for which the forecast was adjusted due to the deferral
of more than $1.0 million in revenue associated with fourth quarter
licenses of the Company's new 1T-SRAM(R) CLASSIC Macros.
Total revenue for the fourth quarter included licensing revenue of
$1.3 million and royalty revenue of $1.1 million. This compares to
licensing revenue of $118,000 and royalty revenue of $1.1 million in
the fourth quarter of 2004 and licensing revenue of $3.2 million and
royalty revenue of $897,000 in the prior quarter. During the quarter,
we recorded licensing revenue from 15 different chip development
projects, compared to 16 projects in the previous quarter. We recorded
royalty revenue from 17 different licensees as compared to 15
licensees in the previous quarter. The increased number of royalty
payers comes as additional licensees have moved from the development
phase to the production phase.
The gross margin percentage in the fourth quarter of 2005 was 90
percent, increasing from 55 percent in the fourth quarter of 2004 and
84 percent in the third quarter of 2005.
Total operating expenses for the fourth quarter were $4.1 million,
which included approximately $340,000 of legal expenses related to the
UniRam litigation.
Under generally accepted accounting principles (GAAP), the
operating loss for the fourth quarter of 2005 was $1.9 million, as
compared to an operating loss of $3.0 million in the same period in
2004 and an operating loss of $618,000 in the prior quarter. Fourth
quarter net loss was $1.1 million, or ($0.04) per share, compared to a
net loss of $2.4 million, or ($0.08) per share, in the same period
last year and a net income of $50,000, or $0.00 per share, in the
previous quarter.
Our cash, cash equivalents and both long and short-term
investments totaled approximately $86.0 million as of December 31,
2005. With respect to our balance sheet, we had positive net cash flow
from operating activities of approximately $1.0 million in the fourth
quarter of 2005 due to higher cash collection.
Fiscal 2005 Results
For fiscal year 2005, net revenue was $12.3 million compared to
$10.8 million in fiscal 2004. Net loss in 2005 was $3.0 million, or
($0.10) per share, as compared to the net loss of $1.9 million, or
($0.06) per share, reported in 2004. Included in 2004 results was the
termination fee associated with the aborted acquisition and subsequent
litigation with Synopsys, net of expenses and income tax, of $4.6
million.
"Although the revenue deferral impacted our actual results for the
fourth quarter, we are pleased with the strength in overall bookings,
the increase in new projects within the consumer multimedia and
cellular handset market segments and the achievement of positive cash
flow," commented Chet Silvestri, Chief Executive Officer of MoSys.
"The majority of fourth quarter bookings were for our new family of
CLASSIC Macros, which began initial shipments during the quarter."
The Company's CLASSIC memory macros are silicon-proven,
off-the-shelf, high-density solutions offering customers rapid memory
block integration into their SoC designs. These macros are
pre-configured and for targeted applications require minimal
additional customization. They are targeted for high volume consumer
products that require larger embedded memory to support device
enhancements, such as higher resolution cameras and high quality audio
and video capabilities.
"The complexity of portable consumer devices continues to
increase, which poses significant challenges for our customers in
terms of density, speed, power consumption and performance," continued
Silvestri. "As evidenced by the increased bookings experienced in the
fourth quarter, our CLASSIC Macros offer superior embedded memory
subsystems to address these challenges."
"Additionally, we are very pleased to close 2005 with a
year-over-year growth rate of 14 percent. 2005 was a year of
rebuilding for MoSys in the areas of sales and marketing organization,
new product development and target markets expansion. We continue to
have strong relationships with our established customers, such as NEC
and Fujitsu, and are pleased to have secured new major customers, such
as LG Electronics and YAMAHA, in the consumer electronics market. As
we further benefit from our enhanced sales and marketing efforts, we
expect to deepen our penetration into the high volume, high growth
consumer applications market in the U.S., Asia and Europe.
Furthermore, we continue to make strategic investments in research and
development in order to develop macros for additional memory types
such as dual port memories, which will broaden our CLASSIC Macro
family. We look forward to making announcements of additional
achievements in the coming quarters," concluded Mr. Silvestri.
Business Outlook
Chet Silvestri, Chief Executive Officer will update the business
outlook and give guidance for the first quarter of 2006 during their
financial results conference call at 2:15 p.m. PT on Wednesday,
February 15, 2006.
Fourth Quarter 2005 Financial Results Webcast/ Conference Call
MoSys management will host a conference call and web cast with
investors today, February 15, at 2:15 p.m. Central time (5:15 p.m.
Eastern time) to discuss the fourth quarter financial results and the
business outlook going forward for the first quarter of 2006.
Investors and other interested parties may access the call by dialing
866-202-4683 in the U.S. (617-213-8846 outside of the U.S.), and
entering the passcode 18742101 at least 10 minutes prior to the start
of the call. In addition, an audio web cast will be available through
the MoSys Web site at www.mosys.com. A replay will be available for 48
hours following the call at 888-286-8010 in the U.S. (617-801-6888
outside of the U.S.), passcode 13341841.
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 and embedded memory designs, 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.
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 100 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.
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,
2005 2004 2005 2004
---------- ----------- ---------- --------
(unaudited) (unaudited)
Net Revenue
Product $- $33 $10 $952
Licensing 1,339 118 7,725 4,544
Royalty 1,063 1,069 4,547 5,325
---------- ----------- ---------- --------
Total 2,402 1,220 12,282 10,821
---------- ----------- ---------- --------
Cost of Net Revenue
Product - 25 - 655
Licensing 243 519 1,986 1,613
---------- ----------- ---------- --------
Total 243 544 1,986 2,268
---------- ----------- ---------- --------
Gross Profit 2,159 676 10,296 8,553
---------- ----------- ---------- --------
Operating Expenses
Research and development 1,557 1,728 5,839 8,096
Selling, general and
administrative 2,519 1,355 9,922 13,331
Restructuring expenses 5 585 119 585
---------- ----------- ---------- --------
Total operating expenses 4,081 3,668 15,880 22,012
---------- ----------- ---------- --------
Loss from operations (1,922) (2,992) (5,584) (13,459)
Interest and other income 794 550 2,591 11,578
---------- ----------- ---------- --------
Loss before income taxes (1,128) (2,442) (2,993) (1,881)
Income tax benefit
(provision) 44 31 11 (26)
---------- ----------- ---------- --------
Net Loss $(1,084) $(2,411) $(2,982) $(1,907)
========== =========== ========== ========
Net loss per share
Basic ($0.04) ($0.08) ($0.10) ($0.06)
========== =========== ========== ========
Diluted ($0.04) ($0.08) ($0.10) ($0.06)
========== =========== ========== ========
Shares used in computing
net loss per share
Basic 30,698 30,296 30,534 30,750
Diluted 30,698 30,296 30,534 30,750
MONOLITHIC SYSTEM TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2005 2004
------------ ------------
Assets
Current Assets
Cash, cash equivalents and short-term
investments $68,650 $62,349
Accounts receivable - net 638 1,996
Unbilled contract receivable 368 57
Prepaid expenses and other assets 2,632 2,939
------------ ------------
Total Current Assets 72,288 67,341
Long-term investments 17,339 24,562
Property and equipment - net 1,121 685
Goodwill 12,326 12,326
Other Assets 563 539
------------ ------------
Total Assets $103,637 $105,453
============ ============
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $236 $120
Accrued expenses and other liabilities 2,564 3,314
Deferred revenue 1,309 1,372
------------ ------------
Total Current Liabilities 4,109 4,806
Long-term portion of restructuring
liability 196 239
Common stock, additional paid-in capital
and others 100,166 98,260
Retained earnings (Accumulated deficit) (834) 2,148
------------ ------------
Total Stockholders' Equity 99,332 100,408
------------ ------------
Total Liabilities and Stockholders' Equity $103,637 $105,453
============ ============
CONTACT: MoSys, Sunnyvale
Chet Silvestri, 408-731-1811
chet@mosys.com
or
Shelton Investor Relations
Beverly Twing, 972-239-5119 x126
btwing@sheltongroup.com