Exhibit 99.1
Virage Logic Reports Fiscal Year and Fourth-Quarter 2006 Results
Record Annual Revenues for FY2006
FREMONT, Calif.--(BUSINESS WIRE)--Nov. 6, 2006--Virage Logic
Corporation (Nasdaq:VIRL), a pioneer in Silicon Aware IP(TM) and
leading provider of semiconductor intellectual property (IP)
platforms, today reported its financial results for the fiscal year
and fourth fiscal quarter ended September 30, 2006.
For fiscal year 2006, revenues were $59.3 million, up 11 percent
over revenues of $53.4 million reported for fiscal year 2005. GAAP net
loss for fiscal year 2006 was $0.9 million, or ($0.04) per share,
compared with a net loss of $0.3 million, or ($0.01) per share, for
fiscal 2005. Non-GAAP net income for fiscal year 2006 was $3.9 million
or $0.17 per share compared to non-GAAP net loss of $0.3 million or
($0.01) per share for fiscal year 2005. The non-GAAP results exclude
FAS123R stock compensation expense.
Revenues for the fourth quarter of fiscal 2006 were $15.0 million
compared to $12.8 million for the fourth quarter of fiscal 2005 and
$15.3 million for the third quarter of fiscal 2006. License revenue
for the fourth quarter of fiscal 2006 was $11.3 million compared to
$10.0 million for the same period a year ago and $11.1 million for the
previous quarter. Royalties for the fourth quarter of fiscal 2006 were
$3.7 million compared to $2.8 million for the fourth quarter of fiscal
2005 and $4.2 million for the third quarter of fiscal 2006.
In accordance with generally accepted accounting principles
(GAAP), net income for the fourth quarter of fiscal 2006 was $0.8
million, or $0.03 per share compared to net income of $0.2 million, or
$0.01 per share, for the same period a year ago and with a net loss of
$1.6 million, or ($0.07) per share, for the third quarter of fiscal
2006. Non-GAAP net income for the fourth quarter of fiscal 2006 was
$1.3 million or $0.05 per share compared to non-GAAP net income of
$0.2 million or $0.01 per share for the same period of fiscal 2005.
The non-GAAP results exclude FAS123R stock compensation expense.
Cash, cash equivalents and investments increased by $9.8 million
for the year ended September 30, 2006 compared to the fiscal year 2005
and decreased by $0.2 million from the third quarter of fiscal 2006.
"We are pleased with the progress we made in fiscal 2006 to
improve our overall business which puts us in a position to pursue
profitable growth," said Adam Kablanian, president and CEO. "For
fiscal 2007, we are focused on generating top-line revenue growth and
improved profitability. The improvements we made to our business,
along with our leadership position in providing advanced semiconductor
intellectual property, should help us execute toward that goal and
further establish us as the semiconductor industry's trusted IP
partner."
Virage Logic also announced today its business outlook for the
first quarter of fiscal 2007 ending December 31, 2006. The company
currently anticipates total revenues of approximately $14.6 million to
$15.0 million, including royalties of approximately $3.6 million to
$3.8 million. The company expects to report a GAAP net income of
approximately ($0.01) loss to a $0.01 profit per diluted share and
non-GAAP earnings per diluted share excluding FAS123R stock
compensation expense is expected to be in the range of $0.03 to $0.05
for the first fiscal quarter. The company expects $1.4 million of
FAS123R stock compensation expense for the first quarter of fiscal
2007. 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.
Virage Logic's management plans to hold a teleconference on
fourth-quarter 2006 results at 1:30 p.m. PT / 4:30 p.m. ET today. A
live webcast of management's teleconference regarding fourth-quarter
results will be available to all investors, and an archived webcast
will be available from November 6, 2006 until November 6, 2007 on the
Investor Relations page of Virage Logic's website at
http://www.viragelogic.com. In addition, a telephonic replay will be
available through November 13, 2006 at (719) 457-0820, access code
5628154.
About Virage Logic
Founded in 1996, Virage Logic Corporation (Nasdaq:VIRL) rapidly
established itself as a technology and market leader in providing
advanced embedded memory intellectual property (IP) for the design of
complex integrated circuits. Now, as the company celebrates its 10th
anniversary, it is a global leader in semiconductor IP platforms
comprising embedded memories, logic, and I/Os and is pioneering the
development of a new class of IP called Silicon Aware IP(TM). Silicon
Aware IP tightly integrates Physical IP (memory, logic and I/Os) with
the embedded test, diagnostic, and repair capabilities of
Infrastructure IP to help ensure manufacturability and optimized yield
at the advanced process nodes. Virage Logic's highly differentiated
product portfolio provides higher performance, lower power, higher
density and optimal yield to foundries, integrated device
manufacturers (IDMs) and fabless customers who develop products for
the consumer, communications and networking, hand-held and portable,
and computer and graphics markets. The company uses its
FirstPass-Silicon(TM) Characterization Lab for certain products to
help ensure high quality, reliable IP across a wide range of foundries
and process technologies. The company also prides itself on providing
superior customer support and was recently named Customer Service
Leader of the Year in the Semiconductor IP Market by Frost & Sullivan.
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 company trends, business outlook and
technology leadership. 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 improve its operations; its ability to forecast its
business, including its revenue, income and order flow outlook; Virage
Logic's ability to execute on its strategy; 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, 2005, 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.
Reconciliation of GAAP to Non-GAAP Financial Results
- ----------------------------------------------------------------------
Three Months Twelve Months
Statement of Operations Reconciliation Ended Ended
(in thousands) September 30, September 30,
2006 2006
GAAP Net Income (Loss) $ 777 $ (879)
Stock-based compensation expense
related to stock options 1,347 6,715
Stock-based compensation expense
related to custom contracts (277) (248)
Tax effect (583) (1,649)
-------------------------------
Non-GAAP net income $ 1,264 $ 3,939
===============================
Virage Logic Corporation
Unaudited Consolidated Balance Sheets
(In thousands)
September 30, September 30,
2006 2005
------------------ -----------------
ASSETS:
Current assets:
Cash and cash equivalents $ 20,815 $ 26,841
Short-term investments 49,253 34,410
Accounts receivable, net 15,935 14,201
Costs in excess of related
billings on uncompleted
contracts 656 896
Prepaid expenses and other
current assets 3,369 4,517
Taxes receivable 1,711 493
----------------- ----------------
Total current assets 91,739 81,358
Property, equipment and leasehold
improvements, net 4,842 5,093
Goodwill 9,782 9,782
Other intangible assets, net 1,990 2,375
Deferred tax assets 10,089 8,604
Long-term investments 7,533 6,587
Other long-term assets 300 695
----------------- ----------------
Total assets $ 126,275 $ 114,494
================= ================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 446 $ 770
Accrued expenses 4,797 3,623
Deferred revenue 8,896 8,440
Income taxes payable 2,626 1,441
----------------- ----------------
Total current liabilities 16,765 14,274
Deferred tax liabilities 692 852
----------------- ----------------
Total liabilities 17,457 15,126
----------------- ----------------
Stockholders' equity:
Common stock 23 23
Additional paid-in capital 130,620 120,548
Accumulated other comprehensive
income (loss) 309 52
Accumulated deficit (22,134) (21,255)
----------------- ----------------
Total stockholders' equity 108,818 99,368
----------------- ----------------
Total liabilities and
stockholders' equity $ 126,275 $ 114,494
================= ================
Virage Logic Corporation
Unaudited GAAP and Non-GAAP Consolidated Statements of Operations
(In thousands, except per-share amounts)
For the Three Months For the Three Months
Ended September 30, 2006 Ended September 30, 2005
---------------------------------------------------
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
---------------------------------------------------
Revenue:
License $11,362 $-- $11,362 $10,001 $-- $10,001
Royalties 3,674 -- 3,674 2,791 -- 2,791
-------- ------- -------- -------- ------- --------
Total revenues 15,036 -- 15,036 12,792 -- 12,792
-------- ------- -------- -------- ------- --------
Cost and expenses:
Cost of revenues 3,436 150 3,586 3,523 -- 3,523
Research and
development 4,978 (276) 4,702 4,613 -- 4,613
Sales and
marketing 4,273 (330) 3,943 3,492 -- 3,492
General and
administrative 2,704 (614) 2,090 2,805 -- 2,805
-------- ------- -------- -------- ------- --------
Total cost and
expenses 15,391 (1,070) 14,321 14,433 -- 14,433
-------- ------- -------- -------- ------- --------
Operating
income (loss) (355) 1,070 715 (1,641) -- (1,641)
Interest income
and other, net 1,117 -- 1,117 532 -- 532
-------- ------- -------- -------- ------- --------
Income (loss)
before taxes 762 1,070 1,832 (1,109) -- (1,109)
Income tax
provision
(benefit) (15) 583 568 (1,341) -- (1,341)
-------- ------- -------- -------- ------- --------
Net income $777 $487 $1,264 $232 $-- $232
======== ======= ======== ======== ======= ========
Earnings per
share:
Basic $0.03 $0.05 $0.01 $0.01
======== ======== ======== ========
Diluted $0.03 $0.05 $0.01 $0.01
======== ======== ======== ========
Shares used in
computing per
share amounts:
Basic 22,986 22,986 22,473 22,473
======== ======== ======== ========
Diluted 23,443 23,443 22,763 22,763
======== ======== ======== ========
Virage Logic Corporation
Unaudited GAAP and Non-GAAP Consolidated Statements of Operations
(In thousands, except per-share amounts)
For the Twelve Months For the Twelve Months
Ended September 30, 2006 Ended September 30, 2005
-------------------------- -------------------------
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
-------------------------- -------------------------
Revenue:
License $43,214 $-- $43,214 $42,425 $-- $42,425
Royalties 16,089 -- 16,089 10,964 -- 10,964
-------- ------- -------- -------- ------- --------
Total revenues 59,303 -- 59,303 53,389 -- 53,389
-------- ------- -------- -------- ------- --------
Cost and
expenses:
Cost of
revenues 14,803 (1,181) 13,622 13,035 -- 13,035
Research and
development 21,407 (1,245) 20,162 19,841 -- 19,841
Sales and
marketing 16,858 (1,674) 15,184 15,608 -- 15,608
General and
administrative 10,319 (2,367) 7,952 9,083 -- 9,083
-------- ------- -------- -------- ------- --------
Total cost
and expenses 63,387 (6,467) 56,920 57,567 -- 57,567
-------- ------- -------- -------- ------- --------
Operating
income
(loss) (4,084) 6,467 2,383 (4,178) -- (4,178)
Interest income
and other, net 3,325 -- 3,325 1,703 -- 1,703
-------- ------- -------- -------- ------- --------
Income (loss)
before taxes (759) 6,467 5,708 (2,475) -- (2,475)
Income tax
provision
(benefit) 120 1,649 1,769 (2,160) -- (2,160)
-------- ------- -------- -------- ------- --------
Net income
(loss) $(879) $4,818 $3,939 $(315) $-- $(315)
======== ======= ======== ======== ======= ========
Earnings per
share:
Basic $(0.04) $0.17 $(0.01) $(0.01)
======== ======== ======== ========
Diluted $(0.04) $0.17 $(0.01) $(0.01)
======== ======== ======== ========
Shares used in
computing per
share amounts:
Basic 22,812 22,812 22,187 22,187
======== ======== ======== ========
Diluted 22,812 23,390 22,187 22,187
======== ======== ======== ========
CONTACT: Virage Logic Corporation
Chief Financial Officer
Christine Russell, 510-360-8025
Christine.russell@viragelogic.com