Exhibit 99.1
MoSys, Inc. Reports Second Quarter 2007
Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 31, 2007--MoSys, Inc.
(MoSys), (NASDAQ: MOSY), the industry's leading provider of
high-density system-on-chip (SoC) embedded memory intellectual
property (IP), today reported financial results for its second quarter
ended June 30, 2007.
Second Quarter Highlights
Total revenue for the second quarter of 2007 was $4.3 million,
representing a 38 percent increase compared to $3.1 million in the
first quarter of 2007. Second quarter total revenue increased 85
percent as compared to $2.3 million for the second quarter of 2006.
Second quarter total revenue included $2.1 million of licensing
revenue as compared to $1.1 million in the first quarter of 2007,
representing a sequential increase of 86 percent, and $1.7 million in
the second quarter of 2006. Royalty revenue was $2.2 million as
compared to $2.0 million in the previous quarter and $639,000 in the
same period a year ago. The Company recorded licensing revenue from 14
different chip development projects compared to 12 projects in the
previous quarter, and royalty revenue from 16 different licensees,
which was consistent with the previous quarter.
The second quarter gross margin percentage determined in
accordance with U.S. generally accepted accounting principles (GAAP)
was 84 percent as compared to 82 percent in the first quarter of 2007
and 84 percent in the second quarter of 2006.
Total operating expenses were $4.9 million as compared to $4.7
million in the first quarter of 2007.
On a GAAP basis, net loss for the quarter was $146,000, or
breakeven per share, including stock-based compensation charges of
$794,000. This compares to a net loss of $969,000, or ($0.03) per
share, in the previous quarter and a net loss of $2.1 million, or
($0.07) per share, in the second quarter of 2006. Earnings per share
for the quarter on a GAAP basis were computed using 31,945,000 shares.
The non-GAAP net income for the second quarter of 2007, which
excludes the total stock-based compensation charges of $794,000, was
$648,000, or $0.02 fully diluted per share. Net income per share for
the quarter on a non-GAAP basis was computed using 32,882,000 shares.
A reconciliation of GAAP results to non-GAAP results is provided in
the financial statement tables following the text of this press
release.
Cash, cash equivalents and long and short-term investments totaled
approximately $87.6 million as of June 30, 2007, an increase from the
approximately $84.3 million as of December 31, 2006.
"During the second quarter, we signed another Technology License
agreement for our 1T-SRAM(R) at an advanced process node. This
agreement will enable NEC Electronics (NEC) to incorporate our 1T-SRAM
technology onto their 55nm process for use in chip implementations
targeting next-generation consumer, graphics and networking
applications," stated Chet Silvestri, CEO of MoSys, Inc. "This
agreement aligns with our strategy to sign technology license
agreements with major semiconductor manufacturers at the most advanced
process nodes and is further evidence of the scalability of our
technology. In addition to our technology license progress, we are
pleased with the growth in royalties that we are achieving due to the
incorporation of our 1T-SRAM technology into the Nintendo Wii game
console. The success of this game console is contributing to
quarter-over-quarter growth in royalty revenues and increasing the
visibility of our 1T-SRAM technology in the marketplace."
"With respect to our other major technology initiative, we
announced the tape-out of our first 1T-FLASH(TM) memory macro during
the quarter. This macro completes an important milestone in our first
customer licensing agreement and signals the beginning of our market
roll-out of this technology to other customers," continued Mr.
Silvestri.
Mr. Silvestri continued, "In another important milestone for the
quarter, we announced the acquisition of a number of Mixed Signal chip
designs from Atmel Corporation. One of these chip designs is an Analog
Front End (AFE) targeted at the High Definition/Blue Ray DVD market.
Another chip design is an 8 port Gigabit Switch, which is targeted at
the networking market. These product acquisitions support our strategy
to further penetrate the high-volume consumer multimedia and
networking markets and complements our 1T-SRAM and 1T-FLASH(TM) memory
IP offerings. By expanding our technology portfolio with these
products, we can offer our licensees a more complete set of IP to
support their system solutions."
Business Outlook
The Company's Chief Executive Officer and Chief Financial Officer
will comment further on the highlights of the second quarter and
provide additional financial details on the Company's business outlook
during their conference call at 1:30 p.m. (PT) on Tuesday, July 31,
2007.
Second Quarter 2007 Financial Results Webcast / Conference Call
MoSys management will host a conference call and webcast with
investors today, July 31, 2007, at 1:30 p.m. Pacific time (4:30 p.m.
Eastern time) to discuss the second quarter 2007 financial results and
the business outlook. Investors and other interested parties may
access the call by dialing 1-866-203-3206 in the U.S. (1-617-213-8848
outside of the U.S.), and entering the passcode 69285920 at least 10
minutes prior to the start of the call. In addition, an audio webcast
will be available through the MoSys website at http://www.mosys.com. A
telephonic 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
of 58674627.
Use of Non-GAAP Financial Measures
To supplement MoSys' consolidated financial statements presented
in accordance with GAAP, MoSys uses non-GAAP financial measures that
exclude from the statement of operations the effects of stock-based
compensation and the effects of our adoption of Statement of Financial
Accounting Standard No. 123R (SFAS 123R) upon the number of shares
used in calculating non-GAAP loss per share. MoSys management uses the
above non-GAAP financial measures internally to understand, manage and
evaluate our business. MoSys believes it is useful for itself and
investors to review, as applicable, both GAAP information and the
non-GAAP measures, which exclude the effects of stock-based
compensation and the effects of our adoption of Statement of SFAS
123R, in order to assess the performance of our continuing operations
and for planning and forecasting in future periods. The presentation
of these non-GAAP measures is intended to provide investors with an
understanding of our operational results and trends that enables them
to analyze our base financial and operating performance and facilitate
period-to-period comparisons and analysis of operational trends. MoSys
believes the presentation of these non-GAAP financial measures is
useful to investors in allowing for greater transparency with respect
to supplemental information used by management in its financial and
operational decision-making.
Investors are encouraged to review the reconciliation of these
non-GAAP financial measures to the comparable GAAP results, which is
provided in a table immediately below the Condensed Consolidated
Statements of Operations. For additional information regarding these
non-GAAP financial measures, and management's explanation of why it
considers such measures to be useful, refer to the Form 8-K dated July
31, 2007 that we have submitted to the Securities and Exchange
Commission.
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 and 1T-FLASH, and Mixed
Signal technologies.
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, 1T-FLASH
or Mixed Signal technologies, the timing and nature of the license
agreements being signed with our customers and their 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, 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 expenses and other
consequences of litigation, including intellectual property
infringement litigation, to which we may be or may become a party from
time to time, 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.
About MoSys, Inc.
Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and
markets industry-leading embedded memory IP for semiconductors. MoSys'
patented 1T-SRAM(R) and 1T-FLASH(TM) technologies offer a combination
of high density, low power consumption, high speed and low cost that
is unmatched by other memory technologies. MoSys licensees have
shipped more than 110 million chips incorporating 1T-SRAM,
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 at
http://www.mosys.com. 1T-SRAM is a registered trademark and 1T-FLASH
is a trademark of MoSys, Inc.
MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net Revenue:
Licensing 2,159 1,701 3,317 3,969
Royalty 2,170 639 4,149 1,893
----------- ----------- ----------- -----------
Total net revenue 4,329 2,340 7,466 5,862
Cost of Net Revenue:
Licensing 678 381 1,242 734
----------- ----------- ----------- -----------
Total cost of net
revenue 678 381 1,242 734
Gross Profit 3,651 1,959 6,224 5,128
Operating Expenses:
Research and
development 2,101 2,129 4,179 4,081
Selling, general and
administrative 2,825 2,806 5,405 5,435
----------------------- -----------------------
Total operating
expenses 4,926 4,935 9,584 9,516
Loss from operations (1,275) (2,976) (3,360) (4,388)
Other income/expenses 1,232 926 2,296 1,378
----------- ----------- ----------- -----------
Loss before income
taxes (43) (2,050) (1,064) (3,010)
Benefit (provision)
for income taxes (103) (14) (51) (28)
----------- ----------- ----------- -----------
Net loss $(146) $(2,064) $(1,115) $(3,038)
=========== =========== =========== ===========
Net loss per share
Basic ($0.00) ($0.07) ($0.04) ($0.10)
Diluted ($0.00) ($0.07) ($0.04) ($0.10)
Shares used in
computing net loss
per share
Basic 31,945 31,293 31,820 31,157
Diluted 31,945 31,293 31,820 31,157
MOSYS, INC.
Reconciliation of GAAP to Non-GAAP Net Income (Loss) and Net Income
(Loss) Per Share
(In thousands, except per share amounts)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2007 2006 2007 2006
------- -------- -------- --------
GAAP net loss $(146) $(2,064) $(1,115) $(3,038)
Stock compensation expense
-Cost of revenue 122 52 222 104
-Research and development 224 235 529 462
Selling, general and
- administrative 448 337 929 661
------- -------- -------- --------
Total stock compensation
expense 794 624 1,680 1,227
Non-GAAP net income (loss) $648 $(1,440) $565 $(1,811)
======= ======== ======== ========
GAAP net loss per share ($0.00) ($0.07) ($0.04) ($0.10)
Reconciling item:
-Stock compensation expense 0.02 0.02 0.06 0.04
------- -------- -------- --------
Non-GAAP net income (loss) per
share: Basic and Diluted $0.02 $(0.05) $0.02 $(0.06)
======= ======== ======== ========
Shares used in computing non-GAAP
net income (loss) per share
Basic 31,945 31,293 31,820 31,157
Diluted 32,882 31,293 32,751 31,157
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2007 2006
----------- ------------
(unaudited) (audited)
Assets:
Current assets:
Cash, cash equivalents and short-term
investments $71,962 $81,807
Accounts receivable - net 356 2,491
Unbilled contract receivable 716 360
Prepaid expenses and other assets 3,223 2,831
----------- ---------
Total current assets 76,257 87,489
Long-term investments 15,633 2,492
Property and equipment - net 1,258 855
Goodwill 12,326 12,326
Other assets 418 598
----------- ---------
Total assets $105,892 $103,760
=========== =========
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $295 $307
Accrued expenses and other liabilities 1,484 1,865
Deferred revenue 637 619
----------- ---------
Total current liabilities 2,416 2,791
Long-term portion of restructuring
liability - 54
Stockholders' equity:
Common stock, additional paid-in
capital and others 110,763 107,087
Accumulated deficit (7,287) (6,172)
----------- ---------
Total stockholders' equity 103,476 100,915
----------- ---------
Total liabilities and
stockholders' equity $105,892 $103,760
=========== =========
CONTACT: MoSys
Jim Pekarsky, CFO, 408-731-1846
jimp@mosys.com
or
Shelton Investor Relations
Beverly Twing, Senior Account Manager, 972-239-5119 x126
btwing@sheltongroup.com