Record First Quarter Results Put Company on Track to Achieve Approximately 100% Year over Year Revenue Growth for Fiscal 2010
FREMONT, Calif. — (BUSINESS WIRE) — February 3, 2010 — Virage Logic Corporation (NASDAQ: VIRL), the semiconductor industry’s trusted IP partner, today reported its financial results for the first fiscal quarter ended December 31, 2009. Total revenue for the first quarter of fiscal 2010 was $21.7 million, compared with $11.3 million for the first quarter of fiscal 2009 and $13.1 million for the fourth quarter of fiscal 2009. License revenue for the first quarter of fiscal 2010 was $16.9 million compared with $8.5 million for the same period a year ago and $10.9 million for the prior quarter. Royalty income for the first quarter of fiscal 2010 was $4.7 million, compared with $2.8 million and $2.2 million for first and fourth quarter of fiscal 2009, respectively.
As reported under U.S. generally accepted accounting principles (GAAP), net loss was $2.2 million, or ($0.09) per share for the first quarter of fiscal 2010 compared to a net loss for the first quarter of fiscal 2009 of $2.6 million, or ($0.11) per share, and net loss of $3.2 million or ($0.14) per share for the fourth quarter of fiscal 2009.
Excluding the effects of stock-based compensation expenses, acquisition related expenses and amortization of intangibles, the company would have reported total net income after tax of $0.9 million, or $0.04 per share, or $0.06 per share excluding the net loss associated with our mid-quarter acquisition of NXP’s advanced CMOS IP and engineering team (NXP Strategic Outsourcing).
The reconciliation of GAAP to Non-GAAP financial results includes $1.0 million of stock-based compensation expense and $3.3 million of amortization of intangibles and other acquisition related charges reduced by $1.2 million tax effect for a net total of $3.1 million.
Virage Logic President and CEO, Dr. Alex Shubat said, “We are pleased with our record first quarter results, as they put us on track to achieve approximately 100% year over year revenue growth for fiscal 2010. We grew total license revenues by 55%, from $10.9 million in the prior quarter to $16.9 million in our first fiscal quarter. Our royalty income grew 114% from $2.2 million to $4.7 million. This strong increase in royalty income was a result of both increased wafer foundry utilization as well as royalties from our recent ARC International acquisition.
Fiscal 2009 was a pivotal year for Virage Logic and our first quarter fiscal 2010 results underscore the significant progress we made against the transformational goals we outlined in early 2007. The infrastructure and organizational alignments we made in fiscal years 2007 and 2008 enabled us to accelerate on our inorganic growth initiatives for fiscal year 2009 and beyond. Our recent acquisitions of ARC International and a portion of NXP’s advanced CMOS IP portfolio in late fiscal 2009 were facilitated by these organizational changes. In addition, the increasing shift that large semiconductor IDMs are making towards a ‘fabless’ or ‘fab-lite’ business model have continued to play to our core strengths, enabling us to gain market share by serving as a Trusted IP partner to a broader account base. Finally, our continued focus on standard versus custom products and the deeper, strategic engagements we established with this expanded customer base has resulted in an increasing sales pipeline, both from a total dollar value and individual deal size. First quarter fiscal 2010 highlights of our continued progress against some of our stated transformation goals include:
Broadening our product portfolio to further establish Virage Logic as a single source provider of a broad line of semiconductor IP.
- We announced the availability of the new ARC® 601 32-bit microprocessor, which offers more than twice the performance of the current market leading solution at a comparable size and power. The ARC 601, ideal for microcontroller replacement as well as embedded applications, expands our processor product portfolio, one that was already the second most widely used processor architecture in the industry, with ARC cores currently shipping in more than 425 million products annually.
- We added a new member, the STAR™ (Self Test and Repair) Silicon Browser, to our flagship STAR™ Memory System product family. The STAR Silicon Browser increases the efficiency of post silicon test, system debug and embedded memory characterization.
- The integration of the NXP team is on schedule. In addition, we are in the exploratory phase with our key customers, which will result in prioritizing the development and launch efforts of the acquired NXP IP portfolio.
- Our Leadership team has been strengthened by the appointment of two new executives – Stuart Crumbaugh, Vice President of Finance, and Joshua Rom, GM of Analog Business Unit (as previously announced on January 11th ).
