SANTA CLARA, Calif. — (BUSINESS WIRE) — July 20, 2012 — MoSys, Inc., (NASDAQ: MOSY), a leader in semiconductor solutions that enable fast, intelligent data access for network and communications systems, today reported financial results for the second quarter ended June 30, 2012.
Second Quarter Highlights
- Released first generation carrier-grade Bandwidth Engine® IC to production;
- Shipped first Bandwidth Engine IC production units;
- Expanded sales channel coverage in North America; and
- Ended the quarter with total cash and investments of approximately $49 million.
Management Commentary
Commenting on the quarter, Len Perham, MoSys’ President and Chief Executive Officer, said: “In the quarter, we released our first generation Bandwidth Engine IC into production and made initial production shipments for customer prototyping and system-level qualifications. The commencement of production shipments represents another major achievement in our evolution to become a fabless semiconductor company. We also completed multiple, onsite operational audits that fully affirmed our ISO 9000 compliance and carrier-grade rating, further assuring customers that we have the capabilities to meet or exceed their quality standards and support their future volume production requirements.
“We continue to collaborate closely with new and existing customers to integrate our high-speed, serial access Bandwidth Engine IC into their next-generation systems. Over the last few months, we expanded our sales and support channel, with a strong focus on accelerating customer adoption and increasing design win momentum.”
Second Quarter Results
Total net revenue for the second quarter of 2012 was $1.7 million, compared with $1.4 million reported in the first quarter of 2012 and $3.3 million in the second quarter of 2011.
Second quarter 2012 total revenue included licensing and other revenue of $0.6 million, compared with $0.2 million for the previous quarter and $1.2 million for the second quarter of 2011. Second quarter 2012 royalty revenue was $1.1 million, compared with $1.2 million in the previous quarter and $2.1 million for the second quarter of 2011.
Gross margin for the second quarter of 2012 was 90 percent, compared with 96 percent in the first quarter of 2012 and 86 percent for the second quarter of 2011.
Total operating expenses on a GAAP basis for the second quarter of 2012 were $8.1 million, compared with $8.6 million in the previous quarter and $8.5 million of expenses for the second quarter of 2011. Second quarter 2012 operating expenses included $0.6 million of amortization of intangible assets and $1.0 million of stock-based compensation expense.
GAAP net loss for the second quarter of 2012 was $6.6 million, or ($0.17) per share, compared with a net loss of $7.2 million, or ($0.19) per share, in the previous quarter and a net loss of $5.7 million, or ($0.15) per share, for the second quarter of 2011. The non-GAAP net loss for the second quarter of 2012 was $5.0 million, or ($0.13) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the second quarter of 2012 were computed using approximately 38.9 million shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
As of June 30, 2012, cash and investments totaled $48.9 million.
Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to discuss the second quarter 2012 financial results. Investors and other interested parties may access the call by dialing 1-800-659-2056 in the U.S. (1-617-614-2714 outside of the U.S.), and entering the pass code 79076983 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys Web site at http://www.mosys.com. A telephone replay will be available for two business days following the call at 1-888-286-8010 in the U.S. (1-617-801-6888 outside of the U.S.), pass code of 79831991.
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 amortization of recorded intangible assets. MoSys’ management believes that the presentation of these non-GAAP financial measures is useful to investors and other interested persons because they are one of the primary indicators that MoSys’ management uses for planning and forecasting future performance. MoSys’ management believes that the presentation of non-GAAP financial measures that exclude these items is useful to investors because MoSys’ management does not consider these charges part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that would be used to evaluate management’s operating performance.
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is provided in a table below the Condensed Consolidated Statements of Operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. 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 20, 2012, that the Company filed with 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 embedded memory and interface technologies, anticipated benefits and performance expected from the Bandwidth Engine product and the Company’s future markets and future business prospects.
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 the following:
- achieving additional design wins for the Bandwidth Engine IC;
- commencing volume shipments of Bandwidth Engine ICs;
- our ability to enhance our existing proprietary technologies and develop new technologies;
- achieving necessary acceptance of our IC architecture and interface protocols by potential customers and their suppliers;
- difficulties and delays in the development, production, testing and marketing of our ICs;
- reliance on our manufacturing partners to assist successfully with the fabrication of our ICs;
- availability of quantities of ICs supplied by our manufacturing partners at a competitive cost;
- our lack of recent experience as a fabless semiconductor company making and selling proprietary ICs;
- 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;
- vigor and growth of markets served by our customers and our operations; and
other risks identified in the Company’s most recent reports on Form 10-K and Form 10-Q 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.
MoSys, Inc. (NASDAQ: MOSY) is an IP-rich fabless semiconductor company that provides high performance solutions for fast, intelligent data access in network and communications systems. Engineered and built for high-reliability carrier and enterprise applications, MoSys' products are breaking bandwidth barriers™ in data processing to allow for faster packet access and analysis, expanded user capacity and new capabilities required by the expanding global infrastructure. MoSys' Bandwidth Engine® family of ICs combines the company's patented 1T-SRAM® high-density, embedded memory and high-speed, 10 Gigabits per second serial interface with its intelligent access technology and a highly efficient GigaChip™ Interface transport protocol to eliminate bottlenecks in high-speed data access. MoSys is headquartered in Santa Clara, California, and more information is available at http://www.mosys.com.
MoSys, 1T-SRAM and Bandwidth Engine are registered trademarks of MoSys, Inc. in the US and/or other countries. Breaking Bandwidth Barriers, GigaChip and the MoSys logo are trademarks of MoSys, Inc. All other marks mentioned herein are the property of their respective owners.
| MOSYS, INC. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (In thousands, except per share amounts; unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Net Revenue | ||||||||||||||||||||
| Licensing and other | $ | 644 | $ | 1,216 | $ | 865 | $ | 2,563 | ||||||||||||
| Royalty | 1,092 | 2,076 | 2,295 | 4,268 | ||||||||||||||||
| Total net revenue | 1,736 | 3,292 | 3,160 | 6,831 | ||||||||||||||||
| Cost of Net Revenue | ||||||||||||||||||||
| Licensing and other | 179 | 469 | 236 | 1,159 | ||||||||||||||||
| Total cost of net revenue | 179 | 469 | 236 | 1,159 | ||||||||||||||||
| Gross Profit | 1,557 | 2,823 | 2,924 | 5,672 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||
| Research and development | 6,688 | 6,566 | 14,194 | 12,721 | ||||||||||||||||
| Selling, general and administrative | 1,428 | 1,917 | 4,354 | 4,631 | ||||||||||||||||
| Gain on sale of assets | - | - | (1,856 | ) | - | |||||||||||||||
| Total operating expenses | 8,116 | 8,483 | 16,692 | 17,352 | ||||||||||||||||
| Loss from operations | (6,559 | ) | (5,660 | ) | (13,768 | ) | (11,680 | ) | ||||||||||||
| Other income, net | 36 | 25 | 60 | 34 | ||||||||||||||||
| Loss before income taxes | (6,523 | ) | (5,635 | ) | (13,708 | ) | (11,646 | ) | ||||||||||||
| Income tax provision | 30 | 17 | 60 | 35 | ||||||||||||||||
| Net loss | $ | (6,553 | ) | $ | (5,652 | ) | $ | (13,768 | ) | $ | (11,681 | ) | ||||||||
| Net loss per share | ||||||||||||||||||||
| Basic and diluted | ($0.17 | ) | ($0.15 | ) | ($0.36 | ) | ($0.31 | ) | ||||||||||||
| Shares used in computing net loss per share | ||||||||||||||||||||
| Basic and diluted | 38,880 | 37,738 | 38,723 | 37,505 | ||||||||||||||||
| MOSYS, INC. | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (in thousands, unaudited) | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2012 | 2011 | |||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash, cash equivalents and investments | $ | 30,313 | $ | 49,438 | ||||||||
| Accounts receivable, net | 326 | 969 | ||||||||||
| Unbilled contract receivables | 33 | 74 | ||||||||||
| Prepaid expenses and other assets | 1,742 | 1,522 | ||||||||||
| Total current assets | 32,414 | 52,003 | ||||||||||
| Long-term investments | 18,626 | 8,537 | ||||||||||
| Property and equipment, net | 924 | 1,382 | ||||||||||
| Goodwill | 23,134 | 23,134 | ||||||||||
| Intangible assets, net | 3,154 | 4,400 | ||||||||||
| Other assets | 177 | 181 | ||||||||||
| Total assets | $ | 78,429 | $ | 89,637 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 623 | $ | 336 | ||||||||
| Accrued expenses and other liabilities | 2,278 | 2,779 | ||||||||||
| Deferred revenue | 851 | 920 | ||||||||||
| Total current liabilities | 3,752 | 4,035 | ||||||||||
| Long-term liabilities | 144 | 109 | ||||||||||
| Stockholders' equity | 74,533 | 85,493 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 78,429 | $ | 89,637 | ||||||||
| MOSYS, INC. | |||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share | |||||||||||||||||||||||
| (In thousands, except per share amounts; unaudited) | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
| GAAP net loss | $ | (6,553 | ) | $ | (5,652 | ) | $ | (13,768 | ) | $ | (11,681 | ) | |||||||||||
|
Stock-based compensation expense |
|||||||||||||||||||||||
| -Cost of net revenue | 38 | 46 | 46 | 107 | |||||||||||||||||||
| -Research and development | 730 | 507 | 1,496 | 810 | |||||||||||||||||||
| -Selling, general and administrative | 252 | 291 | 521 | 636 | |||||||||||||||||||
| Total stock-based compensation expense | 1,020 | 844 | 2,063 | 1,553 | |||||||||||||||||||
| Amortization of intangible assets | 563 | 654 | 1,246 | 1,309 | |||||||||||||||||||
| Non-GAAP net loss | $ | (4,970 | ) | $ | (4,154 | ) | $ | (10,459 | ) | $ | (8,819 | ) | |||||||||||
| GAAP net loss per share | $ | (0.17 | ) | $ | (0.15 | ) | $ | (0.36 | ) | $ | (0.31 | ) | |||||||||||
| Reconciling items | |||||||||||||||||||||||
| -Stock-based compensation expense | 0.03 | 0.02 | 0.06 | 0.04 | |||||||||||||||||||
| -Amortization of intangible assets | 0.01 | 0.02 | 0.03 | 0.03 | |||||||||||||||||||
| Non-GAAP net loss per share: Basic and diluted | $ | (0.13 | ) | $ | (0.11 | ) | $ | (0.27 | ) | $ | (0.24 | ) | |||||||||||
| Shares used in computing non-GAAP net loss per share | |||||||||||||||||||||||
| Basic and diluted | 38,880 | 37,738 | 38,723 | 37,505 | |||||||||||||||||||
Contact:
MoSys, Inc.
Jim Sullivan, CFO, +1-408-418-7500
Email Contact
or
Shelton
Group, Investor Relations
Beverly Twing, +1-972-239-5119 ext. 126
Sr.
Acct. Manager
Email Contact