These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding non-cash equity-based compensation provides meaningful supplemental information to investors, as well as management that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.
(a) Non-cash equity-based compensation expense related to the Company's
adoption of SFAS No. 123 revised (123R) beginning July 1, 2005. For
the fourth fiscal quarter ending June 30, 2007 of $1.6 million,
allocated as follows: $539,000 to research and development, $508,000
to sales and marketing and $572,000 to general and administrative.
For the third fiscal quarter ending March 31, 2007 of $2.3 million,
allocated as follows: $871,000 to research and development, $721,000
to sales and marketing and $660,000 to general and administrative.
For the fourth quarter of fiscal 2006 ending March 31, 2006 of $1.7
million, allocated as follows: $639,000 to research and development,
$468,000 to sales and marketing and $562,000 to general and
administrative. Management believes that it is useful to investors
to understand how the expenses associated with the adoption of SFAS
123R are reflected in net income.
MIPS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER SHARE
(In thousands, except per share data)
(unaudited)
Twelve Months Ended Twelve Months Ended
June 30, 2007 June 30, 2006
GAAP net income $8,483 $11,021
Net income per basic share $0.19 $0.26
Net income per diluted share $0.18 $0.25
(a) Equity-based compensation expense
under SFAS 123R (see note below) $7,701 $8,279
(b) Acquired in-process research and
development (see note below) -- $570
Non-GAAP net income $16,184 $19,870
Non-GAAP net income per basic share $0.37 $0.46
Non-GAAP net income per diluted share $0.35 $0.45
Common shares outstanding - basic 43,516 42,894
Common shares outstanding - diluted 45,891 44,611
These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding non-cash equity- based compensation, acquired in-process research and development and restructuring costs provides meaningful supplemental information to investors, as well as management that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.
(a) Non-cash equity-based compensation expense of $7.7 million in fiscal
2007 related to the Company's adoption of SFAS No. 123 revised (123R)
beginning in the first quarter of fiscal 2006, allocated as follows:
$2.9 million to research and development, $2.3 million to sales and
marketing and $2.5 million to general and administrative. For fiscal
2006 ending June 30, 2006 of $8.3 million, allocated as follows:
$4.0 million to research and development, $1.9 million to sales and
marketing and $2.4 million to general and administrative.
Management believes that it is useful to investors to understand how
the expenses associated with the adoption of SFAS 123R are reflected
in net income.
(b) The charge of $570,000 for acquired in-process research and
development expense related to the acquisition of First Silicon
Solutions (FS2) completed in September 2005. Management believes
that excluding this charge facilitates comparisons to MIPS' core
operating results during periods when there were no acquisitions.
Web site: http://www.mips.com/
