5. Provisions
Non- Total
Current current provision
GBP '000s GBP '000s GBP '000s
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At January 1, 2006 (audited) 77 209 286
Utilised (77) - (77)
Reclassified from non-current to
current 209 (209) -
Charges to the income statement 97 38 135
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At December 31, 2006 (audited) 306 38 344
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Utilised (181) - (181)
Reclassified from non-current to
current 38 (38) -
Charges to the income statement - 20 20
----------------------------------------------------------------------
At December 31, 2007 (unaudited) 163 20 183
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The utilisation of the provisions in 2007 relates to onerous lease commitments in Elstree, UK and for the onerous lease commitment in Santa Cruz, USA. The balance of the provision of GBP 183,000 represents the restoration costs for the Elstree, UK facility. The Elstree lease terminated in July 2007 and there is uncertainty as to the timing and amount of the restoration payments.
6. Acquisitions
The group purchased Tenison Technology EDA Limited on June 14, 2007 for a total consideration of GBP 1,107,000, Alarity Corporation, Inc. on September 21, 2007 for a total consideration of GBP 3,048,000 and certain assets of Teja Technologies, Inc. on March 30, 2007 for GBP 2,461,000.
All intangible assets were recognized at their respective fair values. The residual excess over the net assets acquired is recognized as goodwill in the financial statements. The fair values are subject to adjustments in respect of achieving specified net asset amounts, which affect intangible assets for developed core technology, net tangible assets, deferred tax, and goodwill.
Fair values assigned to the acquiree's identifiable assets and liabilities have been determined provisionally. Any adjustments to these provisional values as a result of completing work on the fair values of the assets and liabilities acquired will be recognised within 12 months of the acquisition date and recognised as if they occurred as at the date of acquisition.
Tenison Technology EDA Limited
ARC International acquired 100% of the voting shares in Tenison Technology EDA Limited.
The fair value of the acquisition is for the net assets and includes intangible assets for developed core technology.
Goodwill of GBP 992,000 represents the value of synergies and assembled work force.
Teja Technologies
In the Teja purchase, only key assets were acquired. The acquisition includes Teja's software products, key customer contracts, its engineering team, and patents for Teja's award-winning technology.
The fair value of the acquisition is predominantly for intangible developed core technology, and to a lesser extent, customer relationships, trade receivables, and deferred revenue.
Goodwill of GBP 478,000 represents the value of synergies and assembled work force.
Alarity Corporation, Inc.
ARC International acquired 100% of the voting shares in Alarity Corporation, Inc.
The fair value of the acquisition is for the net assets and for intangible developed core technology.
Goodwill of GBP 1,944,000 represents the value of synergies and assembled work force.
About ARC International plc
ARC International is the world leader in multimedia subsystems and configurable CPU/DSP processors. Used by over 140 companies worldwide, ARC's configurable solutions enable the creation of highly differentiated system-on-chips (SoCs) that ship in hundreds of millions of devices annually. ARC's patented subsystems and cores are smaller, consume less power, and are less expensive to manufacture than competing products.
ARC International maintains a worldwide presence with corporate and research and development offices in San Jose and Lake Tahoe, Calif., St. Albans, England, and St. Petersburg, Russia. For more information visit www.ARC.com. ARC International is listed on the London Stock Exchange as ARC International plc (LSE: ARK).
ARC, ARC-Based, ARChitect, and the ARC logo, ConfigCon, and Sonic Focus and the Sonic Focus logo are trademarks or registered trademarks of ARC International. All other brands or product names contained herein are the property of their respective owners. This release may contain "forward-looking statements" including the development, implementation, and release of features described herein, statements concerning plans, future events or performance and underlying assumptions and other statements that are other than statements of historical fact. These are at the sole discretion of ARC International. ARC's actual results for future periods may differ materially from those expressed in any forward-looking statements made by or on behalf of ARC. The factors that could cause actual results to differ materially include, without limitation, general economic and business conditions; potential for fluctuations in and unpredictability of ARC's quarterly results; assumptions regarding ARC's future business strategy; the ability of semiconductor partners to manufacture and market microprocessors based on the ARC(R) architecture; the acceptance of ARC technology by systems companies; the availability of development tools, systems software and operating systems; the rapid change in technology in the semiconductor industry and ARC's ability to develop new products in a timely manner; competition from other architectures; ARC's ability to protect its intellectual property; regulatory policies adopted by governmental authorities; risks associated with ARC's international operations; management of ARC's growth; ARC's ability to attract and retain employees; and other uncertainties that are discussed in the "Investment Considerations" section of ARC's listing particulars dated September 28, 2000 filed with the United Kingdom Listing Authority and the Registrar of Companies in England and Wales.
Contact:
Media:
ARC International
Lee Garvin Flanagin,
+1-408-437-3433
or
Investor:
Financial
Dynamics
Juliet Clarke/Matt Dixon, +1 44 20 7831 3113
