As we began fiscal 2009, we announced the promotion of Dr. Alex Shubat, Virage Logic’s co-founder and chief operating officer, to president and chief executive officer, and my appointment to executive chairman. Alex provided the innovation leadership and strong management direction during the early phases of our transformation and it was with great confidence that I relinquished the CEO role, with all the responsibilities that the position holds, to him in early October. As executive chairman, I will focus on corporate strategies, demand creation, investor relations and merger and acquisition activities. Both Alex and I believe that, with this change, we can accelerate the drive to make our company the largest and most trusted IP partner in the semiconductor industry.”
Dr. Alex Shubat stated, “As Dan noted, we made significant progress on our transformation initiatives in fiscal 2008. As we enter fiscal 2009, we have a strong executive team in place, a new product line operational structure, and robust, scalable productivity programs that I believe will enable us to make strong progress against our transformation goals. In terms of our business outlook for the first quarter of fiscal 2009, we enter the quarter with a strong opportunity pipeline and we believe that we are starting to see the increases in royalties as a result of the strong 65 and 55 nm license wins of fiscal 2007 and 2008. In projecting forward revenue, however, these positives must be weighed against the cautious outlook coming from our foundry partners, semiconductor IDM customers and fabless IC customers. Accordingly, we are being conservative in our outlook and are forecasting total revenue that will be flat to slightly up for the first quarter of fiscal 2009 as compared to the fourth quarter of fiscal 2008.”
“In summary, we anticipate first quarter fiscal 2009 revenues of $15.5 million to $16.0 million and non-GAAP earnings per share of $0.02 to $0.04 per share. The company expects approximately $1 million in non-GAAP expense comprised of FAS123R stock compensation expense and acquisition related expenses.”
Although this news release will be available on the company’s website, the company disclaims any duty or intention to update these or any other forward-looking statements.
Use of Non-GAAP Information
We believe the financial figures we include that are not presented in accordance with GAAP assist investors in understanding our business and operating results. This information is intended to provide investors with useful supplemental data regarding the underlying economics of our business operations because operating results presented under GAAP may include charges that are nonrecurring or not necessarily relevant to ongoing operations, or are difficult to forecast for future periods. The Company’s management evaluates and makes operating decisions about its business operations primarily based on revenue and the core costs of those business operations. Management believes that acquisition related charges, stock-based compensation and restructuring charges are not part of its core business operations. Therefore, management presents non-GAAP financial measures, along with GAAP measures, in this earnings release by excluding these items from the period expenses. The income statement line items involved in the adjustment from GAAP to non-GAAP presentation in this earnings release are restructuring charges, acquisition related charges and stock-based compensation that are included in cost of revenues, research and development, general and administrative and sales and marketing expenses. To determine our non-GAAP tax provision, the Company recalculates tax based on non-GAAP income before taxes and adjusts accordingly.
For each such non-GAAP measure, the adjustment provides management with information about the Company’s underlying operating performance that enables a more meaningful comparison of our finance results in different reporting periods. For example, since the Company does not acquire businesses on a predictable cycle, management excludes acquisition-related charges in order to provide a more consistent and meaningful evaluation of the Company’s operating expenses. Management also excludes the impact of stock-based compensation to help it compare current period operating expenses against the operating expenses for prior periods. In addition, the availability of non-GAAP information helps management track actual performance relative to financial targets. This information also helps investors compare the Company’s performance with other companies in the industry, which use similar financial measures to supplement their GAAP financial information.
Management recognizes that the use of these non-GAAP measures has
limitations, including the fact that management must exercise judgment
in determining which types of charges should be excluded from the
non-GAAP financial information. Management believes that providing this
non-GAAP financial information, in addition to GAAP information,
facilitates consistent comparison of the Company’s
financial performance over time. The Company has historically provided
non-GAAP information to the investment community, not as an alternative
but as an important supplement to GAAP information, to enable investors
to evaluate the Company ’ s core operating
performance in the way that management does.
