MoSys, Inc. Reports Second Quarter 2011 Financial Results

® high-density memory with its high-speed interface technology. MoSys' IP portfolio includes silicon proven SerDes and DDR3 PHYs that support a wide range of data rates across a variety of standards and 1T-SRAM memory cores that provide a combination of high-density, low-power consumption, high-speed and low cost advantages for high-performance networking, computing, storage and consumer/graphics applications. MoSys is headquartered in Santa Clara, California. More information is available on MoSys' website at http://www.mosys.com.

MoSys, 1T-SRAM and Bandwidth Engine are registered trademarks of MoSys, Inc. in the US and/or other countries. The MoSys logo is a trademark 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,
			2011			2010			2011			2010

Net Revenue
	Licensing		$	1,216		$	2,019		$	2,563		$	3,566
	Royalty			2,076			2,250			4,268			4,253
		Total net revenue		3,292			4,269			6,831			7,819

Cost of Net Revenue
	Licensing			469			541			1,159			1,323
		Total cost of net revenue		469			541			1,159			1,323

Gross Profit				2,823			3,728			5,672			6,496

Operating Expenses
	Research and development			6,566			6,704			12,721			12,677
	Selling, general and administrative			1,917			2,508			4,631			5,106
		Total operating expenses		8,483			9,212			17,352			17,783

	Loss from operations			(5,660	)		(5,484	)		(11,680	)		(11,287	)

	Other income, net			25			83			34			192
		Loss before income taxes		(5,635	)		(5,401	)		(11,646	)		(11,095	)

	Income tax provision			17			26			35			58

Net loss			$	(5,652	)	$	(5,427	)	$	(11,681	)	$	(11,153	)

Net loss per share
	Basic and diluted			($0.15	)		($0.17	)		($0.31	)		($0.35	)

Shares used in computing net loss per share
	Basic and diluted			37,738			31,636			37,505			31,455



MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)

				June 30,		December 31,
				2011		2010

Assets
	Current assets:
		Cash, cash equivalents and investments		$	24,794	$	29,351
		Accounts receivable, net			546		1,079
		Unbilled contract receivables			177		202
		Prepaid expenses and other assets			2,991		3,377
			Total current assets		28,508		34,009

	Long-term investments				6,526		8,193
	Property and equipment, net				1,898		2,160
	Goodwill				23,134		23,134
	Intangible assets, net				4,929		6,238
	Other assets				197		232
			Total assets	$	65,192	$	73,966

Liabilities and Stockholders’ Equity
	Current liabilities:
		Accounts payable		$	500	$	839
		Accrued expenses and other liabilities			2,872		2,623
		Accrued acquisition-related earn-out			500		1,500
		Deferred revenue			1,726		1,801
			Total current liabilities		5,598		6,763

	Long-term liabilities				55		146

	Stockholders' equity				59,539		67,057

			Total liabilities and stockholders’ equity	$	65,192	$	73,966



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,
				2011			2010			2011			2010

	GAAP net loss			$	(5,652	)	$	(5,427	)	$	(11,681	)	$	(11,153	)
		Stock-based compensation expense
		-	Cost of net revenue		46			88			107			170
		-	Research and development		507			362			810			681
		-	Selling, general and administrative		291			308			636			612
			Total stock-based compensation expense		844			758			1,553			1,463

		Amortization of intangible assets (1)			654			826			1,309			1,469
		Acquisition-related contingent compensation charges (2)			-			485			-			987
		Acquisition-related transaction costs (3)			-			-			-			195

	Non-GAAP net loss			$	(4,154	)	$	(3,358	)	$	(8,819	)	$	(7,039	)

	GAAP net loss per share				($0.15	)		($0.17	)		($0.31	)		($0.35	)
		Reconciling items
		-	Stock-based compensation expense		0.02			0.02			0.04			0.04
		-	Amortization of intangible assets (1)		0.02			0.03			0.03			0.05
		-	Acquisition-related contingent compensation charges (2)		-			0.01			-			0.03
		-	Acquisition-related transaction costs (3)		-			-			-			0.01

	Non-GAAP net loss per share: Basic and diluted				($0.11	)		($0.11	)		($0.24	)		($0.22	)

	Shares used in computing non-GAAP net loss per share
		Basic and diluted			37,738			31,636			37,505			31,455

(1) Non-cash charges for amortization of intangibles arising from acquired assets.
(2) Contingent earn-out compensation charges arising from acquisitions. Amounts included in research and development (R&D) and selling, general and administrative (SG&A) expenses for the three months ended June 30, 2010 are $354,000 and $131,000, respectively. Amounts included in R&D and SG&A expenses for the six months ended June 30, 2010 are $842,000 and $145,000, respectively.
(3) Charges primarily related to legal and accounting fees incurred for the acquisition of MagnaLynx, Inc. in March 2010. These charges are included in SG&A expenses.

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