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MoSys, Inc. Reports Fourth Quarter and 2010 Financial Results
SANTA CLARA, Calif., Feb 03, 2011 -- MoSys, Inc., (NASDAQ: MOSY), a leading architect of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems and advanced system-on-chip (SoC) designs, today reported financial results for the fourth quarter and fiscal year ended December 31, 2010.
Fourth Quarter and Year 2010 Highlights
Full year 2010 revenue increased 36 percent to $15.6 million from $11.5 million in 2009;
Fourth quarter 2010 revenue increased 12 percent over the prior year period to $4.0 million;
Raised $20.0 million in equity capital, ending the year with total cash and investments of $37.5 million;
Launched Bandwidth Engine® family of integrated circuits (ICs) in February 2010 and shipped first samples in December 2010;
Introduced the GigaChip(TM) Interface, an open, CEI-11 compatible interface that enables highly efficient serial chip-to-chip communications in high-speed networking systems; and
Established the GigaChip Alliance, an ecosystem of companies supporting the GigaChip Interface, with initial members including Altera, NetLogic Microsystems and Xilinx.
Management Commentary
"MoSys made significant progress towards expanding our business and future growth opportunities in 2010. Further, total revenues increased 36 percent, driven by growth in both license and royalty. These increased revenues were more than offset as we invested heavily in the development of our new Bandwidth Engine family of ICs," commented Len Perham, President and CEO of MoSys. "At the end of the year we strengthened our balance sheet by completing a direct equity financing of approximately $20 million, which will be used for general corporate purposes, including working capital and the further development of our Bandwidth Engine family of ICs.
"We announced our Bandwidth Engine family of ICs in February and shipped the first samples in December. This remarkable accomplishment was made possible by the extreme dedication and extraordinary efforts of our excellent team coupled with great support from our partners. The high level of interest being generated by potential customers is particularly gratifying."
Mr. Perham concluded, "Looking out over 2011, we anticipate increasing demand for Bandwidth Engine IC samples, both in the form of reference board pairs and stand alone components as we compete to win design-in runoffs at several potential customers. We also anticipate completing the definition and initiating the design of our second generation IC family aimed squarely at the bandwidth and access requirements of next generation networking equipment. Additionally, there will be an intensified level of activity around our IP business. In 2011, IP will be our primary source of sales, and we intend to support that business with the resources required to achieve maximum revenue contribution. Overall, our efforts will be focused on driving MoSys to become an IP-rich, fabless semiconductor company."
Fourth Quarter Results
Total net revenue for the fourth quarter of 2010 was $4.0 million, compared with $3.8 million reported in the third quarter of 2010 and $3.5 million in the fourth quarter of 2009. Fourth quarter revenue was driven by increased royalties from licensees in the gaming and networking markets.
Fourth quarter 2010 total revenue included licensing revenue of $1.4 million, compared with $1.5 million for the previous quarter and $1.3 million for the fourth quarter of 2009. Fourth quarter royalty revenue was $2.6 million, compared with $2.3 million in the previous quarter and $2.2 million for the fourth quarter of 2009.
Gross margin for the fourth quarter of 2010 was 81 percent, compared with 81 percent for the third quarter of 2010 and 80 percent for the fourth quarter of 2009.
Total operating expenses on a GAAP basis for the fourth quarter of 2010 were $8.9 million, compared with $9.2 million in the previous quarter and $8.2 million for the fourth quarter of 2009. Fourth quarter 2010 operating expenses included $0.7 million of amortization of intangible assets and $1.0 million of stock-based compensation expense.
GAAP net loss for the fourth quarter of 2010 was $5.7 million, or ($0.17) per share, compared with a net loss of $6.2 million, or ($0.19) per share, for the previous quarter and a net loss of $4.9 million, or ($0.16) per share, for the fourth quarter of 2009. The non-GAAP net loss for the fourth quarter of 2010 was $4.0 million, or ($0.12) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the fourth quarter 2010 were computed using approximately 33.1 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.
Cash and investments totaled $37.5 million as of December 31, 2010, which included approximately $20 million in proceeds from the Company's December 2010 registered direct equity financing. The Company conducted the financing without the services of a placement agent or underwriter and issued approximately 5.0 million shares of common stock from its existing shelf registration statement.
Full Year 2010 Results
Total revenue for 2010 was $15.6 million, compared with $11.5 million for fiscal 2009. Net loss for the year was $23.1 million, or ($0.72) per share, compared with a net loss of $19.1 million, or ($0.61) per share, in 2009. The non-GAAP net loss for 2010 was $15.8 million, or ($0.49) per share, excluding stock-based compensation charges of $3.3 million, acquisition-related charges totaling $1.2 million and approximately $2.8 million in intangible asset amortization charges. Non-GAAP net loss for 2009 was $12.5 million, or ($0.40) per share, excluding a restructuring charge of $0.7 million, stock-based compensation charges of $3.1 million, acquisition-related charges totaling $1.4 million and approximately $1.5 million in intangible asset amortization charges. Earnings per share for the full year 2010 were computed using approximately 31.9 million shares on a GAAP and non-GAAP basis.
Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the fourth quarter and full year 2010 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-800-798-2884 in the U.S. (1-617-614-6207) outside of the U.S.), and entering the pass code 82811589 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 www.mosys.com. A telephone replay will be available for two business days following the call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.), pass code of 92811342.
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 restructurings, stock-based compensation and certain acquisition-related charges, including amortization of acquired intangible assets, transaction costs and contingent compensation charges. 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 February 3, 2011, that the Company filed with the Securities and Exchange Commission.
About MoSys, Inc.
MoSys, Inc. (NASDAQ: MOSY) is a leading provider of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems. MoSys' Bandwidth Engine® family of ICs combines the company's patented 1T-SRAM® high-density memory with its high-speed interface technology. A key element of Bandwidth Engine technology is the GigaChip(TM) Interface, an open, short-reach, low-power serial interface developed by MoSys to enable highly efficient, high-bandwidth, low-latency performance not achievable using currently available serial protocols. 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 www.mosys.com.
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