MOUNTAIN VIEW, Calif., Nov. 8 /PRNewswire-FirstCall/ -- MIPS
Technologies, Inc. (NASDAQ:MIPS), a leading provider of
industry-standard architectures, processor cores and analog IP for
digital consumer, home networking, wireless, communications and
business applications, today reported consolidated financial
results for the quarter ending September 30, 2007. First quarter
results include financials from Chipidea Microelectronica, S.A.
(Chipidea) following the completion of the acquisition on August
27, 2007. Revenue for the first quarter was $22.3 million, a
decrease of 6 percent over the prior quarter revenue of $23.7
million, and an increase of 14 percent from the $19.6 million
reported in the first fiscal quarter a year ago. Revenue from
royalties was $10.5 million, a decrease of 7 percent from the $11.3
million reported in the prior quarter and a decrease of 6 percent
from the $11.2 million reported in the first quarter a year ago.
Contract revenue was $11.8 million, a decrease of 5 percent from
the $12.4 million reported in the prior quarter and an increase of
42 percent from the $8.3 million reported in the first quarter a
year ago. Net loss in the first quarter of fiscal 2008 on a
generally accepted accounting principles (GAAP) basis was $7.2
million which includes a write-off of $5.4M for the in-process
R&D charge related to the Chipidea acquisition, compared to net
income of $2.3 million in the prior quarter and $2.3 million in the
first quarter a year ago. GAAP net loss per share on a basic and
diluted basis in the first quarter of 2008 was $0.16, compared with
GAAP net income per diluted share of $0.05 in the prior quarter and
$0.05 in the first quarter a year ago. Non-GAAP net income in the
first quarter of fiscal 2008, which excludes the effect of equity
based compensation expense and certain costs and expenses related
to the acquisition of Chipidea, was $3.8 million or $0.08 per
diluted share, compared with $4.0 million or $0.09 per diluted
share in the prior quarter and $4.4 million or $0.10 per diluted
share in the first quarter a year ago. A reconciliation of non-GAAP
adjustments is summarized in the tables below. "The acquisition of
Chipidea during Q1 was perhaps the company's most significant event
during its nearly 10-year history," said John Bourgoin, president
and CEO of MIPS Technologies. "Analog products are increasingly
becoming critical in the decision process for our customers, often
determining whether a company is able to migrate to a higher
performance or lower cost technology, and Chipidea is the
undisputed world leader in analog IP. We expect this acquisition to
lead to greater growth for MIPS Technologies, and anticipate that
it will augment our earnings during the fiscal year. "Our processor
business revenue, despite one of our best September quarters in
history, was short of our expectations as previously announced. Our
high-performance product base, with the 1GHz MIPS32(R) 74K(TM)
processor and our multi-threading product line, are the most
competitive in the industry. And just this week, we announced an
agreement with Microchip Technology, the leader in the 8- and
16-bit microcontroller market, which now positions the MIPS
architecture strongly in the low-cost 32-bit microcontroller
segment." MIPS Technologies invites you to listen to management's
discussion of Q1 results and Q2 guidance in a live conference call
today beginning at 1:45 p.m. Pacific time. The conference call
number is 1-203-844-7000 and the replay number is 1-203-369-1303
which will be available for seven days, following the conference
call. The access code for both numbers is MIPS. An audio replay of
the conference will be posted on the company's website
(http://www.mips.com/) soon thereafter. Q1 FY 2008 News Highlights:
From its founding more than 20 years ago, the MIPS(R) architecture
has represented innovation and performance. Today, MIPS
Technologies and its licensees continue to lead in system
performance and innovative solutions for established and emerging
markets -- especially in the digital living room and connected
home. With multiple design teams actively developing the
architecture, more than 900 MIPS-Based(TM) implementations
throughout the world, and a vibrant ecosystem of third-party tools
and software, MIPS continues to be at the core of the user
experience. Following are selected press release headlines from
MIPS Technologies, and the company's licensees, systems vendors and
third party providers: Processor Business Group Highlights: --
Infineon Licenses MIPS Next-Generation MIPS32(R) 74K(TM) Core --
MIPS Technologies Acquires World's Leading Analog Intellectual
Property Company -- Hong Kong Applied Science and Technology
Research Institute (ASTRI) Selects MIPS32(R) M4K(R) Core for
Next-Generation Video Processing -- Genesis Microchip Licenses
MIPS(R) Cores to Power Next-Generation Flat-Panel Display Solutions
-- Teradici Licenses MIPS Technologies' Most Popular Embedded
Processor for Innovative TERA Chipset in Datacenter-Based Computing
-- Shanghai's Opulan Technologies Extends Commitment to
MIPS-Based(TM) SoC Design with Hard Core License -- MIPS32(R)
24KE(TM) Core Designed Into VDSL2 Residential Gateway from Ikanos
-- PowerLayer Microsystems Licenses MIPS32(R) 24KE(TM) Core for
Next- Generation DTV Designs in Growing China Market Analog
Business Group Highlights: -- Cadence Selects Chipidea's USB 2.0 IP
For Its SoC Functional Verification Kit -- Chipidea's Flexible
Mixed-Signal IP Platform Architecture Provides Unprecedented Analog
Integration -- Chipidea Delivers First TSMC Qualified USB
High-Speed PHY IP on 65nm General Process (GP) Technology Customer
and Partner Announcements: -- Broadcom Announces Industry's Most
Advanced 65 Nanometer Solution for Next Generation Cable, Satellite
and IP Set-Top Boxes -- PMC-Sierra's New MIPS-Based(TM)
Multi-Service Processors Optimize Power and Performance for Network
and Storage Applications -- FS2 and Tektronix Introduce
FPGAView(TM) Software for Tektronix MSO4000 Mixed Signal
Oscilloscopes -- Cavium Networks Introduces MIPS-Based(TM) OCTEON
Plus-based Accelerators for Appliance, Blade Server and Storage
Systems -- Wind River Supports Raza Microelectronics, Inc.
Multi-Core, Multi- Thread Processor Solutions -- Broadcom Extends
Leadership in Networking Silicon Market with Industry's First
MIPS-Based(TM) 65 Nanometer Gigabit Ethernet Switches -- CSR boosts
Actions Semiconductor's MIPS-Based(TM) MP3 design with wireless
connectivity About MIPS Technologies, Inc. MIPS Technologies, Inc.
(NASDAQ:MIPS) is a leading provider of industry- standard processor
architectures and cores for digital consumer, networking, personal
entertainment, communications and business applications. The
company drives the broadest architectural alliance that delivers
32- and 64-bit embedded RISC solutions to the embedded market, and
in combination with its licensees, offers the widest range of
robust, scalable processors in standard, custom, semi-custom and
application-specific products worldwide. MIPS Technologies
currently owns more than 400 patent properties (patents and
applications) worldwide and licenses its intellectual property to
today's leading semiconductor companies, ASIC developers and system
OEMs. Today, MIPS-Based(TM) designs are integrated in millions of
products around the world, including broadband devices from
Linksys, digital cameras from Canon, DTVs and entertainment systems
from Sony, DVD Recordable devices from Pioneer, digital set-top
boxes from Motorola, network routers from Cisco and laser printers
from Hewlett- Packard. Founded in 1998, MIPS Technologies is based
in Mountain View, California, with offices worldwide. For more
information, please contact (650) 567-5000 or visit
http://www.mips.com/. Forward Looking Statements This press release
contains forward-looking statements; such statements are indicated
by forward looking language such as "plans", "anticipates",
"expects", "will", and other words or phrases contemplating future
activities including statements regarding MIPS Technologies'
expectations regarding customers' use of MIPS' products. These
forward looking statements include MIPS' expectation regarding the
anticipated growth in our business and earnings from the Chipidea
acquisition. Actual events or results may differ materially from
those anticipated in these forward-looking statements as a result
of a number of different risks and uncertainties, including but not
limited to: the fact that there can be no assurance that our
products will achieve market acceptance, difficulties that may be
encountered in the integration of the Chipidea business, changes in
our research and development expenses, the anticipated benefits of
our partnering relationships may be more difficult to achieve than
expected, the timing of or delays in customer orders, delays in the
design process, the length of MIPS Technologies' sales cycle, MIPS
Technologies' ability to develop, introduce and market new products
and product enhancements, and the level of demand for
semiconductors and end-user products that incorporate
semiconductors. For a further discussion of risk factors affecting
our business, we refer you to the risk factors section in the
documents we file from time to time with the Securities and
Exchange Commission. MIPS TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands) September 30, June 30, 2007 2007
(unaudited) Assets Current assets: Cash and cash equivalents
$17,586 $119,039 Short-term investments - 25,845 Accounts
receivable, net 21,762 5,212 Prepaid expenses and other current
assets 18,596 2,472 Total current assets 57,944 152,568 Equipment,
furniture and property, net 15,636 5,781 Goodwill 112,357 565 Other
assets 68,632 15,948 $254,569 $174,862 Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $3,767
$503 Accrued liabilities 51,832 16,118 Debt - short term 24,028 -
Deferred revenue 4,670 2,633 Total current liabilities 84,297
19,254 Long-term liabilities 18,836 5,726 Stockholders' equity
151,436 149,882 $254,569 $174,862 MIPS TECHNOLOGIES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) (unaudited) Three Months Ended September 30, 2007 2006
Revenue: Royalties $10,519 $11,207 Contract Revenue $11,792 8,343
Total revenue 22,311 19,550 Costs and expenses: Costs of contract
revenue 3,324 337 Research and development 9,013 7,774 Sales and
marketing 5,586 4,871 General and administrative 7,009 4,311
Acquired in-process research and development 5,440 - Total costs
and expenses 30,372 17,293 Operating income (loss) (8,061) 2,257
Other income, net 494 1,429 Income (loss) before income taxes
(7,567) 3,686 Provision (benefit) for income taxes (413) 1,363 Net
income (loss) $(7,154) $2,323 Net income (loss) per basic share
$(0.16) $0.05 Net income (loss) per diluted share $(0.16) $0.05
Common shares outstanding-basic 43,766 43,461 Common shares
outstanding-diluted 43,766 45,101 MIPS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER
SHARE (In thousands, except per share data) (unaudited) Three
Months Ended Three Months Ended Three Months Ended September 30,
2007 June 30, 2007 September 30, 2006 GAAP net income (loss)
$(7,154) $2,335 $2,323 Net income (loss) per basic share $(0.16)
$0.05 $0.05 Net income (loss) per diluted share $(0.16) $0.05 $0.05
(a) Equity-based compensation expense under SFAS 123R $2,391 $1,619
$2,063 (b) Amortization of intangibles 970 - - (c) Acquisition
related cost 1,319 - - (d) Integration cost 839 - - (e) Acquired
in-process research and development 5,440 - - Non-GAAP net income
$3,805 $3,954 $4,386 Non-GAAP net income per basic share $0.09
$0.09 $0.10 Non-GAAP net income per diluted share $0.08 $0.09 $0.10
Common shares outstanding - basic 43,766 43,535 43,461 Common
shares outstanding - diluted 46,723 46,374 45,101 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, amortization of intangible
assets, acquired in- process research and development, integration
and acquisition expenses in connections with the acquisition of
Chipidea Microelectronica provide 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 first fiscal
quarter ending September, 2007, $2.4 million of equity-based
compensation was allocated as follows: $833,000 to research and
development, $662,000 to sales and marketing and $896,000 to
general and administrative. For the fourth fiscal quarter ending
June 30, 2007, $1.6 million of equity-based compensation expense
was allocated as follows: $539,000 to research and development,
$508,000 to sales and marketing and $572,000 to general and
administrative. For the first quarter of fiscal 2007 ending
September 30, 2006, $2.1 million equity-based compensation expense
was allocated as follows: $789,000 to research and development,
$566,000 to sales and marketing and $708,000 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. (b) This adjustment reflects the
non-cash expense related to the amortization of intangibles
acquired in connection with the acquisition of Chipidea included in
operating expenses. For the quarter ending September, 2007,
$970,000 of amortization expense related to these intangible assets
was allocated as follows: $834,000 to cost of sales and $136,000 to
sales and marketing. Management believes that excluding this charge
facilitates comparisons to MIPS' core operating results because the
expense for the amortization of intangibles is not indicative of
core operational performance and the amount of such charges varies
significantly based on the size and timing of our acquisitions and
the maturity of the business being acquired. (c) This adjustment
reflects the expense related to the amortization of $648,000 of an
amount held in escrow and payable to the founders of Chipidea in
connection with the acquisition of Chipidea, and legal expense of
$335,000 related to legal fees incurred in association with certain
financing activities. These expenses were both included in
operating expense. This adjustment also includes $337,000 in loan
origination fees recorded under other income and expense.
Management believes that excluding these charges facilitates
comparisons to MIPS' core operating results during periods when
there was no escrow amortization or financing activities. (d) This
adjustment reflects integration expense related to the acquisition
of Chipidea recorded in accounting and legal expense. Management
believes that excluding this charge facilitates comparisons to
MIPS' core operating results during periods when there were no
acquisitions. (e) The charge of $5.4 million for acquired
in-process research and development expense related to the
acquisition of Chipidea. Management believes that excluding this
charge facilitates comparisons to MIPS' core operating results
during periods when there were no acquisitions. DATASOURCE: MIPS
Technologies, Inc. CONTACT: Media, Jodi Guilbault, +1-650-567-5035,
, or Investors, Mark Tyndall, +1-650-567-5100, , both of MIPS
Technologies, Inc. Web site: http://www.mips.com/
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