MoSys, Inc. Reports First Quarter 2013 Financial Results
MoSys, Inc., (NASDAQ: MOSY), a leader in semiconductor solutions that
enable fast, intelligent data access for network and communications
systems, today reported financial results for the first quarter ended
March 31, 2013.
First Quarter and Recent Highlights
-
Secured first order from a Tier-One customer for Bandwidth Engine®
2;
-
Secured an additional platform win with an existing customer;
-
Unveiled newest member of Bandwidth Engine family of ICs, the MSR820,
with on-board accelerators for 400G networking equipment;
-
Announced new LineSpeed™ 100G Multi-Mode Gearbox IC to enable data
path connectivity, speed and intelligence for 100G data transmission;
and
-
Ended the quarter with total cash and investments of $37.3 million.
Management Commentary
“During the first quarter, we continued to build design win momentum for
our first and second-generation Bandwidth Engine ICs,” commented Len
Perham, MoSys’ President and Chief Executive Officer. “Most notably, we
received our first Tier-One customer order for prototype quantities of
Bandwidth Engine 2 and secured another platform win with an existing
customer. Additionally, we have sample requests for Bandwidth Engine 2
(BE-2) from multiple existing and prospective customers, demonstrating
the user communities’ growing interest in this uniquely architected,
network equipment solution. To date, the characterization and testing of
BE-2 has been very gratifying. BE-2 is functioning according to its
specifications, and we are satisfied that it meets the necessary
standards and criteria to fulfill current sample requests. Though much
remains to be done, we are very pleased with the progress we are making
to ready these great new members of the Bandwidth Engine product family
for a full release to the market. Finally, we anticipate satisfying all
outstanding sample and/or prototyping orders for this new product in the
current quarter.
During the first quarter, we further demonstrated our ongoing commitment
to leverage our existing core IP and technical expertise by announcing
the expansion of the Bandwidth Engine family of products. Our newest
member, Bandwidth Engine 2 – Macro (MSR820), accelerates intelligent
networking with on-board macro functions for 400G equipment.
We also announced a new high-speed SerDes-based product, the LineSpeed
100G Multi-Mode Gearbox IC, for networking and communications systems.
This fully functional, high-performance SerDes IC enables high-density,
low-power line cards and modules for short and extended reach datapath
applications. We are pleased with the customer interest in our initial
LineSpeed product, expect to have samples available later this quarter,
and plan to add more products to the LineSpeed family in future
quarters. We believe 2013 is off to a very good start, and we look
forward to providing additional updates as more progress and milestones
are achieved.”
First Quarter Results
Total net revenue for the first quarter of 2013 was $1.3 million,
compared with $1.6 million reported in the fourth quarter of 2012 and
$1.4 million in the first quarter of 2012.
First quarter 2013 total revenue included licensing and other revenue of
$0.2 million, consistent with the previous quarter and first quarter of
2012. First quarter 2013 royalty revenue was $1.1 million, compared with
$1.4 million in the previous quarter and $1.2 million for the first
quarter of 2012.
Gross margin for the first quarter of 2013 was 99 percent, compared with
97 percent in the fourth quarter of 2012 and 96 percent for the first
quarter of 2012. The sequential increase in gross margin was primarily
due to less engineering services required on existing licensing
contracts.
Total operating expenses on a GAAP basis for the first quarter of 2013
were $6.3 million, compared with $9.4 million in the previous quarter
and $8.6 million of expenses for the first quarter of 2012. First
quarter 2013 operating expenses included a $0.6 million gain on the sale
of assets, as well as $0.3 million for amortization of intangible assets
and $0.9 million in stock-based compensation expense.
GAAP net loss for the first quarter of 2013 was $5.0 million, or ($0.12)
per share, compared with a net loss of $7.8 million, or ($0.19) per
share, in the previous quarter and a net loss of $7.2 million, or
($0.19) per share, for the first quarter of 2012. The non-GAAP net loss
for the first quarter of 2013 was $3.9 million, or ($0.10) per share,
which excludes amortization of intangible assets and stock-based
compensation expense. Earnings per share for the first quarter of 2013
were computed using approximately 40.3 million weighted 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.
Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at
5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to discuss the first
quarter 2013 financial results. Investors and other interested parties
may access the call by dialing 1-866-318-8615 in the U.S.
(1-617-399-5134 outside of the U.S.), and entering the pass code 67286312
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 http://www.mosys.com.
A telephone replay will be available for two business days following the
call at 1-888-286-8010 in the U.S. (1-617-801-6888 outside of the U.S.),
pass code of 85064172.
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 stock-based
compensation and amortization of recorded intangible assets. 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 April 19, 2013,
that the Company filed with the Securities and Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about the
Company, including, without limitation, anticipated benefits and
performance expected from our IC products and the Company’s future
markets and future business prospects.
Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors include, but
are not limited, to the following:
-
achieving additional design wins for Bandwidth Engine ICs;
-
commencing volume shipments of Bandwidth Engine ICs;
-
our ability to enhance our existing proprietary technologies and
develop new technologies;
-
achieving necessary acceptance of our IC architecture and interface
protocols by potential customers and their suppliers;
-
difficulties and delays in the development, production, testing and
marketing of our ICs;
-
reliance on our manufacturing partners to assist successfully with the
fabrication of our ICs;
-
availability of quantities of ICs supplied by our manufacturing
partners at a competitive cost;
-
our lack of recent experience as a fabless semiconductor company
making and selling proprietary ICs;
-
level of intellectual property protection provided by our patents, the
expenses and other consequences of litigation, including intellectual
property infringement litigation, to which we may be or may become a
party from time to time;
-
vigor and growth of markets served by our customers and our
operations; and
other risks identified in the Company’s most recent report on Form 10-K
filed with the Securities and Exchange Commission, as well as other
reports that MoSys files from time to time with the Securities and
Exchange Commission. MoSys undertakes no obligation to update publicly
any forward-looking statement for any reason, except as required by law,
even as new information becomes available or other events occur in the
future.
About MoSys, Inc.
MoSys, Inc. (NASDAQ: MOSY) is an IP-rich fabless semiconductor company
that provides high performance solutions for fast, intelligent data
access in network and communications systems. Engineered and built for
high-reliability carrier and enterprise applications, MoSys' products
are breaking bandwidth barriers™ in data processing to allow for faster
packet access and analysis, expanded user capacity and new capabilities
required by the expanding global infrastructure. MoSys' Bandwidth
Engine® family of ICs combines the company's patented 1T-SRAM®
high-density, embedded memory and high-speed, 10 Gigabits per second
serial interface with its intelligent access technology and a highly
efficient GigaChip™ Interface transport protocol to eliminate
bottlenecks in high-speed data access. MoSys is headquartered in Santa
Clara, California, and more information is available at http://www.mosys.com.
MoSys, 1T-SRAM and Bandwidth Engine are registered trademarks of
MoSys, Inc. in the US and/or other countries. Breaking Bandwidth
Barriers, GigaChip, LineSpeed and the MoSys logo are trademarks of
MoSys, Inc. All other marks mentioned herein are the property of their
respective owners.
(Financial Tables to Follow)
|
MOSYS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Net Revenue
|
|
|
|
|
|
Licensing and other
|
|
|
$
|
249
|
|
|
$
|
221
|
|
Royalty
|
|
|
|
1,086
|
|
|
|
1,203
|
|
Total net revenue
|
|
|
|
1,335
|
|
|
|
1,424
|
|
|
|
|
|
|
|
Cost of Net Revenue
|
|
|
|
|
|
Licensing and other
|
|
|
|
19
|
|
|
|
57
|
|
Total cost of net revenue
|
|
|
|
19
|
|
|
|
57
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
1,316
|
|
|
|
1,367
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
Research and development
|
|
|
|
5,320
|
|
|
|
7,506
|
|
Selling, general and administrative
|
|
|
|
1,623
|
|
|
|
2,926
|
|
Gain on sale of assets
|
|
|
|
(630
|
)
|
|
|
(1,856
|
)
|
Total operating expenses
|
|
|
|
6,313
|
|
|
|
8,576
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
(4,997
|
)
|
|
|
(7,209
|
)
|
|
|
|
|
|
|
Other income, net
|
|
|
|
20
|
|
|
|
24
|
|
Loss before income taxes
|
|
|
|
(4,977
|
)
|
|
|
(7,185
|
)
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
20
|
|
|
|
30
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,997
|
)
|
|
$
|
(7,215
|
)
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
Basic and diluted
|
|
|
|
($0.12
|
)
|
|
|
($0.19
|
)
|
|
|
|
|
|
|
Shares used in computing net loss per share
|
|
|
|
|
|
Basic and diluted
|
|
|
|
40,264
|
|
|
|
38,566
|
|
|
|
|
|
|
|
|
MOSYS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash, cash equivalents and investments
|
|
|
$
|
30,459
|
|
$
|
33,327
|
Accounts receivable, net
|
|
|
|
68
|
|
|
287
|
Prepaid expenses and other assets
|
|
|
|
1,510
|
|
|
1,362
|
Total current assets
|
|
|
|
32,037
|
|
|
34,976
|
|
|
|
|
|
|
Long-term investments
|
|
|
|
6,849
|
|
|
7,383
|
Property and equipment, net
|
|
|
|
1,118
|
|
|
1,238
|
Goodwill
|
|
|
|
23,134
|
|
|
23,134
|
Intangible assets, net
|
|
|
|
2,404
|
|
|
2,654
|
Other assets
|
|
|
|
145
|
|
|
149
|
Total assets
|
|
|
$
|
65,687
|
|
$
|
69,534
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
1,645
|
|
$
|
393
|
Accrued expenses and other liabilities
|
|
|
|
2,041
|
|
|
3,947
|
Deferred revenue
|
|
|
|
336
|
|
|
481
|
Total current liabilities
|
|
|
|
4,022
|
|
|
4,821
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
185
|
|
|
171
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
61,480
|
|
|
64,542
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
65,687
|
|
$
|
69,534
|
|
|
|
|
|
|
|
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
|
|
|
|
March 31,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(4,997
|
)
|
|
$
|
(7,215
|
)
|
Stock-based compensation expense
|
|
|
|
|
|
-Cost of net revenue
|
|
|
|
2
|
|
|
|
8
|
|
-Research and development
|
|
|
|
590
|
|
|
|
766
|
|
-Selling, general and administrative
|
|
|
|
296
|
|
|
|
269
|
|
Total stock-based compensation expense
|
|
|
|
888
|
|
|
|
1,043
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
250
|
|
|
|
683
|
|
|
|
|
|
|
|
Non-GAAP net loss
|
|
|
$
|
(3,859
|
)
|
|
$
|
(5,489
|
)
|
|
|
|
|
|
|
GAAP net loss per share
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.19
|
)
|
Reconciling items
|
|
|
|
|
|
-Stock-based compensation expense
|
|
|
|
0.01
|
|
|
|
0.03
|
|
-Amortization of intangible assets
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
|
|
|
|
Non-GAAP net loss per share: basic and diluted
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
Shares used in computing non-GAAP net loss per share
|
|
|
|
|
|
Basic and diluted
|
|
|
|
40,264
|
|
|
|
38,566
|
|
|
|
|
|
|
|