MoSys
(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, 2014.
First Quarter and Recent Highlights
-
Secured multiple new design wins for Bandwidth Engine® ICs;
-
Increased production shipments of Bandwidth Engine ICs
quarter-over-quarter;
-
Achieved carrier-grade qualification of Bandwidth Engine 2 product
family;
-
Announced production availability of all three Bandwidth Engine 2
products;
-
Introduced third generation Bandwidth Engine architecture; and
-
Ended the quarter with total cash and investments of $45.7 million.
Management Commentary
“We are pleased to begin 2014 with increasing revenue generated from IC
product sales and multiple new design wins for our Bandwidth Engine
family of advanced networking memories,” commented Len Perham, MoSys’
president and chief executive officer. “Customer interest and sales
activity continues to be strong for our Bandwidth Engine and LineSpeed™
families as we announced new products and successfully demonstrated our
technology leadership at several industry shows this quarter.
“We have achieved carrier-grade qualification and announced the
production release of all three Bandwidth Engine 2 products. These
accomplishments provide additional validation of our technology and
further support for our expanding sales efforts with customers. They
position us to begin production shipments in the second half of this
year.
“In addition, we continued to make progress with the development of our
third generation Bandwidth Engine product family and have early
engagements with processor partners and prospective Tier 1 networking
and communications customers. We are well positioned to greatly increase
our total design wins compared with 2013 and further expand the breadth
of our product offerings to meet the performance challenges faced by
customers in their next-generation networking systems,” concluded Mr.
Perham.
First Quarter Results
Total net revenue for the first quarter of 2014 was $1.3 million,
compared with $1.0 million in the fourth quarter of 2013 and $1.3
million in the first quarter of 2013.
First quarter 2014 total revenue included product revenue of $0.6
million. Royalty and other revenue for the first quarter of 2014, which
includes licensing revenue, was $0.8 million, consistent with the
previous quarter, compared with $1.3 million in the first quarter of
2013.
Gross margin for the first quarter of 2014 was 57%, compared with 78% in
the fourth quarter of 2013 and 99% for the first quarter of 2013. The
decrease in gross margin was due to the increased sales of IC products,
which carry a lower gross margin than the Company’s licensing and
royalty revenue.
Total operating expenses on a GAAP basis for the first quarter of 2014
were $8.9 million, which compared with $7.3 million in the previous
quarter and $6.3 million for the first quarter of 2013. The sequential
increase in first quarter 2014 operating expenses reflected increased
personnel-related and CAD software expenses related to the development
of the Company’s Bandwidth Engine and LineSpeed products. First quarter
operating expenses also included $0.3 million of amortization of
intangible assets and $1.5 million of stock-based compensation expense.
GAAP net loss for the first quarter of 2014 was $8.1 million, or ($0.16)
per share, which compared with a loss of $6.5 million, or ($0.13) per
share in the previous quarter and a loss of $5.0 million, or ($0.12) per
share, for the first quarter of 2013. The non-GAAP net loss for the
first quarter of 2014 was $6.3 million, or ($0.13) per share, which
excluded amortization of intangible assets and stock-based compensation
expense. Earnings per share for the first quarter of 2014 were computed
using approximately 49.2 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
5:30a.m. Pacific Time (8:30a.m.Eastern Time) to discuss the first
quarter 2014 financial results. Investors and other interested parties
may access the call by dialing 1-877-280-4959 in the U.S.
(1-857-244-7316 outside of the U.S.), and entering the pass code
12601161 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 81357435.
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 May 2, 2014,
which 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 our ICs;
-
commencing volume shipments of Bandwidth Engine ICs;
-
our ability to enhance our existing proprietary technologies and
develop new technologies;
-
achieving necessary acceptance and adoption 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 a fabless semiconductor company enabling
leading equipment manufacturers in the networking and communications
systems markets to address the continual increase in Internet users,
data and services. The company's solutions deliver data path
connectivity, speed and intelligence while eliminating data access
bottlenecks on line cards and systems scaling from 100G to
multi-terabits per second. Engineered and built for high-reliability
carrier and enterprise applications, MoSys' Bandwidth Engine® and
LineSpeed™ IC product families are based on the company's patented
high-performance, high-density intelligent access and high-speed serial
interface technology, and utilize the company's highly efficient
GigaChip™ Interface. MoSys is headquartered in Santa Clara, California.
More information is available at www.mosys.com.
Bandwidth Engine and MoSys are registered trademarks of MoSys, Inc.
in the US and/or other countries. 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,
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
|
|
|
|
|
|
Product
|
|
|
$
|
581
|
|
|
|
$
|
61
|
|
|
Royalty and other
|
|
|
|
751
|
|
|
|
|
1,274
|
|
|
Total net revenue
|
|
|
|
1,332
|
|
|
|
|
1,335
|
|
|
|
|
|
|
|
|
|
|
Cost of Net Revenue
|
|
|
|
|
|
|
|
Product and other
|
|
|
|
577
|
|
|
|
|
19
|
|
|
Total cost of net revenue
|
|
|
|
577
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
755
|
|
|
|
|
1,316
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
7,054
|
|
|
|
|
5,320
|
|
|
Selling, general and administrative
|
|
|
|
1,797
|
|
|
|
|
1,623
|
|
|
Gain on sale of assets
|
|
|
|
-
|
|
|
|
|
(630
|
)
|
|
Total operating expenses
|
|
|
|
8,851
|
|
|
|
|
6,313
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
(8,096
|
)
|
|
|
|
(4,997
|
)
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
30
|
|
|
|
|
20
|
|
|
Loss before income taxes
|
|
|
|
(8,066
|
)
|
|
|
|
(4,977
|
)
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
21
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(8,087
|
)
|
|
|
$
|
(4,997
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
($0.16
|
)
|
|
|
|
($0.12
|
)
|
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,174
|
|
|
|
|
40,264
|
|
|
|
MOSYS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and investments
|
|
|
|
$
|
34,852
|
|
|
|
$
|
36,556
|
|
|
|
Accounts receivable, net
|
|
|
|
|
353
|
|
|
|
|
148
|
|
|
|
Inventory
|
|
|
|
|
924
|
|
|
|
|
567
|
|
|
|
Prepaid expenses and other assets
|
|
|
|
|
1,052
|
|
|
|
|
1,104
|
|
|
|
Total current assets
|
|
|
|
|
37,181
|
|
|
|
|
38,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term investments
|
|
|
|
|
10,824
|
|
|
|
|
13,926
|
|
|
|
Property and equipment, net
|
|
|
|
|
697
|
|
|
|
|
706
|
|
|
|
Goodwill
|
|
|
|
|
23,134
|
|
|
|
|
23,134
|
|
|
|
Intangible assets, net
|
|
|
|
|
1,405
|
|
|
|
|
1,655
|
|
|
|
Other assets
|
|
|
|
|
204
|
|
|
|
|
193
|
|
|
|
Total assets
|
|
|
|
$
|
73,445
|
|
|
|
$
|
77,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
825
|
|
|
|
$
|
276
|
|
|
|
Accrued expenses and other liabilities
|
|
|
|
|
1,845
|
|
|
|
|
1,909
|
|
|
|
Deferred revenue
|
|
|
|
|
155
|
|
|
|
|
170
|
|
|
|
Total current liabilities
|
|
|
|
|
2,825
|
|
|
|
|
2,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
224
|
|
|
|
|
216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
70,396
|
|
|
|
|
75,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
73,445
|
|
|
|
$
|
77,989
|
|
|
|
|
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,
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(8,087
|
)
|
|
|
|
$
|
(4,997
|
)
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
-Cost of net revenue
|
|
|
|
-
|
|
|
|
|
|
2
|
|
|
|
|
-Research and development
|
|
|
|
1,083
|
|
|
|
|
|
590
|
|
|
|
|
-Selling, general and administrative
|
|
|
|
408
|
|
|
|
|
|
296
|
|
|
|
|
Total stock-based compensation expense
|
|
|
|
1,491
|
|
|
|
|
|
888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
250
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss
|
|
|
$
|
(6,346
|
)
|
|
|
|
$
|
(3,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share
|
|
|
$
|
(0.16
|
)
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
-Stock-based compensation expense
|
|
|
|
0.03
|
|
|
|
|
|
0.01
|
|
|
|
|
-Amortization of intangible assets
|
|
|
|
-
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share: basic and diluted
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net loss per share
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,174
|
|
|
|
|
|
40,264
|
|
|
|
|
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