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 fourth quarter and fiscal year ended
December 31, 2014.
Full Year 2014 and Recent Highlights
-
Recently announced collaboration with EZchip Semiconductor’s NPS
family of network processors and a customized derivative of the MoSys
Bandwidth Engine® 3;
-
Launched LineSpeed™ 100G Low-Power Retimer;
-
Established a dual-sourcing product and technology partnership with
GSI Technology;
-
Introduced third-generation Bandwidth Engine architecture;
-
Nearly doubled total number of IC design wins in 2014 over 2013;
-
Increased IC product revenue to over 40% of total 2014 revenue; and
-
Ended the year with total cash and investments of $25.8 million.
Management Commentary
Commenting on the results, Len Perham, president and CEO of MoSys, said,
“We finished 2014 on a strong note, as design win activity for our
Bandwidth Engine products picked up substantially in the fourth quarter.
Specifically, the accelerating adoption of our Bandwidth Engine 2
products resulted in our best design win quarter to date, and total
design wins for 2014 nearly doubled the number of wins secured in 2013.
These most recent wins include expanded traction for our solutions into
high-performance switching and security applications that reside in both
the data center and at the edge of the Cloud.
“During the year, we continued to make progress on our product
development roadmap and broadened our product offerings with the
introduction of the Bandwidth Engine 3 architecture and our LineSpeed
100G Low Power Retimer for optical modules. These solutions, along with
an anticipated further expansion of our LineSpeed product portfolio,
will allow us to meaningfully expand our served available market in
2015. In addition, we recently announced a collaboration with EZchip
intended to provide a customized version of Bandwidth Engine 3 for
EZchip’s NPS family of C-programmable network processors. This
significant partnership should accelerate the adoption of our Bandwidth
Engine products in the marketplace. We believe it demonstrates the value
that leading IC companies in our ecosystem are beginning to place on our
solutions. We are currently working closely with EZchip to complete the
integration and technology verification of our respective component
families with the goal of sampling to customers later this year.
Mr. Perham concluded, “With our strong fourth quarter design win
activity, we believe we are well positioned for growth in 2015 with
solid design win traction, a robust sales funnel and an expanding
product portfolio, all of which are expected to drive both additional
design wins and a ramping of revenue in the second half of the year.”
Fourth Quarter Results
Total net revenue for the fourth quarter of 2014 was $1.1 million,
compared with $1.1 million reported in the third quarter of 2014 and
$1.0 million in the fourth quarter of 2013.
Fourth quarter 2014 total revenue included product revenue of $0.3
million, compared with $0.4 million in the third quarter of 2014 and
$0.2 million in the year ago period. Royalty and other revenue for the
fourth quarter of 2014, which includes licensing revenue, was $0.8
million as compared with $0.7 million in the previous quarter and $0.8
million in the fourth quarter of 2013.
Gross margin for the fourth quarter of 2014 was 76 percent, compared
with 61 percent in the third quarter of 2014 and 78 percent for the
fourth quarter of 2013. Fourth quarter gross margin reflects a higher
mix of royalty and other revenue, which carry higher gross margins than
IC products.
Total operating expenses on a GAAP basis for the fourth quarter of 2014
were $9.8 million, compared with $9.2 million in the previous quarter
and $7.3 million for the fourth quarter of 2013, as research and
development expenses for taping out new products were significantly
higher than in prior periods. Fourth quarter 2014 operating expenses
included $0.3 million of amortization of intangible assets and $1.0
million in stock-based compensation expense.
GAAP net loss for the fourth quarter of 2014 was $9.0 million, or
($0.18) per share, compared with a net loss of $8.5 million, or ($0.17)
per share, in the previous quarter and a net loss of $6.5 million, or
($0.13) per share, for the fourth quarter of 2013. Non-GAAP net loss for
the fourth quarter of 2014 was $7.7 million, or ($0.15) per share, which
excludes amortization of intangible assets and stock-based compensation
expense. Earnings per share for the fourth quarter of 2014 were computed
using approximately 49.8 million weighted shares on a GAAP and non-GAAP
basis.
Full Year 2014 Results
Total revenue for 2014 was $5.4 million, compared with $4.4 million for
2013. Net loss for 2014 was $32.7 million, or ($0.66) per share,
compared with a loss of $24.8 million, or ($0.55) per share, in 2013.
Non-GAAP net loss for 2014 was $27.1 million, or ($0.55) per share,
excluding stock-based compensation charges of $4.6 million and
intangible asset amortization charges of $1.0 million, compared with a
non-GAAP net loss for 2013 of $20.1 million, or ($0.44) per share.
Earnings per share for the full year 2014 were computed using
approximately 49.5 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 fourth
quarter and full year 2014 financial results. Investors and other
interested parties may access the call by dialing 1-800-510-0146 in
the U.S. (1-617-614-3449 outside of the U.S.), and entering the pass
code 62577051 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 78602238.
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 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 January 30,
2015, 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 IC design wins;
-
commencing volume shipments of Bandwidth Engine ICs;
-
the timing of customer orders and product shipments;
-
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, GigaChip and MoSys are registered trademarks of
MoSys, Inc. in the US and/or other countries. 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
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
$
|
287
|
|
|
$
|
183
|
|
|
|
$
|
2,280
|
|
|
$
|
394
|
|
|
Royalty and other
|
|
|
|
859
|
|
|
|
803
|
|
|
|
|
3,100
|
|
|
|
4,004
|
|
|
|
Total net revenue
|
|
|
|
1,146
|
|
|
|
986
|
|
|
|
|
5,380
|
|
|
|
4,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Net Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Product and other
|
|
|
|
272
|
|
|
|
220
|
|
|
|
|
2,318
|
|
|
|
474
|
|
|
|
Total cost of net revenue
|
|
|
|
272
|
|
|
|
220
|
|
|
|
|
2,318
|
|
|
|
474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
874
|
|
|
|
766
|
|
|
|
|
3,062
|
|
|
|
3,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
8,268
|
|
|
|
5,779
|
|
|
|
|
29,261
|
|
|
|
23,325
|
|
|
Selling, general and administrative
|
|
|
|
1,543
|
|
|
|
1,483
|
|
|
|
|
6,519
|
|
|
|
6,161
|
|
|
Gain on sale of assets
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(630
|
)
|
|
|
Total operating expenses
|
|
|
|
9,811
|
|
|
|
7,262
|
|
|
|
|
35,780
|
|
|
|
28,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
(8,937
|
)
|
|
|
(6,496
|
)
|
|
|
|
(32,718
|
)
|
|
|
(24,932
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
28
|
|
|
|
43
|
|
|
|
|
143
|
|
|
|
209
|
|
|
|
Loss before income taxes
|
|
|
|
(8,909
|
)
|
|
|
(6,453
|
)
|
|
|
|
(32,575
|
)
|
|
|
(24,723
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
42
|
|
|
|
3
|
|
|
|
|
107
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(8,951
|
)
|
|
$
|
(6,456
|
)
|
|
|
$
|
(32,682
|
)
|
|
$
|
(24,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
($0.18
|
)
|
|
|
($0.13
|
)
|
|
|
|
($0.66
|
)
|
|
|
($0.55
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,783
|
|
|
|
48,543
|
|
|
|
|
49,528
|
|
|
|
45,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOSYS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash, cash equivalents and investments
|
|
|
$
|
23,549
|
|
$
|
36,556
|
|
|
Accounts receivable, net
|
|
|
|
177
|
|
|
148
|
|
|
Inventories
|
|
|
|
881
|
|
|
567
|
|
|
Prepaid expenses and other
|
|
|
|
887
|
|
|
1,104
|
|
|
|
Total current assets
|
|
|
|
25,494
|
|
|
38,375
|
|
|
|
|
|
|
|
|
|
|
Long-term investments
|
|
|
|
2,245
|
|
|
13,926
|
|
Property and equipment, net
|
|
|
|
854
|
|
|
706
|
|
Goodwill
|
|
|
|
23,134
|
|
|
23,134
|
|
Intangible assets, net
|
|
|
|
655
|
|
|
1,655
|
|
Other assets
|
|
|
|
244
|
|
|
193
|
|
|
|
Total assets
|
|
|
$
|
52,626
|
|
$
|
77,989
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
495
|
|
$
|
276
|
|
|
Accrued expenses and other
|
|
|
|
2,350
|
|
|
2,079
|
|
|
|
Total current liabilities
|
|
|
|
2,845
|
|
|
2,355
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
241
|
|
|
216
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
49,540
|
|
|
75,418
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
52,626
|
|
$
|
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
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(8,951
|
)
|
|
$
|
(6,456
|
)
|
|
|
$
|
(32,682
|
)
|
|
$
|
(24,794
|
)
|
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Cost of net revenue
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
7
|
|
|
|
-
|
Research and development
|
|
|
|
766
|
|
|
|
641
|
|
|
|
|
3,419
|
|
|
|
2,565
|
|
|
|
-
|
Selling, general and administrative
|
|
|
|
229
|
|
|
|
257
|
|
|
|
|
1,172
|
|
|
|
1,126
|
|
|
|
|
Total stock-based compensation expense
|
|
|
|
995
|
|
|
|
898
|
|
|
|
|
4,591
|
|
|
|
3,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
250
|
|
|
|
249
|
|
|
|
|
1,000
|
|
|
|
999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss
|
|
|
$
|
(7,706
|
)
|
|
$
|
(5,309
|
)
|
|
|
$
|
(27,091
|
)
|
|
$
|
(20,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.13
|
)
|
|
|
$
|
(0.66
|
)
|
|
$
|
(0.55
|
)
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Stock-based compensation expense
|
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
|
0.09
|
|
|
|
0.09
|
|
|
|
-
|
Amortization of intangible assets
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share: basic and diluted
|
|
|
$
|
(0.15
|
)
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.55
|
)
|
|
$
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net loss per share
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,783
|
|
|
|
48,543
|
|
|
|
|
49,528
|
|
|
|
45,246
|
|
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