http://www.businesswire.com/news/home/20091102006474/en
Revenues Increase 10% Quarter Over Quarter
FREMONT, Calif.--(Business Wire)--
Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry`s trusted IP
partner, today reported its financial results for the fourth quarter and fiscal
year ended September 30, 2009.
For fiscal 2009, total revenues were $47.4 million compared to $59.3 million for
the prior year. Revenues for the fourth quarter of fiscal 2009 were $13.1
million, compared with $15.5 million for the fourth quarter of fiscal 2008 and
$11.9 million for the third quarter of fiscal 2009.
License and maintenance revenue for the fourth quarter of fiscal 2009 was $10.9
million, compared with $12.1 million for the same period a year ago and $10.7
million for the prior quarter. Royalties for the fourth quarter of fiscal 2009
were $2.2 million, compared with $3.4 million for the fourth quarter of fiscal
2008 and $1.2 million for the third quarter of fiscal 2009.
Net loss for the fourth quarter ended September 30, 2009 on a GAAP basis was
$3.2 million, or $(0.14) per share, compared with a net loss of $47,000, or
$(0.00) per share in the fourth quarter of 2008. For the 2009 fiscal year net
loss was $34.1 million or ($1.48) per share fully diluted compared to net income
of $0.6 million or $0.02 per share for fiscal 2008.
On a non-GAAP basis which excludes the effects of stock-compensation expense,
restructuring and acquisition-related charges, the company would have reported a
net income of $0.5 million, or $0.02 per share for the quarter ended September
30, 2009 and a net loss of $3.4 million or $0.15 per share for the full fiscal
year ended September 30, 2009. The reconciliation of GAAP to non-GAAP for the
quarter includes $1.5 million of stock-based compensation expense, $1.4 million
of deferred tax allowance and approximately $3.7 million of acquisition-related
charges reduced by $2.9 million tax effect for a net total of $3.7 million.
Virage Logic President and CEO, Dr. Alex Shubat, said, "We grew our license
revenues from $10.7 million in the third quarter to $10.9 million in the fourth
quarter. Our royalty revenue grew from $1.2 million to $2.2 million as foundry
utilization increased.
Fiscal 2009 was a pivotal year for the company and we are proud of the progress
we made on our transformation goals, especially in light of the challenging
global economic environment. As we outlined in early 2007, our transformation
goals included:
Broadening our product portfolio. Through a combination of ongoing R&D efforts
and inorganic growth initiatives, our product offerings quadrupled. This
resulting non-captive SAM (served available market) grew from $200 million in
2007 to approximately $1 billion in 2010, positioning us well to serve as a
single source supplier of a broad range of semiconductor IP.
* The acquisition of ARC International expanded our product portfolio to include
microprocessor cores and media subsystems and software, representing the largest
segment of the semiconductor IP market. With approximately $24 million in
revenue for the trailing twelve months ended June 30, 2009 and over 150
customers, ARC should contribute meaningful scale to our business.
* Our recently announced agreement with NXP transfers part of their advanced
CMOS IP portfolio and engineering talent to Virage Logic in a long-term
licensing and IP development relationship between the two companies. NXP will
pay Virage Logic $60 million over four years from the closing of the transaction
which is expected to occur by the end of calendar year 2009.
* Early this year, we announced a licensing agreement with AMD that granted us
the rights to license modify and sell high speed interfaces including PCI
Express, HDMI/DVI/DisplayPort and MIPI IP. In the fourth fiscal quarter, we
rolled out this new product line to market. The high speed interface business
unit posted record bookings in Q4 and is poised for significant growth in 2010.
Being first-to-market with next generation advanced technology products. As a
result of our early leadership at 40nm and more recently at 28nm, we believe our
SiWare Memory and SiWare Logic products offer the industry`s broadest portfolio
of silicon proven IP on this technology node. Today about 15 customers are
actively designing SoCs with our 40nm IP, contributing to about 25 tape-outs
over the next six months thereby enabling our 40nm royalty revenues to continue
growing. Also, during the quarter, we booked our 4th deal in the 28/32nm node.
Specifically, we are very proud of this deal as it represents our first
multi-year, multi-million dollar 28nm engagement with an end customer, a leading
IDM.
Fiscal 2009 marked an inflection point and represented a pivotal year for Virage
Logic. We executed well on our inorganic growth initiatives, made continued
significant progress on becoming a standard product company versus custom shop,
and established deeper, strategic engagements. Our sales pipeline continues to
increase and points to strong future growth in terms of both dollar value and
individual deal size. Finally, the continuing shift the large semiconductor IDMs
are making towards a `fabless` or `fab-lite` business model, plays to our core
strengths and enables us to serve as an increasingly trusted IP partner."
Dr. Shubat concluded, "As a result of all the progress that I`ve itemized above,
as well as very strong license bookings for the past two quarters, we are
entering Fiscal 2010 with record backlog. Beginning in fiscal 2009, we have
worked with our major customers in constructing license contracts that will
reflect longer term ratable revenue streams for our company. During the past two
quarters, we were successful in booking several large, ratable agreements with
major IDMs.
This strong backlog, coupled with the recent acquisitions and IP agreements of
the past year, will enable our company to enjoy record license revenue in Fiscal
2010. In addition, we believe that revenue from royalties will increase sharply
in fiscal 2010, as a result of strong growth in semiconductor wafer shipments.
For the first quarter fiscal 2010, we are projecting revenues of $18.5 million
to $19.0 million and non-GAAP eps results of $0.02 to $0.04 per share. The
Company expects to realize, before tax, approximately $2.6 million to $2.8
million in non-GAAP adjustments comprised primarily of stock-compensation and
acquisition-related expenses."
Although this news release will be available on the Company`s website, the
Company disclaims any duty or intention to update these or any other
forward-looking statements.
Use of Non-GAAP Information
We believe the financial figures we include that are not presented in accordance
with GAAP assist investors in understanding our business and operating results.
This information is intended to provide investors with useful supplemental data
regarding the underlying economics of our business operations because operating
results presented under GAAP may include charges that are nonrecurring or not
necessarily relevant to ongoing operations, or are difficult to forecast for
future periods. The Company`s management evaluates and makes operating decisions
about its business operations primarily based on revenue and the core costs of
those business operations. Management believes that goodwill impairment charges,
valuation allowance on deferred tax assets, restructuring charges,
acquisition-related charges and stock-based compensation are not part of its
core business operations. Therefore, management presents non-GAAP financial
measures, along with GAAP measures, in this earnings release by excluding these
items from the period expenses. The income statement line items involved in the
adjustment from GAAP to non-GAAP presentation in this earnings release are
goodwill impairment charges, valuation allowance on deferred tax assets,
restructuring charges, acquisition-related charges, and stock-based compensation
that are included in cost of revenues, research and development, general and
administrative and sales and marketing expenses. To determine our non-GAAP tax
provision, the Company recalculates tax based on non-GAAP income before taxes
and adjusts accordingly.
For each such non-GAAP measure, the adjustment provides management with
information about the Company`s underlying operating performance that enables a
more meaningful comparison of our finance results in different reporting
periods. For example, since the Company does not acquire businesses on a
predictable cycle, management excludes acquisition-related charges in order to
provide a more consistent and meaningful evaluation of the Company`s operating
expenses. Management also excludes goodwill impairment, valuation allowance on
deferred tax assets and restructuring charges as these are non-recurring charges
which are not expected to occur on a regular basis. Management also excludes the
impact of stock-based compensation to help it compare current period operating
expenses against the operating expenses for prior periods. In addition, the
availability of non-GAAP information helps management track actual performance
relative to financial targets. This information also helps investors compare the
Company`s performance with other companies in the industry, which use similar
financial measures to supplement their GAAP financial information.
Management recognizes that the use of these non-GAAP measures has limitations,
including the fact that management must exercise judgment in determining which
types of charges should be excluded from the non-GAAP financial information.
Management believes that providing this non-GAAP financial information, in
addition to GAAP information, facilitates consistent comparison of the Company`s
financial performance over time. The Company has historically provided non-GAAP
information to the investment community, not as an alternative but as an
important supplement to GAAP information, to enable investors to evaluate the
Company`s core operating performance in the way that management does.
Conference Call
Virage Logic's management will hold a teleconference on fourth quarter and
fiscal year 2009 results at 1:30 p.m. PACIFIC / 4:30 p.m. EASTERN today,
November 2, 2009. Participants can access the call by dialing (877) 941-9205
(domestic) or (480) 629-9835 (international) or can listen via a live Internet
webcast, which can be found on the Investor Relations page of the Virage Logic
website at www.viragelogic.com. A replay of the call will be available at (800)
406-7325 (domestic) or (303) 590-3030 (international), access number 4171278
through November 7, 2009; and the webcast can be accessed at www.viragelogic.com
for 30 days.
About Virage Logic
Virage Logic is a leading provider of both functional and physical semiconductor
intellectual property (IP) for the design of complex integrated circuits. The
company's highly differentiated product portfolio includes processor centric
solutions, interface IP solutions, embedded SRAMs and NVMs, embedded memory test
and repair, logic libraries, and memory development software. As the industry's
trusted semiconductor IP partner, more than 350 foundry, IDM and fabless
customers rely on Virage Logic to achieve higher performance, lower power,
higher density and optimal yield, as well as shorten time-to-market and
time-to-volume. For further information, visit http://www.viragelogic.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Statements made in this news release, other than statements of historical fact,
and any assumptions underlying these statements, are forward-looking statements,
including, for example, statements relating to company trends, business outlook
and technology leadership.Forward-looking statements are subject to a number of
known and unknown risks and uncertainties, which might cause actual results to
differ materially from those expressed or implied by such statements.These risks
and uncertainties include Virage Logic`s ability to improve its operations; its
ability to forecast its business, including its revenue, income and order flow
outlook; Virage Logic`s ability to execute on its strategy; the company`s
ability to overcome the challenges associated with establishing licensing
relationships with semiconductor companies; the company`s ability to obtain
royalty revenues from customers in addition to license fees; business and
economic conditions generally and in the semiconductor industry in particular;
competition in the market for semiconductor IP platforms; and other risks
including those described in the company`s Annual Report on Form 10-K for the
period ended September 30, 2008, and in Virage Logic`s other periodic reports
filed with the SEC, all of which are available from Virage Logic`s website
(www.viragelogic.com) or from the SEC`s website (www.sec.gov), and in news
releases and other communications.Virage Logic disclaims any intention or duty
to update any forward-looking statements made in this news release.
All trademarks are the property of their respective owners and are protected
herein.
Reconciliation of GAAP to Non-GAAP Financial Results
Statement of Operations Reconciliation Three Months Ended Twelve Months Ended
September 30, 2009 September 30, 2009
(in thousands)
GAAP net loss $ (3,244 ) $ (34,124 )
Stock-based compensation expense charged to operating expense 1,497 2,956
Stock-based compensation expense related to custom contracts (41 ) (48 )
Amortization of intangibles and expense for earn-outs related to acquisition 3,699 6,244
Deferred tax allowance 1,435 12,430
Goodwill impairment -- 11,839
Restructuring charges 4 1,499
Tax effect (2,861 ) (4,186 )
Non-GAAP net income (loss) $ 489 $ (3,390 )
Income (loss) per share:
Basic $ 0.02 $ (0.15 )
Diluted $ 0.02 $ (0.15 )
Shares used in computing per share amounts:
Basic 23,106 22,979
Diluted 23,204 22,979
Virage Logic Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per-share amounts)
(Unaudited)
For the Three Months Ended For the Twelve Months
September 30, Ended
September 30,
2009 2008 2009 2008
Revenue:
License $ 10,931 $ 12,139 $ 39,295 $ 47,261
Royalties 2,217 3,374 8,148 12,069
Total revenues 13,148 15,513 47,443 59,330
Cost and expenses:
Cost of revenues 2,334 2,924 9,833 11,106
Research and development 7,721 7,677 29,967 27,725
Sales and marketing 4,820 3,634 12,815 14,749
General and administrative 3,980 2,336 10,836 8,382
Goodwill impairment -- -- 11,839 --
Restructuring charges 4 -- 1,499 316
Total cost and expenses 18,859 16,571 76,789 62,278
Operating loss (5,711 ) (1,058 ) (29,346 ) (2,948 )
Interest and other income (expense), net (16 ) 755 674 3,395
Income (loss) before taxes (5,727 ) (303 ) (28,672 ) 447
Minority interest in loss of consolidated subsidiaries 47 -- 47 --
Income tax provision (benefit) (2,436 ) (256 ) 5,499 (107 )
Net income (loss) $ (3,244 ) $ (47 ) $ (34,124 ) $ 554
Earnings (loss) per share:
Basic $ (0.14 ) $ 0.00 $ (1.48 ) $ 0.02
Diluted $ (0.14 ) $ 0.00 $ (1.48 ) $ 0.02
Shares used in computing per share amounts:
Basic 23,106 23,217 22,979 23,423
Diluted 23,106 23,217 22,979 23,673
Virage Logic Corporation
Unaudited Consolidated Balance Sheets
(In thousands)
September 30, September 30,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 22,473 $ 13,214
Short-term investments 7,383 31,148
Accounts receivable, net 15,930 16,526
Costs in excess of related billings on uncompleted contracts 1,262 972
Deferred tax assets 416 1,255
Prepaid expenses 6,887 4,995
Taxes receivable 108 2,733
Total current assets 54,459 70,843
Property, plant and equipment, net 6,533 3,966
Goodwill 10,984 11,751
Other intangible assets, net 29,645 6,270
Deferred tax assets - long-term 8,858 14,548
Taxes receivable - long-term 2,768 --
Long-term investments -- 21,443
Other long-term assets 4,858 383
Total assets $ 118,105 $ 129,204
LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities:
Accounts payable $ 4,767 $ 1,023
Accrued expenses 18,713 5,678
Deferred revenues 9,930 8,866
Income taxes payable -- 1,702
Total current liabilities 33,410 17,269
Income tax liabilities 935 1,083
Deferred tax liabilities 3,156 --
Other long-term accruals 1,397 150
Minority interest 997 --
Total liabilities 39,895 18,502
Stockholders` equity:
Common stock 24 24
Additional paid-in capital 143,754 141,220
Accumulated other comprehensive (loss) income (129) 207
Treasury stock, at cost (5,130) (4,564)
Accumulated deficit (60,309) (26,185)
Total stockholders` equity 78,210 110,702
Total liabilities and stockholders` equity $ 118,105 $ 129,204
Virage Logic Corporation
Brian Sereda, 510-360-8017
Chief Financial Officer
brian.sereda@viragelogic.com
Copyright Business Wire 2009
