MOUNTAIN VIEW, Calif., Oct. 29 /PRNewswire-FirstCall/ -- MIPS Technologies, Inc. (NASDAQ: MIPS), a leading provider of industry-standard architectures, processors and analog IP for digital consumer, home networking, wireless, communications and business applications, today reported consolidated financial results for its first quarter fiscal 2009 ended September 30, 2008. All financial results are reported in U.S. GAAP unless otherwise noted.
Revenue for the first quarter was $26.2 million, a decrease of 9 percent over the prior quarter revenue of $28.9 million but an increase of 18 percent from the $22.2 million reported in the first fiscal quarter a year ago. The Q1 sequential revenue decrease was driven primarily by lower contract and license revenues partially offset by increased revenues from royalties.
Contract and license revenue was $14.4 million, a decrease of 20 percent from the $18.1 million reported in the prior quarter but an increase of 24 percent from the $11.6 million reported in the first quarter a year ago. This first quarter sequential contract and license revenue decrease was due to lower Analog Business Group license results. The year to year contract and license revenue increase was due to the impact of having a full quarters' Analog Business revenue in the Q1'09 results compared with only 5 weeks in Q1'08. Revenue from royalties was $11.8 million, an increase of $1.0 million or 10 percent from the prior quarter and $1.3 million or 12 percent from the $10.5 million reported in the first quarter a year ago. The sequential increase in royalty revenue was driven by higher licensee unit volumes compared with the prior quarter. End user licensee units grew 14% to 112 million units.
The Company's fiscal Q1 2009 GAAP net loss was $7.0 million or $0.16 per share on a basic and diluted basis. This compares with a net loss of $108.5 million or $2.45 per basic and diluted share in the prior quarter and a net loss of $7.0 million or $0.16 per share in the first quarter a year ago.
Non-GAAP net income in the first quarter of fiscal 2009, which excludes the effect of equity based compensation expense, restructuring costs, and certain costs related to the acquisition of Chipidea, was $1.5 million or $0.03 per diluted share, compared with a non-GAAP net income of $1.3 million or $0.03 per diluted share in the prior quarter and $3.9 million or $0.08 per diluted share in the first quarter a year ago. The tables below provide a reconciliation of non-GAAP measures used in this release to the corresponding GAAP results.
The Company's Q1'09 ending cash balance was $16.2 million, up $2.2 million from the previous quarter including approximately a $1.3 million outflow related to the restructuring.
"We had a solid quarter in both processor royalty and licensing activity, reflecting continued momentum for that side of the business," said John Bourgoin, president and CEO. "Our mixed first quarter results reflect challenges we are facing with a softening market and difficulties in reaching our revenue objectives in our Analog business. But our cost reduction efforts, which we began during the quarter and continue today, are having an important positive impact on our costs, and in the uncertain economy, these actions provide us with added financial safety margin," added Bourgoin.
MIPS Technologies invites you to listen in a live conference call to management's discussion of Q1 fiscal 2009 results, as well as guidance for Q2 fiscal 2009. The conference call number is 210-839-8502 and the replay number is 203-369-1154. The password for both calls is MIPS. The replay will be available for 30 days shortly following the end of the conference call. An audio replay of the conference call will also be posted on the company's website at: http://www.mips.com/company/investor-relations/.
About MIPS Technologies, Inc.
MIPS Technologies, Inc. (NasdaqGS: MIPS) is the world's second largest semiconductor design IP company and the number one analog IP company worldwide. With more than 250 customers around the globe, MIPS Technologies is the only company that provides a combined portfolio of processors, analog IP and software tools for the embedded market. The company powers some of the world's most popular products for the digital entertainment, home networking, wireless, and portable media markets-including broadband devices from Linksys, DTVs and digital consumer devices from Sony, DVD recordable devices from Pioneer, digital set-top boxes from Motorola, network routers from Cisco, 32-bit microcontrollers from Microchip Technology and laser printers from Hewlett-Packard. Founded in 1998, MIPS Technologies is headquartered in Mountain View, California, with offices worldwide. For more information, 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 improvements in financial results. 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, 2008 2008 (unaudited) Assets Current assets: Cash and cash equivalents $16,174 $13,938 Accounts receivable, net 13,951 14,462 Prepaid expenses and other current assets 22,122 24,803 Total current assets 52,247 53,203 Equipment, furniture and property, net 14,339 16,307 Goodwill 31,311 40,624 Other assets 31,150 42,610 129,047 $152,744 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $3,529 $3,441 Accrued liabilities 45,883 51,963 Debt - short term 7,377 18,641 Deferred revenue 5,079 4,283 Total current liabilities 61,868 78,328 Long-term liabilities: Debt - long term 10,695 - Other long term liabilities 20,465 29,496 Total long term liabilities 31,160 29,496 Stockholders' equity 36,019 44,920 $129,047 $152,744 MIPS TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Ended September 30, 2008 2007 Revenue: Royalties $11,832 $10,519 Contract Revenue 14,385 11,633 Total revenue 26,217 22,152 Cost of Sales 7,644 3,324 Gross Margin 18,573 18,828 Operating expenses: Research and development 7,347 9,013 Sales and marketing 5,045 5,586 General and administrative 6,957 7,009 Acquired in-process research and development - 5,440 Restructuring 4,931 - Total operating expenses 24,280 27,048 Operating loss (5,707) (8,220) Other income, net (1,438) 495 Loss before income taxes (7,145) (7,725) Benefit from income taxes (178) (694) Net loss $(6,967) $(7,031) Net loss per share, basic and diluted $(0.16) $(0.16) Common shares outstanding, basic and diluted 44,334 43,766 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 Three Months Three Months Ended Ended Ended September 30, June 30, September 30, 2008 2008 2007 GAAP net loss $(6,967) $(108,462) $(7,031) Net loss per basic share $(0.16) $(2.45) $(0.16) Net loss per diluted share $(0.16) $(2.45) $(0.16) (a) Equity-based compensation expense under SFAS 123R $1,161 $1,617 $2,391 (b) Amortization of intangibles 1,515 2,541 970 (c) Acquisition related cost 1,545 2,052 1,313 (d) Integration cost - - 839 (e) Acquired in-process research and development - - 5,440 (f) Impairment of goodwill and acquired intangible assets - 103,107 - (g) Restructuring 4,931 281 - (h) Equity Write-Down 2,276 - (i) Tax adjustment (662) (2,092) - Non-GAAP net income $1,523 $1,320 $3,922 Non-GAAP net income per basic share $0.03 $0.03 $0.09 Non-GAAP net income per diluted share $0.03 $0.03 $0.08 Common shares outstanding - basic 44,334 44,193 43,766 Common shares outstanding - diluted 44,952 44,869 46,723