Second Quarter Key Points
Commenting on the Company’s second quarter, Len Perham, MoSys’ President and Chief Executive Officer, stated, “While the second quarter was challenging due to continued instability in the macroeconomic environment, we achieved major progress towards positioning MoSys for future growth through our acquisition of Prism Circuits, a leader in high-speed parallel and serial interface IP. The acquisition significantly expands our total addressable market, accelerates our growth opportunities in networking and communications applications and brings us a world class team of experts in high speed SerDes and DDR interface technology. We’ve already made great progress integrating the teams and we recorded our first interface IP revenue during the second quarter and expect this new revenue stream to contribute significantly in the second half of 2009 and beyond. The combination of our proven 1T-SRAM memory with high speed serial I/O IP will enable us to provide a more compelling and comprehensive solution for next generation SoCs and ASICs targeted for the networking and communications markets. We are confident in our forward direction and believe this acquisition will be a catalyst to drive the company towards growth and profitability.”
Second Quarter Results
Total net revenue for the second quarter of 2009 was $2.0 million, compared with $2.6 million for the first quarter of 2009 and $3.2 million for the second quarter of 2008.
Second quarter total revenue included licensing revenue of $306,000, compared with $524,000 for the first quarter of 2009 and $667,000 for the second quarter of 2008. Royalty revenue for the second quarter was $1.7 million, which includes royalties associated with the Nintendo Wii game console. Royalty revenue decreased from the previous quarter primarily due to lower shipment volumes as inventory levels were reduced. Additionally, most production by one of our major licensees is now subject to a license agreement that provides for royalties to be reported and recognized in the quarter subsequent to shipment of the licensee’s products, instead of the shipment quarter, as was the case under the previous agreement. This has reduced the comparability of our current royalty revenue to the previous quarter’s royalty revenue of $2.0 million and the royalty revenue of $2.5 million for the second quarter of 2008.
Gross margin as determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was 86 percent, compared with 88 percent for the first quarter of 2009 and 74 percent for the second quarter of 2008.
Total operating expenses on a GAAP basis for the second quarter were $7.0 million, compared with $6.5 million for the previous quarter and $7.5 million for the second quarter of 2008. Second quarter operating expenses included acquisition-related costs, including legal and accounting transaction fees, amortization of intangible assets and contingent compensation expense, which totaled $611,000, a restructuring charge of $431,000 and stock-based compensation expense of $788,000.
GAAP net loss for the second quarter of 2009 was $5.1 million, or ($0.16) per share, compared with a net loss of $4.1 million, or ($0.13) per share, for the first quarter of 2009 and a net loss of $4.6 million, or ($0.14) per share, for the second quarter of 2008.
The non-GAAP net loss for the second quarter was $3.3 million, or ($0.11) per share, excluding charges related to the acquisition, restructuring and stock-based compensation. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
Earnings per share for the quarter on both a GAAP and non-GAAP basis were computed using 31,198,000 shares.
Cash, cash equivalents and investments totaled approximately $45.4
million as of June 30, 2009, compared with approximately $67.5 million
as of December 31, 2008. The year to date decrease in cash and
investments included a $13.6 million cash payment related to the
acquisition of Prism Circuits in the second quarter, as well as first
quarter expenditures of approximately $1.0 million related to the exit
of the analog/mixed-signal product lines and approximately $0.9 million
of stock repurchases.