Revenues for the second quarter of fiscal 2008 were $14.7 million, compared with $10.6 million for the second quarter of fiscal 2007 and $14.1 million for the first quarter of fiscal 2008. License revenue for the second quarter of fiscal 2008 was $12.1 million, compared with $7.8 million for the same period a year ago and $10.8 million for the prior quarter. Royalties for the second quarter of fiscal 2008 were $2.6 million, compared with $2.8 million for the second quarter of fiscal 2007 and $3.3 million for the first quarter of fiscal 2008.
As reported under U.S. generally accepted accounting principles (GAAP), net income for the second quarter of fiscal 2008 was $0.6 million, or $0.03 per share, compared with net loss of $1.8 million, or ($0.08) per share for the second quarter of fiscal 2007 and net income of $1.1 million or $0.05 per share for the first quarter of fiscal 2008.
Excluding the effects of FAS123R stock compensation expense and acquisition related charges, the company would have reported a net income of $1.0 million, or $0.04 per share for the quarter ended March 31, 2008. The reconciliation of GAAP to non GAAP includes $1.0 million of stock-based compensation expense and approximately $143,000 of acquisition related charges and other reduced by $0.8 million tax effect for a net total of $1.0 million.
Dan McCranie, president, chief executive officer and chairman of Virage Logic, said, “License revenue increased 13% sequentially, and 55% year-over-year. This is the highest license revenue the company has posted in 12 quarters. Total revenue, which includes royalties, increased 4% sequentially and 39% year-over-year. The growth in license revenue is a direct result of our efforts in the past year on two key initiatives:
Mr. McCranie continued, “As we mentioned in last quarter’s press release, we believe that the semiconductor industry in general continues to outsource building-block IP to third-party providers. We believe that we can benefit from this secular trend. In order to be successful, we must continue to define, develop and execute new business structures, processes and product portfolios to enable deeper, strategic partnerships with our customers.”
Mr. McCranie concluded, “We enjoyed strong license bookings in this most recent quarter, including substantial orders from major foundries. In addition, our opportunity pipeline remains strong, particularly in advanced physical IP, as well as our DDR memory interface IP product family. As a result of these two Virage Logic-specific parameters, we continue to be optimistic with regard to our future license revenue growth for our current product portfolio. With regard to royalties, I believe our company will enjoy increased royalty revenue in future quarters, as our customers move their advanced node SoC products into full production. Royalty revenue in current quarters, however, is a reflection of wafer fabrication production at older process nodes. As such, we have seen soft royalty revenues in the first half of fiscal 2008, and we are forecasting continued soft royalty revenues for the third fiscal quarter ending June 30, 2008. However, royalty revenues should increase in the second half of calendar 2008, as our major customers move into production with products on the advanced process nodes.”
Virage Logic also announced today its business outlook for the third
quarter of fiscal 2008 ending June 30, 2008. The company currently
anticipates total license revenues to be in the $12.4 to $13.0M range,
or up 3 to 7 percent over the previous quarter. Royalty revenues for
third fiscal quarter are projected to be $2.2 to $2.5M. The company
expects to report a non-GAAP earnings per diluted share excluding
FAS123R stock compensation expense and acquisition related expenses are
expected to be in the range of $0.04 to $0.06 for the third fiscal
quarter. The company expects $1.0 million of FAS123R stock compensation
expense and $1.9 million acquisition related expenses that include $1.8
million of acquisition related performance based payments linked to
predefined sales and technology goals for the third quarter of fiscal
2008. 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.