SUNNYVALE, Calif., April 27, 2010 (GLOBE NEWSWIRE) -- MIPS Technologies, Inc. (Nasdaq:MIPS), a leading provider of industry-standard processor architectures and cores for digital consumer, home networking, wireless, communications and business applications, today reported consolidated financial results for its third fiscal quarter 2010 ended March 31, 2010. All financial results are reported in U.S. GAAP unless otherwise noted, and compare current results with historical results recast to reflect the disposition of MIPS Technologies' Analog Business Group.
Summary Third Quarter Fiscal 2010 Financial Highlights:
- Revenue grew 15 percent sequentially to $17.5 million
- Quarterly royalty units grew to a record 135 million units from 126 million units in Q2'10
- GAAP net income was $3.1 million or $0.07 per share
- Non-GAAP net income was $3.9 million or $0.08 per share
- Cash and investment balances grew to $51.2 million at quarter end
Fiscal Third Quarter 2010 Details:
Revenue for the third quarter was $17.5 million, an increase of 15 percent over the prior quarter revenue of $15.2 million and a decrease of 1 percent from the $17.7 million reported in the third fiscal quarter a year ago.
Revenue from royalties was $12.1 million, an increase of 6 percent from the prior quarter and 13 percent from the third quarter a year ago. License revenue was $5.4 million, a sequential increase of 42 percent from the prior quarter and a decrease of 23 percent from the $7.0 million reported in the third quarter a year ago.
The Company's fiscal Q3 GAAP net income from continuing operations was $3.1 million or $0.07 per share, which was equal to the earnings per share in both the prior quarter and the third quarter a year ago.
Non-GAAP net income from continuing operations in the third quarter of fiscal 2010, which excludes certain costs detailed in the tables below, was $3.9 million or $0.08 per share, compared with a non-GAAP net income from continuing operations of $4.1 million or $0.09 per share in the prior quarter and $4.4 million or $0.10 per share in the third quarter a year ago. The tables below provide a reconciliation of non-GAAP measures used in this release to the corresponding GAAP results.
"I'm very encouraged with our results for this quarter, including signing our largest mobile handset customer to-date coupled with record royalty units achieved during the quarter," said Sandeep Vij, MIPS Technologies chief executive officer. "As MIPS Technologies' solutions continue to proliferate around the globe, we are focused on extending our lead in the home entertainment and networking markets, and making continued inroads into new markets such as storage and mobile handsets."
The Company also reported that it paid off its remaining debt of $8.4 million on April 7, 2010.
MIPS Technologies invites you to listen in a live conference call to management's discussion of Q3 fiscal 2010 results, as well as forward looking guidance for Q4 fiscal 2010. The conference call number is 210-839-8502 and the replay number is 203-369-0063. 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: www.mips.com/company/investor-relations/.
About MIPS Technologies, Inc.
MIPS Technologies, Inc. (Nasdaq:MIPS) is a leading provider of industry-standard processor architectures and cores that power some of the world's most popular products for the home entertainment, communications, networking and portable multimedia markets. These include 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 Sunnyvale, California, with offices worldwide. For more information, contact (408) 530-5000 or visit 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 about future technology and growth. These forward-looking statements include MIPS Technologies' 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, 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' 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, in particular the level of demand in these markets during the recessionary period currently affecting global economies. 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 is a trademark or registered trademark in the United States and other countries of MIPS Technologies, Inc. All other trademarks referred to herein are the property of their respective owners.
| MIPS TECHNOLOGIES, INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| March 31, 2010 | June 30, 2009 | |
| (unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $28,049 | $44,507 |
| Short term investments | 23,163 | -- |
| Accounts receivable, net | 3,621 | 2,461 |
| Prepaid expenses and other current assets | 974 | 1,566 |
| Total current assets | 55,807 | 48,534 |
| Equipment, furniture and property, net | 1,968 | 2,608 |
| Goodwill | 565 | 565 |
| Other assets | 8,674 | 11,699 |
| Assets of discontinued operations | -- | 4,479 |
| Total assets | $67,014 | $67,885 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $1,778 | $2,305 |
| Accrued liabilities | 9,354 | 8,568 |
| Debt – short term | 8,750 | 4,986 |
| Deferred revenue | 1,889 | 2,011 |
| Total current liabilities | 21,771 | 17,870 |
| Long-term liabilities | ||
| Debt – long term | -- | 7,813 |
| Other long term liabilities | 7,309 | 9,603 |
| Total long term liabilities | 29,080 | 17,416 |
| Liabilities of discontinued operations | -- | 5,938 |
| Stockholders' equity | 37,934 | 26,661 |
| Total liabilities and stockholders' equity | $67,014 | $67,885 |
| MIPS TECHNOLOGIES, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share data) | ||||
|
(unaudited) |
||||
|
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| Revenue: | ||||
| Royalties | $12,100 | $10,664 | $33,244 | $34,849 |
| License and contract revenue | 5,406 | 6,999 | 14,431 | 22,730 |
| Total Revenue | 17,506 | 17,663 | 47,675 | 57,579 |
| Costs and expenses: | ||||
| Cost of Sales | 75 | 74 | 309 | 530 |
| Research and development | 6,315 | 5,401 | 17,913 | 16,047 |
| Sales and marketing | 3,889 | 2,419 | 10,840 | 7,768 |
| General and administrative | 3,282 | 3,672 | 9,993 | 11,937 |
| Restructuring | -- | 374 | -- | 644 |
| Total costs and expenses | 13,561 | 11,940 | 39,055 | 36,926 |
| Operating income | 3,945 | 5,723 | 8,620 | 20,653 |
| Other income (expense), net | (136) | (83) | 201 | (544) |
| Income before income taxes | 3,809 | 5,640 | 8,821 | 20,109 |
| Provision for income taxes | 748 | 2,421 | 1,889 | 11,874 |
| Income from continuing operations | 3,061 | 3,219 | 6,932 | 8,235 |
| Loss from discontinued operations, net of tax | -- | (4,026) | -- | (11,033) |
| Net income (loss) | $3,061 | $(807) | $6,932 | $(2,798) |
| Net income per share – from continuing operations | $0.07 | $0.07 | $0.15 | $0.18 |
| Net loss per share, basic – from discontinued operations | $ -- | $(0.09) | $ -- | $(0.24) |
| Net income (loss) per share, basic | $0.07 | $(0.02) | $0.15 | $(0.06) |
| Net income per share, diluted – from continuing operations | $0.07 | $0.07 | $0.15 | $0.18 |
| Net loss per share, diluted – from discontinued operations | $ -- | $(0.09) | $ -- | $(0.24) |
| Net income (loss) per share, diluted | $0.07 | $(0.02) | $0.15 | $(0.06) |
| Common shares outstanding, basic | 45,560 | 44,682 | 45,339 | 44,534 |
| Common shares outstanding, diluted | 46,472 | 44,719 | 46,148 | 44,755 |
| 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 Ended March 31, 2010 |
Three Months Ended December 31, 2009 |
Three Months Ended March 31, 2009 |
||
| GAAP net income (loss) | $3,061 | $3,277 | $(807) | |
| Net income (loss) per basic share | $0.07 | $0.07 | $(0.02) | |
| Net income (loss) per diluted share | $0.07 | $0.07 | $(0.02) | |
| (a) | Loss from discontinued operations, net of tax | -- | -- | 4,026 |
| (b) | Stock-based compensation expense | 800 | 963 | 976 |
| (c) | Severance adjustment | -- | 476 | -- |
| (d) | Restructuring | -- | -- | 374 |
| (e) | Gain on investment | -- | (611) | -- |
| (f) | Tax adjustment | -- | -- | (150) |
| Non-GAAP net income | $3,861 | $4,105 | $4,419 | |
| Non-GAAP net income per basic share | $0.08 | $0.09 | $0.10 | |
| Non-GAAP net income per diluted share | $0.08 | $0.09 | $0.10 | |
| Common shares outstanding – basic | 45,560 | 45,387 | 44,682 | |
| Common shares outstanding – diluted | 46,472 | 46,209 | 44,719 | |
These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding discontinued operations, stock-based compensation expense, restructuring cost, severance adjustment, gain on investment, tax adjustment and tax on change in legal structure provides meaningful supplemental information to investors, as well as management that is indicative of the Company's ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.
(a) This adjustment reflects the loss, net of tax, of the Analog Business Group.
(b) This adjustment reflects the stock-based compensation expense. For the fiscal quarter of fiscal 2010 ending March 31, 2010, $800,000 of stock-based compensation was allocated as follows: $297,000 to research and development, $221,000 to sales and marketing and $282,000 to general and administrative. For the second quarter of fiscal 2010 ending December 31, 2009, $963,000 of stock-based compensation was allocated as follows: $341,000 to research and development, $222,000 to sales and marketing and $400,000 to general and administrative. For the third fiscal quarter ending March 31, 2009, $976,000 stock-based compensation expense was allocated as follows: $437,000 to research and development, $172,000 to sales and marketing and $367,000 to general and administrative.
(c) This adjustment reflects severance to the Company's former CEO allocated to general and administrative.
(d) This adjustment reflects restructuring expense related to reduction in workforce and facilities exit costs.
(e) This adjustment reflects a gain on an investment in a privately held company that was acquired. This gain was recorded in other income/expense.
(f) This adjustment reflects the net tax effect of the specific items presented in the non-GAAP adjustments described above.
| MIPS TECHNOLOGIES, INC. | |||
| RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER SHARE | |||
| (In thousands, except per share data) | |||
| (unaudited) | |||
|
Nine Months Ended March 31, 2010 |
Nine Months Ended March 31, 2009 |
||
| GAAP net loss | $6,932 | $(2,798) | |
| Net loss per basic share, basic and diluted | $0.15 | $(0.06) | |
| (g) | Loss from discontinued operations, net of tax | -- | $11,033 |
| (h) | Stock-based compensation expense | 2,696 | 3,156 |
| (i) | Severance adjustment | 476 | -- |
| (j) | Restructuring | -- | 644 |
| (k) | Gain on investment | (611) | -- |
| (l) | Tax adjustment | -- | (257) |
| (m) | Tax on change in legal structure | 1,009 | -- |
| Non-GAAP net income | $10,502 | $11,778 | |
| Non-GAAP net income per basic share | $0.23 | $0.26 | |
| Non-GAAP net income per diluted share | $0.23 | $0.26 | |
| Common shares outstanding – basic | 45,339 | 44,534 | |
| Common shares outstanding – diluted | 46,148 | 44,755 | |
These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income (loss) and net income (loss) per share excluding discontinued operations, stock-based compensation expense, restructuring cost, severance adjustment, gain on investment, tax adjustment and tax on change in legal structure provides meaningful supplemental information to investors, as well as management that is indicative of the Company's ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.
(g) This adjustment reflects the loss, net of tax, of the Analog Business Group.
(h) This adjustment reflects the stock-based compensation expense. For the nine months ending March 31, 2010, $2.7 million of stock-based compensation was allocated as follows: $1.0 million to research and development, $0.7 million to sales and marketing and $1.0 million to general and administrative. For the nine months ending March 31, 2009, $3.2 million of stock-based compensation was allocated as follows: $1.1 million to research and development, $0.7 million to sales and marketing and $1.4 million to general and administrative.
(i) This adjustment reflects severance to the Company's former CEO allocated to general and administrative.
(j) This adjustment reflects restructuring expense related to reduction in workforce and facilities exit costs.
(k) This adjustment reflects a gain on an investment in a privately held company that was acquired. This gain was recorded in other income/expense.
(l) This adjustment reflects the net tax effect of the specific items presented in the non-GAAP adjustments.
(m) This adjustment reflects the withholding tax in connection with the change in legal structure of foreign operations.