MIPS Technologies, Inc. (Nasdaq:MIPS), a leading provider of
industry-standard processor architectures and cores for digital
home, networking and mobile applications, today reported
consolidated financial results for its second fiscal quarter of
2012 ended December 31, 2011. All financial results are reported in
U.S. GAAP unless otherwise noted.
Summary Second Quarter Fiscal 2012 Financial Metrics:
- Revenue was $15.3 million, a quarter-to-quarter decrease of 11
percent
- Licensee royalty units grew to 186 million units from 173
million units in Q1'12
- Non-GAAP net income was $0.6 million or $0.01 per share; down
$0.04 per share from Q1'12
- Cash and investment balances ended the quarter at $110.7
million, representing an increase of $4.1 million from September
30, 2011
Revenue from royalties was $13.2 million, while license revenue
was $2.1 million. The Company's fiscal Q2'12 GAAP net loss was $1.0
million or $0.02 per share compared to net income of $0.5 million
and $0.01 per share in the first quarter of fiscal 2012.
Non-GAAP net income in the second quarter of fiscal 2012, which
excludes certain stock and non-recurring charges, was $0.6 million
or $0.01 per share, compared with $2.6 million or $0.05 per share
in the first quarter of fiscal 2012. The tables below provide a
reconciliation of non-GAAP measures used in this press release to
the corresponding GAAP results.
"Business conditions continue to be challenging in the
semiconductor market, especially in the digital home and networking
areas that comprise the majority of our revenue. MIPS continues to
make inroads into the fast-growing mobile market, having introduced
the industry's first Android 4.0 'Ice Cream Sandwich' tablet, and
adding a new mobile licensee this quarter. We have new processor
cores coming to market this year for which we already have advance
orders. In addition, we are actively assessing alternatives to
unlock the value in our portfolio of 580+ patent properties
worldwide," said Sandeep Vij, chief executive officer, MIPS
Technologies.
MIPS Technologies invites you to listen to management's
discussion of Q2 2012 results, as well as guidance for the third
quarter of fiscal 2012 in a live conference call beginning today at
1:45 p.m. Pacific:
- Live webcast: visit www.mips.com/company/investor-relations/
for a link to the listen-only webcast
- Live conference call: dial 312-470-0125; password: MIPS
- Replay call (available for 30 days shortly following the end of
the conference call): dial 203-369-3229; password: MIPS
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 for digital
home, networking and mobile applications. The MIPS architecture
powers some of the world's most popular products, 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 Sunnyvale, California, with offices worldwide. For
more information, contact (408) 530-5000 or visit www.mips.com.
The MIPS Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11351
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, the level of demand for semiconductors and end-user
products that incorporate semiconductors and our ability to compete
effectively with larger companies and other companies that are
active in our markets. 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 of MIPS
Technologies, Inc. in the United States and other countries.
MIPS TECHNOLOGIES,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In
thousands) |
|
|
|
|
|
December 31, 2011 |
June 30, 2011 |
|
(unaudited) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$76,829 |
$69,202 |
Short-term
investments |
33,907 |
40,194 |
Accounts receivable,
net |
1,036 |
2,619 |
Prepaid expenses and
other current assets |
1,784 |
1,615 |
Total current assets |
113,556 |
113,630 |
Equipment, furniture and property, net |
2,843 |
2,014 |
Goodwill |
565 |
565 |
Other assets |
12,757 |
5,418 |
Total assets |
$129,721 |
$121,627 |
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$1,192 |
$1,684 |
Accrued liabilities |
8,086 |
8,127 |
Deferred revenue |
1,465 |
1,812 |
Total current
liabilities |
10,743 |
11,623 |
Long-term liabilities |
10,474 |
5,231 |
Stockholders' equity |
108,504 |
104,773 |
Total liabilities and
stockholders' equity |
$129,721 |
$121,627 |
|
MIPS TECHNOLOGIES,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATION |
(In thousands, except
per share data) |
(unaudited) |
|
|
Three Months
Ended December 31, |
Six Months
Ended December 31, |
|
2011 |
2010 |
2011 |
2010 |
Revenue: |
|
|
|
|
Royalties |
$13,224 |
$14,817 |
$26,203 |
$28,431 |
License and contract
revenue |
2,077 |
7,039 |
6,315 |
15,964 |
Total revenue |
15,301 |
21,856 |
32,518 |
44,395 |
Costs and expenses: |
|
|
|
|
Cost of sales |
344 |
311 |
605 |
897 |
Research and
development |
8,278 |
7,090 |
16,184 |
12,951 |
Sales and marketing |
3,892 |
4,925 |
8,723 |
8,838 |
General and
administrative |
3,339 |
3,739 |
6,603 |
6,891 |
Total costs and
expenses |
15,853 |
16,065 |
32,115 |
29,577 |
Operating income (loss) |
(552) |
5,791 |
403 |
14,818 |
Other income, net |
14 |
821 |
67 |
757 |
Income (loss) before income taxes |
(538) |
6,612 |
470 |
15,575 |
Provision for income taxes |
434 |
776 |
919 |
2,123 |
Income (loss) from continuing operations |
(972) |
5,836 |
(449) |
13,452 |
Income from discontinued operations, net of
tax |
-- |
212 |
-- |
212 |
Net income (loss) |
$(972) |
$6,048 |
$(449) |
$13,664 |
Net income (loss) per share, basic – from
continuing operations |
$(0.02) |
$0.12 |
$(0.01) |
$0.28 |
Net income (loss) per share, basic – from
discontinued operations |
$-- |
$0.00 |
$-- |
$0.00 |
Net income (loss) per share, basic |
$(0.02) |
$0.12 |
$(0.01) |
$0.28 |
Net income (loss) per share, diluted – from
continuing operations |
$(0.02) |
$0.11 |
$(0.01) |
$0.26 |
Net income (loss) per share, diluted – from
discontinued operations |
$-- |
$0.00 |
$-- |
$0.00 |
Net income (loss) per share, diluted |
$(0.02) |
$0.11 |
$(0.01) |
$0.26 |
Common shares outstanding, basic |
52,886 |
50,394 |
52,773 |
48,629 |
Common shares outstanding, diluted |
52,886 |
53,703 |
52,773 |
51,921 |
|
MIPS TECHNOLOGIES,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited) |
(In
thousands) |
|
|
Six Months Ended
December 31, |
|
2011 |
2010 |
Operating activities: |
|
|
Net income (loss) -
continuing operations |
$(449) |
$13,452 |
|
|
|
Depreciation |
471 |
508 |
Stock-based compensation |
2,953 |
2,143 |
Amortization of intangible
assets |
252 |
55 |
Gain on exchange and sale of
investment |
-- |
(547) |
Amortization of investment
premium, net |
265 |
268 |
Other non-cash charges |
139 |
25 |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
1,500 |
3,202 |
Prepaid expenses |
(230) |
(691) |
Other assets |
791 |
2,287 |
Accounts payable |
(613) |
42 |
Accrued liabilities |
(3,620) |
(2,937) |
Deferred revenue |
(488) |
(70) |
Long-term liabilities |
53 |
(1,158) |
Net cash provided by operating
activities – continuing operations |
1,024 |
16,579 |
Net cash provided by operating
activities – discontinued operations |
-- |
212 |
Net cash provided by operating
activities |
1,024 |
16,791 |
Investing activities: |
|
|
Purchases of marketable
securities |
(22,588) |
(34,344) |
Proceeds from sales of
marketable securities |
2,613 |
5,075 |
Proceeds from maturities of
marketable securities |
26,000 |
10,650 |
Capital expenditures |
(659) |
(572) |
Net cash provided by (used in)
investing activities |
5,366 |
(19,191) |
Financing activities: |
|
|
Net proceeds from issuance of
common stock |
1,269 |
32,242 |
Net cash provided by financing
activities |
1,269 |
32,242 |
Effect of exchange rates on cash |
(32) |
77 |
Net increase in cash and cash
equivalents |
7,627 |
29,919 |
Cash and cash equivalents, beginning of
period |
69,202 |
31,625 |
Cash and cash equivalents, end of period |
$76,829 |
$61,544 |
|
MIPS
TECHNOLOGIES, INC. |
RECONCILIATION OF GAAP
TO NON-GAAP NET INCOME (LOSS) and NET INCOME (LOSS) PER
SHARE |
(In thousands, except
per share data) |
(unaudited) |
|
|
|
Three Months Ended
December 31, 2011 |
Three Months Ended
September 30, 2011 |
Three Months Ended
December 31, 2010 |
|
GAAP net income (loss) |
$(972) |
$523 |
$6,048 |
|
Net income (loss) per basic share |
$(0.02) |
$0.01 |
$0.12 |
|
Net income (loss) per diluted share |
$(0.02) |
$0.01 |
$0.11 |
(a) |
Stock-based compensation expense |
1,412 |
1,541 |
1,249 |
(b) |
Severance adjustment |
49 |
312 |
-- |
(c) |
Expenses related to stockholder
activities |
158 |
265 |
-- |
(d) |
Tax on change in legal structure |
-- |
-- |
937 |
(e) |
Gain from discontinued operations, net of
tax |
-- |
-- |
(212) |
(f) |
Gain on investment |
-- |
-- |
(547) |
|
Non-GAAP net income |
$647 |
$2,641 |
$7,475 |
|
Non-GAAP net income per basic share |
$0.01 |
$0.05 |
$0.15 |
|
Non-GAAP net income per diluted share |
$0.01 |
$0.05 |
$0.14 |
|
Common shares outstanding – basic |
52,886 |
52,660 |
50,394 |
|
Common shares outstanding – diluted |
53,658 |
53,690 |
53,703 |
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 stock-based compensation expense,
severance, expenses related to stockholder activities, tax on
change in legal structure, gain from discontinued operations, net
of tax, and gain on investment 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 stock-based compensation
expense. For the second quarter of fiscal 2012 ending December
31, 2011, $1.4 million stock-based compensation expense was
allocated as follows: $532,000 to research and development,
$239,000 to sales and marketing and $641,000 to general and
administrative. For the first quarter of fiscal 2012 ending
September 30, 2011, $1.5 million stock-based compensation expense
was allocated as follows: $463,000 to research and development,
$496,000 to sales and marketing and $582,000 to general and
administrative. For the second fiscal quarter of fiscal 2011
ending December 31, 2010, $1.2 million stock-based compensation
expense was allocated as follows: $364,000 to research and
development, $304,000 to sales and marketing and $581,000 to
general and administrative.
(b) This adjustment reflects the severance to the Company's
former executives. For the second quarter of fiscal 2012
ending December 31, 2011, $49,000 was allocated to general and
administrative. For the first quarter of fiscal 2012 ending
September 30, 2011, $312,000 was allocated to sales and
marketing.
(c) This adjustment reflects the expenses in response to
our activities and inquiries of Starboard Value LP allocated to
general and administrative.
(d) This adjustment reflects the withholding tax in
connection with the change in legal structure of foreign
operations.
(e) The adjustment reflects the gain, net of tax, of
the Analog Business Group.
(f) The adjustment reflects a gain on an investment in a
privately held company that was acquired. This gain was
recorded in other income.
|
MIPS
TECHNOLOGIES, INC. |
RECONCILIATION OF GAAP
TO NON-GAAP NET INCOME (LOSS) and NET INCOME (LOSS) PER
SHARE |
(In thousands, except
per share data) |
(unaudited) |
|
|
|
Six Months Ended
December 31, 2011 |
Six Months Ended
December 31, 2010 |
|
GAAP net income (loss) |
$(449) |
$13,664 |
|
Net income (loss) per basic share |
$(0.01) |
$0.28 |
|
Net income (loss) per diluted share |
$(0.01) |
$0.26 |
(g) |
Stock-based compensation expense |
2,953 |
2,143 |
(h) |
Severance adjustment |
361 |
-- |
(i) |
Expenses related to stockholder
activities |
423 |
-- |
(j) |
Tax on change in legal structure |
-- |
937 |
(k) |
Gain from discontinued operations, net of
tax |
-- |
(212) |
(l) |
Gain on investment |
-- |
(547) |
|
Non-GAAP net income |
$3,288 |
$15,985 |
|
Non-GAAP net income per basic share |
$0.06 |
$0.33 |
|
Non-GAAP net income per diluted share |
$0.06 |
$0.31 |
|
Common shares outstanding – basic |
52,773 |
48,629 |
|
Common shares outstanding – diluted |
53,702 |
51,921 |
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 stock-based compensation expense,
severance, expenses related to stockholder activities, tax on
change in legal structure, gain from discontinued operations, net
of tax, and gain on investment 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 stock-based compensation
expense. For the six months ending December 31, 2011, $3.0
million stock-based compensation expense was allocated as follows:
$995,000 to research and development, $735,000 to sales and
marketing and $1.2 million to general and administrative. For
the six months ending December 31, 2010, $2.1 million stock-based
compensation expense was allocated as follows: $655,000 to research
and development, $535,000 to sales and marketing and $953,000 to
general and administrative.
(h) This adjustment reflects the severance to the Company's
former executives. For the six months ending December 31,
2011, $361,000 was allocated as follows: $312,000 to sales and
marketing and $49,000 to general and administrative.
(i) This adjustment reflects the expenses in response to our
activities and inquiries of Starboard Value LP allocated to general
and administrative.
(j) This adjustment reflects the withholding tax in
connection with the change in legal structure of foreign
operations.
(k) The adjustment reflects the gain, net of tax, of the
Analog Business Group.
(l) The adjustment reflects a gain on an investment in a
privately held company that was acquired. This gain was
recorded in other income.
CONTACT: Media Contact:
Jen Bernier-Santarini
MIPS Technologies, Inc.
+1 408-530-5178
jenb@mips.com
Investor Contact:
Bill Slater
MIPS Technologies, Inc.
+1 408-530-5200
ir@mips.com
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