• Net revenues totaled $25.6 million, increase of 3% from the second quarter last year
• New product revenue of $11.5 million, up 29% sequentially and up 63% from the second quarter of fiscal year 2013
• New product design wins grew over 40% in first half of fiscal year compared to same period last year

CAMARILLO, Calif. — (BUSINESS WIRE) — May 6, 2014 — Vitesse Semiconductor Corporation (NASDAQ: VTSS), a leading provider of advanced IC solutions for Carrier, Enterprise and Internet of Things (IoT) networks, reported its financial results for the second quarter of fiscal year 2014, ended March 31, 2014.

“Vitesse’s new product revenue was $11.5 million, up 29% sequentially, and now 46% of product revenue. We expect new product revenue to sustain strong growth in the second half and throughout 2015,” said Chris Gardner, CEO of Vitesse.

“We are very pleased with the traction of our new product portfolio in the market. Our success in converting design wins to growing new product revenue, expanding relationships with existing customers and winning new major customers has given us increased confidence in our position in the market and our business model going forward. Design win performance is the primary leading indicator for future growth. In the first half of 2014, total new product wins increased more than 40% from the year ago period. Vitesse’s Carrier Ethernet switch engines are leading our success, with wins for just these products up nearly 100% from last year. Strong momentum is being driven by our core Carrier and Enterprise markets, as well as accelerating traction in Ethernet-based IoT, which now represent over 25% of our design wins.”

Second Quarter Fiscal Year 2014 Financial Results Summary

• Total net revenue was $25.6 million, compared to $27.1 million in the first quarter of fiscal year 2014 and $24.8 million in the second quarter of fiscal year 2013.
• Product revenue was $24.9 million, compared to $24.9 million in the first quarter of fiscal year 2014 and $24.7 million in the second quarter of fiscal year 2013.
  • The product lines contributed the following as a percentage of product revenue as compared to the first quarter of fiscal year 2014:
    • Carrier networking products: 47.6% versus 52.1%
    • Enterprise networking products: 51.7% versus 47.3%
  • Intellectual property revenue totaled $0.7 million, compared to $2.2 million in the first quarter of fiscal year 2014 and $0.1 million in the second quarter of fiscal year 2013.
• Product margins were 55.9%, compared to 57.1% in the first quarter of fiscal year 2014 and 54.0% in the second quarter of fiscal year 2013.
• Operating expenses were $19.0 million, compared to $18.6 million in the first quarter of fiscal year 2014 and $17.3 million in the second quarter of fiscal year 2013.
• Operating loss was $4.4 million, compared to operating loss of $2.2 million in the first quarter of fiscal year 2014 and $3.9 million in the second quarter of fiscal year 2013.
• Non-GAAP operating loss was $2.7 million, compared to non-GAAP operating loss of $0.9 million in the first quarter of fiscal year 2014 and non-GAAP operating loss of $2.8 million in the second quarter of fiscal year 2013.
• Net loss was $5.8 million, or $0.10 per basic and fully diluted share. This compares to net loss of $5.4 million, or $0.09 per basic and fully diluted share, in the first quarter of fiscal year 2014, and net loss of $4.8 million, or $0.13 per basic and fully diluted share, in the second quarter of fiscal year 2013.
• Non-GAAP net loss was $4.1 million, or $0.07 per basic and fully diluted share, compared to non-GAAP net loss of $2.4 million, or $0.04 per basic and fully diluted share, for the first quarter of fiscal year 2014, and non-GAAP net loss of $3.8 million, or $0.10 per basic and fully diluted share, in the second quarter of fiscal year 2013.