Recent Highlights
- Reported total fourth quarter revenue of $4.0 million
- Ended the year with cash and investments of $67.5 million
- Announced plan to exit unprofitable Analog/Mixed-Signal product lines to lower operating costs
Management Commentary
Commenting on the results, Len Perham, MoSys’ President and Chief Executive Officer, stated, “The continued decline in the global economic environment has resulted in customer projects being delayed or pushed out, which impacted our license revenue during the quarter. These results were partially offset by an increase in royalties associated with the Nintendo Wii game console and royalties generated by another major OEM customer that licenses our 1T-SRAM embedded memory IP for advanced mobile phone applications. During the fourth quarter, we signed a new license with a mobile phone provider for use of our application-specific DDI (display driver integrated circuit) memory IP in their display driver subsystems. We ended the year with five customer design wins for our DDI solution and brought up support at three foundries. In addition, we made significant progress with our 1T-FLASH program, as our lead customer moved into pre-production manufacturing and expects to begin shipping production samples late first quarter of 2009 with a full production ramp later this year.”
During the fourth quarter, the Company announced a plan to exit its unprofitable analog/mixed signal product lines. As part of this plan, the Company will be reducing headcount by approximately 90 employees, primarily located in China and Romania. The Company began executing this plan in the fourth quarter and expects to substantially complete the process in the first quarter of 2009. The Company expects to realize annualized cost savings of approximately $5.5 million.
Looking forward, Mr. Perham concluded, “We believe the current weakness in the global economic environment will extend throughout 2009. Certainly, the first quarter will be impacted by the continued slowdown in the consumer market segments beyond the typical seasonality associated with that quarter. This environment has significantly limited our near-term visibility, and we will continue our policy of not providing specific financial guidance until further notice. While we will be stringently managing our expenses, we will continue to strategically invest in R&D in order to position the Company for future growth.”
Fourth Quarter Results
Total net revenue for the fourth quarter of 2008 was $4.0 million, compared with $4.1 million in the third quarter of 2008 and $2.9 million for the fourth quarter of 2007.
Fourth quarter total revenue included licensing revenue of $859,000, compared with $1.2 million in the third quarter of 2008 and $388,000 in the fourth quarter of 2007. Royalty revenue for the fourth quarter was $3.1 million, which included royalties associated with the Nintendo Wii game console. This compares with royalty revenue of $2.9 million in the previous quarter and $2.5 million in the fourth quarter of 2007.
Gross margin as determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) was 83.8 percent, compared with 79.2 percent in the third quarter of 2008 and 71.5 percent in the fourth quarter of 2007.
Total operating expenses on a GAAP basis for the fourth quarter of 2008 were $9.8 million, including approximately $2.7 million in restructuring and asset impairment charges. This compares with $6.8 million in the previous quarter and $7.7 million in the fourth quarter of 2007.
GAAP net loss for the quarter was $6.3 million, or ($0.20) per share, including a restructuring charge of $1.3 million, an asset impairment charge of $1.4 million, stock-based compensation expense of $1.0 million and intangible asset amortization charges of $151,000. This compares with a net loss of $3.2 million, or ($0.10) per share, for the third quarter of 2008 and a net loss of $4.6 million, or ($0.14) per share, for the fourth quarter of 2007.
The net loss on a non-GAAP basis for the fourth quarter was $2.4 million, or ($0.08) per share, excluding restructuring, asset impairment, stock-based compensation and intangible asset amortization charges. A reconciliation of GAAP to non-GAAP results is provided in the financial 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 31.6 million shares.
Cash, cash equivalents and both long and short-term investments totaled $67.5 million as of December 31, 2008, compared to $72.1 million as of September 30, 2008. During the fourth quarter, the Company repurchased approximately 275,000 shares of its common stock under its repurchase program at a total cost of approximately $1.0 million.
