UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): July
22, 2014
MoSys,
Inc.
(Exact
name of registrant as specified in its charter)
000-32929
(Commission
File Number)
Delaware
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77-0291941
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification No.)
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3301 Olcott Street Santa Clara, California 95054
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(Address
of principal executive offices, with zip code)
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(408) 418-7500
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On July 22, 2014, MoSys, Inc., or the Company, issued a press release
announcing its financial results for the three and six months ended June
30, 2014. A copy of this press release is furnished as Exhibit 99.1 to
this report. The press release should be read in conjunction with the
statements regarding forward-looking statements, which are included in
the text of the release.
In addition to disclosing financial results calculated in accordance
with U.S. generally accepted accounting principles (GAAP), management
also presents information regarding the Company’s performance over
comparable periods based on gross margin, operating expenses (research
and development and sales, general and administrative), operating loss,
net loss and net loss per share, exclusive of stock-based compensation
and amortization of intangibles. Because management discloses financial
measures calculated without taking into account these items, these
financial measures are characterized as "non-GAAP financial measures"
under Securities and Exchange Commission rules.
Stock-based compensation charges represent non-cash charges related to
equity awards granted by the Company. Although these are recurring
charges to the Company’s operations, management believes the measurement
of these amounts can vary considerably from period to period and depend
substantially on factors that are not a direct consequence of operating
performance that is within management’s control. Thus, management
believes that excluding these charges facilitates comparisons of the
Company’s operational performance in different periods, as well as with
similarly determined non-GAAP financial measures of comparable
companies.
Amortization of intangible assets results from the Company’s acquisition
of MagnaLynx, Inc. in 2010 and the value recorded for a license the
Company retained to patents sold in 2011. The amortization does not
represent operating expenses ordinarily incurred by the Company with
respect to its primary business activities of selling integrated
circuits. Thus, these charges are excluded from the Company’s non-GAAP
financial measures to provide another basis for evaluating and comparing
the Company’s performance for the three and six months ended June 30,
2014.
Management and the Company’s board of directors will continue to analyze
the Company's historical consolidated results of operations and
comprehensive loss (revenue, gross margin, research and development
expenses, selling, general and administrative expenses, operating loss,
net loss and net loss per share), excluding stock-based compensation and
charges for amortization of intangibles described above, to assess the
business and compare operating results to the Company's performance
objectives. For example, the Company's budgeting and planning process
utilizes these non-GAAP financial measures, along with other types of
financial information.
The Company discloses these non-GAAP financial measures to the public as
an additional means by which investors can assess the Company's
performance and to identify the Company's operating results for
investors on the same basis applied by management. The non-GAAP
financial measures disclosed by the Company should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with GAAP, and the financial results calculated in accordance
with GAAP and reconciliations to those financial statements should be
carefully evaluated. The non-GAAP financial measures used by the Company
may be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies. The Company has
furnished reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures in the press release
furnished as Exhibit 99.1.
Moreover, although these non-GAAP financial measures adjust expense,
they should not be viewed as a pro forma presentation reflecting the
elimination of the underlying share-based compensation programs, which
are an important element of the Company's compensation structure. GAAP
requires that all forms of share-based payments should be valued and
included, as appropriate, in results of operations. Management believes
these expenses are a material part of the Company's operating results.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
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Description
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99.1 Press Release by MoSys, Inc. dated July 22, 2014.
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOSYS, INC.
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Date:
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July 22, 2014
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By:
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/s/ James W. Sullivan
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James W. Sullivan
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Vice President of Finance and Chief Financial
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Officer
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Exhibit No.
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Description
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99.1 Press Release by MoSys, Inc. dated July 22, 2014.
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Exhibit 99.1
MoSys,
Inc. Reports Second Quarter 2014 Financial Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 22, 2014--MoSys (NASDAQ:
MOSY), a leader in semiconductor solutions that enable fast, intelligent
data access for network and communications systems, today reported
financial results for the second quarter ended June 30, 2014.
Second Quarter Highlights
-
Secured additional design wins for MoSys® Bandwidth Engine® ICs;
-
Increased shipments of Bandwidth Engine ICs quarter-over-quarter;
-
Established a dual-sourcing product and technology partnership with
GSI Technology; and
-
Ended the quarter with total cash and investments of $40.1 million.
Management Commentary
“We continued to gain traction in the second quarter for our Bandwidth
Engine ICs by securing additional design wins and increasing shipments
to customers,” commented Len Perham, MoSys’ president and chief
executive officer. “Most notable, total IC shipments for the first half
of 2014 were double the amount shipped during all of 2013. While the
timing of our customers’ production ramps remains difficult to predict,
we remain optimistic that our early design win customers are making
solid progress and will initiate their production ramps later this year.
“Also of note, during the quarter, we announced a dual-sourcing and
technology partnership with GSI Technology. This partnership is an
important milestone because it provides our customers and potential
customers the comfort of having multiple sources of supply for key
components. It also provides the opportunity to collaborate on future
products critical to the fast-moving advancements we are seeing in the
network infrastructure. Furthermore, this dual-sourcing relationship
should allow both companies to grow their served available markets.
“In addition, we continued to advance the development of our third
generation Bandwidth Engine IC family and next-generation 100G PHY
LineSpeed™ products. Our R&D roadmap aligns well with the market’s
transition toward next-generation networking systems and the drive
toward 400G+ platforms. The growing trend toward data center and edge
devices that expand capacity, security and deep packet inspection are
generating increased interest in both our technology and our advanced IC
solutions. We are working closely with both customers and partners to
address these growing needs.”
Second Quarter Results
Total net revenue for the second quarter of 2014 was $1.8 million,
compared with $1.3 million reported in the first quarter of 2014 and
$1.1 million in the second quarter of 2013.
Second quarter 2014 total revenue included product revenue of $1.0
million, compared with $0.6 million in the first quarter of 2014.
Royalty and other revenue for the second quarter of 2014, which includes
licensing revenue, was $0.8 million, consistent with the previous
quarter and compared with $1.1 million in the second quarter of 2013.
Gross margin for the second quarter of 2014 was 42 percent, compared
with 57 percent in the first quarter of 2014 and 93 percent for the
second quarter of 2013. The sequential decrease in gross margin reflects
increased IC product sales, which carry a lower gross margin than the
Company’s licensing and royalty revenue.
Total operating expenses on a GAAP basis for the second quarter of 2014
were $7.9 million, compared with $8.9 million in the previous quarter
and $7.4 million for the second quarter of 2013. Second quarter 2014
operating expenses included $0.3 million of amortization of intangible
assets and $1.0 million in stock-based compensation expense.
GAAP net loss for the second quarter of 2014 was $7.2 million, or
($0.14) per share, compared with a net loss of $8.1 million, or ($0.16)
per share, in the previous quarter and a net loss of $6.4 million, or
($0.15) per share, for the second quarter of 2013. Non-GAAP net loss for
the second quarter of 2014 was $5.9 million, or ($0.12) per share, which
excludes amortization of intangible assets and stock-based compensation
expense. Earnings per share for the second quarter of 2014 were computed
using approximately 49.5 million weighted shares on a GAAP and non-GAAP
basis. A reconciliation of GAAP results to non-GAAP results is provided
in the financial statement tables following the text of this press
release.
Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at
5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to discuss the second
quarter 2014 financial results. Investors and other interested parties
may access the call by dialing 1-866-271-6103 in the U.S.
(1-617-213-8894 outside of the U.S.), and entering the pass code
61562569 at least 10 minutes prior to the start of the call. In
addition, an audio webcast will be available through the MoSys Web site
at http://www.mosys.com. A telephone replay will be available for
two business days following the call at 1-888-286-8010 in the U.S.
(1-617-801-6888 outside of the U.S.), pass code of 74177110.
Use of Non-GAAP Financial Measures
To supplement MoSys’ consolidated financial statements presented in
accordance with GAAP, MoSys uses non-GAAP financial measures that
exclude from the statement of operations the effects of stock-based
compensation and amortization of recorded intangible assets. MoSys’
management believes that the presentation of these non-GAAP financial
measures is useful to investors and other interested persons because
they are one of the primary indicators that MoSys’ management uses for
planning and forecasting future performance. MoSys’ management believes
that the presentation of non-GAAP financial measures that exclude these
items is useful to investors because management does not consider these
charges part of the day-to-day business or reflective of the core
operational activities of the company that are within the control of
management or that would be used to evaluate management’s operating
performance.
Investors are encouraged to review the reconciliation of these non-GAAP
financial measures to the comparable GAAP results, which is provided in
a table below the Condensed Consolidated Statements of Operations. The
non-GAAP financial measures disclosed by the company should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results calculated
in accordance with GAAP and reconciliations to those financial
statements should be carefully evaluated. The non-GAAP financial
measures used by the company may be calculated differently from, and
therefore may not be comparable to, similarly titled measures used by
other companies. For additional information regarding these non-GAAP
financial measures, and management’s explanation of why it considers
such measures to be useful, refer to the Form 8-K dated July 22, 2014,
that the company filed with the Securities and Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about the
company, including, without limitation, anticipated benefits and
performance expected from our IC products and the company’s future
markets and future business prospects.
Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors include, but
are not limited to, the following:
-
achieving additional IC design wins;
-
commencing volume shipments of Bandwidth Engine ICs;
-
the timing of customer orders and product shipments;
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our ability to enhance our existing proprietary technologies and
develop new technologies;
-
achieving necessary acceptance and adoption of our IC architecture and
interface protocols by potential customers and their suppliers;
-
difficulties and delays in the development, production, testing and
marketing of our ICs;
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reliance on our manufacturing partners to assist successfully with the
fabrication of our ICs;
-
availability of quantities of ICs supplied by our manufacturing
partners at a competitive cost;
-
our lack of recent experience as a fabless semiconductor company
making and selling proprietary ICs;
-
level of intellectual property protection provided by our patents, the
expenses and other consequences of litigation, including intellectual
property infringement litigation, to which we may be or may become a
party from time to time;
-
vigor and growth of markets served by our customers and our
operations; and
other risks identified in the company’s most recent report on Form 10-K
filed with the Securities and Exchange Commission, as well as other
reports that MoSys files from time to time with the Securities and
Exchange Commission. MoSys undertakes no obligation to update publicly
any forward-looking statement for any reason, except as required by law,
even as new information becomes available or other events occur in the
future.
About MoSys, Inc.
MoSys, Inc. (NASDAQ: MOSY) is a fabless semiconductor company enabling
leading equipment manufacturers in the networking and communications
systems markets to address the continual increase in Internet users,
data and services. The company’s solutions deliver data path
connectivity, speed and intelligence while eliminating data access
bottlenecks on line cards and systems scaling from 100G to
multi-terabits per second. Engineered and built for high-reliability
carrier and enterprise applications, MoSys' Bandwidth Engine® and
LineSpeed™ IC product families are based on the company's patented
high-performance, high-density intelligent access and high-speed serial
interface technology, and utilize the company's highly efficient
GigaChip® Interface. MoSys is headquartered in Santa Clara, California.
More information is available at www.mosys.com.
Bandwidth Engine, GigaChip and MoSys are registered trademarks of
MoSys, Inc. in the US and/or other countries. LineSpeed and the MoSys
logo are trademarks of MoSys, Inc. All other marks mentioned herein are
the property of their respective owners.
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MOSYS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share amounts; unaudited)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2014
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2013
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2014
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2013
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Net Revenue
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Product
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$
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975
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$
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60
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$
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1,556
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$
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121
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Royalty and other
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774
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1,060
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|
|
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1,525
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|
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|
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2,334
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Total net revenue
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|
|
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1,749
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|
|
|
|
1,120
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|
|
|
|
|
3,081
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|
|
|
|
2,455
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|
|
|
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Cost of Net Revenue
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|
|
|
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|
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Product and other
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|
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1,022
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|
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77
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|
|
|
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1,599
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|
|
|
|
96
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Total cost of net revenue
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|
|
|
1,022
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|
|
|
|
77
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|
|
|
|
|
1,599
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|
|
|
|
96
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|
|
|
|
|
|
|
|
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|
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Gross Profit
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|
727
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1,043
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1,482
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2,359
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Operating Expenses
|
|
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Research and development
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6,432
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|
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5,983
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|
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13,486
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|
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|
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11,303
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Selling, general and administrative
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|
|
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1,490
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|
|
|
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1,460
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|
|
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3,287
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|
|
|
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3,083
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Gain on sale of assets
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|
|
|
-
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|
|
|
|
-
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-
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|
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(630
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)
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Total operating expenses
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|
|
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7,922
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|
|
|
|
7,443
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|
|
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16,773
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|
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|
13,756
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|
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Loss from operations
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|
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(7,195
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)
|
|
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(6,400
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)
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|
|
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(15,291
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)
|
|
|
|
(11,397
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Other income, net
|
|
|
|
55
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|
|
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|
24
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|
|
|
|
|
85
|
|
|
|
|
44
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|
Loss before income taxes
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|
|
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(7,140
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)
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|
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|
(6,376
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)
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|
|
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|
(15,206
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)
|
|
|
|
(11,353
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)
|
|
|
|
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|
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|
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Income tax provision
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|
|
|
21
|
|
|
|
|
20
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|
|
|
|
|
42
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|
|
40
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|
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|
|
|
|
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Net loss
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|
$
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(7,161
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)
|
|
|
$
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(6,396
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)
|
|
|
|
$
|
(15,248
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)
|
|
|
$
|
(11,393
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
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Basic and diluted
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|
|
|
($0.14
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)
|
|
|
|
($0.15
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)
|
|
|
|
|
($0.31
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)
|
|
|
|
($0.27
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share
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|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,511
|
|
|
|
|
43,892
|
|
|
|
|
|
49,344
|
|
|
|
|
42,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOSYS, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(in thousands, unaudited)
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|
|
|
|
|
|
|
|
|
|
June 30,
|
|
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December 31,
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|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
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Assets
|
|
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Current assets:
|
|
|
|
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|
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Cash, cash equivalents and investments
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|
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$
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31,034
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$
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36,556
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Accounts receivable, net
|
|
|
|
307
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|
|
|
148
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Inventories
|
|
|
|
628
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|
|
567
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Prepaid expenses and other assets
|
|
|
|
1,326
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|
|
|
1,104
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Total current assets
|
|
|
|
33,295
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|
|
|
38,375
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|
|
|
|
|
|
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Long-term investments
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9,106
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13,926
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Property and equipment, net
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|
|
|
613
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|
|
706
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Goodwill
|
|
|
|
23,134
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|
|
|
23,134
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Intangible assets, net
|
|
|
|
1,155
|
|
|
|
1,655
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Other assets
|
|
|
|
204
|
|
|
|
193
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Total assets
|
|
|
$
|
67,507
|
|
|
$
|
77,989
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
764
|
|
|
$
|
276
|
Accrued expenses and other liabilities
|
|
|
|
2,028
|
|
|
|
1,909
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Deferred revenue
|
|
|
|
103
|
|
|
|
170
|
Total current liabilities
|
|
|
|
2,895
|
|
|
|
2,355
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
232
|
|
|
|
216
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
64,380
|
|
|
|
75,418
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
67,507
|
|
|
$
|
77,989
|
|
|
|
|
|
|
|
|
|
|
MOSYS, INC.
|
Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(7,161
|
)
|
|
|
$
|
(6,396
|
)
|
|
|
|
$
|
(15,248
|
)
|
|
|
$
|
(11,393
|
)
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Cost of net revenue
|
|
|
|
-
|
|
|
|
|
5
|
|
|
|
|
|
-
|
|
|
|
|
7
|
|
- Research and development
|
|
|
|
784
|
|
|
|
|
720
|
|
|
|
|
|
1,867
|
|
|
|
|
1,310
|
|
- Selling, general and administrative
|
|
|
|
247
|
|
|
|
|
236
|
|
|
|
|
|
655
|
|
|
|
|
532
|
|
Total stock-based compensation expense
|
|
|
|
1,031
|
|
|
|
|
961
|
|
|
|
|
|
2,522
|
|
|
|
|
1,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
250
|
|
|
|
|
250
|
|
|
|
|
|
500
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss
|
|
|
$
|
(5,880
|
)
|
|
|
$
|
(5,185
|
)
|
|
|
|
$
|
(12,226
|
)
|
|
|
$
|
(9,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share
|
|
|
$
|
(0.14
|
)
|
|
|
$
|
(0.15
|
)
|
|
|
|
$
|
(0.31
|
)
|
|
|
$
|
(0.27
|
)
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Stock-based compensation expense
|
|
|
|
0.02
|
|
|
|
|
0.02
|
|
|
|
|
|
0.05
|
|
|
|
|
0.05
|
|
- Amortization of intangible assets
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share: basic and diluted
|
|
|
$
|
(0.12
|
)
|
|
|
$
|
(0.12
|
)
|
|
|
|
$
|
(0.25
|
)
|
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
49,511
|
|
|
|
|
43,892
|
|
|
|
|
|
49,344
|
|
|
|
|
42,078
|
|
CONTACT:
MoSys, Inc.
Jim Sullivan, CFO, +1 408-418-7500
jsullivan@mosys.com
or
Shelton
Group, Investor Relations
Beverly Twing, +1 214-272-0089
Sr. Acct.
Manager
btwing@sheltongroup.com
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