MoSys, Inc. (NASDAQ:MOSY), a leader in semiconductor solutions that
enable fast, intelligent data access for Cloud, network, and
communications systems, today reported financial results for the
third quarter ended September 30, 2016.
Third Quarter and Recent
Highlights
- Achieved another quarter of double-digit design wins for
Bandwidth Engine® and LineSpeed™ products;
- Shipped production and prototype quantities of Bandwidth Engine
ICs to an expanding customer base; and
- Accelerated Programmable Search Engine IC program to respond to
initial data-center customer demand.
“During the quarter, we secured double-digit
design wins, including Bandwidth Engine 2 wins for IP security
appliance and video applications and multiple LineSpeed wins with
new customers for networking, monitoring, and module applications,”
commented Len Perham, MoSys’ president and chief executive officer.
“We are also beginning to ship initial production quantities of
Bandwidth Engine 2 to our lead IP security appliance customer.
Furthermore, I am particularly encouraged by the interest in our
Programmable Search Engine for applications in the expanding
data-center market segment.
“Although we shipped production and
pre-production quantities of ICs to multiple customers during the
quarter, customer production schedules have not yet ramped to
volumes originally anticipated by this point in the year. However,
I continue to remain confident that a growth trend will become
evident over the coming quarters as more of our designs from 2014
and 2015 commence production.”
Total net revenue for the third quarter of 2016
was $1.6 million, consistent with the second quarter of 2016 and
compared with $1.0 million in the third quarter of 2015. Product
revenue in the third quarter of 2016 was $1.2 million, compared
with $1.3 million in the previous quarter and $0.6 million in the
year-ago period. Royalty and other revenue for the third quarter of
2016 was $0.4 million, compared with $0.3 million in the previous
quarter and $0.5 million in the year ago period.
Gross margin for the third quarter of 2016 was
58 percent, compared with 41 percent in the previous quarter and 22
percent for the third quarter of 2015.
Total operating expenses on a GAAP basis for the
third quarter of 2016 were $5.4 million, compared with $6.5 million
in the second quarter of 2016 and $10.3 million in the year-ago
period. Third quarter 2016 operating expenses included stock-based
compensation and amortization of intangible asset expenses of $0.7
million.
GAAP net loss for the third quarter of 2016 was
$4.7 million, or ($0.07) per share, including stock-based
compensation and amortization expenses. This compares with a net
loss of $6.0 million, or ($0.09) per share, in the previous quarter
and a net loss of $10.1 million, or ($0.15) per share, for the
third quarter of 2015. Non-GAAP net loss for the third quarter of
2016 was $4.0 million, or ($0.06) per share, which excludes
amortization of intangible assets and stock-based compensation
expense. Earnings per share for the third quarter of 2016 was
computed using approximately 66.1 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
CallMoSys 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 third quarter 2016 financial results. Investors and
other interested parties may access the call by dialing
1-855-779-0042 in the U.S. (or +1-631-485-4856
outside of the U.S.) and entering the pass code
96101270 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
1-855-859-2056 in the U.S. (or +1-404-537-3406 outside of the
U.S.), pass code of 96101270.
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, amortization of recorded
intangible assets and restructuring charges. 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 November 4, 2016, that the Company filed with
the Securities and Exchange Commission.
Forward-Looking StatementsThis
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;
- 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;
- 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 of Cloud, networking, communications, and
data center systems 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®, Programmable Search 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.
(Financial Tables to Follow)
|
MOSYS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except per share amounts;
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Net
Revenue |
|
|
|
|
|
|
|
|
Product |
|
|
|
$ |
1,205 |
|
$ |
565 |
|
|
$ |
3,612 |
|
$ |
1,288 |
|
Royalty and other |
|
|
|
|
368 |
|
|
457 |
|
|
|
1,045 |
|
|
1,504 |
|
Total net revenue |
|
|
|
|
1,573 |
|
|
1,022 |
|
|
|
4,657 |
|
|
2,792 |
|
|
|
|
|
|
|
|
|
|
Cost of Net
Revenue |
|
|
|
|
658 |
|
|
793 |
|
|
|
2,484 |
|
|
1,593 |
|
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
|
|
|
915 |
|
|
229 |
|
|
|
2,173 |
|
|
1,199 |
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
|
|
3,927 |
|
|
8,793 |
|
|
|
14,043 |
|
|
21,475 |
|
Selling, general and
administrative |
|
|
|
|
1,450 |
|
|
1,547 |
|
|
|
4,543 |
|
|
4,711 |
|
Restructuring charges |
|
|
|
|
- |
|
|
- |
|
|
|
676 |
|
|
- |
|
Total operating expenses |
|
|
|
|
5,377 |
|
|
10,340 |
|
|
|
19,262 |
|
|
26,186 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
|
|
(4,462 |
) |
|
(10,111 |
) |
|
|
(17,089 |
) |
|
(24,987 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
(219 |
) |
|
19 |
|
|
|
(421 |
) |
|
71 |
|
Loss before income taxes |
|
|
|
|
(4,681 |
) |
|
(10,092 |
) |
|
|
(17,510 |
) |
|
(24,916 |
) |
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
|
|
20 |
|
|
13 |
|
|
|
60 |
|
|
60 |
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
|
|
$ |
(4,701 |
) |
$ |
(10,105 |
) |
|
$ |
(17,570 |
) |
$ |
(24,976 |
) |
|
|
|
|
|
|
|
|
|
Net loss per
share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
$ |
(0.07 |
) |
$ |
(0.15 |
) |
|
$ |
(0.27 |
) |
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
Shares used in
computing net loss per share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
66,091 |
|
|
65,317 |
|
|
|
65,918 |
|
|
61,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOSYS, INC. |
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
(In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash, cash equivalents and
investments |
|
|
|
$ |
12,758 |
|
$ |
20,238 |
|
|
|
|
Accounts receivable, net |
|
|
|
|
626 |
|
|
729 |
|
|
|
|
Inventories |
|
|
|
|
1,424 |
|
|
1,597 |
|
|
|
|
Prepaid expenses and other |
|
|
|
|
564 |
|
|
701 |
|
|
|
|
Total current assets |
|
|
|
|
15,372 |
|
|
23,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
|
1,492 |
|
|
1,630 |
|
|
|
|
Goodwill |
|
|
|
|
23,134 |
|
|
23,134 |
|
|
|
|
Other assets |
|
|
|
|
374 |
|
|
663 |
|
|
|
|
Total assets |
|
|
|
$ |
40,372 |
|
$ |
48,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
$ |
261 |
|
$ |
940 |
|
|
|
|
Accrued expenses and other |
|
|
|
|
2,190 |
|
|
2,664 |
|
|
|
|
Total current liabilities |
|
|
|
|
2,451 |
|
|
3,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable |
|
|
|
|
8,238 |
|
|
- |
|
|
|
|
Other long-term liabilities |
|
|
|
|
240 |
|
|
247 |
|
|
|
|
Total liabilities |
|
|
|
|
10,929 |
|
|
3,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
29,443 |
|
|
44,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
|
|
$ |
40,372 |
|
$ |
48,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
|
|
$ |
(4,701 |
) |
$ |
(10,105 |
) |
|
$ |
(17,570 |
) |
$ |
(24,976 |
) |
Stock-based compensation
expense |
|
|
|
|
|
|
|
|
-Research and development |
|
|
|
|
458 |
|
|
590 |
|
|
|
1,278 |
|
|
2,151 |
|
-Selling, general and
administrative |
|
|
|
|
186 |
|
|
230 |
|
|
|
515 |
|
|
713 |
|
Total stock-based compensation
expense |
|
|
|
|
644 |
|
|
820 |
|
|
|
1,793 |
|
|
2,864 |
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
|
|
|
- |
|
|
- |
|
|
|
676 |
|
|
- |
|
Amortization of intangible
assets |
|
|
|
|
27 |
|
|
28 |
|
|
|
83 |
|
|
293 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
loss |
|
|
|
$ |
(4,030 |
) |
$ |
(9,257 |
) |
|
$ |
(15,018 |
) |
$ |
(21,819 |
) |
|
|
|
|
|
|
|
|
|
GAAP net loss
per share |
|
|
|
$ |
(0.07 |
) |
$ |
(0.15 |
) |
|
$ |
(0.27 |
) |
$ |
(0.41 |
) |
Reconciling items |
|
|
|
|
|
|
|
|
-Stock-based compensation
expense |
|
|
|
|
0.01 |
|
|
0.01 |
|
|
|
0.03 |
|
|
0.05 |
|
-Restructuring charges |
|
|
|
|
- |
|
|
- |
|
|
|
0.01 |
|
|
- |
|
-Amortization of intangible
assets |
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
loss per share: basic and diluted |
|
|
|
$ |
(0.06 |
) |
$ |
(0.14 |
) |
|
$ |
(0.23 |
) |
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
Shares used in
computing non-GAAP net loss per share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
66,091 |
|
|
65,317 |
|
|
|
65,918 |
|
|
61,486 |
|
|
|
|
|
|
|
|
|
|
Contacts:
Jim Sullivan, CFO
MoSys, Inc.
+1 (408) 418-7500
jsullivan@mosys.com
Beverly Twing, Sr. Acct. Manager
Shelton Group, Investor Relations
+1 (214) 272-0089
btwing@sheltongroup.com
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