Posts Record Quarterly License Revenue
Fourth quarter revenue from royalties was $11.3 million, an increase of 5 percent over the $10.7 million reported in the third quarter and an increase of 9 percent over royalties of $10.4 million reported in the fourth quarter of fiscal 2006. Contract revenue was $12.4 million, an increase of 48 percent from the $8.3 million reported in the third quarter and an increase of 57 percent over contract revenue of $7.9 million reported in the fourth quarter a year ago.
As previously announced on July 2, 2007, the company completed and filed with the SEC its Annual Report on Form 10-K for the year ended June 30, 2006 and its Quarterly Reports on Form 10-Q for the first, second and third quarters of fiscal 2007. These filings contain financial statements that were restated as a result of a voluntary review of the company's stock option practices conducted by a special committee of the company's board of directors. The company incurred approximately $3.0 million in costs and charges related to the stock option investigation and restatement in the fourth quarter of fiscal 2007 and $5.7 million for the fiscal year.
Net income in the fourth quarter of fiscal 2007 on a generally accepted accounting principles (GAAP) basis was $2.3 million, compared to net income of $1.2 million in the third quarter and $7.5 million in the fourth quarter of fiscal 2006. GAAP net income per share on a diluted basis in the fourth quarter of 2007 was $0.05, compared with GAAP net income per share of $0.03 in the third quarter and $0.17 in the fourth quarter of 2006.
The company recognized equity-based compensation expense pursuant to the fair value method under SFAS 123R of $1.6 million in the fourth quarter. Non-GAAP net income in the fourth quarter of fiscal 2007, which excludes the effect of equity based compensation expense, was $4.0 million or $0.09 per diluted share, compared with $3.5 million or $0.08 per diluted share in the third quarter and $9.1 million or $0.20 per share in the fourth quarter of 2006. A reconciliation of non-GAAP adjustments is summarized in the tables below.
Total revenue for fiscal 2007, ended June 30, 2007, was $83.3 million, an increase of 30 percent over the $64.1 million reported in fiscal 2006. Royalty revenue was $44.4 million, an increase of 21 percent over the $36.7 million in fiscal 2006. Contract revenue was $38.9 million, an increase of 42 percent from the $27.4 million reported last year.
Fiscal 2007 net income on a GAAP basis was $8.5 million compared to $11.0 million in fiscal 2006. Fiscal 2007 net income per share on a diluted basis was $0.18 compared to net income of $0.25 in fiscal 2006. Fiscal 2007 non-GAAP net income, which excludes the effect of equity based compensation expense of $7.7 million was $16.2 million or $0.35 on a diluted basis compared to $19.9 million or $0.45 per share in fiscal 2006.
"MIPS fourth fiscal quarter was outstanding in several respects," said John Bourgoin, president and CEO. "Record license revenues helped us close a fiscal year in which we enjoyed 30 percent growth over the prior year, we introduced our performance-leading 74K(TM) core family to considerable industry acclaim, and we completed the process of becoming current with our SEC filings. Our licensees' unit shipments also grew a healthy 29 percent in the fiscal year. As we enter our new fiscal year, MIPS has the strongest product base we have ever offered to our customers."
MIPS Technologies invites you to listen to management's discussion of Q4 and fiscal 2007 results and guidance for Q1 fiscal 2008 in a live conference call today beginning at 1:45 p.m. Pacific time. The conference call number is 1-517-308-9188. The replay number is 1-203-369-1294 and will be available for seven days, beginning shortly after the end of the conference call. The access code is MIPS. An audio replay of the conference will be posted on the company's website ( http://www.mips.com) soon thereafter.
Q4 FY 2007 News Highlights:
From its founding more than 20 years ago, the MIPS(R) architecture has represented innovation and performance. Today, MIPS Technologies and its licensees continue to lead in system performance and innovative solutions for established and emerging markets-especially in the digital living room and connected home. With multiple design teams actively developing the architecture, more than 900 MIPS-Based(TM) implementations throughout the world, and a vibrant ecosystem of third-party tools and software, MIPS continues to be at the core of the user experience.
Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers:
* Infineon Licenses MIPS Next-Generation MIPS32(R) 74K(TM) Core: Top
Semiconductor Company Becomes First Customer After GA to Leverage
Embedded Industry's Fastest Processor
* Teradici Licenses MIPS Technologies' Most Popular Embedded Processor
for Innovative TERA Chipset in Datacenter-Based Computing
* MIPS Technologies Files Annual Report, Quarterly Reports and Proxy
Statement
* TrendChip Technologies Licenses MIPS32(R) 24KE(TM) and MIPS32 34K(TM)
Cores for Cutting-Edge Broadband Access Solutions
* EDA Leaders Team with MIPS Technologies to Support New High-performance
MIPS32(R) 74K(TM) Core Family
* Kolorific Licenses MIPS32(R) 24KEc(TM) Core for Next-Generation iDTV
Applications
* MIPS Technologies Unveils Industry's First Fully Synthesizable
Processors to Surpass 1 GHz; Broadcom Takes Early License
* FS2(R) Introduces SYSTEM NAVIGATOR(TM) Tools for MIPS32(R) 74K(TM) Core
Debug
* Entropic Marks Milestone with Shipment of Five Millionth MIPS-Based(TM)
Coax Network Chipset
* MIPS64(R) Architecture Licensed by NEC Electronics for Next-Generation
VR Series(TM) Processor Core
* MIPS Technologies and Trident Microsystems Complete Licensing Agreement
for MIPS32(R) 24KEc(TM) Pro Core
* Next-Generation MIPS-Based(TM) Designs Spotlight Innovation at Embedded
Systems Conference
About MIPS Technologies
MIPS Technologies, Inc. (NASDAQ: MIPS) is a leading provider of industry-standard processor architectures and cores for digital consumer, networking, personal entertainment, communications and business applications. The company drives the broadest architectural alliance that delivers 32- and 64-bit embedded RISC solutions to the embedded market, and in combination with its licensees, offers the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products worldwide. MIPS Technologies currently owns more than 400 patent properties (patents and applications) worldwide and licenses its intellectual property to today's leading semiconductor companies, ASIC developers and system OEMs.
Today, MIPS-Based(TM) designs are integrated in millions of products around the world, including broadband devices from Linksys, digital cameras from Canon, DTVs and entertainment systems from Sony, DVD Recordable devices from Pioneer, digital set-top boxes from Motorola, network routers from Cisco and laser printers from Hewlett-Packard. Founded in 1998, MIPS Technologies is based in Mountain View, California, with offices worldwide. For more information, please contact (650) 567-5000 or visit http://www.mips.com.
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 regarding MIPS Technologies' expectations regarding customers' use of MIPS' products. 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 Technologies' ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors. 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.
