SUNNYVALE, Calif.–(BUSINESS WIRE)–Apr. 28, 2009–
MoSys, Inc., (NASDAQ: MOSY), a leading provider of high-density
system-on-chip (SoC) memory intellectual property (IP), today reported
financial results for the first quarter ended March 31, 2009.

Recent Highlights

  • Reported first quarter total revenue of $2.6 million
  • Ended quarter with total cash and investments of $62 million
  • Completed the exit of the analog/mixed-signal product lines, which is
    expected to result in a $5.5 million annual cost savings

Management Commentary

Commenting on the Company’s first quarter financial performance, Len
Perham
, MoSys’ President and Chief Executive Officer, stated, “The first
quarter remained challenging for MoSys due to the continued uncertainty
in the macroeconomic environment as customers delayed or cancelled
projects and tightly managed spending levels. During the quarter, we
secured two new 1T-SRAM macro licenses, one of which we anticipate will
be used in an application in a new market segment for our technology.
Royalty revenue decreased from the previous quarter primarily due to the
gradual transition by a major integrated device manufacturer licensee to
an SoC utilizing a more advanced processing node. As a result of this
transition, royalties that were previously being reported and recognized
by us in the quarter in which the licensee shipped the SoCs are now
being reported and recognized by us in the quarter subsequent to
shipment. In response to the global economic crisis, we continued to
closely manage expenses while also completing our exit from the
analog/mixed-signal product lines, which contributed to a sequential
decrease in total operating expenses.”

Mr. Perham continued, “In order to position the Company for future
growth, we remain focused on furthering the proliferation of our proven
1T-SRAM technology, strengthening our foundry partnerships, bringing our
1T-FLASH product to market and leveraging our patented IP for the
development of new products to serve an expanded available market.
1T-SRAM remains the cost effective solution of choice for designs where
high-density, embedded memory is a requirement.”

First Quarter Results

Total net revenue for the first quarter of 2009 was $2.6 million,
compared with $4.0 million for the fourth quarter of 2008 and $2.8
million
for the first quarter of 2008.

First quarter total revenue included licensing revenue of $524,000,
compared with $859,000 for the fourth quarter of 2008 and $432,000 for
the first quarter of 2008. Royalty revenue for the first quarter was
$2.0 million, which includes royalties associated with the Nintendo Wii
game console. First quarter royalty revenue compares with $3.1 million
for the previous quarter and $2.4 million for the first quarter of 2008.

Gross margin as determined in accordance with U.S. Generally Accepted
Accounting Principles (GAAP) was 87.5 percent, compared with 83.8
percent for the fourth quarter of 2008 and 83.0 percent for the first
quarter of 2008.

Total operating expenses on a GAAP basis for the first quarter were $6.5
million
, compared with $9.8 million for the previous quarter and $7.7
million
for the first quarter of 2008.

GAAP net loss for the first quarter of 2009 was $4.1 million, or ($0.13)
per share, including a restructuring charge of $275,000 and stock-based
compensation expense of $447,000. This compares with a net loss of $6.3
million
, or ($0.20) per share, for the fourth quarter of 2008 and a net
loss of $4.3 million, or ($0.14) per share, for the first quarter of
2008.

The non-GAAP net loss for the first quarter was $3.4 million, or ($0.11)
per share, excluding restructuring and stock-based compensation charges.
A reconciliation of GAAP results to non-GAAP results is provided in the
financial statement 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 31,322,000 shares.

Cash, cash equivalents and both long and short-term investments totaled
approximately $62.0 million as of March 31, 2009, compared with
approximately $67.5 million as of December 31, 2008. The decrease in
cash and investments included expenditures of approximately $1.0 million
related to the exit of the analog/mixed-signal product lines and
approximately $0.9 million of stock repurchases.

First Quarter Financial Results Webcast / Conference Call

MoSys will host a conference call and webcast with investors today at
1:30 p.m. Pacific time (4:30 p.m. Eastern time) to discuss the first
quarter 2009 financial results and the business outlook. Investors and
other interested parties may access the call by dialing 888-713-4213
in the U.S. (617-213-4865 outside of the U.S.), and entering the pass
code 93024073 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 https://dev-mosys-web-04-19.pantheonsite.io.
A telephone replay will be available for 2 business days following the
call at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.),
pass code of 87854028.

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 income statement the effects of restructuring and asset
impairment charges related to the Company’s exit from its
analog/mixed-signal product lines, stock-based compensation and the
effects of certain charges related to acquired intangible assets and
other acquisition-related 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 believes that the presentation of non-GAAP
financial measures that exclude these items is useful to investors
because MoSys 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 immediately 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 April
28, 2009
, 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, benefits and performance
expected from use of the Company’s 1T-SRAM and 1T-FLASH technologies,
the Company’s execution and results, improving operational efficiencies,
growth of the business and future business prospects and the estimated
cost savings from restructuring plans.

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, customer acceptance of our proprietary technologies
for 1T-SRAM and 1T-FLASH, the timing and nature of the license
agreements to be entered into with our customers and their requests for
our services under existing license agreements, the timing of customer
acceptance of our work under such agreements, the level of commercial
success of licensees’ products, ease of manufacturing and yields of
devices incorporating our proprietary technologies, our ability to
enhance our existing proprietary technologies and develop new
technologies, the 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, the vigor and growth of
markets served by our licensees and customers and operations of the
Company 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.

Founded in 1991, MoSys (NASDAQ: MOSY), develops, markets and licenses
innovative embedded memory intellectual property (IP) technologies for
advanced systems-on-chips (SoCs) used in a variety of home
entertainment, mobile consumer, networking and storage applications.
MoSys’ patented 1T-SRAM and 1T-FLASH technologies offer a combination of
high density, low power consumption, high speed and low cost unmatched
by other available memory technologies. MoSys’ embedded memory IP has
been included in more than 175 million devices demonstrating
silicon-proven manufacturability in a wide range of processes and
applications. MoSys is headquartered at 755 N. Mathilda Avenue,
Sunnyvale, California 94085. More information is available on MoSys’
website at https://dev-mosys-web-04-19.pantheonsite.io.

MoSys and 1T-SRAM are registered trademarks of MoSys, Inc.
1T-FLASH(TM) is a trademark of MoSys, Inc.

MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
   
Three Months Ended
March 31,
2009   2008
 
Net Revenue
Licensing $ 524 $ 432
Royalty   2,042       2,385  
Total net revenue 2,566 2,817
 
Cost of Net Revenue
Licensing   320       480  
Total cost of net revenue 320 480
 
Gross Profit 2,246 2,337
 
Operating Expenses
Research and development 3,829 4,099
Selling, general and administrative 2,417 3,356
Restructuring charge 275
Amortization of intangible assets         197  
Total operating expenses 6,521 7,652
 
Loss from operations (4,275 ) (5,315 )
 
Other income, net   203       1,074  
Loss before income taxes (4,072 ) (4,241 )
 
Provision for income taxes   (7 )     (43 )
 
Net loss $ (4,079 )   $ (4,284 )
 
Net loss per share
Basic and diluted ($0.13 ) ($0.14 )
 
Shares used in computing net loss per share
Basic and diluted 31,322 31,673
 
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
March 31,
2009   2008
 
GAAP net loss $ (4,079 ) $ (4,284 )
Stock-based compensation expense
– Cost of net revenue 32 80
– Research and development 174 373
– Selling, general and administrative   241       813  
Total stock-based compensation expense 447 1,266
 
Restructuring charge (1) 275
Amortization of intangible assets         197  
 
Non-GAAP net loss $ (3,357 )   $ (2,821 )
 
GAAP net loss per share ($0.13 ) ($0.14 )
Reconciling items
– Stock-based compensation expense 0.01 0.04
– Restructuring charge (1) 0.01
– Amortization of intangible assets         0.01  
 
Non-GAAP net loss per share: Basic and diluted   ($0.11 )     ($0.09 )
 
Shares used in computing non-GAAP net loss per share
Basic and diluted 31,322 31,673
 
(1) Charge related to the exit of the analog/mixed-signal product
lines
 
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
   
March 31, December 31,
2009   2008
 
Assets
Current assets:
Cash, cash equivalents and investments $ 37,003 $ 44,075
Accounts receivable, net 445 688
Unbilled contract receivables 38 428
Prepaid expenses and other assets   2,332     2,158
Total current assets 39,818 47,349
 
Long-term investments 24,972 23,395
Property and equipment, net 1,081 958
Goodwill 12,326 12,326
Other assets   1,616     1,905
Total assets $ 79,813   $ 85,933
 
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 515 $ 167
Accrued expenses and other liabilities 1,558 2,235
Accrued restructuring liabilities 270 1,004
Deferred revenue   275     639

Total current liabilities

2,618 4,045
 
Stockholders’ equity 77,195 81,888
     
Total liabilities and stockholders’ equity $ 79,813   $ 85,933

Source: MoSys, Inc.

MoSys, Inc.
Jim Sullivan, CFO, +1 408-731-1800
jsullivan@mosys.com
or
Shelton
Group, Investor Relations
Beverly Twing, +1 972-239-5119 ext. 126
Sr.
Acct. Manager
btwing@sheltongroup.com