SANTA CLARA, Calif.–(BUSINESS WIRE)–May 1, 2015–
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 first quarter ended March 31, 2015.

First Quarter and Recent Highlights

  • Achieved another quarter of double-digit design wins;
  • Secured new Bandwidth Engine® design wins with existing Tier-One
    customer;
  • Completed underwritten public offering of common stock for net
    proceeds of $21.4 million; and
  • Ended the quarter with total cash and investments of $40.7 million.

Management Commentary

“Building upon the design win momentum generated last quarter, we
achieved another quarter of double-digit design win activity, putting us
on track to achieve our goal of doubling design wins again in 2015,”
commented Len Perham, president and CEO of MoSys. “Most of our design
wins in the quarter were for our Bandwidth Engine products and reflect,
in some cases, additional market penetration with existing customers. In
several instances, these customers are now re-using the Bandwidth Engine
architecture as a building block for new systems or line card
applications to achieve higher aggregate data rates or new features. We
also have multiple active design engagements with customers for our
LineSpeed™ products, particularly our newest product, the LineSpeed 100G
Low Power Retimer, targeting high data-rate, low-power, smart optical
module applications.

“In addition, we continued to make progress on our product development
roadmap, especially with our new Bandwidth Engine 3 product family,
which we expect to bring to market in the second half of the year. We
remain on track with the development schedules of our early Bandwidth
Engine 3 alpha customers and our NPU partner, EZchip, and continue to
work closely with our FPGA partners, Altera and Xilinx.”

Mr. Perham concluded, “Overall, customer interest and sales activity for
both the Bandwidth Engine and LineSpeed product families remain very
robust, setting the stage for additional design wins in the coming
quarters. We remain focused on doubling design wins again this year,
bringing additional products to market, and expanding our served
available market and customer base, while remaining well positioned to
support our customers’ production ramps.”

First Quarter Results

Total net revenue for the first quarter of 2015 was $0.8 million,
compared with $1.1 million reported in the fourth quarter of 2014 and
$1.3 million in the first quarter of 2014.

First quarter 2015 total revenue included product revenue of $0.2
million
, compared with $0.3 million in the fourth quarter of 2014 and
$0.6 million in the year ago period. Royalty and other revenue for the
first quarter of 2015, which includes licensing revenue, was $0.6
million
as compared with $0.8 million in both the previous quarter and
the first quarter of 2014.

Gross margin for the first quarter of 2015 was 69 percent, compared with
76 percent in the fourth quarter of 2014 and 57 percent for the first
quarter of 2014.

Total operating expenses on a GAAP basis for the first quarter of 2015
were $8.5 million, compared with $9.8 million in the previous quarter
and $8.9 million for the first quarter of 2014. First quarter 2015
operating expenses included $0.2 million of amortization of intangible
assets and $1.2 million in stock-based compensation expense.

GAAP net loss for the first quarter of 2015 was $8.0 million, or ($0.15)
per share, compared with a net loss of $9.0 million, or ($0.18) per
share, in the previous quarter and a net loss of $8.1 million, or
($0.16) per share, for the first quarter of 2014. Non-GAAP net loss for
the first quarter of 2015 was $6.5 million, or ($0.12) per share, which
excludes amortization of intangible assets and stock-based compensation
expense. Earnings per share for the first quarter of 2015 were computed
using approximately 54.3 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 first
quarter financial results. Investors and other interested parties may
access the call by dialing 1-855-779-0042 in the U.S.
(1-631-485-4856 outside of the U.S.), and entering the pass code 21672962
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. (1-404-537-3406 outside of the U.S.),
pass code of 21672962.

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 May 1, 2015,
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;
  • 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 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.

(Financial Tables to Follow)

   
MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
 
Three Months Ended
March 31,
  2015     2014  
 
Net Revenue
Product $ 180 $ 581
Royalty and other   596     751  
Total net revenue 776 1,332
 
Cost of Net Revenue
Product and other   237     577  
Total cost of net revenue 237 577
 
Gross Profit 539 755
 
Operating Expenses
Research and development 6,893 7,054
Selling, general and administrative   1,614     1,797  
Total operating expenses 8,507 8,851
 
Loss from operations (7,968 ) (8,096 )
 
Other income, net   23     30  
Loss before income taxes (7,945 ) (8,066 )
 
Income tax provision   20     21  
 
Net loss $ (7,965 ) $ (8,087 )
 
Net loss per share
Basic and diluted ($0.15 ) ($0.16 )
 
Shares used in computing net loss per share
Basic and diluted 54,282 49,174
     
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
 
March 31, December 31,
  2015   2014
 
Assets
Current assets:
Cash, cash equivalents and investments $ 33,086 $ 23,549
Accounts receivable, net 82 177
Inventories 1,177 881
Prepaid expenses and other   1,020   887
Total current assets 35,365 25,494
 
Long-term investments 7,597 2,245
Property and equipment, net 830 854
Goodwill 23,134 23,134
Other assets   631   899
Total assets $ 67,557 $ 52,626
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 311 $ 495
Accrued expenses and other   2,287   2,350
Total current liabilities 2,598 2,845
 
Long-term liabilities 245 241
 
Stockholders’ equity 64,714 49,540
   
Total liabilities and stockholders’ equity $ 67,557 $ 52,626
   
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,
  2015     2014  
 
GAAP net loss $ (7,965 ) $ (8,087 )
Stock-based compensation expense
Research and development 966 1,083
Selling, general and administrative   261     408  
Total stock-based compensation expense 1,227 1,491
 
Amortization of intangible assets   237     250  
 
Non-GAAP net loss $ (6,501 ) $ (6,346 )
 
GAAP net loss per share $ (0.15 ) $ (0.16 )
Reconciling items
Stock-based compensation expense 0.02 0.03
Amortization of intangible assets 0.01
   
Non-GAAP net loss per share: basic and diluted $ (0.12 ) $ (0.13 )
 
Shares used in computing non-GAAP net loss per share
Basic and diluted 54,282 49,174

Source: MoSys, Inc.

MoSys, Inc.
Jim Sullivan, +1-408-418-7500
CFO
jsullivan@mosys.com
or
Shelton
Group, Investor Relations
Beverly Twing, +1-214-272-0089
Sr.
Acct. Manager
btwing@sheltongroup.com