Total revenue for the first quarter of fiscal 2009 was $11.3 million, compared with $14.1 million for the first quarter of fiscal 2008 and $15.5 million for the fourth quarter of fiscal 2008. License revenue for the first quarter of fiscal 2009 was $8.5 million, compared with $10.8 million for the same period a year ago and $12.1 million for the prior quarter. Royalties for the first quarter of fiscal 2009 were $2.8 million, compared with $3.3 million for the first quarter of fiscal 2008 and $3.4 million for the fourth quarter of fiscal 2008.
As reported under U.S. generally accepted accounting principles (GAAP), net loss for the first quarter of fiscal 2009 was $2.6 million, or ($0.11) per share, compared with net income of $1.1 million, or $0.05 per share for the first quarter of fiscal 2008 and net loss of $47,000 or ($0.00) per share for the fourth quarter of fiscal 2008.
Excluding the effects of FAS123R expenses, acquisition related expenses and amortization of intangibles, the company would have reported a net loss of $1.4 million, or ($0.06) per share. The reconciliation of GAAP to Non-GAAP financial results includes $75,000 of stock-based compensation expense and $2.0 million of amortization of intangibles and other acquisition related charges reduced by $922,000 tax effect for a net total of $1.2 million.
“Our first quarter fiscal 2009 proved to be challenging. We began with a solid backlog and strong sales pipeline, but the rapid decline of the semiconductor industry impacted our business towards the end of the quarter,” said Dr. Alex Shubat, president and chief executive officer (CEO), Virage Logic. “A number of customers delayed orders that we now expect will close in the next one to two quarters. We also experienced a small number of cancellations, something the company has never seen before. Our decline in royalties is attributed to lower wafer starts at our major foundry partners.”
“Last week we announced a restructure that will increase efficiencies as part of our on-going transformation. We consolidated two smaller research and development (R&D) sites into four major R&D centers and realigned our sales resources to market opportunities. We expect to realize approximately a 13% reduction in labor expenses and additional overhead savings from site consolidations.”
“The combination of our strong cash position and the transformational efforts to date allows us to take advantage of the economic environment and execute on both organic and inorganic growth initiatives.
“In summary, despite the current economic uncertainty, we remain confident that executing our transformation initiatives will enable us to retain our leadership position. We anticipate second quarter fiscal 2009 revenues of $11.25 million to $12.75 million and non-GAAP loss per share of ($0.06) to $0.00 per share. The company expects to realize, before tax, approximately $2.2 to $2.4 million in non-GAAP expenses comprised of FAS123R stock compensation, acquisition related and restructuring expenses.”
Although this news release will be available on the company’s website, the company disclaims any duty or intention to update these or any other forward-looking statements.
Use of Non-GAAP Information
We believe the financial figures we include that are not presented in
accordance with GAAP assist investors in understanding our business and
operating results. This information is intended to provide investors
with useful supplemental data regarding the underlying economics of our
business operations because operating results presented under GAAP may
include charges that are nonrecurring or not necessarily relevant to
ongoing operations, or are difficult to forecast for future periods. The
Company’s management evaluates and makes operating decisions about its
business operations primarily based on revenue and the core costs of
those business operations. Management believes that acquisition related
charges, stock-based compensation and restructuring charges are not part
of its core business operations. Therefore, management presents non-GAAP
financial measures, along with GAAP measures, in this earnings release
by excluding these items from the period expenses. The income statement
line items involved in the adjustment from GAAP to non-GAAP presentation
in this earnings release are restructuring charges, acquisition related
charges, and stock-based compensation that are included in cost of
revenues, research and development, general and administrative and sales
and marketing expenses. To determine our non-GAAP tax provision, the
Company recalculates tax based on non-GAAP income before taxes and