- Q3 revenues of $18.1 million, up 29% from $14.0 million in Q3 fiscal 2008
- Q3 pro forma income of $5.3 million or $0.53 per diluted share, compared to $5.4 million or $0.50 per diluted share in Q3 fiscal 2008
- Q3 GAAP net income of $2.3 million or $0.23 per diluted share, compared to a net loss of $1.2 million or $0.11 per diluted share in Q3 fiscal 2008
"Our strong financial results for the third quarter, achieved during a period of global economic turmoil, demonstrate that the Company is well positioned to meet its financial targets for fiscal 2009," said John Lindgren, President and CEO, MOSAID.
"The landmark agreements that we recently announced with Nokia Corporation and Micron Technology are key transition points for the Company," said Lindgren. "Our deal with Nokia, the world leader in the mobile phone industry, fulfills management's commitment to license a major handset vendor this fiscal year, and boosts the momentum of our wireless licensing program. With the Micron deal, MOSAID has now licensed virtually 100% of the global commodity DRAM market to its patents, and has also gained title to an important portfolio of 400 patents that will help generate new revenue streams and assist us in reaching new agreements with existing licensees."
MOSAID had cash and marketable securities of $62.2 million at the end of the third quarter of fiscal 2009, compared to $59.8 million at the end of the second quarter of fiscal 2009. In Q3 fiscal 2009, MOSAID returned $2.5 million to shareholders in quarterly dividend payments.
On February 26, 2008, MOSAID declared a quarterly dividend of $0.25 per share. The dividend, which is an eligible dividend, is payable on April 16, 2009 to shareholders of record as of April 2, 2009.
A reconciliation of pro forma income to Canadian generally accepted accounting principles (GAAP) net income is included in the Notes to the Financial Statements accompanying this press release.
Semiconductor licensing: MOSAID announced the settlement of patent infringement litigation with Micron Technology, Inc., and that the companies had entered into two separate agreements: a patent license agreement and a patent transfer agreement. Under the patent license agreement, Micron received a lives-of-the-patents license to certain MOSAID patents, and a 10-year term license to certain other MOSAID patents. Micron will make a series of fixed cash payments to MOSAID. Under the patent transfer agreement, MOSAID acquired title to 400 Micron patents related to DRAM, Flash memory and semiconductor process technology.
First wireless handset license: MOSAID announced that Nokia Corporation became the first major vendor of Wi-Fi enabled handsets to license MOSAID's wireless patents. MOSAID granted Nokia a license under MOSAID's wireless technology patents, as well as certain other patents, covering the company's products sold globally under the Nokia brand name.
MOSAID also announced patent license agreements with three vendors of wireless and wired networking equipment. Buffalo Inc., ATEN Technology, Inc., and Sena Technologies, Inc. were each granted five year, running royalty licenses under certain of MOSAID's wireless patents.
Patent portfolio: At the end of the third quarter, MOSAID's portfolio comprised 1,397 patents and applications, compared with 897 patents and applications one year ago.
Q4 and Fiscal 2009 Guidance
Management offers the following guidance for the fourth quarter of fiscal 2009:
- Q4 revenues of $16.0 million to $18.0 million
- Q4 pro forma income of $6.4 million to $7.4 million, or $0.62 to $0.71 per diluted share, based on 10.3 million diluted shares
The Company is maintaining its annual guidance for fiscal 2009, as follows:
- Fiscal 2009 revenues in the range of $61.0 million to $63.0 million
- Fiscal 2009 pro forma income of $20.0 million to $21.0 million, or $1.92 to $2.02 per diluted share, based on 10.4 million diluted shares
MOSAID's revenues result primarily from intellectual property agreements, which by their nature may actually close on dates other than those projected. MOSAID's priority and focus is on obtaining the best terms possible under its agreements, rather than on the particular timing of agreement closure. MOSAID's revenues depend upon, among other items, the continued ability of its licensees to pay amounts as they become due.
Conference Call and Webcast
Management will hold a conference call and webcast on Thursday, February 26, 2009 at 5:00 p.m. EST. The webcast will be live at www.mosaid.com and may also be accessed by dialing 1-800-264-7882. The webcast will be available on mosaid.com for 90 days following the event.
MOSAID Technologies Inc. is one of the world's leading intellectual property companies. MOSAID develops semiconductor memory technology and licenses patented intellectual property in the areas of semiconductors, and wired and wireless communications systems. MOSAID counts many of the world's largest semiconductor companies among its licensees. Founded in 1975, MOSAID is based in Ottawa, Ontario.
Pro forma income, a non-GAAP measure, is GAAP net income adjusted for stock-based compensation, patent amortization and imputed interest, foreign exchange gains and losses on "Other long-term liabilities," and any other non-recurring items. The Company uses pro forma measures internally to evaluate and manage operating performance, and to forecast and plan. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers.
Forward Looking Information
This document and certain other public documents incorporated by reference in this document, contain forward-looking statements to the extent they relate to MOSAID or its management, including those identified by the expressions "anticipate," "believe," "foresee," "estimate," "expect," "intend," "could," "may," "plan," "will," "would" and similar expressions. Similarly, statements in this document that describe MOSAID's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. These forward-looking statements are not historical facts, but rather reflect MOSAID's current expectations regarding future events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in such forward-looking statements. Assumptions made in preparing forward-looking statements and financial guidance include, but are not limited to, the following: MOSAID's continued expansion of its patent portfolio and of its opportunities for future patent licensing revenue as a result of MOSAID's acquisition of patents from third parties and from development of new inventions; DRAM manufacturers continuing to infringe MOSAID's patents; the timing and amount of MOSAID's litigation expenses; MOSAID's ability to sign new patent licensees; current assumptions as to the identification of products that are unlicensed to MOSAID's wireless patents; and the timing and amount of MOSAID's Research & Development expenses.
Factors that could cause actual results to differ materially from expected results include, but are not limited to, the following: the extent of embedded DRAM proliferation in the System-on-a-Chip markets; legal rulings and/or regulatory investigations or complaints having an adverse impact on the validity, enforceability, potential royalty rates, and strength or breadth of coverage of MOSAID's essential and/or nonessential patents (including, but not limited to, adverse results from litigation or proceedings in patent offices and government regulatory agencies in various countries around the world); judicial, legislative or regulatory changes that impair the ability of patent holders to earn licensing revenues; economic, social, and political conditions in the countries in which MOSAID or patent licensees operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates; non-payment or delays in payment by, or insolvency of, licensees or other debtors; variability in patent licensees' sales of licensed products, failure to maintain and enforce MOSAID's existing patent portfolio, or failure to obtain valuable patents as a result of research and development activities, or failure to acquire valuable patents from third parties; MOSAID's ability to recruit and retain skilled personnel; change in MOSAID's financial position; consolidation of MOSAID's licensees; natural events, such as severe weather and earthquakes in the locations in which MOSAID or patent licensees operate; and changes in the tax rate applicable to MOSAID as the result of changes in the tax law in the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets.
MOSAID assumes no obligation to update or revise any forward-looking statements. Additional information identifying risks and uncertainties affecting MOSAID's business and other factors that could cause MOSAID's financial results to fluctuate are contained in MOSAID's Annual Information Form, under the section entitled "Risk Factors," and in MOSAID's other public filings available online at www.sedar.com.
MOSAID Technologies Incorporated
Unaudited Consolidated Financial Statements
For the Quarter Ended January 31, 2009