MoSys, Inc. Reports Second Quarter 2017 Financial Results
July 17 2017 - 4:05PM
MoSys, Inc. (NASDAQ:MOSY), today reported financial results
for the second quarter ended June 30, 2017.
Second Quarter 2017 Financial
ResultsTotal net revenue for the second quarter of 2017
was $1.4 million, compared with $1.2 million for the previous
quarter and $1.6 million for the second quarter of 2016. Product
revenue for the second quarter was $1.1 million, compared with $1.0
million in the first quarter of 2017 and $1.3 million in the
year-ago period.
Gross margin for the second quarter of 2017 was
47 percent, compared with 50 percent for the first quarter of 2017
and 41 percent for the second quarter of 2016.
Total operating expenses on a GAAP basis for the
second quarter of 2017 were $4.4 million, compared with $4.8
million for the first quarter of 2017 and $6.5 million for the
second quarter of 2016. GAAP net loss for the second quarter of
2017 was $4.0 million, or ($0.60) per share, compared with a net
loss of $4.4 million, or ($0.66) per share, for the previous
quarter and a net loss of $6.0 million, or ($0.91) per share, for
the second quarter of 2016. Non-GAAP net loss for the second
quarter of 2017 was $2.8 million, or ($0.42) per share, which
excludes restructuring charges, intangible asset amortization and
stock-based compensation expenses. A reconciliation of GAAP results
to non-GAAP results is provided in the financial statement tables
following the text of this press release. In February 2017, the
Company effected a 1-for-10 reverse stock split of its common
stock. All share and per share amounts in this press release have
been adjusted to reflect the reverse stock split for all current
and prior periods.
Management Commentary“Second
quarter 2017 IC revenue reflected an increase in shipments of our
IC products, and we have received order visibility for at least the
next 12 months from our lead customers and expect a meaningful
increase in revenue in the second half of the year,” commented Len
Perham, MoSys’ president and CEO. “We continue to pursue new
design-in opportunities for our products, and recorded an
additional design win during the quarter for our Bandwidth Engine
3.”
“Also, during the quarter, we began to realize
the benefits of our initial cost reduction initiatives, which we
implemented early in the second quarter, resulting in non-GAAP
operating expenses decreasing by 30% sequentially. We expect to
implement additional cost reductions and further reduce operating
expenses in the coming quarters. More recently, we successfully
completed a financing that resulted in net proceeds of
approximately $2.0 million, which will be used to support ongoing
operations and improve our balance sheet, in combination with the
reductions in costs and operating expenses.”
Financial Results Conference
CallThe Company will not be hosting a conference call or
webcast in conjunction with today’s release of its second quarter
results.
Use of Non-GAAP Financial MeasuresTo 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 non-cash goodwill
impairment, restructuring, stock-based compensation and intangible
asset amortization 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’ 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 July 17, 2017 that the Company filed with the
Securities and Exchange Commission.
Forward-Looking StatementsThis press release
may contain forward-looking statements about the Company,
including, without limitation, anticipated benefits and performance
expected from its 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:
- a lack of working capital to fund continued product development
and growth;
- 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. There can be no
assurance that MoSys’ review of strategic alternatives will result
in any specific action.
About MoSys, Inc.MoSys, Inc. (NASDAQ:MOSY)
is a fabless semiconductor company enabling leading equipment
manufacturers in the data center, networking and communications
systems markets to address the continual increase in Internet
users, data and services. More information is available
at www.mosys.com.
Bandwidth Engine and MoSys are registered trademarks of MoSys,
Inc. in the US and/or other countries. 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 |
|
Six Months Ended |
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue |
|
|
|
|
|
|
|
Product |
|
$ |
1,111 |
|
$ |
1,287 |
|
|
$ |
2,066 |
|
$ |
2,407 |
|
|
|
Royalty and
other |
|
273 |
|
|
346 |
|
|
|
530 |
|
|
677 |
|
|
|
|
Total net
revenue |
|
1,384 |
|
|
1,633 |
|
|
|
2,596 |
|
|
3,084 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Net Revenue |
|
732 |
|
|
963 |
|
|
|
1,334 |
|
|
1,826 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
652 |
|
|
670 |
|
|
|
1,262 |
|
|
1,258 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
Research
and development |
|
2,313 |
|
|
4,884 |
|
|
|
5,798 |
|
|
10,116 |
|
|
|
Selling,
general and administrative |
|
1,101 |
|
|
1,577 |
|
|
|
2,415 |
|
|
3,093 |
|
|
|
Restructuring charges |
|
1,002 |
|
|
- |
|
|
|
1,002 |
|
|
676 |
|
|
|
|
Total
operating expenses |
|
4,416 |
|
|
6,461 |
|
|
|
9,215 |
|
|
13,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(3,764 |
) |
|
(5,791 |
) |
|
|
(7,953 |
) |
|
(12,627 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense, net |
|
(230 |
) |
|
(213 |
) |
|
|
(446 |
) |
|
(242 |
) |
|
Net
Loss |
|
$ |
(3,994 |
) |
$ |
(6,004 |
) |
|
$ |
(8,399 |
) |
$ |
(12,869 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share |
|
|
|
|
|
|
|
Basic and
diluted |
$ |
(0.60 |
) |
$ |
(0.91 |
) |
|
$ |
(1.26 |
) |
$ |
(1.95 |
) |
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share |
|
|
|
|
|
|
|
Basic and
diluted |
|
6,677 |
|
|
6,598 |
|
|
|
6,662 |
|
|
6,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOSYS, INC. |
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
(In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
December 31, |
|
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash, cash
equivalents and investments |
$ |
2,743 |
|
$ |
9,768 |
|
|
|
|
|
|
|
Accounts
receivable, net |
|
522 |
|
|
559 |
|
|
|
|
|
|
|
Inventories |
|
1,048 |
|
|
1,451 |
|
|
|
|
|
|
|
Prepaid
expenses and other |
|
1,124 |
|
|
473 |
|
|
|
|
|
|
|
|
Total current
assets |
|
5,437 |
|
|
12,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
885 |
|
|
1,274 |
|
|
|
|
|
|
Goodwill |
|
|
13,276 |
|
|
13,276 |
|
|
|
|
|
|
Other |
|
|
290 |
|
|
344 |
|
|
|
|
|
|
|
|
Total assets |
$ |
19,888 |
|
$ |
27,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
$ |
165 |
|
$ |
561 |
|
|
|
|
|
|
|
Deferred
revenue |
|
1,273 |
|
|
271 |
|
|
|
|
|
|
|
Accrued
expenses and other |
|
2,094 |
|
|
2,502 |
|
|
|
|
|
|
|
|
Total current
liabilities |
|
3,532 |
|
|
3,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable |
|
8,702 |
|
|
8,250 |
|
|
|
|
|
|
Other |
|
|
391 |
|
|
233 |
|
|
|
|
|
|
|
|
Total liabilities |
|
12,625 |
|
|
11,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
7,263 |
|
|
15,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
19,888 |
|
$ |
27,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Six Months Ended |
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
$ |
(3,994 |
) |
$ |
(6,004 |
) |
|
$ |
(8,399 |
) |
$ |
(12,869 |
) |
|
|
|
Stock-based
compensation expense |
|
|
|
|
|
|
|
|
- |
Research and
development |
|
102 |
|
|
383 |
|
|
|
211 |
|
|
821 |
|
|
|
|
- |
Selling, general and
administrative |
|
69 |
|
|
162 |
|
|
|
145 |
|
|
329 |
|
|
|
|
|
Total stock-based
compensation expense |
|
171 |
|
|
545 |
|
|
|
356 |
|
|
1,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
1,002 |
|
|
- |
|
|
|
1,002 |
|
|
676 |
|
|
|
|
Amortization of intangible assets |
|
28 |
|
|
27 |
|
|
|
56 |
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss |
$ |
(2,793 |
) |
$ |
(5,432 |
) |
|
$ |
(6,985 |
) |
$ |
(10,988 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share |
$ |
(0.60 |
) |
$ |
(0.91 |
) |
|
$ |
(1.26 |
) |
$ |
(1.95 |
) |
|
|
|
Reconciling
items |
|
|
|
|
|
|
|
|
- |
Stock-based
compensation expense |
|
0.03 |
|
|
0.08 |
|
|
|
0.06 |
|
|
0.18 |
|
|
|
|
- |
Restructuring
charges |
|
0.15 |
|
|
- |
|
|
|
0.15 |
|
|
0.10 |
|
|
|
|
- |
Amortization of
intangible assets |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share: basic and
diluted |
$ |
(0.42 |
) |
$ |
(0.83 |
) |
|
$ |
(1.05 |
) |
$ |
(1.67 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net loss per
share |
|
|
|
|
|
|
|
Basic and
diluted |
|
6,677 |
|
|
6,598 |
|
|
|
6,662 |
|
|
6,583 |
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Jim Sullivan, CFO
MoSys, Inc.
+1 (408) 418-7500
jsullivan@mosys.com
Beverly Twing, Sr. Acct. Manager
Shelton Group, Investor Relations
+1 (214) 272-0089
btwing@sheltongroup.com
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