OTTAWA, Ontario – November 27, 2007 - MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the second quarter of fiscal 2008, ended October 31, 2007.
- Q2 revenues within guidance: $11.5 million
- Q2 pro forma income at top end of guidance: $3.8 million or $0.34 per diluted share
- Maintaining fiscal 2008 full year guidance for revenue and pro forma income
"I am pleased that MOSAID delivered solid financial results for the second quarter, meeting revenue guidance and delivering the top end of the range on pro forma income guidance, despite challenges posed by the rapid appreciation of the Canadian dollar," said John Lindgren, President and Chief Executive Officer, MOSAID. "Moving into the second half of fiscal 2008, we are on plan and confident in achieving our guidance targets for the full year. We are making good progress in our wireless/wireline and semiconductor licensing programs, as we are in various stages of communication and negotiations with more than 50 companies."
Revenues for the second quarter of fiscal 2008 were $11.5 million, compared to $14.8 million in the second quarter of fiscal 2007. Revenues in the second quarter a year ago were higher primarily as a result of a double payment by one licensee and a higher foreign exchange rate.
Pro forma income was $3.8 million or $0.34 per diluted share in the second quarter of fiscal 2008, compared to $6.2 million or $0.55 per diluted share in the same period a year ago. Pro forma income for the second quarter of fiscal 2008 was less than the same period in the prior year primarily due to reduced revenue. Slightly higher operating expenses and reduced net interest income in Q2 fiscal 2008, as compared to the same period in the prior year, also contributed to the reduced pro forma income result. 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.
GAAP net income for the second quarter of fiscal 2008 was $4.7 million or $0.43 per diluted share, as compared to net income of $4.7 million or $0.42 per diluted share reported in the same quarter last year. For the second quarter of fiscal 2008, GAAP net income significantly exceeded the Company's guidance of $900,000 primarily due to downward revaluation of U.S. dollar denominated liabilities, resulting in a foreign exchange gain.
MOSAID's balance of cash and marketable securities at the end of the second quarter of fiscal 2008 was $56.8 million, compared to $62.5 million at the end of the first quarter of fiscal 2008. During the second quarter, the Company expended $4.5 million of cash to repurchase and cancel 224,000 shares under the normal course issuer bid announced on September 10, 2007, and returned $2.8 million to shareholders in quarterly dividend payments. It is the intention of the Board of Directors to continue the Company's previously announced normal course issuer bid.
Today the Company also announced that it is in active discussions with respect to the potential sale of its Ottawa head office campus, on terms that would allow the Company to remain as a tenant in part of the premises. MOSAID hopes to complete a transaction on these terms, and in the price range of $10.0 million to $12.0 million, before the end of fiscal 2008.
On November 27, 2007, MOSAID Technologies declared a quarterly dividend of $0.25 per share. The dividend, which is an eligible dividend, is payable on January 21, 2008 to shareholders of record as of January 2, 2008.
Guidance
Management offers the following guidance for the third quarter of fiscal 2008:
- Q3 revenues of $11.5 million to $12.5 million
- Q3 pro forma income of $3.5 million to $4.5 million, or $0.31 to $0.40 per diluted share
MOSAID is maintaining its guidance for fiscal 2008:
- Fiscal 2008 revenues in the range of $55 million
- Fiscal 2008 pro forma income of $20.0 million to $22.0 million, or $1.77 to $1.95 per diluted share
Conference Call and Webcast
Management will hold a conference call and analyst webcast on Tuesday, November 27, 2007 at 5:00 p.m. (EST). Analysts may access the conference call by dialing 1-800-732-9382. The webcast will be live at www.mosaid.com and available on MOSAID's web site for 90 days following the event.
About MOSAID
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 customers. Founded in 1975, MOSAID is based in Ottawa, Ontario. For more information, visit www.mosaid.com.
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; the value proposition associated with MOSAID's products relative to its competition in the market; the timing and amount of MOSAID's Research & Development expenses; the timing of MOSAID's new product introductions; MOSAID's ability to develop, manufacture, and market innovative products in a rapidly changing technological environment; and MOSAID's ability to maintain and enhance existing customer relationships.
Factors that could cause actual results to differ materially from expected results include, but are not limited to, the following: declines or unexpected variations in market growth rates for MOSAID's products; the extent of embedded DRAM proliferation in the System-on-a-Chip markets; variability in customer deployment schedules from quarter to quarter; shifts in the mix of MOSAID products sold; unfavorable legal rulings in MOSAID's patent litigations; economic, social, and political conditions in the countries in which MOSAID, its customers, suppliers, 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 customers/licensees; 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; obsolescence of products or inappropriate targeting to markets that fail to materialize; inability to transition to new technologies to meet customer demand; variations in average sales cycles; key component supply restrictions and/or cost increases; critical industry transitions; consolidation of MOSAID's customers and/or licensees; natural events, such as severe weather and earthquakes in the locations in which MOSAID, its customers, suppliers, 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.
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