OTTAWA, Ontario – March 6, 2008 - MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the third quarter of fiscal 2008, ended January 31, 2008.
- Q3 revenues of $14.0 million, compared to $13.8 million in Q3 fiscal 2007
- Q3 pro forma income of $5.4 million, or $0.50 per diluted share, compared to $5.5 million or $0.49 per diluted share in Q3 fiscal 2007
- Q3 GAAP net loss of $1.2 million or $0.11 per share includes a one-time, non-cash income tax expense of $3.2 million as a result of new “substantially enacted” lower federal income tax rates, compared to net income of $4.3 million or $0.38 per diluted share in Q3 fiscal 2007
“MOSAID delivered excellent third quarter financial results, exceeding both revenue and pro forma income guidance, and we are on track to meet our targets for the fiscal year,” said John Lindgren, President and CEO, MOSAID. “Operationally, we had an eventful quarter as we continued to deliver on our objectives. MOSAID set an important benchmark by signing a seven year, royalty bearing license with Winbond Electronics. Winbond was the first company to sign a term license with us, and this was our first opportunity to re-sign a company to a new term license. This agreement, along with our new license with ProMOS, which has a six year term, demonstrates the growing strength and longevity of our semiconductor patent portfolio.”
“MOSAID’s success in settling the litigation against ProMOS and Mosel Vitelic, two of the four defendants in our patent infringement case in Texas, is another encouraging development,” said Lindgren. “On the wireless licensing front, we are in substantive business and technical discussions with multiple companies.”
MOSAID had cash and marketable securities of $50.8 million at the end of the third quarter of fiscal 2008, compared to $56.8 million at the end of the second quarter of fiscal 2008.
During the third quarter, the Company returned $2.7 million to shareholders in quarterly dividend payments; expended $4.2 million of cash to retire, on its due date, the mortgage on its Ottawa head office campus; and used $5.5 million to repurchase and cancel 315,000 shares under the normal course issuer bid (NCIB) announced September 10, 2007. MOSAID has now repurchased and cancelled 559,583 common shares, representing the full 5% of the 11,191,669 common shares issued and outstanding when the NCIB was announced.
On March 6, 2008, MOSAID declared a quarterly dividend of $0.25 per share. The dividend, which is an eligible dividend, is payable on April 18, 2008 to shareholders of record as of April 2, 2008.
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.
Guidance
Management offers the following guidance for the fourth quarter of fiscal 2008:
- Q4 revenues of $16.0 million to $17.0 million
- Q4 pro forma income of $5.1 million to $5.8 million, or $0.45 to $0.53 per diluted share
MOSAID is maintaining revenue guidance and updating pro forma income guidance for fiscal 2008:
- Fiscal 2008 revenues in the range of $55 million, plus or minus
- Fiscal 2008 pro forma income of $19.0 million to $20.0 million, or $1.71 to $1.80 per diluted share
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.
Conference Call and Webcast
Management will hold a conference call and webcast on Thursday, March 6, 2008 at 5:00 p.m. EDT. The webcast will be live at www.mosaid.com and may also be accessed by dialing 1-800-215-2393. The webcast will be 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.
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 as well as 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.
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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