UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February
7, 2014
MoSys,
Inc.
(Exact
name of registrant as specified in its charter)
000-32929
(Commission
File Number)
Delaware |
|
77-0291941 |
(State or other jurisdiction of |
|
(I.R.S. Employer Identification No.) |
3301 Olcott Street |
(Address of principal executive offices, with zip code) |
(408) 418-7500
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 7, 2014, MoSys, Inc., or the Company, issued a press release announcing its financial results for the three months and fiscal year ended December 31, 2013. A copy of this press release is furnished as Exhibit 99.1 to this report. The press release should be read in conjunction with the statements regarding forward-looking statements, which are included in the text of the release.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), management also presents information regarding the Company’s performance over comparable periods based on gross margin, operating expenses (research and development and sales, general and administrative), operating loss, net loss and net loss per share, exclusive of stock-based compensation and amortization of intangibles. Because management discloses financial measures calculated without taking into account these items, these financial measures are characterized as "non-GAAP financial measures" under Securities and Exchange Commission rules.
Stock-based compensation charges represent non-cash charges related to equity awards granted by the Company. Although these are recurring charges to the Company’s operations, management believes the measurement of these amounts can vary considerably from period to period and depend substantially on factors that are not a direct consequence of operating performance that is within management’s control. Thus, management believes that excluding these charges facilitates comparisons of the Company’s operational performance in different periods, as well as with similarly determined non-GAAP financial measures of comparable companies.
Amortization of intangible assets results from the Company’s acquisition of MagnaLynx, Inc. in 2010 and the value recorded for a license the Company retained to patents sold in 2011. The amortization does not represent operating expenses ordinarily incurred by the Company with respect to its primary business activities of licensing intellectual property and selling integrated circuits. Thus, these charges are excluded from the Company’s non-GAAP financial measures to provide another basis for evaluating and comparing the Company’s performance for the three months and fiscal year ended December 31, 2013.
Management and the Company’s board of directors will continue to analyze the Company's historical consolidated results of operations and comprehensive loss (revenue, gross margin, research and development expenses, selling, general and administrative expenses, operating loss, net loss and net loss per share), excluding stock-based compensation and charges for amortization of intangibles described above, to assess the business and compare operating results to the Company's performance objectives. For example, the Company's budgeting and planning process utilizes these non-GAAP financial measures, along with other types of financial information.
The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess the Company's performance and to identify the Company's operating results for investors on the same basis applied by management. 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. The Company has furnished reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures in the press release furnished as Exhibit 99.1.
Moreover, although these non-GAAP financial measures adjust expense, they should not be viewed as a pro forma presentation reflecting the elimination of the underlying share-based compensation programs, which are an important element of the Company's compensation structure. GAAP requires that all forms of share-based payments should be valued and included, as appropriate, in results of operations. Management believes these expenses are a material part of the Company's operating results.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Description |
99.1 Press Release by MoSys, Inc. dated February 7, 2014.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MOSYS, INC. |
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Date: | February 7, 2014 | By: |
/s/ James W. Sullivan |
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James W. Sullivan |
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Vice President of Finance and Chief Financial |
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Officer |
EXHIBIT INDEX |
Exhibit No. |
Description |
|
99.1 |
Press Release by MoSys, Inc. dated February 7, 2014. |
Exhibit 99.1
MoSys, Inc. Reports Fourth Quarter and Full Year 2013 Financial Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--February 7, 2014--MoSys (NASDAQ: MOSY), a leader in semiconductor solutions that enable fast, intelligent data access for network and communications systems, today reported financial results for the fourth quarter and fiscal year ended December 31, 2013.
Full Year 2013 and Recent Highlights
Management Commentary
“We continued to make good progress throughout 2013 on our operational execution, design win momentum and sales activity,” said Len Perham, MoSys’ president and chief executive officer. “We increased our design wins three-fold in 2013 compared with 2012, including both Bandwidth Engine ICs and LineSpeed 100G PHY solutions. These new design wins represent an expanded customer base, as well as extended use of Bandwidth Engine ICs within existing customers. As our first design wins advance toward production release, IC unit shipments began to accelerate in the fourth quarter of 2013, and this acceleration in shipped volumes will likely continue period to period through 2014.
“In 2013, we announced sample availability of the three members of the Bandwidth Engine 2 family, the Burst, Access and Macro products, which enables us to provide a broad range of purpose-built solutions to meet our customers’ application needs. In addition, we introduced the first two members of our LineSpeed family of integrated CMOS PHY ICs. The LineSpeed 100G Multi-Mode Gearbox and Quad Full Duplex Retimer have proven their functionality with industry standards and interoperability with the 100G optical module and networking equipment ecosystem. The Bandwidth Engine and LineSpeed products enable critical density, performance and features for line cards in next generation networking and communications equipment. We also just announced our third generation Bandwidth Engine architecture, which represents a new co-processing paradigm with the ability to advance memory access performance well beyond current levels. This innovative architecture is capable of throughput up to 800+ Gbps, provides intelligent offload to relieve the packet processing engine of access-intensive operations and represents a powerful solution for the memory access bottleneck.
“In conclusion, I believe we are progressing well in our transition toward becoming a fabless semiconductor company. We now have a portfolio of IC products with design wins at leading customers and expect to begin generating early stage production revenue in 2014,” concluded Mr. Perham.
Fourth Quarter Results
Total net revenue for the fourth quarter of 2013 was $1.0 million, consistent with the third quarter of 2013 and compared with $1.6 million in the fourth quarter of 2012.
Fourth quarter 2013 total revenue included licensing and other revenue of $0.2 million, compared with $0.1 million in the third quarter of 2013 and $0.2 million in the fourth quarter of 2012. Revenue attributable to shipments of integrated circuits is included in licensing and other revenue. Fourth quarter 2013 royalty revenue was $0.8 million, consistent with the previous quarter and compared with $1.4 million for the fourth quarter of 2012.
Gross margin for the fourth quarter of 2013 was 78%, compared with 83% in the third quarter of 2013 and 97% for the fourth quarter of 2012.
Total operating expenses on a GAAP basis for the fourth quarter of 2013 were $7.3 million compared with $7.8 million in the previous quarter and $9.4 million for the fourth quarter of 2012. Fourth quarter 2013 operating expenses included $0.2 million of amortization of intangible assets and $0.9 million of stock-based compensation expense.
GAAP net loss for the fourth quarter of 2013 was $6.5 million, or ($0.13) per share, compared with a loss of $6.9 million, or ($0.14) per share, in the previous quarter and a loss of $7.8 million, or ($0.19) per share, for the fourth quarter of 2012. The non-GAAP net loss for the fourth quarter of 2013 was $5.3 million, or ($0.11) per share, which excluded amortization of intangible assets and stock-based compensation expense. Earnings per share for the fourth quarter of 2013 were computed using approximately 48.5 million weighted shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
As of December 31, 2013, cash and investments totaled $50.5 million.
Full Year 2013 Results
Total revenue for 2013 was $4.4 million, compared with $6.1 million for 2012. Net loss for 2013 was $24.8 million, or ($0.55) per share, compared with a loss of $27.6 million, or ($0.70) per share, in 2012. Non-GAAP net loss for 2013 was $20.1 million, or ($0.44) per share, excluding stock-based compensation charges of $3.7 million and intangible asset amortization charges of $1.0 million. Non-GAAP net loss for 2012 was $22.1 million, or ($0.56) per share. Earnings per share for the full year 2013 were computed using approximately 45.2 million weighted shares on a GAAP and non-GAAP basis.
MoSys also announced, in accordance with NASDAQ Listing Rule 5635(c)(4), as a material inducement to the hiring of three new employees, it has granted or offered to grant stock options for a total of 125,000 shares of common stock. Inducement option grants have an exercise price equal to the closing price of MoSys' common stock on the NASDAQ market on the grant date, and vest over four years and expire in ten years, assuming continued service.
Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at 5:30a.m. Pacific Time (8:30a.m. Eastern Time) to discuss the fourth quarter 2013 financial results. Investors and other interested parties may access the call by dialing 1-877-474-9502 in the U.S. (1-857-244-7555 outside of the U.S.), and entering the pass code 19238799 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys Web site at http://www.mosys.com. A telephone replay will be available for two business days following the call at 1-888-286-8010 in the U.S. (1-617-801-6888 outside of the U.S.), pass code of 27352937.
Use of Non-GAAP Financial Measures
To 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 stock-based compensation and amortization of recorded intangible assets. 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 MoSys’ 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 February 7, 2014, which the Company filed with the Securities and Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about the Company, including, without limitation, anticipated benefits and performance expected from our 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:
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.
About MoSys, Inc.
MoSys, Inc. (NASDAQ: MOSY) is a fabless semiconductor company enabling leading equipment manufacturers in the networking and communications systems markets to address the continual increase in Internet users, data and services. The company's solutions deliver data path connectivity, speed and intelligence while eliminating data access bottlenecks on line cards and systems scaling from 100G to multi-terabits per second. Engineered and built for high-reliability carrier and enterprise applications, MoSys' Bandwidth Engine® and LineSpeed™ IC product families are based on the company's patented high-performance, high-density intelligent access and high-speed serial interface technology, and utilize the company's highly efficient GigaChip™ Interface. MoSys is headquartered in Santa Clara, California. 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. GigaChip, LineSpeed and the MoSys logo are trademarks of MoSys, Inc. All other marks mentioned herein are the property of their respective owners.
MOSYS, INC. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(In thousands, except per share amounts; unaudited) | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Net Revenue | |||||||||||||||||||||
Licensing and other | $ | 231 | $ | 227 | $ | 781 | $ | 1,340 | |||||||||||||
Royalty | 755 | 1,368 | 3,617 | 4,742 | |||||||||||||||||
Total net revenue | 986 | 1,595 | 4,398 | 6,082 | |||||||||||||||||
Cost of Net Revenue | |||||||||||||||||||||
Licensing and other | 220 | 45 | 474 | 334 | |||||||||||||||||
Total cost of net revenue | 220 | 45 | 474 | 334 | |||||||||||||||||
Gross Profit | 766 | 1,550 | 3,924 | 5,748 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||
Research and development | 5,779 | 7,260 | 23,325 | 28,480 | |||||||||||||||||
Selling, general and administrative | 1,483 | 2,126 | 6,161 | 8,218 | |||||||||||||||||
Gain on sale of assets | - | - | (630 | ) | (3,291 | ) | |||||||||||||||
Total operating expenses | 7,262 | 9,386 | 28,856 | 33,407 | |||||||||||||||||
Loss from operations | (6,496 | ) | (7,836 | ) | (24,932 | ) | (27,659 | ) | |||||||||||||
Other income, net | 43 | 34 | 209 | 155 | |||||||||||||||||
Loss before income taxes | (6,453 | ) | (7,802 | ) | (24,723 | ) | (27,504 | ) | |||||||||||||
Income tax provision (benefit) | 3 | (29 | ) | 71 | 110 | ||||||||||||||||
Net loss | $ | (6,456 | ) | $ | (7,773 | ) | $ | (24,794 | ) | $ | (27,614 | ) | |||||||||
Net loss per share | |||||||||||||||||||||
Basic and diluted | ($0.13 | ) | ($0.19 | ) | ($0.55 | ) | ($0.70 | ) | |||||||||||||
Shares used in computing net loss per share | |||||||||||||||||||||
Basic and diluted | 48,543 | 39,958 | 45,246 | 39,176 | |||||||||||||||||
MOSYS, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, unaudited) | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and investments | $ | 36,556 | $ | 33,327 | ||||
Accounts receivable, net | 148 | 287 | ||||||
Prepaid expenses and other assets | 1,671 | 1,362 | ||||||
Total current assets | 38,375 | 34,976 | ||||||
Long-term investments | 13,926 | 7,383 | ||||||
Property and equipment, net | 706 | 1,238 | ||||||
Goodwill | 23,134 | 23,134 | ||||||
Intangible assets, net | 1,655 | 2,654 | ||||||
Other assets | 193 | 149 | ||||||
Total assets | $ | 77,989 | $ | 69,534 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 276 | $ | 393 | ||||
Accrued expenses and other liabilities | 1,909 | 3,947 | ||||||
Deferred revenue | 170 | 481 | ||||||
Total current liabilities | 2,355 | 4,821 | ||||||
Long-term liabilities | 216 | 171 | ||||||
Stockholders' equity | 75,418 | 64,542 | ||||||
Total liabilities and stockholders’ equity | $ | 77,989 | $ | 69,534 | ||||
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 | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
GAAP net loss | $ | (6,456 | ) | $ | (7,773 | ) | $ | (24,794 | ) | $ | (27,614 | ) | |||||||||
Stock-based compensation expense | |||||||||||||||||||||
- Cost of net revenue | - | 4 | 7 | 53 | |||||||||||||||||
- Research and development | 641 | 590 | 2,565 | 2,694 | |||||||||||||||||
- Selling, general and administrative | 257 | 226 | 1,126 | 1,064 | |||||||||||||||||
Total stock-based compensation expense | 898 | 820 | 3,698 | 3,811 | |||||||||||||||||
Amortization of intangible assets | 249 | 250 | 999 | 1,746 | |||||||||||||||||
Non-GAAP net loss | $ | (5,309 | ) | $ | (6,703 | ) | $ | (20,097 | ) | $ | (22,057 | ) | |||||||||
GAAP net loss per share | $ | (0.13 | ) | $ | (0.19 | ) | $ | (0.55 | ) | $ | (0.70 | ) | |||||||||
Reconciling items | |||||||||||||||||||||
- Stock-based compensation expense | 0.02 | 0.01 | 0.09 | 0.10 | |||||||||||||||||
- Amortization of intangible assets | - | 0.01 | 0.02 | 0.04 | |||||||||||||||||
Non-GAAP net loss per share: basic and diluted | $ | (0.11 | ) | $ | (0.17 | ) | $ | (0.44 | ) | $ | (0.56 | ) | |||||||||
Shares used in computing non-GAAP net loss per share | |||||||||||||||||||||
Basic and diluted | 48,543 | 39,958 | 45,246 | 39,176 |
CONTACT:
MoSys, Inc.
Jim Sullivan, CFO, +1 408-418-7500
jsullivan@mosys.com
or
Shelton
Group, Investor Relations
Beverly Twing, +1 972-239-5119 ext. 126
Sr.
Acct. Manager
btwing@sheltongroup.com