MOSAID releases year-end results
OTTAWA, ONTARIO--MOSAID Technologies Inc. (TSE:MSD - news) today reported revenues of $22,776,000 for its fiscal year ended April 30, 1999, representing a
decrease of 45 percent from fiscal 1998 revenues of $41,379,000.
Net loss for the year was $10,175,000, compared to net earnings of $5,211,000 reported for the previous year. Net loss per share, on a fully diluted basis, was $1.42 for
fiscal 1999 compared to net earnings of $0.67 for fiscal 1998. Fiscal 1999 net loss included the following pre-tax items: a charge of $4,324,000 associated with the restructuring in the first quarter; a
writedown of the Company's investment in Accelerix Incorporated of $3,569,000 in the fourth quarter; and a gain on sale of assets (principally the balance of MOSAID's investment in Semtech Corporation
[Nasdaq:SMTC - news]) of $916,000.
Revenues for the fourth fiscal quarter ended April 30, 1999 totaled $7,443,000 compared to $9,569,000 for the fourth quarter ended May 1, 1998, a decrease of 22 percent. Net loss for the quarter was
$3,302,000 compared to net earnings of $3,000 for the fourth quarter of the previous fiscal year. Net loss per share for the quarter, on a fully diluted basis, was $0.46 compared to nil for the corresponding
quarter last year.
''MOSAID's revenues for the year were in the range forecast in the Company's July 29, 1998 news release and represent steady quarterly sequential growth throughout the fiscal year,'' said Richard
Boadway, Senior Vice President and CFO of MOSAID. ''Our earnings from operations in the fourth quarter were $267,000, compared with a loss from operations of $396,000 in last year's fourth quarter
results, and represent a marked improvement over the operating losses of the last four quarters.''
During the fourth quarter, MOSAID wrote down its investment in Accelerix Inc. from $4,012,000 to $443,000, consistent with MOSAID's offer to purchase all the outstanding shares of Accelerix not
already owned by MOSAID for $1,058,000. On May 31, 1999, MOSAID announced its success in acquiring these shares and the amalgamation of Accelerix is proceeding. The acquisition brings with it a
talented workforce, intellectual property and capital assets which are currently deployed in MOSAID's chip development and licensing activities.
The fourth quarter yielded three new patents for MOSAID, whose tally now stands at 64 patents issued, with more than one hundred pending. The Company continues to pursue its strategy to license its
patents to major semiconductor companies with the licensing of Fujitsu Limited representing its first major milestone.
''This has been a challenging year,'' said George Cwynar, President and CEO of MOSAID. ''Our traditional markets of memory design and test have been slow as a result of the depressed DRAM business
and the weak economies of our Asian customers. Nevertheless, an improvement in our tester backlog and some signs of activity in Korea are early indicators of the widely anticipated DRAM market
recovery. We have remained committed to our marketing and development efforts to ensure that we continue to have superior offerings for our traditional customers. Additional substantial marketing and
development efforts have been expended in our fabless semiconductor activities targeting new chips for the networking market. As a result, we have developed several fundamental underpinnings for our future
success in this area, namely the multi-million dollar agreement with Toshiba Corporation to design, manufacture and sell a networking chip, the $6.2 million contribution from the Government of ! Canada's
Technology Partnership's Canada program to support chip R&D, and the $4 million contract with Chrysalis-ITS Inc. to design and supply an encryption chip.''
MOSAID continues to have a strong balance sheet, with $16.7 million in cash and short-term marketable securities, and working capital of $25.6 million.
About MOSAID
MOSAID Technologies Incorporated is an independent semiconductor company with a rich 25-year history of design innovation. MOSAID's Semiconductor Division designs leading-edge standard
memories, application specific memories and complex system-on-a-chip products, and is emerging as a fabless semiconductor company in the networking components sector. The Company's Systems
Division designs, manufactures and markets engineering test systems for memory chips. For more information, visit the Company's web site at www.mosaid.com.
THREE FINANCIAL STATEMENTS FOLLOW
MOSAID TECHNOLOGIES INCORPORATED
(incorporated under the Ontario Business Corporations Act)
CONSOLIDATED BALANCE SHEET
(in thousands of Canadian dollars)
(audited)
As at As at
April 30, May 1,
1999 1998
------------------------------------------------------------
Current Assets
Cash and short term marketable
securities $16,703 $19,625
Accounts receivable 7,021 9,489
Income taxes receivable 1,727 -
Revenues in excess of amounts billed 1,071 4,003
Inventories 4,939 5,512
Prepaid expenses 504 476
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31,965 39,105
Capital Assets 13,861 14,593
Technology Acquisitions 88 1,239
Long-term Investments 1,425 5,814
Future Income Taxes Recoverable 1,648 -
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$48,987 $60,751
------------------------------------------------------------
------------------------------------------------------------
Current Liabilities
Accounts payable and accrued liabilities $4,572 $ 5,150
Mortgage payable 139 128
Income taxes payable - 1,069
Deferred revenue 1,674 630
Future income tax liability - 430
------------------------------------------------------------
6,385 7,407
Mortgage Payable 5,703 5,842
Future Income Tax Liability - 461
------------------------------------------------------------
12,088 13,710
------------------------------------------------------------
Shareholders' Equity
Share capital 21,253 21,220
Retained earnings 15,646 25,821
------------------------------------------------------------
36,899 47,041
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$48,987 $60,751
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MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS
(in thousands of Canadian dollars, except per share amounts)
13 weeks 13 weeks 52 weeks 52 weeks
ended ended ended ended
April 30, May 1, April 30, May 1,
1999 1998 1999 1998
(unaudited)(unaudited)(audited) (audited)
------------------------------------------------------------
Revenues
Operations $7,209 $9,361 $21,938 $40,672
Interest 234 208 838 707
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7,443 9,569 22,776 41,379
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Expenses
Labour and materials 960 2,411 3,784 9,434
Research and
development 3,186 4,187 12,912 13,956
Selling and marketing 2,032 1,888 7,049 7,157
General and
administration 1,408 1,716 5,575 5,627
Bad debt (349) (237) (170) 542
Restructuring (61) - 4,324 -
------------------------------------------------------------
7,176 9,965 33,474 36,716
------------------------------------------------------------
Earnings from operations 267 (396) (10,698) 4,663
Loss on writedown of
long-term investment (3,569) - (3,569) -
Gain on sale of assets - 399 916 3,897
------------------------------------------------------------
(3,302) 3 (13,351) 8,560
Income tax (recovery)
expense - - (3,176) 3,012
Non-controlling interest - - - 337
------------------------------------------------------------
Net earnings (3,302) 3 (10,175) 5,211
Retained earnings,
beginning of period 18,948 25,818 25,821 20,610
------------------------------------------------------------
Retained earnings, end
of period $15,646 $25,821 $15,646 $25,821
------------------------------------------------------------
------------------------------------------------------------
Earnings per share
Basic ($0.46) $0.00 ($1.42) $0.73
Fully diluted ($0.46) $0.00 ($1.42) $0.67
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Weighted average
number of shares
Basic 7,149,685 7,162,049 7,153,440 7,143,500
Fully diluted 8,205,957 8,053,520 8,174,999 8,024,505
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MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENT OF
CHANGES IN FINANCIAL POSITION
(in thousands of Canadian dollars)
(audited)
52 weeks 52 weeks
ended ended
April 30, May 1,
1999 1998
------------------------------------------------------------
Operating
Net (loss) earnings ($10,175) $5,211
Items not affecting cash
Amortization 3,279 3,301
Loss (gain) on long-term investment 2,654 (4,103)
(Gain) loss on disposal of capital
assets (23) 206
Future income taxes recoverable (1,648) -
Non-controlling interest - 337
Future income tax liability (891) (205)
Restructuring expense 3,855 -
------------------------------------------------------------
(2,949) 4,747
Change in non-cash working capital items 783 1,301
------------------------------------------------------------
(2,166) 6,048
------------------------------------------------------------
Investing
Acquisition of capital assets - net (2,463) (10,357)
Acquisition of technology - (547)
Long term investments (982) (4,002)
Proceeds on disposition of capital
assets 66 -
Proceeds of disposition of long term
investments 2,718 3,781
------------------------------------------------------------
(661) (11,125)
------------------------------------------------------------
Financing
Issue of mortgage - 6,000
Repayment of mortgage (128) (30)
Repurchase of shares (120) -
Issue of common shares 153 395
------------------------------------------------------------
(95) 6,365
------------------------------------------------------------
Net cash inflow (outflow) (2,922) 1,288
Cash position, beginning of period 19,625 18,337
------------------------------------------------------------
Cash position, end of period $16,703 $19,625
------------------------------------------------------------
------------------------------------------------------------
Cash comprises the following:
Cash $471 $1,367
Marketable securities 16,232 18,258
------------------------------------------------------------
$16,703 $19,625
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