Fin, Re: SANTA CLARA, Calif.--Transmeta, which makes power-saving chips for notebook computers, said Monday that it expects third-quarter revenues of $5 million as the slowdown in its customer spending dragged on through the summer.
>>Is that revenue or net earnings? If it's total revenue, TMTA won't be around much longer, or it will be bought out.
Revenue. If you look at their Q2 statement below, and factor in their new statement that things are going worse than when they issued it, has to be revenue. So, another Rise Technology?
Transmeta expects revenue for the third quarter of 2001 to be flat to down 15% compared to second quarter revenue of $10.5 million.
Transmeta Corporation Meets Revised Guidance For Second Quarter 2001
For Immediate Release
SANTA CLARA, California (July 19, 2001) - Transmeta Corporation (Nasdaq: TMTA) today reported net revenue of $10.5 million for its second quarter of fiscal 2001, ended June 29, 2001, meeting the company's revised guidance set on June 20, 2001.
Net revenue for the second quarter of fiscal 2001 was $10.5 million, compared with $354,000 for the same period last year. Pro forma net loss was $17.8 million, or $0.14 per share, for the second quarter of fiscal 2001. This compares to pro forma net loss of $19.1 million, or $0.59 per share, for the second quarter of fiscal 2000. Pro forma net loss excludes the effects of amortization of intangible assets and deferred stock compensation, purchased in-process technology, and charges to write-off excess inventory. Details on the purchased in-process technology and the write-off of excess inventory, totaling $41.7 million are discussed below.
During the second quarter of fiscal 2001, Transmeta acquired certain in-process technology from AMD for shares of the company's unregistered common stock with a fair value of $13.6 million. The company expensed the cost of this technology as a one-time charge of $13.6 million, or approximately $0.11 per share, as a write off of in-process research and development.
In addition, the company recorded a $28.1 million charge to cost of sales primarily comprised of excess inventory as a result of a significant decrease in actual and forecasted demand for its products. Excluding this charge, gross margins remained consistent with the prior quarter at 44%.
Actual net loss for the second quarter of fiscal 2001 was $69.3 million or $0.54 per share, compared with actual net loss of $23.8 million or $0.73 per share for the same period last year.
Net revenue for the first six months of fiscal 2001 was $29.1 million, compared with $358,000 for the first six months of fiscal 2000. Pro forma net loss was $31.0 million or $0.24 per share for the first six months of fiscal 2001, compared with pro forma net loss of $35.8 million or $1.16 per share for the first six months of fiscal 2000.
Actual net loss for the first six months of fiscal 2001 was $92.0 million or $0.72 per share, compared with actual net loss of $43.8 million or $1.42 per share for the first six months of fiscal 2000.
"Although Transmeta has just completed a difficult quarter, we remain committed to our long term plan of Crusoe adoption into the rapidly evolving mobile and wireless platforms," stated Transmeta President and CEO, Mark K. Allen. "With the adoption of Crusoe by Toshiba and Sharp this quarter, we are pleased to be able to count all major Japanese notebook makers as our customers. We attribute this success to the benefits of low power and long battery life that our product brings to the marketplace."
The Second Quarter in Review
New Product Announcements
In June, Transmeta introduced its new TM5800 and TM5500 Crusoe microprocessors. These new microprocessors are manufactured with advanced 0.13 micron process technology and feature up to 50 percent higher performance and 20 percent lower power consumption than the company's previous generation of microprocessors. These new Crusoe products will be manufactured for Transmeta by TSMC, which is the world's largest dedicated semiconductor foundry and provides the industry's most advanced 0.13 micron process technology.
In early May, Toshiba Corporation announced its first Crusoe based notebook computer. Toshiba announced the Libretto L1/060TNMM with a 600 MHz Crusoe processor, a 10" wide SXGA TFT screen and a 10 gigabyte hard drive. This new notebook measures 10.5" wide by 6.6" deep and is 0.81" thick. The Libretto delivers life up to 4.5 hours with a standard battery and up to 14 hours with an optional battery. The notebook runs Microsoft Windows Me, has two USB connectors and Bluetooth capability. The Libretto has been available for sale in Japan since May 18.
In mid-May, Sharp Electronics Corporation also announced a new notebook, the Mebius PC-SX1-H1, which incorporates a 600 MHz Crusoe TM5600 processor and weighs only 3.2 lbs. The new Sharp notebook offers up to five hours of battery life with a standard battery, and up to 10 hours with an optional battery. This notebook has three USB ports, a SmartMedia card slot, SD memory card slot, IEEE 1394 interface and built-in modem, network and standard DB-15 video connectors. These features make the Mebius PC-SX1-H1 the first notebook to provide connections with handheld devices and digital cameras. This system incorporates Microsoft Windows Me, a 20 gigabyte hard drive, 128 megabytes of memory and a 10.4" TFT screen.
Honors and Awards
In June, Fujitsu won Best of Show Award at TECHXNY (formerly PC Expo) for the Crusoe-based Fujitsu FMV-Biblo Loox T ultralight notebook. Two of the other three other finalists for this CNET sponsored award were Crusoe based machines. Along with the winning Fujitsu notebook, CNET also selected the Crusoe-based NEC Versa DayLite and the Crusoe-based Cassiopeia Fiva MPC-206VL as finalists in the ultralight notebook category.
Transmeta was also recognized this quarter by the U.S Environmental Protection Agency for our energy-efficient microprocessor. The EPA noted that Transmeta's innovative approach to microprocessor design is enabling many Energy Star Partners to meet program energy-efficient specifications, which is an asset to both consumers and the environment. Consumers are able to recognize energy saving devices through the wide spread use of the Energy Star label.
Significant Transactions
In April, Transmeta announced the licensing of certain intellectual property from Advanced Micro Devices, Inc., including AMD's HyperTransport interconnect technology. The HyperTransport interconnect enables the chips inside of PCs, networking and communications devices to communicate with each other up to 48 times faster than with existing technologies.
In May, Transmeta and Seiko Epson agreed to cooperate in developing semiconductor technology related to low power Crusoe microprocessors for mobile equipment. Seiko Epson and Transmeta will collaborate and share information about their respective "energy-saving" technologies in an effort to develop higher-level peripheral chipsets and other devices for Crusoe microprocessors. In conjunction with this cooperative arrangement, Transmeta acquired from Seiko Epson certain patents and patent rights relating to microprocessor technology. Together, Transmeta and Seiko Epson will explore possibilities for further cooperation and technical exchange in other technology areas focusing on the development of semiconductor products for mobile information equipment and development of a partnership or alliance in the Internet appliance field.
Current Financial Outlook for Third Quarter 2001
The following outlook statements are based upon current expectations. These statements are forward looking, and our actual results could differ materially.
Transmeta expects revenue for the third quarter of 2001 to be flat to down 15% compared to second quarter revenue of $10.5 million.
Transmeta expects gross margin percentage for the third quarter to be approximately 44%. Our gross margin is influenced by several factors, including the yields achieved in the ramp of our 0.13 micron product, average selling prices, product mix and foundry pricing.
Transmeta expects that the total dollar spending in Research and Development and Selling, General and Administrative will be approximately flat to the second quarter spending levels of $26.1 million.
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