Transmeta Reports First Quarter 2008 Results
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Transmeta Corporation (NASDAQ:TMTA) today announced financial results
for the first quarter ended March 31, 2008.
Revenue for the first quarter of 2008 was $661,000 compared to $126,000
for the fourth quarter of 2007. First quarter revenue consisted of
$240,000 of license revenue, $168,000 of services revenue, and $253,000
of end-of-life product revenue. For the fourth quarter of 2007, license
revenue was $102,000 and service revenue was $24,000.
Total operating expenses for the first quarter of 2008 were $3.1
million, compared with $20.9 million in the fourth quarter of 2007.
First quarter operating expenses included $5.9 million of income from
the settlement and licensing agreement with Intel, restructuring charges
of $342,000, non-cash charges of $1.5 million for amortization of
intangible assets, and non-cash stock compensation charges of $1.5
million.
In the first quarter, the Company recorded interest income of $2.6
million, including $1.7 million of imputed interest income from the
settlement and licensing agreement with Intel. Net loss was $41,000, or
$0.00 per share, compared with a net loss of $23.9 million, or a loss of
$1.99 per share, in the fourth quarter of 2007.
The Company’s cash, cash equivalents and short
term investments at March 31, 2008 totaled $158.8 million. Transmeta
continues to be debt free.
Transmeta expects to be profitable on a GAAP net income basis in the
second quarter of 2008, and for fiscal year 2008. Operating expenses in
the second quarter of 2008, excluding non-cash charges, are expected to
be in the range of $4.5 million to $5.0 million. In the second quarter,
the Company expects to recognize $5.9 million of operating income, and
$1.1 million of imputed interest income, from the settlement and
licensing agreement with Intel.
"We initiated a process several months ago to
actively explore a full range of strategic alternatives. With the
assistance of our independent advisors, including Piper Jaffray, we have
been engaged in discussions with other companies about potential ways to
increase value for all of our shareholders, and we are committed to
pursuing that process,” stated Les Crudele,
president and CEO. "At the same time, we are
making progress on developing IP components and tools to help facilitate
the adoption and implementation of LongRun2 technologies. In addition,
we have seen renewed interest in our patent portfolio since the Intel
settlement and continue to pursue opportunities to monetize those assets.” Conference Call
Transmeta’s management will host a conference
call today at 5:00 p.m. Eastern time / 2:00 p.m. Pacific time to discuss
the operating performance for the quarter. The conference call will be
available live over the Internet at the investor relations section of
Transmeta's website at www.transmeta.com.
To listen to the conference call, please dial (913) 312-0822. A
recording of the conference call will be available for one week,
starting one hour after the completion of the call, until 11:59 p.m.
Pacific time on May 14, 2008. The phone number to access the recording
is (719) 457-0820, and the passcode is 8889410.
About Transmeta Corporation
Transmeta Corporation develops and licenses innovative computing,
microprocessor and semiconductor technologies and related intellectual
property. Founded in 1995, we first became known for designing,
developing and selling our highly efficient x86-compatible
software-based microprocessors, which deliver a balance of low power
consumption, high performance, low cost and small size suited for
diverse computing platforms. We are presently focused on developing and
licensing our advanced power management technologies for controlling
leakage and increasing power efficiency in semiconductor and computing
devices, and in licensing our computing and microprocessor technologies
to other companies. To learn more about Transmeta, visit www.transmeta.com.
Safe Harbor Statement
This release contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such statements speak only as of the date of this release, and
we will not necessarily provide updates of our projections or other
forward-looking statements. Investors are cautioned that such
forward-looking statements are subject to many risks and uncertainties,
and may differ materially or adversely from our actual results or future
events. Important risk factors that could have material or adverse
effects on our results include practical operational challenges
following our recent restructuring and change of business model, the
potential loss of key technical and business personnel, uncertainty
about the adoption and market acceptance of our technology offerings by
current and potential customers and licensees, our inability to predict
or ensure that third parties will license our technologies or use our
technologies to generate royalties, difficulties in developing our
technologies in a timely and cost effective manner, patents and other
intellectual property rights, and other risk factors. We urge investors
to review our filings with the Securities and Exchange Commission,
including our most recent reports on Forms 10-K, 10-Q and 8-K, which
describe these and other important risk factors that could have an
adverse effect on our results. We undertake no obligation to revise or
update publicly any forward-looking statement for any reason.
Transmeta and LongRun2 are trademarks of Transmeta Corporation. All
other product or service names mentioned herein are the trademarks of
their respective owners.
Transmeta Corporation Consolidated Balance Sheets (In thousands) (Unaudited)
March 31, 2008 December 31, 2007 March 31, 2007
ASSETS
Current assets:
Cash and cash equivalents
$
138,922
$
15,607
$
6,863
Short-term investments
19,921
2,968
18,981
Accounts receivable
126
163
454
Other receivables, current
19,138
149,400
-
Prepaid expenses and other current assets
2,567
2,476
2,383
Total current assets
180,674
170,614
28,681
Other receivables, long-term
67,195
85,200
-
Property and equipment, net
228
284
639
Patents and patent rights, net
909
2,388
7,523
Other assets
600
800
2,147
TOTAL ASSETS
$
249,606
$
259,286
$
38,990
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$
765
$
341
$
2,523
Accrued compensation
13,128
15,351
1,193
Income taxes payable
23
3,306
40
Other accrued liabilities
1,391
1,028
2,248
Current portion of deferred income from settlement and licensing
23,460
23,460
-
Current portion of accrued restructuring costs
980
1,592
4,667
Current portion of long-term payable
733
667
533
Total current liabilities
40,480
45,745
11,204
Long-term deferred income from settlement and licensing, net of
current portion
205,275
211,140
-
Long-term accrued restructuring costs, net of current portion
-
-
651
Long-term payable, net of current portion
600
800
1,339
Total liabilities
246,355
257,685
13,194
Stockholders' equity:
Convertible preferred stock
6,966
6,966
-
Common stock
740,957
739,268
726,003
Treasury stock
(2,439
)
(2,439
)
(2,439
)
Accumulated other comprehensive gain (loss)
31
29
7
Accumulated deficit
(742,264
)
(742,223
)
(697,775
)
Total stockholders' equity
3,251
1,601
25,796
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
249,606
$
259,286
$
38,990
Transmeta Corporation Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited)
Three Months Ended March 31, 2008 December 31, 2007 March 31, 2007
Revenue:
Product
$
253
$
-
$
142
License
240
102
-
Service
168
24
1,997
Total revenue
661
126
2,139
Cost of revenue
Product
3
-
80
Service (1)
163
11
1,138
Impairment charge on inventories
-
-
364
Total cost of revenue
166
11
1,582
Gross profit (loss)
495
115
557
Gross margin %
74.9
%
91.3
%
26.0
%
Operating expenses:
Income from settlement and licensing
(5,865
)
-
-
Research and development (1)
2,850
1,981
4,936
Selling, general and administrative (1)
4,342
17,236
6,106
Restructuring charges, net
342
1
6,723
Amortization of patents and patent rights
1,480
1,712
1,712
Impairment charge on long-lived and other assets
-
-
294
Total operating expenses
3,149
20,930
19,771
Operating loss
(2,654
)
(20,815
)
(19,214
)
Interest income and other, net
2,615
138
509
Interest (expense)
(2
)
53
(10
)
Income (loss) before income taxes
(41
)
(20,624
)
(18,715
)
Provision for income taxes
-
3,301
19
Net income (loss)
$
(41
)
$
(23,925
)
$
(18,734
)
Net income (loss) per share - basic
$
(0.00
)
$
(1.99
)
$
(1.88
)
Net income (loss) per share - fully diluted
$
(0.00
)
$
(1.99
)
$
(1.88
)
Weighted average shares outstanding - basic
12,113
12,021
9,961
Weighted average shares outstanding - diluted
12,113
12,021
9,961
(1) Includes stock-based compensation:
Cost of service revenue
$
82
$
1
$
3
Research and development
847
328
(82
)
Selling, general and administrative
$
632
$
343
$
382
