Transmeta Corporation (NASDAQ: TMTA) today announced financial results
for the second quarter of fiscal 2007, ended June 30, 2007.
Revenue for the second quarter of 2007 was $171,000, which included
$146,000 of service revenue and $25,000 of end-of-life product revenue.
This compared with revenue of $2.1 million in the first quarter of 2007,
which included $2.0 million of service revenue and $140,000 of
end-of-life product revenue. Net loss for the second quarter of 2007 was
$11.5 million, or a loss of $0.06 per share, compared with a net loss of
$18.7 million, or a loss of $0.09 per share, in the first quarter of
2007. The second quarter of 2007 results included restructuring charges
totaling $1.9 million, non-cash charges of $1.7 million for amortization
of intangible assets and $693,000 for stock-based compensation expenses.
Gross margin for the second quarter of 2007 was 53 percent, compared
with a gross margin of 26 percent in the first quarter of 2007. The
sequential increase in gross margin is primarily due to two items: the
first quarter 2007 included a one-time $364,000 impairment charge, and
the second quarter revenue included higher margin product revenue from
inventories that were previously written-off and fully reserved.
The Company’s cash, cash equivalents and short
term investments at June 30, 2007 totaled $15.3 million. The Company
continues to be debt free. Cash at June 30, 2007 does not include the
approximate $7.0 million in net proceeds that Transmeta received from AMD’s
investment in the Company in July 2007.
"In the first half of 2007 we made significant
progress to reduce our spending by streamlining our operations to focus
on developing and licensing our technologies and intellectual property,”
said Les Crudele, president and CEO. "In
addition, we continue to focus our efforts on strengthening our balance
sheet, which was recently improved by the strategic investment by AMD.
We are pleased with AMD’s investment in the
future of Transmeta, and we will continue to explore additional
opportunities to finance our operations.
"The progress we have made enables us to now
bring even greater focus on developing our technology, building our
licensing business and expanding our customer base. We continue to have
a number of LongRun2 licensing opportunities in various stages of
discussion and are pleased that our first royalty licensee, NEC
Electronics, expects to move to volume production of its M2 mobile phone
chip in the fourth quarter of this year,” said
Mr. Crudele.
2007 Annual Meeting Results
Transmeta Corporation held its Annual Meeting of Stockholders on Monday,
July 31, 2007 as scheduled. A quorum of stockholders was present in
person or by proxy. During the meeting, the motion to elect Messrs.
Barnes and Goldman as members in Class I of the Board of Directors of
the Company was approved. In addition, the proposal submitted to the
stockholders, allowing the Company's Board of Directors to effectuate a
reverse stock split at any time prior to July 31, 2008 was approved.
There were also sufficient votes to ratify the appointment of Burr,
Pilger & Mayer as the Company's independent registered public accounting
firm for the fiscal year ending December 31, 2007. A complete tally of
the votes on each of these measures will be published in the Company’s
next regular report on Form 10-Q for the quarterly period ending
September 30, 2007, which is expected to be filed with the Securities
and Exchange Commission in November 2007.
Conference Call
As previously announced, 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) 981-4910. 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 August 12, 2007. The phone number to access the
recording is (888) 203-1112, and the passcode is 6927401. For callers
outside the U.S., please dial (719) 457-0820, with the same passcode.
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 difficulties in implementing
our restructuring plan and modifying our business model, the potential
loss of key technical and business personnel, our ability to satisfy the
continued listing requirements of the
Nasdaq Stock Market, 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, the risk that we
have difficulties entering into strategic collaborations or raising
financing on satisfactory terms, 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-Q, 10-K 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 Condensed Consolidated Balance Sheets (in thousands)
June 30, 2007 December 31, 2006 (Unaudited) (1) ASSETS
Current assets:
Cash and cash equivalents
$
4,267
$
11,595
Short-term investments
10,984
29,955
Accounts receivable, net
224
310
Inventories
-
-
Prepaid and other current assets
1,935
2,729
Total current assets
17,410
44,589
Property, plant and equipment, net
487
758
Patents and patent rights, net
5,811
9,234
Other assets
2,015
2,148
TOTAL ASSETS
$
25,723
$
56,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$
1,406
$
1,467
Accrued compensation and related compensation liabilities
1,183
3,245
Deferred income, net
-
15
Other accrued liabilities
2,464
3,015
Advances from customers
-
1,320
Current portion of accrued restructuring costs
3,771
1,996
Current portion of long-term payables
533
667
Total current liabilities
9,357
11,725
Long-term accrued restructuring costs, net of current portion
-
988
Long-term payables, net of current portion
1,200
1,333
Total liabilities
10,557
14,046
Stockholders' equity:
Common stock
726,823
724,229
Treasury stock
(2,439
)
(2,439
)
Accumulated other comprehensive gain (loss)
7
(66
)
Accumulated deficit
(709,225
)
(679,041
)
Total stockholders' equity
15,166
42,683
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
25,723
$
56,729
(1) Derived from the Company's audited statements as of December 31,
2006, included in the Company's Form 10-K filed with the Securities
and Exchange Commission.
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)
Three Months Ended Six Months Ended June 30, 2007 March 31, 2007 June 30, 2006 June 30, 2007 June 30, 2006
Revenue:
Product
$
25
$
142
$
361
$
167
$
950
License
-
-
-
-
-
Service
146
1,997
8,970
2,143
27,890
Total revenue
171
2,139
9,331
2,310
28,840
Cost of revenue
Product (1)
-
80
(62
)
80
100
License
-
-
-
-
-
Service (1)
80
1,138
5,795
1,218
16,676
Impairment charge on inventories
-
364
-
364
-
Total cost of revenue
80
1,582
5,733
1,662
16,776
Gross profit
91
557
3,598
648
12,064
Operating expenses:
Research and development (1)
2,537
4,936
4,769
7,473
8,021
Selling, general and administrative (1)
5,644
6,106
6,043
11,750
11,587
Restructuring charges
1,920
6,665
96
8,585
170
Amortization of intangible assets
1,711
1,712
1,712
3,423
3,423
Impairment charge on long-lived and other assets
8
294
-
302
-
Total operating expenses
11,820
19,713
12,620
31,533
23,201
Operating loss
(11,729
)
(19,156
)
(9,022
)
(30,885
)
(11,137
)
Interest income and other, net
365
490
590
855
1,093
Interest expense
(86
)
(68
)
(37
)
(154
)
(72
)
Net loss from continuing operations
$
(11,450
)
$
(18,734
)
$
(8,469
)
(30,184
)
(10,116
)
Net loss per share--basic and fully diluted
$
(0.06
)
$
(0.09
)
$
(0.04
)
$
(0.15
)
$
(0.05
)
Weighted average shares
outstanding - basic
199,935
199,220
195,725
199,580
194,553
Weighted average shares
outstanding - fully diluted
199,935
199,220
195,725
199,580
194,553
(1) Includes charges for stock-based compensation:
Three Months Ended Six Months Ended June 30, 2007 March 31, 2007 June 30, 2006 June 30, 2007 June 30, 2006
Cost of product revenue
$
-
$
-
$
5
$
-
$
9
Cost of service revenue
14
3
763
17
1,364
Research and Development
364
(82
)
403
282
661
Selling, general and administrative
315
382
739
697
1,193
Total stock-based compensation
$
693
$
303
$
1,910
$
996
$
3,227
