MIPS Technologies' CEO Discusses F4Q12 Results - Earnings Call Transcript

MIPS Technologies, Inc. (MIPS)

F4Q12 Earnings Call

August 15, 2012 4:45 PM ET

Executives

Jen Bernier – Director, Communications

Sandeep Vij – President and CEO

Bill Slater – VP, CFO and Treasurer

Analysts

Gary Mobley – Benchmark

Vikas Tandon – Bastogne Capital

Charlie Anderson – Dougherty & Company

Anthony Stoss – Craig-Hallum

Presentation

Operator

Thank you for standing by. All lines in today’s call will be in a listen-only mode until the question-and-answer session. (Operator Instructions) Today’s call is being recorded. If you have any objections, you may disconnect at this time.

And I’d now like to introduce Communications Director, Jen Bernier. You may begin.

Jen Bernier

Thank you. Welcome to the MIPS Technologies fourth quarter and fiscal 2012 earnings conference call. My name is Jen Bernier and I’m the Communications Director for MIPS. Leading the call today are Sandeep Vij, Chief Executive Officer; and Bill Slater, Chief Financial Officer. After they discuss the business highlights and detailed financial results, we will open the call for Q&A. If you do not have a copy of the earnings release, it is available on our website at www.mips.com.

Before we begin, I’d like to remind you that this conference call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including projections of certain operating results for the first quarter of fiscal 2013. Listeners are cautioned not to place undue reliance on this forward-looking information. Many important factors could cause the results to differ materially from those contained in such projections or forward-looking statements. We refer you to the Risk Factors section of the documents that we file from time-to-time with the Securities and Exchange Commission for factors that would cause the results to differ materially from our forward-looking statements.

In our financial discussions today, we will be referring to fourth quarter and fiscal 2012 GAAP and non-GAAP results. MIPS management believes that non-GAAP information is useful because it can enhance the understanding of the company’s ongoing economic performance. MIPS Technologies uses non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. The non-GAAP results discussed today exclude stock compensation and non-recurring charges incurred during the period. Please refer to the earnings press release or the Investor Relations page of our website for a reconciliation of GAAP to non-GAAP.

As a reminder, the playback number for this conference call is 203-369-1251 and the access code is MIPS. The recorded call will be available for 30 days after this call. An audio replay will also be posted on the Investor Relations page of our website at www.mips.com.

With that said, I will now turn the call over to Sandeep Vij.

Sandeep Vij

Thank you, Jen. Hello, everyone. Thank you for joining us today. We’re pleased to share that Q4 was a record quarter for MIPS. We signed one of the largest licensing agreements in MIPS Technologies’ history. This license agreement with Broadcom, MIPS’ largest customer, demonstrates the value of our patent portfolio. This license is the first tangible result of our strategic efforts around patent monetization and we continue to consider all of our options in this area. This effort to monetize our patents is a natural extension of our business: licensing processors, architectures and now patents.

On the processor front, in the fourth quarter, we publicly announced our new Aptiv generation of products. MIPS’ sales, marketing and technical experts traveled throughout the world to present the new cores to customers and prospects and have developed a pipeline of identified opportunities. In the current quarter, we will start to see the general availability and revenue from the higher end cores. Now, I would like to provide some updates on activity in our target market segments.

In mobile, we are pleased to have recently announced with our licensee, Ingenic, together with Karbonn, a well-known maker of mobile devices in India, the second Android 4.1 Jelly Bean tablet in the world, following only the launch of Google’s own Nexus 7 tablet. The Karbonn tablet is the lowest cost Android 4.1 tablet making this achievement a great example of the cost and power efficiency of MIPS as well as yet another example of just how fast MIPS and our customers can move when it comes to being one of the first in the market with devices based on new versions of Android. In this case, second only to Google itself.

We saw other new MIPS-based tablets with the Ingenic chipset enter the market in the quarter including the T7 and T7+ tablets from Philips. These were the first non-ARM tablets to be certified by Google. And the new tablet from China-based manufacturer, Ramos, is expected to be available soon in markets such as India, Latin America and Europe. The Ramos tablets leverage a MIPS-based chip from Actions Semiconductor, a public company in China.

We had one new mobile license this quarter which was a new license with Nationz Technologies which was previously part of telecommunications powerhouse ZTE. As we announced, Nationz is using MIPS for mobile payment products used in cellular phones. More than one million of its MIPS-based devices have already shipped.

We continue to make progress in our efforts with Google this quarter. Google released an official native development kit or NDK for Android 4.0 with full MIPS support. Google also announced a platform developer’s kit or PDK that provides early access to Android releases for quicker porting. MIPS was invited by Google to participate in this program giving us access to the new Jelly Bean release ahead of open source.

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