Transmeta Reports Record Quarterly Revenue and Positive Earnings; Achieves Positive Cash Flow from Operations of $4.8 Million; Raises Cash Guidance to $47 Million at 2005 Fiscal Year End
Business Wire - August 09, 2005 16:30
SANTA CLARA, Calif., Aug 09, 2005 (BUSINESS WIRE) -- Transmeta Corporation (Nasdaq:TMTA), the leader in efficient computing technologies, today announced record financial results for the second quarter ended June 30, 2005.
Highlights for the Second Quarter 2005
-- Net revenue of $24.7 million
-- Net income improved significantly to $6.8 million, or $0.04 per share
-- Positive cash flow from operations of $4.8 million
-- Cash balance of $46.6 million at June 30, 2005
-- Deferred revenue of $15.5 million
-- Engineering services projects with Sony and Microsoft continue to progress well
-- Semiconductor industry veterans Lester M. Crudele and Robert V. Dickinson joined the Transmeta Board of Directors
Business Update
"Our performance during the second quarter clearly reflects the positive steps we have taken and the continued execution of our transformation plan," commented Arthur L. Swift, president and CEO. "The strategic decisions we took earlier this year regarding the evolution of our business model, and the means of bringing our technology to market, are already delivering measurable positive results. Although we are still in a transitional period, the progress we are making with our partners gives us confidence in our ability to win and successfully execute additional projects for new customers and strategic partners."
Net revenue for the second quarter of 2005 was $24.7 million, compared to $6.9 million in the first quarter of 2005, and $6.0 million in the second quarter of 2004. Revenue in the second quarter comprised $10.0 million of license revenue, $7.6 million of service revenue, and $7.1 million of product revenue. This compares with no license revenue, $0.3 million of service revenue, and $5.7 million of product revenue in the second quarter of 2004. The increased product revenue on a sequential and year-over-year basis reflects in part the effects of end-of-life (EOL) product sales. In addition, the Company reported deferred revenue of $15.5 million as of June 30, 2005, an increase of $1.0 million compared to the first quarter of 2005.
The Company reported gross margin of 99.8% for the license business, 45.6% for the service business, and 44.1% for the product business. On a consolidated basis, the Company's gross margin was 67.1% for the second quarter of 2005, compared to 28.3% for the first quarter of 2005, and a negative 54.4% for the second quarter of 2004.
The Company's net income for the second quarter of 2005 improved significantly to $6.8 million, or $0.04 per share, compared with a net loss of $21.1 million, or a loss of $0.11 per share, in the first quarter of 2005, and a net loss of $26.8 million, or a loss of $0.15 per share, in the second quarter of 2004.
The Company had positive cash flow from operations of $4.8 million in the second quarter of 2005, as compared to negative cash flow from operations of $13.3 million and $20.4 million in the first quarter of 2005 and the second quarter of 2004, respectively. The Company's cash, cash equivalents and short term investments at June 30, 2005 totaled $46.6 million.
Guidance
"We continue to be encouraged by the positive financial and operational progress of our business," commented Mark R. Kent, chief financial officer. "Having significantly surpassed our first objective of reducing our cash burn, we will now look to build upon the positive achievements of Q2 and expect to be at break even or better cash flow from operations for the second half of 2005. As a result, we are raising our cash projections and now expect that our cash position will be at least $47 million at December 31, 2005, up from our previous guidance of $35 million."
