Annualized Cost Savings Expected to Approximate $6.0 Million
SUNNYVALE, Calif.--(BUSINESS WIRE)--Dec. 10, 2008--MoSys, Inc., (NASDAQ: MOSY), a leading provider of high-density
system-on-chip (SoC) memory, today announced that it has initiated a
plan to exit its analog/mixed-signal product lines, which include the
mixed-signal chip designs acquired from Atmel Corporation in 2007. The
plan reflects the Company's initiative to exit unprofitable and non-core
product lines, reduce losses from operations and focus on the
development and licensing of its memory technologies. The Company
expects to realize annualized cost savings of approximately $6.0
million. The board of directors has authorized management to pursue the
sale of all or part of the assets associated with these product lines
and this process is ongoing.
Additionally, as a result of this action, the Company will eliminate
approximately 90 positions associated with the analog/mixed-signal
design teams located in China and Romania. The Company expects to
complete the headcount reductions and related activities by the end of
the first quarter of 2009.
"Since my arrival at MoSys late in 2007, we have been conducting an
in-depth evaluation of our technology, products and the markets we serve
in order to accelerate the growth and expansion of our business. As a
result of this evaluation, we have determined that the time and
investment required to further support the analog/mixed-signal product
lines is not in the best interest of the Company or its stockholders,
especially when considering the current global economic environment,"
stated Len Perham, MoSys' President and Chief Executive Officer. "In
particular, the continued deterioration of the economy has had a severe
effect on consumer spending. This has caused the Blu-Ray market to
decline considerably against projections and greatly reduced our
opportunities to penetrate the analog intellectual property market.
Today's announcement and the anticipated reduction in operating expenses
will better position us to pursue additional growth opportunities in our
core embedded memory business and to drive improved financial
performance. We remain focused on leveraging our memory technology for
strategic product and technology development to address the design
challenges of our customers and foundry partners, as well as executing
on our sales initiatives to secure additional license agreements and
build our royalty streams."
The Company expects to record restructuring-related charges in the
fourth quarter of 2008 of up to $3.3 million. It expects to incur costs
of up to $1.5 million for severance benefits, lease obligations and
other related expenses that will be paid in 2009. The Company believes
non-cash asset impairment charges related to the exit will approximate
This press release may contain forward-looking statements about the
Company, including, without limitation, benefits and performance
expected from use of the Company's 1T-SRAM, 1T-FLASH and
analog/mixed-signal technologies, the Company's execution and results,
improving operational efficiencies, growth of the business and future
business prospects, the expected restructuring charges and costs and
cost savings, including the timing of such savings, related to the
product line exit plan.
Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors include, but
are not limited to, the risks, uncertainties and assumptions including
the timing and execution of plans and programs subject to local labor
law requirements, including consultation with appropriate works
councils; assumptions related to potential severance costs, as well as
other risks identified in the Company's most recent reports on forms
10-Q and 10-K filed with the Securities and Exchange Commission, as well
as other reports that MoSys files from time to time with the Securities
and Exchange Commission.
About MoSys, Inc.
Founded in 1991, MoSys (NASDAQ: MOSY), develops, markets and licenses
innovative embedded memory intellectual property (IP) technologies for
advanced SoCs used in a variety of home entertainment, mobile consumer,
networking and storage applications. MoSys' patented 1T-SRAM and
1T-FLASH technologies offer a combination of high density, low power
consumption, high speed and low cost unmatched by other available memory
technologies. MoSys' embedded memory IP has been included in more than
160 million devices demonstrating silicon-proven manufacturability in a
wide range of processes and applications. MoSys is headquartered at 755
N. Mathilda Avenue, Sunnyvale, California 94085. More information is
available on MoSys' website at http://www.mosys.com.
MoSys and 1T-SRAM are registered trademarks of MoSys, Inc.
1T-FLASH(TM) is a trademark of MoSys, Inc
Jim Sullivan, CFO, 408-731-1800
Shelton Group, Investor Relations
Beverly Twing, Sr. Acct. Manager, 972-239-5119 ext. 126
Source: MoSys, Inc.