Dublin, Ireland - April 24, 2001 - Parthus Technologies (LSE:
PRH; Nasdaq: PRTH), today announced its financial results for the quarter
ended March 31 2001.
Highlights for the first quarter ended March 31 2001 (US
Licensing and royalty revenue up 114% to $5.9 million (Q1 2000:
$2.7 million); 14% higher than Q4 2000
Total revenue up 58% to $9.8 million (Q1 2000: $6.2 million)
Royalty revenue - first recorded in Q3 2000 grew to $142,000
Five new license agreements signed
STMicroelectronics Bluetooth licensing agreement
Overall gross margin increased to 64% (Q1 2000: 54%); up three
points from Q4 2000
MobiStream - a full GPRS/2.5G solution - launched and licensed
during the quarter
Basic and diluted losses before exceptional items¹ amounted to
$0.0045 per ordinary share for the quarter or $0.045 per ADS² (Q1 2000:
$0.0059 per ordinary share or $0.059 per ADS)
1 Exceptional items include
non-cash stock compensation expense and amortization costs.
American Depositary Share (ADS) represents 10 ordinary shares.
Commenting today on the results, Brian Long, chief executive officer,
"I am delighted to announce strong results for the first quarter, ahead
of market expectations and continuing the positive growth momentum into
2001. In a tightening semiconductor market the benefits to our customers
of licensing our IP platforms, including lower cost and faster
time-to-market for new products, are even more compelling. We experienced
good licensing activity during the quarter and the calibre of our
announced customer wins, including Hitachi, Sharp, and today
STMicroelectronics, is evidence of the strength of our platform-level IP
licensing business model. As we go forward we are particularly encouraged
by the level of licensing interest in, and commitment to, planned platform
upgrades and new technology developments."
Elaine Coughlan, chief financial officer, commented further that:
"We outperformed on all key metrics including revenue growth, revenue
mix, overall gross margins and ultimately the bottom line loss, despite
the current economic and market turmoil. All key aspects of the business
continue to point towards a return to profitability and most importantly
gross margins continue to improve. While in the current climate we remain
particularly vigilant with regards to costs, budgets and recruitment, we
benefit from the fact that Parthus' IP licensing business gives good
Total revenue for the first quarter ended March 31 2001 amounted to
$9.8 million, representing an increase of 58% year-on-year and a 5%
increase sequentially from $9.3 million in the fourth quarter 2000.
Revenue continues to be well balanced between Europe, the U.S. and Asia,
with each market showing good growth and a pipeline of business
IP licensing and royalty revenue grew strongly, increasing by 114% to
$5.9 million over the first quarter 2000 and a 14% sequential increase
from $5.1 million in the fourth quarter 2000. Royalty revenue grew to
$142,000 for the quarter, continuing to validate the licensing and royalty
Five new license agreements were signed during the quarter. The
company's focus on Tier 1 customers continued with announced agreements
with Sharp, Hitachi and STMicroelectronics. Sharp signed an agreement for
the InfoStream mobile computing platform. Sharp leads the industry in the
deployment and integration of technology for the world's leading PDA
manufacturers. Hitachi signed a co-operation agreement for the development
of system-on-chip products for Bluetooth deployments including a
license for Parthus' BlueStream baseband and protocol stack. Hitachi is
one of the world's leading global electronics companies and the largest
supplier of RF (Radio Frequency) chipsets to the GSM market. Today, the
company announced that STMicroelectronics signed a licensing and royalty
agreement for the development of a single chip Bluetooth radio that
combines very high performance with low power consumption, ideal for next
generation mobile devices such as cellular phones or PDAs.
STMicroelectronics is one of the world's largest suppliers of
semiconductor products to the wireless marketplace.
IP creation revenue of $2.4 million in the first quarter 2001
represented 25% of total revenue. The change in the mix of business to
licensing and royalties has resulted in this planned reduction with
year-on-year IP creation revenue down 30% and down 10% sequentially. Hard
IP revenue amounted to $1.5 million for the quarter, a similar level to
the fourth quarter 2000.
Gross margins grew to 64%, a 10 point improvement year-on-year and a 3
point increase over the fourth quarter 2000 as the proportion of overall
revenue generated from higher margin licensing and royalty business
increased. Licensing and royalty revenue now accounts for 60% of total
revenue, up from 55% for the fourth quarter and up from 44% from the first
Investment in research and development (R&D) grew according to plan
to $6.0 million for the quarter, a 7% increase on the fourth quarter 2000.
Sales and marketing expenses increased marginally to $2.7 million. General
and administration expenses increased to $1.9 million from $1.7 million in
the fourth quarter 2000. This mainly reflects the addition of key
management, the associated costs of the new R&D center in France and
additional office space in Dublin. The foreign exchange impact of the 6%
weakening of the U.S. dollar against the Euro resulted in significantly
higher U.S. dollar reported costs. Headcount in the first quarter rose by
16 people to 403 people. The majority of these recruits were in
engineering and sales.
Amortization of intangibles of $366,000 is related to the patents
acquired through the 2000 acquisitions. Non-cash stock compensation
expenses of $336,000 is a recurring charge arising from the amortization
of the grant of share options to company employees in 1999 and the first
quarter 2000. Both of these items are included in operating expenses.
The net loss for the first quarter ended March 31 2001, excluding
amortization and non-cash stock compensation expense, amounted to $2.4
million, representing a $0.0045 loss per ordinary share or $0.045 per ADS.
Including amortization and non-cash stock compensation expense the net
loss for the first quarter was $3.1 million, representing a $0.0059 loss
per ordinary share or $0.059 per ADS.
Total assets as at March 31 2001 were $178.3 million, including cash
and cash equivalents of $157.0 million. This compares with total assets as
at December 31 2000 of $179.2 million, including cash and cash equivalents
of $159.9 million. The decrease in cash of $2.8 million during the quarter
relates primarily to capital expenditure of $1.6 million, cash outflow
from operations of $502,000 and a non-cash translation loss of $1 million.
Accounts receivable grew to $5.0 million from $3.2 million, reflecting the
overall growth in the underlying business. Debtors days outstanding rose
from 33 to 41 days. Deferred revenue amounted to $6.8 million as at March
31 2001, representing a three-fold increase year-on-year and 20% increase
During the quarter, Parthus solidified its position as a leading
supplier of mobile Internet technology with the launch and licensing of a
major new platform - MobiStreamTM. This is a complete GPRS/2.5G platform
and one of the first all new GSM architectures to be launched in recent
years. It includes several innovations, including significantly reduced
power consumption. 2.5G is not only a key stepping stone to full 3G, but
is also a critical component of next generation 3G phones. These phones
will require dual mode capability delivering the ability to roam between
3G (urban) and 2.5G (rural) broadband wireless environments.
Parthus also strengthened and deepened its partnership program,
concluding some significant technical alliances and agreements including:
Condat - the German-based supplier of G23 GPRS technology is
working with Parthus on the MobiStream platform. Currently MobiStream
utilizes Condat's GTI (Generic Target Interface) enabling the G23 protocol
SyncML - Parthus recently announced its participation in the
SyncML initiative with Ericsson, IBM, Lotus, Motorola, Matsushita, Nokia,
Palm, Psion and Starfish Software. SyncML is a common protocol designed to
allow all mobile devices and applications synchronize data across any
Java Community Process - Parthus is working with Ericsson,
Eyeshake, IBM, Mitsubishi, Motorola, Nokia, RIM, Sun Microsystems, Symbian
and Zucotto to define a Java™ API for a range of mobile Internet
platforms, including Bluetooth, to help ensure Java
technology-based devices support the latest protocols for wireless
The Bluetooth SiG held a two-day meeting at Parthus'
headquarters in Dublin where significant progress was made on a key
industry issue of device interoperability.
Parthus' participation in industry groups and working with lead
customers is an important part of the company's IP strategy. It enables
semiconductor companies to reduce the time to deploy interoperable
platforms for next generation products.
Commenting today, Kevin Fielding, president, said:
"Parthus' breadth of core engineering skills, encompassing radio,
baseband and software expertise, has enabled us to develop a unique
portfolio of platform-level intellectual property targeting mobile
Internet devices. As the major semiconductor companies focus significant
resources on delivering next generation mobile Internet products, our
portfolio of platforms delivers competitive advantages. The Parthus model
of delivering complete applications to our customers significantly reduces
their up-front R&D costs, virtually eliminates development risk and
greatly speeds the deployment of these feature-rich products. The inherent
advantage of our business model has attracted a range of blue-chip
technology companies, including five of the top 10 semiconductor companies
world-wide, and this compelling 'in-sourcing' strategy gives us confidence
for the long-term."
For further information About
Forward Looking Statement
This news release may contain "forward-looking
statements" within the meaning of section 27a of the securities act of
1933, as amended, and section 21e of the securities exchange act of 1934,
as amended. Any "forward-looking statements" are subject to certain risks
and uncertainties that could cause actual results to differ materially
from those stated. Any statements that are not statements of historical
fact (including, without limitation, statements to the effect that the
company or its management "believes", "expects", "anticipates", "plans"
and similar expressions) should be considered forward-looking statements.
Important factors that could cause actual results to differ from those
indicated by such forward-looking statements include uncertainties
relating to the acceptance of semiconductor intellectual property
offering, expansion of our business, quarterly variations in results, and
other uncertainties that are discussed in the "risk factors" section of
our follow-on offering prospectus dated November 8, 2000 which is on file
with the SEC and the registrar of companies in the republic of Ireland.