LONDON ARC International plc (St Albans, England) increased revenues by 18 percent to £17 million for the year ended December 2008, with revenues from royalties steaming ahead by 61 percent to £7.9 million compared with the previous year. Licensing revenues, however, were flat at £7.3 million as the company cautioned that uncertainty in the semiconductor industry might affect the timing of new licence revenues and royalty volumes this year.
Operating losses widened to £9.3 million compared with £5.3 million a year ago.
ARC said two contracts were delayed to the first half of 2009 as customers, hurt by a weak economy, reduced spending and postponed development projects.
The net loss for the year was £7.3 million including restructuring charges of £2.3 million and expenses of £1.6 million associated with the acquisition of Sonic Focus. The company said the major restructuring has been
"substantially"completed, and this is expected to generate annual savings of 25 percent of costs.
Commenting on the results, Carl Schlachte, president and chief executive officer, said: "In 2008 ARC traded against the backdrop of an increasingly challenging economic environment that worsened in the second half of the year. Including all non-recurring events our net loss was larger than expected. Going forward into 2009, we remain cautious as visibility is limited and uncertainty in the semiconductor industry with lengthening sales cycles may affect the timing of new licence revenues and royalty volumes."
Schlachte added: "We will continue to assess industry conditions throughout 2009 to ensure that the company's cost structure is aligned with revenue opportunities."
Striking a positive note, he added that ARC expects that over the medium to long term, consumer demand for devices delivering increasingly higher quality multimedia content would continue to grow.
Sales contribution from North America dropped to 55 percent from 65 percent, but that from Asia rose to 25 percent from 15 percent.
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